Downpayment

Poor Credit, Low Income and No Downpayment; these are top three obstacles to home ownership. Lack of downpayment is the most common problem we see, particularly for first time homebuyers. Fortunately for manufactured homes, if the the income is good, then the downpayment can be as little as 5% of the purchase price of the home. And with only 5% downpayment while the interest rate is higher (about 1% greater than a 20% down loan) there is no mortgage insurance adder.

There are no common downpayment assistance programs like we see in traditional home purchases. And I have yet to find a local downpayment assistance program that helps when the mobile home is located in a park. We keep looking but so far no luck.

When buyers don’t have the downpayment readily available, then one significant source can be retirement plans like 401K, IRA, etc that allow an early withdrawal sometimes this can be done without penalty when purchasing a home. But it is good to have clients consult their tax advisor about the income tax implications. Retirement funded loans also work, but we need to take the repayment plan into account.

Another solution is to have a relative “gift” the funds. With the lower cash required for these purchases this makes a family gift more viable. Yes, mobile home lenders are ok with gift funds for a downpayment. The gift giver does not have to be on the contract or live in the home. They just have to show proof of funds along with providing a gift letter.

Contact us for more information, or if you have questions on mobile home financing.