Bakersfield, located in the heart of California, offers a welcoming environment for mobile home ownership, with many residents enjoying the affordability and convenience of manufactured homes in community parks. However, financing these homes can be challenging if you’re unfamiliar with the process. Here’s a comprehensive guide for Bakersfield homebuyers to navigate securing loans for manufactured homes in parks.
Unlike traditional real estate loans, manufactured home loans are often classified as personal property loans rather than mortgages. This is because most manufactured homes in parks are not permanently affixed to land; instead, they are situated on rented lots. Lenders take this into account when structuring loans, which typically have terms of up to 25 years, compared to the standard 30 years for traditional mortgages.
If your manufactured home is permanently affixed to owned land, financing options broaden to include government-backed loans like FHA or VA loans. However, for homes in parks, personal property loan programs designed for manufactured housing are usually the most suitable option.
Personal property loans (chattel loans) are the most common choice for manufactured homes in parks. These loans require a minimum down payment of 5% for borrowers with good credit, although down payment requirements may increase for lower credit scores.
Buy for loans are an excellent choice if you’re purchasing a mobile home for a family member. These loans require a 20% down payment and allow you to finance the home without including the individuals living there on the loan. This simplifies underwriting and may provide better loan terms.
Co-borrower loans can be used to improve your chances of approval or secure more favorable loan terms. By adding a co-borrower, lenders will calculate a blended credit score, averaging the scores of all applicants, which can enhance the overall loan conditions.
Check your credit score early. A score of 640 or above increases your chances of securing better loan terms, but even lower scores may qualify with a higher down payment or other compensating factors. Addressing any negative marks on your credit report before applying can improve your options.
Prepare your documentation. Lenders will require proof of income, tax returns, and identification. If you are using a co-borrower, ensure they provide the necessary documentation as well.
Understand park requirements. Before finalizing a loan, your selected manufactured home park must approve your application. This process can take one to two weeks, so it’s essential to start early.
Compare lenders. Bakersfield has a range of lenders specializing in manufactured home loans. Take the time to compare rates, terms, and requirements to find the best fit for your financial situation.
Work with a knowledgeable agent. Real estate agents familiar with manufactured homes in Bakersfield can guide you through the loan application and park approval processes.
Securing a loan for a manufactured home in a park may seem complex, but with the right preparation and resources, it can be an achievable goal. Bakersfield homebuyers have access to a variety of loan types tailored to their needs, and by understanding the unique aspects of manufactured home financing, you’ll be better positioned to secure your dream home. For personalized guidance, contact lenders who specialize in mobile home loans, such as Smart Money Mortgage, to discuss your specific circumstances.
