A word on CONSTRUCTION LOANS
An important thing to understand when talking to banks, is that you will need a construction loan to get you building, that will eventually be rolled into an mortgage after building is complete, and not every bank does a construction loan in-house. Many banks will outsource the construction loan to another bank, thus allowing them to deal with the end mortgage product.
When one bank does the construction loan, and another bank does the end mortgage, the consumer is subject to two separate sets of closing costs and very limited cost sharing. When one bank does both the construction loan and the end mortgage, you are only subject to one set of closing costs and maximum cost sharing of various items. Therefore is it is often advantageous for the home-builder/consumer to seek out a bank that does an in-house construction loan to go with their mortgage product.
Modular Home Financing
Financing a modular home is very similar to financing a stick-built home. In fact, banks that are familiar with modular construction actually prefer it over stick-built, because the time frame is so much better (3-4 months compared to 6 to 12 months or worse). Banks also assign less cost overruns to modular building, around 3%, compared to 10-15% when financing a stick-built; due to modular home’s better predictability, consistency and structured pricing.
Below are two banks that we highly recommend due to their in-house construction loans and familiarity with building. Rural 1st® powered by Farm Credit Services only finances rural builds or if within city limits, those cities with populations of 2,500 or less. Veridian Credit Union has no qualifications based on location.
Veridian Credit Union
www.veridiancu.org
1-(800) 235-3228
Rural 1st®
www.Rural1st.com
1-844-GO-RURAL
NMLS ID: 407249 NMLS ID: 579135
MODULAR FINANCING PROCESS
WEEK 0 Complete project estimate so you have sound numbers of costs associated with your unique home building plans You also want to talk with bank and get prequalified.
WEEK 1-4 Have floor plans of your house drawn & review options you want to upgrade beyond factory standards.
Fine-tune your project estimate, and have Sunrise help with subcontractors you need (foundation, HVAC, electrician, plumber, garage, porch, septic, misc.)WEEK 5 Sign contract on house, pending approval on construction loan. (after loan's approved, 10% down payment on house)
Provide bank with all necessary building project information they need for appraisal (Sunrise will help with this)WEEK 6-9 Appraisal begins and is completed
WEEK 10 Close on construction loan
Place down payment on / order house
Manufactured Home Financing
Depending on whether a manufactured home is classified as personal property or real property determines the type of financing available to you. Because manufactured homes are often placed in mobile home parks and are often bought without tying it to land, the financial process can differ. Classifying a manufactured home as personal property, and buying a mobile home without using the land as collateral is called a chattel mortgage, and the lender puts a lien against the manufactured home is the loan is repaid. Triad Financial Services and 21st Mortgage Corporation below is two such bank that specializes in chattel mortgages. Classifying a manufactured home as real property and tying it to land you already own or are still paying for will allow you the flexibility of a conventional mortgage, and typically a better interest rate. If you’re looking for a conventional mortgage we recommend Veridian Credit Union above.
Triad Financial Services
Triad is a manufactured home lending specialist and has been for over 50 years. They offer several programs to fit your needs
To apply for a loan visit their website below: https://www.triadfs.com/
21st Mortgage Corporation
21st Mortgage Corporation is a full service lender specializing in manufactured and mobile home loans. They originate and service a variety of loans to borrowers all over the USA.
To apply for a loan visit their website below: