The Hidden Complexities of Buying Mobile, Manufactured, and Modular Homes

For many first-time homebuyers or those on a stringent budget, the allure of mobile, manufactured, or modular homes is undeniable. Their often lower upfront costs can make them seem like a dream come true. However, the reality of purchasing and financing these homes is more intricate than one might assume. Here's what you need to know before considering one of these homes as an "affordable" option.

Not So Simple Financing

While traditional homes have a variety of financing options, including FHA, VA, and Conventional loans, the same isn't true for most mobile, manufactured, or modular homes. Here's why:

• Cash-Only Transactions: The majority of these homes do not qualify for traditional financing, making them largely cash-only purchases. This is a significant barrier for first-time buyers or those on a budget, as coming up with the entire purchase price in cash can be near impossible.
• Specialty Lenders: While there are some lenders who specialize in these home types, their terms are not always favorable. Many require substantial down payments, often exceeding 20%, making it challenging for those without significant savings.

The Reality of "Affordable" Homes

Beyond the financing hurdles, there are other factors to consider:

• Space Rent: Many of these homes reside in parks or communities where space rent is a factor. It's not uncommon for this rent to be $700 or even more per month. And worse, these fees are subject to increases, making it hard to budget long-term.
• Permanent Foundations and Location: Only a small fraction of these homes meet the criteria (being on a permanent foundation and located outside of a park) to qualify for traditional financing. This significantly narrows the pool of homes available to those hoping to use such financing options.

Why Traditional Might Be the Better Route

Given these challenges, traditional stick-built homes often emerge as a more viable option. Their eligibility for a broader range of loan types, combined with the potential for fixed mortgage rates and no space rent, often makes them a more financially sound choice in the long run.

Need Guidance? The McCarty Group Can Help

Purchasing a home, regardless of type, is a significant endeavor. If you're feeling overwhelmed by the options and need guidance, The McCarty Group is here to assist. We understand the nuances of the market and can provide valuable insights to help you make an informed decision.

Contact The McCarty Group today, and let us guide you to a home that meets your needs, budget, and long-term financial goals.