||January 12, 2006
I have received many calls from seniors who live in manufactured homes
Ken Terrill, President, with a Primer on . .
have received many calls from seniors who live in manufactured homes. While a
reverse mortgage may be obtained on a manufactured home, there are quite a few
more requirements on the property than on a "stick built" home.
FHA Reverse Mortgage program (HECM) is the only program that accepts
manufactured homes. The Fannie Mae program does not accept manufactured homes.
FHA has the following requirements:
1) The home must be constructed after June 15, 1976.
2) The home must not have been installed or occupied previously at another
3) The home must be classified and subject to taxation as real estate.
4) The home must be built and remain on a permanent chassis.
5) The home must be on a permanent foundation built to FHA guidelines. A
foundation inspection must be performed by a licensed engineer prior to the
6) The home must have an affixed HUD seal, the appraiser must show the
serial number on the appraisal.
7) The axles and tongue must be removed.
8) Permanent utilities must be installed.
9) Permanent skirting must be installed around the perimeter.
10) The finished grade elevation beneath the home must be at or above the
100 year return frequency flood elevation.
11) The home cannot be located in a "condominium" home owner's association.
Many seniors living in manufactured homes cannot take advantage of the reverse
mortgage program because of number 11 above. If your development is a
condominium development, you are not able to get a reverse mortgage due to FHA's
guidelines. I constantly get calls from seniors living in a manufactured home
and I have to give them the bad news that their property doesn't qualify. If
you are unsure whether or not your home is in a condominium development, a call
to a title company for your legal description will typically answer the
question. I do this for many seniors. There are some developments in North San
Diego County that qualify and I have worked with quite a few seniors to get
their reverse mortgage.
Number 5, listed above, states that you must have a foundation inspection
performed by a licensed engineer. That adds to your cost of getting the reverse
mortgage. There are not many engineers who will do this inspection. This
inspection fee can run anywhere from $350 to $550, and more, depending on what
the inspector wants to charge. If the engineer determines that your home is not
on an FHA approved permanent foundation, you may have it done and paid through
the close of your loan. That is, if the installer agrees. That cost can run
from $2,000 and higher. But, the procedure for installing the permanent
foundation can be done in one day.
addition to the requirements listed above, you must also have an FHA appraisal
performed and a termite inspection completed. Any treatment required by the
termite inspector must be completed prior to your loan documents being drawn.
Any other repairs may be made after your loan closes, you just need to submit
the repair estimates. The repair estimate, $100 to $1000, will be multiplied by
3 plus $100. For example, if your repair estimate is $500, the amount of money
withheld in your repair set-aside will be $1,600. Once the repair is completed,
you will submit the contractor's invoice and he will be paid. The balance will
be refunded to you, either to your line of credit or in a check. You can make
those repairs yourself, then have the contractor come back to inspect.
Please call me at (760) 518-9839 if you have any questions. Or you can e-mail
me at firstname.lastname@example.org.
I am also available to speak to your organization. I look forward to helping
you with your questions about this very important transaction.
Your Local Reverse