Late in 2015, FHA changed their flood zone requirements for manufactured homes in a flood zone.  Because I get lots of questions on the subject, here is a quick summary of the new requirements for FHA, and the requirements for VA and Conventional loans:
FHA will not do a loan on a manufactured home in a flood zone unless a flood elevation survey is done to show that the land under the home and its mechanicals are above the flood elevation.  This means, of course, that only part of the home’s lot is in a flood zone….and the part with the home on it is not.   The old rule was that the living area of the home had to be above the flood elevation….not the land under it.  So now these homes that qualified under the old rule but not the new one, are now ineligible for FHA financing. 
VA-  Follows FHA’s guidelines.
Conventional loans (Fannie Mae and Freddie Mac) “Flood insurance coverage is required for all residential buildings on the mortgaged premises if any part of the structure is located within an SFHA (Special Flood Hazard Area).”  Insurance must be for 100% replacement cost of the improvements or for a minimum of the loan amount. 
So, if the home is in a flood zone, conventional is the way to go!

Call if you have any questions:
Eric North
Arizona Wholesale Mortgage
602-524-2454

When a person buys a manufactured home, they either have it set on real estate they own, or rent.  When the home comes out of the factory, it is titled like a vehicle...it has a title and registration.  And it is taxed like a vehicle.  So, the owner gets a bill every year to register it....just like a car.  If the home is placed in a park, where the land is rented, then the owner will continue to get the bill from DMV every year....once again...just like a car. 

If the home is placed on land that is owned by the owner of the manufactured home, then the owner has the option to turn in the vehicle title to the DMV and get an Affidavit of Affixture.  This is a legal document, recorded in the county's records, that makes the home an improvement of this specific piece of real estate.  Therefore the home and land are now taxed as one.  An affidavit of affixture is required by all loan types.  The affidavit of affixture also enables the lender to foreclose on the land and the home together.  Without it, the lender would only be able to get the land.

A common misconception is that the affidavit of affixture is evidence of a HUD approved foundation, which is required for FHA loans.  It is not.  It in no way has any impact on the physical structure or foundation of the manufactured home.

Many lenders will not do a loan on a doublewide if there are also singlewides in the subdivision.  Old FHA rules stated this, and these communities could not get FHA approval long ago.  This FHA rule is gone, but some of the lenders that still do manufactured home loans still will not approve a loan of any kind in a subdivision that has singlewides in it....and they will not loan on singlewides, period.

It is a good thing that I work with lenders that do not have this restriction.  So, singlewides and doublewides living together in harmony....it is a good thing. 

Eric North

Arizona Wholesale Mortgage

602-524-2454

Conventional loans have several advantages over FHA.  There is no up front mortgage insurance premium.  Second/Vacation homes are permitted with 10% down.  The monthly mortgage insurance is significantly lower, even if you only put 5% down.  And, an FHA/HUD foundation is not required....though many lenders (not the ones I use) require an FHA/HUD foundation on conventional loans too.  Conventional loans are tougher to qualify for though.  So, when I prequalify a borrower for a manufactured (or regular) home loan, I start with the possibility of closing a conventional loan first....and then move to FHA if necessary.

General Questions?  Use the comments section provided.  Call if you have any specific loan scenario questions.

There is a lot of confusion and misinformation when it comes to manufactured home foundations and FHA loans.  Most loan officers don't know how to do manufactured home loans...and they give out bad information.  This is why so many of the loans I do are "rescue loans".....loans that started at another lender.

FHA requires an engineer's certificate in all purchase-money loans to certify that the home has a foundation that meets its guidelines.  This is required because until January 1st of 2009, AZ's building code for manufactured home foundations was not as stringint as HUD/FHA code.  So, buyers simply obtained conventional loans instead of FHA and avoided the extra expense of the "HUD foundation" when a home was installed.

Fast forward to today.  Lots of buyers do not have the credit needed for a conventional loan, but are fine going FHA.  So, FHA is back.  And for buyers and sellers, there is a simple/less expensive path to follow so that a most manufactured homes can be marketed FHA, and sold to an FHA buyer.  This improves the marketability of the home.

For more details, Call the Expert.....Eric North
                                                      602-524-2454

The HUD Data Plate (or Sheet) is a paper label that is affixed inside the manufactured home.  It is usually the size of a standard sheet of paper.  The HUD Data Plate is usually found in a kitchen cabinet, closet door, or electrical panel.  It has a map of the United States or inform the owner of the Wind Zone, Snow Load, and Roof Load of the home.  The HUD Data Plate has 1) the name and address of the manufacturer's plant, 2) the serial number and model of the home, and 3) the date that the home was manufactured.  It also has 4) the HUD Tag labels, 5) a list of factory installed equipment which includes a list of each appliance and its manufacturer. 

The HUD Data Sheet should not be removed from the home, though they often are during a remodel.  HUD regulations require that the HUD Data Sheet be affixed to the inside of the home to show that the home conforms to HUD's 1976 regulations.