There are a couple of basic questions that need to be answered before discussing financing. They are:
- Where is the home going; park or private property?
- How is your credit?
Park (Manufactured home community)
Good Credit (650 plus credit score)
Many local do not finance mobile and manufactured homes. Many do though. Local banks usually require 20 to 30% down payment. I would be happy to discuss which ones do and which ones don't. The way not to find out is to call them. You will usually get a "no, we don't" because they do not know who they are talking to. I would give you names that you can call directly. If you do not have good credit-forget about it. See below about co-signing and buy for. None of the banks will finance anybody without good credit. You must have good credit.
National Finance Companies
National Finance Companies (21st Mortgage, Triad, Others) will set your down payment and interest rate according to your credit score, amount of down payment and other factors. They offer down payments with as little as 5% down payment. 10% down is generally what I have seen though in most cases. They will go longer term than local banks so the payment would be less. They will only allow a co-signer for people with no credit (usually very young). They do not allow a co-signer to heal up bad credit. See the discussion below about helping finance a home for someone.
Not Good Credit (650 or less)
Seller financing is where the community where the home is located or will be located is the company financing the home. They may or may not have a minimum credit score standard. Most of the time they do not. They may overlook bad credit if it is in the past. You must have a down payment. The payments are set up for a 15 year (new) or a shorter (used) loan period with payments going to principal and interest just as if the loan had been processed by a bank.
The communities that I am involved with that do Seller financing are:
- Brookwood MHC West Fargo (on 9th St) Will finance any singles and doubles up to 28 x 64(60)
- Riviera Heights MHC - North Fargo (1 mi. N of the Fargo Dome) Will finance singles and doubles up to 28 x 64(60)
- Countryside MHP - South Fargo (on 25th St between 5th and 9th Avenues) Will finance singles and doubles
- Mobile Manor Park - Moorhead, MN (12th St.l and 15th Ave North) Only 14 x 60(56) homes. Small park.
- Hillsboro MHP - Hillsboro, ND (40 miles North of Fargo) Will finance singles and doubles up to 28 x 64(60)
- Valley Park - Grand forks, ND (North of Highway 2 on North Washington) Will finance singles and doubles up to 28 x 64(60)
The home must stay in the park until it is paid for.
They are primarily doing new home financing. Their objective is to move homes into the park to fill it up. Please check the Seller Financing page to see what is currently available. You can order any new home (within the guidelines) with seller financing. Down payments are generally 10% down payment. Interest Rates are 8.5% on new and 10% on used with 15 year term on new and shorter term on used. They are looking for stability in an application. No minimum credit score. Perfect way to get a home without perfect credit.
Learn more about seller financed homes.
Helping out someone with a lower credit score. There are a couple of ways to help out someone if you should choose to. First of all, it is totally on the co-signer. Actually, there really is no such thing as so-signer. You are the person that they will approve the loan for. The person with poor credit will probably not even be able to be put on the application. They will be looking at you 100%. There are 4 ways that you could finance it. All of them require you squarely in the middle of it. They are:
- Buy-for - This is where you finance through a National manufactured finance company. You must qualify with the new expenses in addition to your own living costs and loans You will not be able to use any income from the person that you are trying to help. It takes a fair amount of income to qualify. This is the most expensive choice. Higher interest rates and closing costs than a local bank.
- Borrow your own money - This will be the cheapest ways to finance. The manufactured home is not even used as collateral. You would put up a CD as collateral. Set up a companion loan in the name of the person you are trying to help. This is important so they can get some credit history built up so they could eventually not have to use you to help them. As the loan is paid down, the CD is released. If the person gets a good enough credit built up, they could finance the home and pay off the loan secured by the CD. There would probably be no down payment requirement.
- Mortgage on Co-signers Home - Same as above instead of CD for collateral, you would use your home as collateral. If you have a first mortgage, a second mortgage might be obtained. Emotionally, it is hard to put a mortgage on your home to help someone else. The way to look at it, is that you are borrowing the money anyway, no matter how you choose to do it. One might say to do it the cheapest way possible. You might have some closing costs with this method.
- Bank financing - Same as above only you would use the manufactured home as collateral. Generally a 20 to 30% down payment. This would be done probably at a bank of your choosing.
Where You Own the Land
The title to the land will be in your name. You would proceed with a process similar to building a house. First of all get general cost guestimates. See if you would qualify for the amount of money that you would need. Get a general approval. Then get firm estimates. The bank may set up a construction loan to get it done. This is too much to discuss here. Call for particulars.
Where Someone Else Owns the Land
You would finance the home the same as the home in a park above. The is no seller financing for homes to be placed on their own lots. Seller financing must be in a park.