Does FHA Loan Caters Both Modular Home Construction and Customization?
The FHA loan is a government insured loan which allows a little more flexible modular home construction loan than the conventional loan. FHA loans do have a few more requirements than the conventional loan, such as mortgage insurance. The FHA loan is geared for both the construction and customization of modular home in Michigan.
FHA Loan Program
The FHA loan program offers two loans, one for home improvements and another for purchase of a modular home, for those who might not otherwise qualify for a conventional loan. That is the reason why it seems there’s nothing the government won’t do to encourage modular home ownership or modular home customization.
FHA approved lenders in Michigan make loans to eligible borrowers to finance property customization or purchase of a modular home, and HUD insures the lender against loss if the borrower defaults. Credit is granted based on the applicant’s credit history and ability to repay the loan in regular monthly payments.
Interest Rate of FHA Loan
These are not low interest rate loans, the rate is based on the prevailing interest rate in your area at the time loan is made. The maximum modular home customization loan for a single family home is $25,000. The maximum home purchase loan for a modular home is $48,600, $16,200 for a developed lot on which to place a modular home, and 64,800 for a modular home and lot in combination.
Term of FHA Loan for Modular Home
The maximum term for a property customization loan on a single family home is 20 years. The home purchase loan term may not exceed 20 years for a manufactured home only. Modular home lot loans are limited to 15 years. A loan on a single-module home and lot is limited to 20 years, while a loan on a multi-module home and lot can extend to 25 years.
Downpayment of FHA Loan for Modular Home
A loan on a new modular home requires a minimum cash down payment of five percent of the first $5,000 of the purchase price and 10 percent of the balance. The same down payment is required on all combination loans, whether the home is new or existing. The minimum down payment on an existing modular home loan or home lot loan is 10 percent of the purchased price.
In case you still have questions about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile, you can check our modular home price sheets by signing up to our blog.