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Monday, September 08, 2008



A manufactured home is one that is constructed almost entirely in a factory. The house is placed on a steel chassis and transported to the building site. The wheels can be removed but the chassis stays in place. A manufactured home can come in many different sizes and shapes. It may be a simple one-story "mobile home," or it can be so large and complex that you might not guess that it was constructed off site. Local building codes do not apply to manufactured homes; instead, these houses are built according to specialized guidelines (Federal HUD regulations in the United States) for manufactured housing. Manufactured homes are not permitted in some communities. In financing, the key is the word "mobile." The less mobile a manufactured home is, the better the financing deal a consumer can get.

Historically, manufactured homes have been financed as personal property, resulting in personal loans that often require a 10 percent down payment, with the remainder financed over 10 to 15 years. Interest rates are higher than mortgages, resembling the rates charged on car and boat loans. However, whether the loan is called a mortgage or not, if it is used to secure your principal home, the interest paid is generally tax-deductible. Though these loans still are the most common, the changes in the industry have attracted additional lenders and types of loans.

Many manufactured homes now require only 5 percent down and finance the remainder over 20 to 30 years. If the home is immobile and if the owner of the home also owns the underlying land, then the loan is likely to be viewed as a mortgage, gaining vital tax benefits. The American Homeowners Association has tips for consumers interested in buying a manufactured home.

1. Know the differences. A manufactured home is built in a factory and transported to your property for assembly and finishing. A site-built home is built where it will stand.

2. Shop around. You don't want to rush into any major expense, including buying a manufactured home. Contact several retailers and make sure you're happy with the style and price.

3. Get the best financing. Many lenders provide a range of financing plans for manufactured home buyers. Ask manufactured home retailers for referrals to local lenders and remember that some conventional long-term loan providers require homes be placed on approved foundations. Manufactured homes are eligible for government-insured loans from the Federal Housing Administration and the Veterans Administration.

4. Make sure it's properly installed. Installation is usually included in the sales price, and all services related to installing your manufactured home should be listed separately in the sales agreement. The installer should adhere to the manufacturer's instructions and, if applicable, any state regulations.

5. Look for the label. Manufactured homes are built to the federal Manufactured Home Construction and Safety Standards -- better known as the HUD Code. Each transportable section displays a red certification label.

6. Shop for a strong warranty. Once again, shop around. Find out what your warranty does not cover, who performs the warranty service, and how long it remains in effect. The manufacturer's warranty does not cover improper installation and maintenance, accidents, negligence, unauthorized repairs or normal wear and aging. And follow the manufacturer's recommended maintenance schedule. Failure to do this could void your warranty.

7. Chose a home site carefully. If you plan to buy land, check out all the local zoning laws and restrictive covenants before you buy. Contact the local public utility about availability of water, electric, gas or sewer connections and their costs. Make sure the site is properly prepared and that water drains away from the foundation before you install your home. Clear away rocks, trees or branches that could impede the transporter or damage your home.

8. Inspect before you move in. You should perform a careful inspection of both the exterior and the interior. Consider hiring a professional home inspection service to identify any problems associated with construction, installation or operation of the home's systems.

9. Think twice about moving your home. While it is possible to move your manufactured home, it can be expensive and potentially damaging to your home. If you do decide to relocate, check with the proper authorities about state transportation rules and local zoning requirements. In addition to transportation costs, you will have to pay for a new foundation, installation and utility hook-up.

10. Pursue complaints. Contact the retailer who sold you the home and thoroughly document your complaint. Follow up by mail with a written list of problems to the retailer, manufacturer and installer. Call to set-up a service appointment. If the problems aren't corrected in a reasonable amount of time, or if the company responsible refuses to correct them, contact the state agency that administers the Federal Manufactured Housing Program in your state. Contact HUD in Washington at 800-927-2891 for information about the agency in your state.



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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed6.38%
30-yr. fixed jumbo7.00%
15-yr. fixed5.88%
15-yr. fixed jumbo6.50%
7/1 ARM6.25%
5/1 ARM6.00%
3/1 ARM5.88%
1-yr. ARM6.00%
1-yr. LIBOR ARM5.50%
10/1 ARM7.88%
*Mortgage Rates Updated: 09/04/2008