Manufactured homes in Condo Parks and Lending Practices
by: RichardOliver
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Word Count: 494
Many high quality
manufactured home developments were first developed as rental or lease
communities and later through the resident or homeowner association
efforts or through owner determination, the development was converted
to resident ownership. One of the most popular methods of park
conversion was through a condominium plan. Unfortunately the legal
verbiage in the condo plan inadvertently excluded
manufactured home communities from certain types of financing,
specifically FHA insured loans or loans that would ultimately be sold
to the secondary market. This often compromised the very heart and soul
of the manufactured home market---either the first home buyer or the
retirement owner. Without appropriate financing the first-time home
buyer was unable to secure the best source of dollars available and the
senior was unable tap into his/her nest egg by virtue of a Reverse
Mortgage. A reverse mortgage lets homeowners 62 years or older borrow
against the equity in their property. They can take the proceeds as a
monthly check, lump sum or line of credity. Instead of making payments
to the lenders, as with a traditional mortgage, the lender pays the
homeowner. The loan is repaid with interest when the borrower sells,
moves or dies.
The understanding of manufactured homes and their associated
communities by the highest level of FHA and HUD officials as well as
our political leaders in Washington was also flawed. Rental parks that
converted to resident ownership through the condominium process were
viewed on paper as developments with lower quality homes. In reality,
these are developments like Rancho Carlsbad and
Champagne Village (just two parks to cite examples with golf
courses, enviable locations and amenities with home prices in the
$300,000-$500,000 range. Far from substandard.
On March 29, 2007, H.R. 1852 (the Expanding Homeownership Act of 2007)
was introduced into the House of
Representatives by Congresswoman Maxine Waters (D-CA). The bill has
been referred to the Senate Committee on Banking, Housing and Urban
Affairs. Passage of a compromise version by both houses of Congress is
expected to pass by the first quarter of 2008. When The U.S. Congress
passes the FHA Modernization bill, this bill will bring the benefits of
reverse mortgages and comprehensive mortgages to homeowners that have
been excluded for too long. HUD officials have given assurances that
the logistics will be implemented quickly.
Some of the logistical issues on a manufactured home are as follows to
secure an FHA insured loan.
Proof that the home is newer than June 15, 1976
Engineer’s Certification that the home is on a permanent foundation and
that any attached buildings to not impact the structural integrity of
the home and that the skirting enclosure is HUD compliant.
Certainly there are other issues pertinent to the loan but without the
two above, FHA financing cannot be procured. On The Level General
Contractors can assist both in the engineer certification process or if
necessary retrofit the home to meet the HUD Handbook 1996 guidelines.
About the Author
Author Bio:
ON THE LEVEL General Contractors (B & C 47 521400) is a
family-owned company specializing in the maintenance and retrofitting
of mobilehome and manufactured home understructures 433A permanent foundation
contractors.
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