(StatePoint) Does homeownership feel out of reach? A manufactured home is an affordable alternative that you may not have considered before.
What is a Manufactured Home?
Rather than building on site, a manufactured home is built in a factory on a permanent steel frame and transported to your property, where it will be affixed to a permanent foundation.
A new category of factory-built homes blends the affordability of manufactured housing with the appearance and financing advantages of site-built homes. They are nearly indistinguishable from site-built homes aesthetically and are constructed using the same building materials. Safety and quality are top priorities in their construction; they are inspected to meet or exceed U.S. Department of Housing and Urban Development Code in such areas as durability, energy efficiency, thermal and electrical systems and fire resistance.
Offering Affordability
A manufactured home may make homeownership possible for more American families. The average price of a new, single-section factory-built home today is around $200,000 including the land, versus more than $500,000 for a new site-built home.
Fortunately, this affordability does not come at the cost of quality. The process of building manufactured homes in a factory is quick, efficient and cost-effective, which accounts for their relatively low cost. It also does not come at the cost of long-term pay-off. According to the U.S. Federal Housing House Price Index, a manufactured home appreciates in value similar to a site-built home.
Titling Considerations
Depending on who owns the land you live on, you can title your home as real property or personal property (also called chattel or home-only). Real property, often called real estate, refers to land and any structures affixed to the land. Personal property is a broader category that covers any property you own that is movable, such as vehicles, tools, furniture and other belongings. If you are buying a manufactured home to install on land that you already own or are planning to purchase, it can be titled as real property once the home is affixed to the land. If you are renting a site in a manufactured housing community or leasing on private land, you will likely need to title the home as personal property.
While titling the home as personal property can be quicker and save you money on real estate taxes, it’s important to know that some lenders will only provide financing for the purchase of real property. To widen your financing options and improve your chances of landing a better interest rate, loan terms and protections in the face of hardships (such as following natural disasters or changes in your financial situation), consider a manufactured home as real property.
There are mortgage products specifically designed for buyers of manufactured homes, including some low-down payment options. For example, Freddie Mac’s CHOICEHome loans offer financing for factory-built homes titled as real property with a down payment as low as 3% of the purchase price. Speak with your lender about which financing option best suits your circumstances.
To learn more about manufactured homes, and for additional insights into making homebuying more affordable, visit myhome.freddiemac.com.
While often overlooked, manufactured homes offer both quality and value, and may be an affordable option to get you into a home of your own.
Photo Credit: Courtesy Clayton Homes
