Modular and manufactured homes?

Listen to FreeDuck.

Before you go too much further in terms of investigating a new modular/manufactured home - go look at some resale ones - see if you can find out (you should be able to get the details from MLS) what they were originally purchased for. Get a sense if, in your location, they will appreciate or depreciate in value. In the general Canadian market, and a couple of specific American ones I know, depreciation is the rule, not the exception - you need to know the market you're in.

Listen to FreeDuck.

If you were in a toy store with Bean and she fell in love with a Hong Kong plastic doll bedecked with feathers and sequins, you'd retain your common sense.

Of course modular homes are very different.....

FHA and other loan programs will allow you to buy w/ no down payment. (Actually, down payment is rolled into the mortgage.) I took a good class on this through the UT Informal Classes. A realtor talked about neighborhoods in Austin, loan types, calculating how much loan you can afford, etc.

FHA will not allow you to get money back at closing, so be careful with how much earnest money you put down. Some "non-traditional" financing options can get you into a house with a small monthly payments, but they can bite you in the behind if you don't understand all of the ramifications.

Another thought: friends of ours bought a land/manufactured home deal (unsure if it was a "mobile home" or not). Then when they could afford it, they built a regular house on the land. They seem pretty happy with the deal.

Hmm..
good point taken.. feathers and all. ;-)


I know that the first house me and mr buy will not be a dream home. My idea for the home we buy will be to work on it 24-7, try to get a good amount of equity built into it so that we can resell it after about 10 years and get what we really want, some WHERE we really want it.
This was something I thought I could achieve with a modular.. small investment, lots of work, big gain = profit. >sigh<
Though, to satisfy my curiousity, I will do just that beth. I will look into some that are existing, standing, and for sale. It has become more of a morbid curiousity then anything else at this point , to see how they do in 5-10 years.

Rereading the thread:



I think you just answered your own question....

The whole re-sale issue is an interesting one, in a number of different housing areas.

Here in Toronto, the new condo market is wild wild wild. The sky's the limit.

However, there is virtually no market for re-sale condos. One of my colleagues is thinking of buying one with her daughter, so they'll have a place to stay dowtown in case of bad weather. Or to use for visitors to town. They've been looking at units that were purchased, new, for between 300 and 500k - they're offering 175 - 250k on 250 - 400k asking prices. Their agent says it'll just take a couple of weeks. The units are 2 - 3 years old.

Yeah, condos are like that. There are only a few markets where condos appreciate.

One thing I noticed in at least one other major metropolitan area was that houses appreciated the fastest in areas surrounding public transportation hubs. In our case, that was any metro station. Part of that was that people were really starting to get sick of having to drive everywhere and of spending 1 hour minimum each way in the car to get to work. We couldn't afford those areas but we chose a neighborhood that had not yet received redevelopment attention and that was on the bus line within a few stops of two metro stations. In two years our house appreciated 40%. It was a very small two bedroom house. By the time we put it on the market we had received several invitations to sell to developers.

But smaller markets are a bit trickier. You have to put your finger in the wind and take a guess at what things other people, not just yourself, will be looking for in a house when you are ready to sell. And banking on neighborhood improvement is a little more of a gamble in smaller areas too.

But Austin is pretty boomin' right? I would think you should be able to find a good little investment there if you look hard enough. I'm sure there are fixer uppers in decent neighborhoods if you two (and it sounds like you are) are willing to do some work to improve it.

yes.. I think I did. ;-)


UT gives classes about how to buy a house?!
Me thinks I need to give ol' Mr Wolf a call at work ( ut ) .. heheh
he may be able to get that class for free!






yeah it is.
And for the amount of work we are realisticly EXPECTING to do and want to do on a home, the fixer-upper route may be just what we need. Aside from that, a fixer upper becomes more yours then a new home in some sense.. we may just get lucky and find a home we dont WANT to sell in the long run...

Prolly right about a modular on a rental lot, boomerang. I had never considered that, and never would. A land/home package, I believe, gets conventional, VA, FHA financing.

If you decide to purchase a modular home make sure they toss in the accompanying, obligatorY sign, which should read in large letters....

WELCOME TORNADOS

The class was part of the UT Informal Classes series. Some pretty cool stuff in there. (I loved the wine tasting class....)

where did you learn about this class?
Is there an online site about it ?
Brochure?

I think brochures are available in the Union on campus.

Online: https://informalclasses.org/index2.html

Select: View Courses->I agree->Change category to "Home Life."

Also, a realtor should get you most of this info for free.

I just hate to appear ignorant and am willing to pay $35 to avoid having to ask too many questions.

shewolf,

We do indeed treat some modulars as stick builit homes. Fannie Mae has tightened the noose a little bit (once again) ...which affects how these types of home are looked at during underwriting of the mortgages. Although their new guidlines do simplify things somewhat.

Some modulars are built on an on-frame chassis. They are considered manufactured homes. If they are on a permanent foundation - and taxed as real property.....they are still underwritten as a manufactured home. Which means the loan carries a higher interest rate plus requires a bigger downpayment. At least on 30 year notes they do. You can still get a 20 year with 5% down. Double that for a 30. You have to be careful when buying a modular.

There are modulars that are considered stick built though!! These modulars are brought to your site on an off frame chassis. In other words the steel undercarriage does not provide support for the structure. It was just put there for transportation purposes. It is removed....as the progression of the home moves forward, on your site. These modulars DO appreciate.

When I send someone out to appraise a home that is "questionable" or said to be a modular ... I make sure they check underneath the home.

I had a guy come in, wanting to refinance his existing mortgage. He told me that his home was a modular. He had purchased it through a real estate agent that had told him it was definitely a modular. This real estate agent lied to him. It was a doublewide. He had gotten financing originally at another bank and it was underwritten as a stick built home or modular. Was very questionable to me. Between chain of title and sending my own appraiser out - I found out it was a doublewide. One of the things that tipped me off was - I had asked him if he had a copy of appraisal from when he purchased this home. He did and he brought it in to me. I noticed that his copy was missing a page. Plus, some other things which I won't get into ... did not sit well with me. All I will say is that we found out ..the real estate agent and the loan officer at this other bank had some shady dealings between them. They worked as a team. Huge mess. My reason in telling you this ---- is so you do NOT always take the word of someone else when questioning if something is modular or doublewide. If you look underneath the home and you see steel ... it is going to be considered a manufactured home and underwritten as such. Alot of times a home that is advertised for sale will be called a ranch home and ends up being a doublewide.

Secondary mortgages ( Freddie Mac ) will loan 95% loan to value on a 30 year refinace of a manufactured home if all guidlines are met. Which I chuckle at because Fannie Mae will only go 90% on a 30 year purchase note through them.

Anyway ... the short of it is this: Some modulars can be decent investments. Some can not. Just do your homework first. I have known people that have went with modulars that were indeed classified stick built and cashed in on their appreciation values. Besides being on off frame chassis - check everything in it. From fixtures to materials used in framing, etc.

Manufacture homes
I live in a manufacture home and just love it. As someone who lives in one, I understand how hard financing can be. At this point in the state of Oregon you can no longer get a blue book value. So some financial institutions are having issues on how they are going to value them. I have made some calls to several different banks and they are all doing financing differently, I suggest calling around. Be prepared you WILL have to put money down, if the manufacture home is newer (96' or newer). The value on the home that the banks will give you is just that, it is on the home, then you have to add in all the owner has put into the home, in a park you add on carport slab, carport, sheds, landscaping, decks, and any upgrades in the house, wood floors, upgrades to kitchen or bathrooms, then if appliances are included and washer and dryer. This is why I am saying be prepared to have to put money down. If you do consider purchasing a manufacture home, make sure it is a 96' or newer, this is when HUD stepped in and made the factures be in compliance the building of manufacture houses with stick build homes. In fact a manufacture home is better then a stick built home because they are built in a controlled indoor environment, so they are not being closed up when there is wet weather and keeps the risk of molds from growing inside the walls.
Once you have decided you want to purchase a manufacture home, I suggest getting an appraisal and inspection done. I know these homes have gotten a bad rap however I do believe that will be changing in time. I live in a great community park, close to town and the schools. If you can find a great home in a great park this is a wonderful affordable place to live. I can easily go out and purchase a home for $300,000.00 but I decided I would rather play on the weekends then be tied down to a huge house payment.
Good luck, and go with what you feel comfortable with!

modular invasion
We live in a newer development and the developer wants to bring in modular homes. He sells them....we are susposed to be an exclusive neighborhood. Homes here range from 180,000 to 375,000. Everyone is afraid their property values will go down if this happens. Currently the building industry has hit a standstill locally. He states that his modulars are the higher end ones and that he has no intention of bring down values. Will the modulars do this???? k

Shewolf - Check out Palm Harbour Homes. I think they are based in TX. They are very well built, and they have pics of how the PH homes withstood Florida hurrican while "real homes" around them did not.

You can get a land / home package so you aren't in a neighborhood and actually can finance through them.

They have some very nice floorplans and you can customize.

http://www.palmharbor.com/index2.asp

Wow!!..

thanks for all the great information Brooke, Why, and Squinney...
Some of the things you guys have said, I have NEVER heard of... stick built? steel foundation?
I have some research to do. I didnt know to look for these things or how theyare appraised.
There are ALOT of already standing manufactured homes here on the outskirts of austin ( on beautiful property too!!) I still have the curiousity about thier value that has kept me 'just looking' , but I will use this info and search around some more.