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Modular vs Manufactured-Through the Lender's eyes

Dean

Senior Member
Joined
Oct 16, 2003
Professional Status
Certified Residential Appraiser
State
Tennessee
Tim is right. If it has a metal frame aka manufactured home with chassis, it is a manufactured home for the secondary lenders who buy the loans. A modular is built to state standards, doesn’t have the metal frame. Look for a HUD label in the unit. Located generally on the rear exterior Walls of the units, with a paper sheet located somewhere inside the unit. That would make it a HUD-manufactured home. A modular unit should have a state tag usually located by or on the breaker box. However, here in Florida, both are very common. The biggest issue is if you tô finance one of the old units built before 1978, many of which are still found in parks. They are not acceptable to secondary lenders.
Thats simply not accurate. A modular home can have a metal frame, and its not the same as a HUD Code home. Its an On Frame Modular.
 

Dean

Senior Member
Joined
Oct 16, 2003
Professional Status
Certified Residential Appraiser
State
Tennessee
SFR is the type of improvement - single family residence. SFR can be a condominium, a mobile home, a manufactured home, a modular home. Any dwelling type designed for occupancy by one family (as opposed to more than one family such as a duplex, triplex, fourplex, apartment, etc.) R1 is the zoning ordinance that applies to your site and generally means single family residential district.

Manufactured Home - built in a factory in sections on a permanent steel chassis after June 6, 1976. It is built to the Manufactured Home Construction and Safety Standards Act, aka HUD Code. It is eligible for financing from Fannie Mae, Freddie Mac, FHA, VA, USDA, etc. It must meet certain other requirements.


Modular Home - Built in sections in a factory on a steel "work table" that is used to transport the section to the site and then removed. The steel chassis is then returned to the factory to be re-used. These are eligible for all types of financing and for loan purposes are considered the same as conventional construction. The GSE’s like Fannie Mae and Freddie Mac view these the same as site-built homes. Modular building construction is regulated at the state and local levels the same way traditional site-built homes are.


Mobile Home – built in sections in a factory and has a permanent steel chassis. These were built on or before June 15, 1976 to various building codes or even no building code. They are not eligible for most types of financing although VA “may” accept them. Some private lenders may finance them but it’s very difficult.

On-frame/Chassis Modular – Built in sections in a factory on a permanent steel chassis. Similar to Mobile and Manufactured. The are not built to the HUD Code. These are not eligible for financing using Fannie Mae, Freddie Mac, and FHA. Some private lenders may lend on them. Very difficult to finance.
I thought that Fannie had decided that they will now take On Frame Modulars
 

BRCJR

Senior Member
Gold Supporting Member
Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
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On-frame/Chassis Modular – Built in sections in a factory on a permanent steel chassis. Similar to Mobile and Manufactured. The are not built to the HUD Code. These are not eligible for financing using Fannie Mae, Freddie Mac, and FHA. Some private lenders may lend on them. Very difficult to finance.

fyi

 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
To the OP. In my state Modular Homes are identified by a Specific Stamp. These are considered to be just like Site Built Homes and are built to the Same Standards/Code. etc If this stamp exist then it does not commonly have a frame. Point is in my state the Modular Stamp qualifies the Improvement for Lending just like a Site Built Home.

Maybe your state has something similar.

Thisis a tricky area of contention. Each State is and can be different. Your best advice will be from one of the Appraisers here who is licensed in Florida, assuming that is where the home is located.

Another problem is financing where a loan will be to FNMA Standards; https://singlefamily.fanniemae.com/media/6181/display
 

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bekandbri

Thread Starter
Freshman Member
Joined
Jun 13, 2020
Professional Status
General Public
State
Florida
Thank you ALL so much for your insight and taking the time to reply. I am definitely trying to do my due diligence by researching before we move forward with this home. I am waiting on the bank to open this morning so that I can call and ask them the same question. From all my research and from what you all have said, it would appear that the home should qualify as if it was a site-built home, not manufactured/mobile. But, at this point, only the bank will be able to tell me exactly what their rules/regs are regarding their loan options. I'm really hoping it works out for the best as we love the house and are ready to move forward. I'll update once I find out more information. Thanks so much again!!
 

bekandbri

Thread Starter
Freshman Member
Joined
Jun 13, 2020
Professional Status
General Public
State
Florida
Update: Thanks again everyone! Can't tell you how much I appreciate your help. I learned a lot over the weekend with your links and direction. I did get some clarification from the bank as to what they consider manufactured homes and I'm happy to say that the modular we are looking at doesn't fall under that classification, so that's good news! Offer on home going in today. :). Thank you again -Rebekah
 
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