Mobile Home Lenders are Declining Loan Applications Left and Right!
1) You’ve had a bankruptcy within the past 5 years
It used to be that you needed to not have a bankruptcy within the past 2 years (or so). But now that banks have tightened their standards, they have put a great deal of importance on bankruptcy, and if you have had one in the last 5 years, you won’t get a mobile home loan. Sometimes, however, you can get manufactured home financing if your bankruptcy was only four years ago.
2) The manufactured home you want to purchase doesn’t have enough value
The housing market as a whole has seen a drop in value. This fluctuates depending on location (state, city, etc.), and comparable home sales in the area. The mobile home market is not exempt, so the home you are trying to buy has likely lost value recently. This is good, right? Not always, because the manufactured home’s lost value may not be worth the amount of the seller’s loan. The mobile home seller will never sale their house for less than they owe, and a lender will not secure a loan with undervalued collateral either. This is a huge problem in buying mobile homes in this market.
3) The mobile home you want to purchase doesn’t have any comparisons to gauge it’s value
If there are not any comparable sales in the mobile home park, then many lenders don’t even want to get involved. You may get lucky and find a lender that will allow a comparison from an adjacent community, but that is rare.
4) Your Credit score is too low
As the banks have tightened their standards, they have put a greater emphasis on the buyer’s credit score. If your FICO is under 700 you have a better chance fitting a camel through a pinhole. If your credit score is below 740, you are going to face challenges, my friend! Unfortunately, even buyers with a credit score in the 800′s may have their manufactured home loan declined because there are no comparisons in the park. Times are tough.
5) The bank no longer has a loan program for mobile homes
Many lenders will tell you that they offer mobile home loan programs, when they simply do not. The problem is that a mortgage specialist in a bank only knows the bank’s loan programs as they relate to traditional home loans. After they take your loan application, and pass it along, their underwriter calls them and says “Are you CRAZY, we don’t do mobile homes.” This is, of course, after you have payed $400 for an appraisal that can not carry over to another lender. We talk to people all the time that have acted on these lies, and lost thousands of dollars as a result.
