| With the increasing popularity of the Reverse | | | | the tires and axles have been removed or some |
| Mortgage loan product for those homeowners 62 | | | | other vague set of standards, not on the basis of |
| and older, loan processors are dealing more and more | | | | the foundation attachment. |
| with manufactured homes in their portfolios. Many | | | | The reason for this requirement is to establish a |
| seniors have chosen the manufactured home | | | | national standard of consistency amidst inconsistent |
| communities as a retirement refuge and the | | | | state installation standards. While manufactured |
| community and recreational atmosphere lend itself | | | | homes have standardized preemptive structural, |
| well to word-of-mouth referrals and the spreading | | | | plumbing, and electrical standards that need to be |
| the news about FHA and Reverse Mortgage Loans | | | | met before leaving the factory, installation standards |
| benefits. However, the manufactured home loan | | | | vary from county to county, state to state. |
| presents a new set of criteria for the loan officer | | | | Additionally, manufactured homes are unique in that |
| and loan processor as well as the borrower so be | | | | they can either be titled either as personal property |
| prepared ahead of time. Certain criteria are absolutes: | | | | (chattel) or real property. In some states the |
| 1. The manufactured must be a HUD home, which | | | | distinction between personal and real property is |
| means it must be manufactured after June 15, 1976. | | | | determined by the type of foundation and |
| If there are metal plates at the rear of the home | | | | underpinnings that support the home. Since the |
| that begin with a three Alpha letters like CAL, ARZ, | | | | individual jurisdictional requirements vary significantly, |
| ORE, that's usually a good sign. If the HUD label is | | | | the Engineer Certification Letter helps to provide a |
| missing, usually a label verification letter from the | | | | standard for excellence. This is generally an |
| Institute for Building Technology and Safety (IBTS) | | | | underwriting requirement for all FHA insured loans, |
| which will give the provenance of the home will | | | | which also include Reverse Mortgages. |
| suffice. 2. The Manufactured homes and FHA Insured | | | | If an existing home is already on a foundation, an |
| Loans is classified and taxed as real estate. A long | | | | engineer can provide a certification attesting to the |
| term lease may also be acceptable in certain | | | | fact that the home meets the guidelines. If it does |
| instances. 3. The axles and tongues must be | | | | not meet the HUD guidelines, there are a variety of |
| removed. 4. The manufactured home must have an | | | | proprietary or approved engineered foundation |
| adequate perimeter enclosure with appropriate | | | | Retrofitting systems in combination with the existing |
| ventilation. 5. Must have a floor area of not less than | | | | structural components. As in any industry, one size |
| 400 square feet 6. Built and remains on a permanent | | | | does not fit all in the engineering landscape and |
| chassis 7. The finished grade elevation beneath the | | | | engineers that specialize in the manufactured home |
| manufactured home shall be at or above the 100 | | | | industry and the HUD inspection specifications are |
| year return frequency flood elevation. 8. The home | | | | even rarer still. Because there are a vast array of |
| must sit on a permanent foundation. | | | | proprietary products that have been introduced into |
| AND All foundation systems, new and existing, must | | | | the national marketplace, knowledge about these |
| meet the guidelines published in the HUD Permanent | | | | systems is also an additional benefit since these have |
| Foundations Guide for Manufactured Housing, | | | | all been pre-engineered and stamped delineating all of |
| (HUD-7584), dated September 1996. A certification | | | | the system specifications. This also means if the |
| attesting to compliance with this handbook must be | | | | foundation does not meet the FHA-insured criteria |
| obtained from a licensed professional engineer and | | | | for a permanent foundation, the engineer does not |
| included in the insuring file. | | | | need to re-invent the wheel with a repair |
| This last requirement can throw the loan processor | | | | recommendation---there are a plethora of products |
| into a quandary if they have never expedited a | | | | available for the retrofit contractor. Therefore finding |
| manufactured home transaction previously because | | | | the right combination of an engineer and contracting |
| this request will often show up at the 11th hour of | | | | team that understands the FHA lending process so |
| loan closing. Nine times out of ten the appraisal report | | | | the engineering certification does not impair the loan |
| will show that the home is on a foundation system | | | | lock timeline, is familiar with the availability of |
| so the processor or loan officer won't have alarm | | | | proprietary systems that can resolve the repair |
| bells off of worry going off when they receive this | | | | issues if they are necessary and are able to liaison |
| condition. Unfortunately, the appraiser often simply | | | | with both lender and borrower to provide turn-key |
| determines "permanence" strictly on the basis that | | | | solutions. |