July 18, 2011
Not all FHA loans have the same rules or requirements. There are different rules for FHA-insured new purchase home loans for existing construction properties, condo projects and manufactured homes.
For example, house hunters may encounter no age restriction on many new purchase home loans when it comes to typical suburban homes or condos–as long as the property meets FHA standards and the lender is willing to approve the loan.
That’s not necessarily true for FHA mortgages on manufactured homes. FHA rules state that manufactured homes are only eligible if they have been built after June 15, 1976. FHA rules for manufactured homes also include a space requirement. “Manufactured homes are homes built as dwelling units of at least 320 square feet in size with a permanent chassis to assure the initial and continued transportability of the home.”
During the appraisal process, the FHA appraiser is required to verify the age and the existence of a special HUD seal, placed on each section of the manufactured home. These seals bear the information an FHA appraiser needs to properly complete his or her report, certifying that the manufactured home has been constructed according to approved specifications.
According to the FHA official site, this label is “the manufacturer’s certification that the home section is built in accordance with HUD’s construction and safety standards. HUD standards cover Body and Frame Requirements, Thermal Protection, Plumbing, Electrical, Fire Safety, and other aspects of the home.”
The FHA doesn’t simply trust what the HUD seals say–there’s an inspection and verification process that happens with manufactured homes at the source, long before the buyer looks at a given make and model. “Certain HUD-approved States and private third party agencies inspect the homes at one stage of production and approve the manufacturer’s designs as consistent with the HUD standards. These agencies are known as a Primary Inspection Agency.”
As you can see, the FHA takes an active interest in manufactured homes both at the production stage and the purchase stage. This protects the buyer and the lender when it comes time to make an offer for such a home. Such protection is one reason why the FHA does not insure loans for manufactured homes built before June 15, 1976.
According to the FHA official site, there are no exceptions to this rule. The FHA does not require a manufactured or mobile home to be brand new, but it does require it to live up to safety and construction standards as mentioned above.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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