The Challenges of Obtaining a Mobile Home Mortgage in Arizona

Obtaining a Mobile Home Mortgage in Arizona

Mobile homes are a great option for those planning to relocate to Arizona. In addition to being more affordable than traditional site-built homes, mobile homes offer more flexibility, making them suitable for different lifestyles. They make homeownership even easier to achieve, especially if you can get a mortgage. Similar to other types of real estate, a mortgage allows you to spread the cost of owning a mobile home over an extended period.

Can you get a mortgage on a mobile home? Yes, you can, but the process is a bit complicated. This post will provide an in-depth review of a mobile home mortgage in Arizona, the unique challenges buyers face when looking for the right lenders, and how to sell a mobile home with a mortgage.

Can You Mortgage a Mobile Home?

Yes, you can get a mortgage for your mobile home. However, the process is different and more complicated than financing a traditional site-built home. The following are some challenges you might face when obtaining a mobile home mortgage in Arizona:

Limited Lenders

Not all lenders offer financing for mobile or manufactured homes. According to recent research by the University of North Carolina’s Center for Community Capital, lenders deny loan applications for purchasing manufactured homes nearly eight times more often than those for purchasing site-built homes. This means you have to look harder for lenders specializing in mobile home financing. Here are a few lenders that may be able to help finance your mobile home in Arizona:

1. 21st Mortgage Corporation
   • Type: Specializes in manufactured and mobile home loans
   • Website: 21stmortgage.com
2. Cascade Loans
   • Type: Manufactured and modular home financing
   • Website: cascadeloans.com
3. Triad Financial Services
   • Type: Manufactured home loans
   • Website: triadfs.com
4. Vanderbilt Mortgage and Finance, Inc.
   • Type: Manufactured home financing
   • Website: vmf.com
5. Credit Human
   • Type: Mobile and manufactured home lending
   • Website: credithuman.com
6. U.S. Bank
   • Type: National bank with varied loan offerings; may offer mobile home loans
   • Website: usbank.com
7. Wells Fargo
   • Type: National bank; may offer mobile home loans in certain regions
   • Website: wellsfargo.com
8. JCF Lending Group
   • Type: Manufactured and mobile home lender
   • Website: chattelmortgage.net

Down Payment Requirements

Lenders often require a larger down payment for mobile home financing than they would for traditional site-built homes and other types of real estate. In most cases, lenders require mobile home buyers to pay a down payment of 10%-30% of the total purchase price, depending on their credit score. The lower your credit score, the larger the down payment you’ll be required to make.

Higher Interest Rates

Mortgage loans for mobile homes usually come with higher interest rates and shorter payment terms compared to site-built homes. This is mainly because most lenders see these mortgages as high-risk investments that could easily go wrong.

Land Ownership

Lenders often require you to own or purchase the land your mobile home will sit on to qualify for a conventional mortgage loan in Arizona. Some lenders even deny mortgage applications for a mobile home on leased land, as it translates to an even bigger risk.

Age and Condition

It’s not unheard of for lenders to have restrictions on the age and condition of mobile homes they’ll finance. Most of the time, old and poorly maintained mobile homes do not qualify for financing in Arizona.

Can I Get a Reverse Mortgage on a Mobile Home?

Mobile homes offer a flexible and affordable housing option to thousands of residents in Arizona. As an Arizonan heading into retirement and exploring different ways to make extra money, this may raise the question, Can you get a reverse mortgage on a mobile home in Arizona? Yes, you can do a reverse mortgage on a mobile home in Arizona. However, there are several requirements you must meet to be eligible for a reverse mortgage.

The most important requirement is that your mobile home must have been built after the Manufactured Home Construction and Safety Standards Act was enacted in 1976. By passing this act, the U.S. Congress intended to improve the quality, safety, durability, and affordability of mobile homes across the country.

The U.S. Department of Housing and Urban Development and the Federal Housing Administration (FHA) also have other requirements that a mobile home must meet for the owner to qualify for a reverse mortgage in Arizona.

These include the following:

• The floor must be at least 400 square feet.
• The mobile home must be built and remain on a permanent chassis or foundation, connected to the foundation using welds, bolts, and other light gauge metal plates.
• It must be built according to FHA guidelines.
• It must be served by an all-weather roadway.
• It must be designed for occupation by a single family.
• The property must be classified and taxed as real estate.
• Any tow hitch must be removed for over a year.
• The finished grade level under the mobile home must be below the 100-year flood level.
• The site must be served by water and sewer facilities approved by the local municipality.
• Every section of the mobile home must have HUD tags that can be accessed by an appraiser.
• The home must not be in a condo association.
• The mobile home’s foundation must be vetted and certified by an engineer.
• The home must be double-wide or bigger.
• The mortgage loan must cover both the mobile home and the site.

On the other hand, the borrower must meet the requirements to qualify for a reverse mortgage:

• Be at least 62 years old.
• Live in the mobile home as their primary residence.
• Stay current on all their financial obligations related to the mobile home, including property taxes and mortgage insurance.
• Own substantial equity in the mobile home.
• Attend a HUD-approved agency counseling session.

How Does a Reverse Mortgage Work?

A reverse mortgage is a loan a homeowner gets in exchange for relinquishing equity in their home. With a reverse mortgage in Arizona, the borrower continues living in the home without making any monthly mortgage payments. Notably, a borrower does not have to repay this loan for as long as they live in the home. This loan will only be repaid once you sell the home, move out permanently, or die.

The amount of money you can borrow using a reverse mortgage in Arizona usually depends on the value of your home, the amount of equity you have built up in the home, your age, current interest rates, and other costs. You can choose to receive this money in one lump sum, a line of credit, or monthly payments.

You can use this money to pay off your current mortgage, supplement your income, pay for your children’s or grandchildren’s education, pay for medical expenses, make home repairs and renovations, travel, and any other purpose you want.

How to Sell a Mobile Home with a Mortgage

If you have a mobile home with a mortgage, you may wonder whether you can still sell it. Fortunately, you can. It’s no different than selling a site-built home with a mortgage.

Here are the steps to follow when selling a mobile home with a mortgage:

1. Contact your lender. Inform your lender of your intention to sell your mobile home. The lender will provide you with the estimated balance you need to pay off and any specific requirements you need to meet to make the sale.
2. Determine your home’s value. Before listing your mobile home for sale, you need to partner with a reputable appraiser to know how much it’s worth. This will ensure you indicate the accurate listing price and help your home sell faster. It’s also important to consider your mortgage loan balance when setting your home’s listing/selling price.
3. Hire a reputable and experienced realtor. Hire a realtor who specializes in mobile homes to help you sell your home. Such a realtor will market your property through print and digital media to get it seen by interested buyers.
4. Disclose mortgage information to the buyer. Be transparent with interested buyers when selling a mobile home with a mortgage in Arizona. This way, they can understand that the sale will go toward paying off the mortgage balance.
5. Negotiate with potential buyers. Once you find an interested buyer, negotiate with them all the aspects of the sale, including the purchase price, closing costs, and closing date. Once you’ve agreed on all terms, you may proceed to open an escrow account with a trustworthy escrow company.
6. Pay off the mortgage. Once you’ve sold your mobile home, you’ll need to pay off your mortgage loan balance. Remember, the lender will not give up the mobile home title or sign off without you paying the outstanding mortgage balance. Lenders usually take 15-25 days to sign off on the home title after receiving the payment.
7. Close the sale. Once you’ve completed all the paperwork, paid off the mortgage balance, and transferred ownership of the mobile home to the buyer, the escrow company will disburse the remaining funds to the respective parties, and the sale will be closed.

Need Help Obtaining a Mobile Home Mortgage?

Are you looking to buy or sell a mobile home in Arizona or struggling to obtain a mobile home mortgage? At Phoenix Mobile Home, we make no-obligation cash offers on mobile homes in Arizona and can also help you with any mortgage issues you’re dealing with. We have a great inventory of mobile homes in Arizona to choose from as well.

Contact us today at (480) 462-6575 or fill out the form on our website to learn more about our solutions.