Why does my bank need the manufactured home’s foundation inspected?
Financing of an existing manufactured home is possible!
Many buyers are convinced they will not be able to finance an existing manufactured home with an FHA or other government insured loan. Not only is this wrong, but as an inspection company that can help see these transactions through, we can advise on changes to bring the home into HUD compliance. Let’s learn about what manufactured homes are? Why the foundations and additions need to be certified? And how we can help buyers, sellers, agents and lenders close these loans?
Lenders and loan underwriters must receive a foundation and/or addition certificate from an engineer assuring the HUD compliance of the structure. This is a required part of getting an FHA (or similar) loan or for some types of re-financing. Being HUD compliant means the foundations is permanent, and that any additional structures like decks, garages and porches are built to the HUD code. The HUD code is different than the building code.
What is a manufactured home?
Manufactured homes are not mobile homes. Mobile homes (trailer houses) pre-date 1976 and are not eligible to be HUD compliant. Pre-1976 mobile homes were often times manufactured cheaply and without a set of standards. This is why the HUD housing code was established by the Housing Authority. It’s safe to say manufactured home technology has come a long way since the 1970s.
Manufactured homes are not modular homes. Modular homes are similar to stick built homes but are built in a factory and assembled onsite either wall by wall or in modular sections. They are not apart of a trailering system and instead ride on the back of a flat bed semi truck.
Manufactured homes are homes that are built off-site, pulled to the home site on wheels and installed by a licensed installer. They can be installed on a crawlspace, basement, slab or sometimes we see them on piers with or without aluminum skirting.
The following is the HUD definition of a manufactured home:
A Manufactured Home is a structure that is transportable in one
or more sections. In traveling mode, the home is eight feet or
more in width and forty feet or more in length. A Manufactured
Home is designed and constructed to the Federal Manufactured
Construction and Safety Standards and is so labeled. When
erected on site, the home is:
at least 400 square feet
built and remains on a permanent chassis
designed to be used as a dwelling with a permanent
foundation built to FHA criteria
The structure must be designed for occupancy as a principal
residence by a single family.
“Single-wides dont qualify!” — WRONG. They can and many do.
“If the house only has aluminum skirting, it cant pass the inspection!”– WRONG! Skirting has zero to do with how the home is made permanent.
“It’s too old to be financed!” WRONG, usually. Manufactured homes newer than 1976 can qualify.
“Its out of level so they can pass it!” WRONG. Any potential dis-level of the home does not impact its HUD compliance.
“If it doesn’t have a block foundation, it wont qualify!” WRONG. Block foundations are not needed to meet HUD compliance.
What does the inspector look for?
The inspector looks to see how the home is made permanent to the ground. This can be as simple as a few 4-inch c-clamps welded into place holding the chassis to an anchor, or “hurricane straps” poured into a concrete slab, and sometimes we see chains in place that are clamped to a cement pillar. There are a lot of ways to secure the home, and it’s the engineer who decides if its compliant or not. We also document the HUD tag and serial number and the data sheet if it’s visible (usually under the kitchen sink or inside the electrical panel). Moving on, we evaluate any decks, porches or added living space and how they’re attached (or not) to the home. It’s important to know that manufactured homes cannot be altered nor support the weight of another structure.
Why is the HUD code and foundation inspection important to me?
You see, the HUD code and foundation/addition inspection differentiates a manufactured home from a camper or a pre-1976 mobile home and assures both the buyer and the lender that the home is up to snuff. As a result, the lender and the buyer rest assured knowing the home could be sold compliant again in the future if necessary.
Once the certification inspection is scheduled with us online, we head out to the home and get to work. When the inspection is complete, one of our partner engineers makes a determination on the HUD compliance of the home. The engineer’s determination is typically available within 48 hours. If the home fails to be compliant, reasonable recommendations are made to bring the home into compliance if possible. After that, a re-inspection is completed and the engineers certificate is then sent to the necessary parties and the loan can continue processing.
In conclusion, if your dream property features a manufactured home, don’t fall into the false narrative that it cannot be easily financed. Work with an experienced banker and have us out to certify the foundation and any additions for the underwriter.