4 Key Questions Your Mortgage Lender Needs Answered Before You Buy A Mobile Home

Posted on: 26 August 2022

Buying a mobile home for sale can be more complicated than buying a stick-built home. The process is easier, however, when you know in advance precisely what your mortgage lender needs to see in mobile homes.

Does the sale include the land?

While it may seem obvious, the lender needs to know if the sales price includes the cost of the land and the mobile home. Additionally, if the land is not included, they will need to know where the home will be moved to or what the existing lot rent is each month.

Does it have a HUD tag?

The Department of Housing and Urban Development Certification label, commonly referred to as the HUD tag, is a metal label permanently attached to every mobile home's frame. It has a six-digit number engraved on it so future owners can identify the home and research the wind load, snow load, and other important construction details, similar to how a VIN number permanently identifies an automobile.

Your mortgage lender will require a photo of the HUD tag as part of the appraisal process. They typically do not lend on mobile homes that are missing the HUD tag. Unfortunately, HUD tags cannot be reissued.

What year was it built?

The year that a stick-built home was constructed is not normally important to a lender. The year that a mobile home was constructed, however, is crucial. In fact, mortgage lenders will not lend on a mobile home built before 1976. This particular year is because the Department of Housing and Urban Development put strict codes in place in 1976 for mobile home construction to increase safety, including regulations on:

  • Plumbing
  • Electrical
  • Fire safety
  • Thermal Protection

The date will be on the HUD tag, but it should also be on the previous owner's title insurance paperwork.

Is the mobile home for sale on a permanent foundation?

While having a mobile home on a permanent foundation is vital for safety and durability, it is also often a bank requirement. This is because when a mobile home is not on a permanent foundation, it can be moved and, therefore, cannot be considered real estate. As a result, it often needs a different type of financing called a chattel loan to accommodate the lack of a permanent foundation.

Buying mobile homes does not need to be complicated. On the contrary, the process is simple if you know what your bank needs — and why — before you head out on your hunt for the perfect mobile home for sale.

Reach out to a company such as Kerman Mobile Homes to find out more.