Many high quality manufactured home developments were first developed as rental or lease communities and later through the resident or homeowner association efforts or through owner determination, the development was converted to resident ownership. One of the most popular methods of park conversion was through a condominium plan. Unfortunately the legal verbiage in the condo plan inadvertently excluded manufactured home communities from certain types of financing, specifically FHA insured loans or loans that would ultimately be sold to the secondary market. This often compromised the very heart and soul of the manufactured home market---either the first home buyer or the retirement owner. Without appropriate financing the first-time home buyer was unable to secure the best source of dollars available and the senior was unable tap into his/her nest egg by virtue of a Reverse Mortgage. A reverse mortgage lets homeowners 62 years or older borrow against the equity in their property. They can take the proceeds as a monthly check, lump sum or line of credity. Instead of making payments to the lenders, as with a traditional mortgage, the lender pays the homeowner. The loan is repaid with interest when the borrower sells, moves or dies.



The understanding of manufactured homes and their associated communities by the highest level of FHA and HUD officials as well as our political leaders in Washington was also flawed. Rental parks that converted to resident ownership through the condominium process were viewed on paper as developments with lower quality homes. In reality, these are developments like Rancho Carlsbad and Champagne Village (just two parks to cite examples with golf courses, enviable locations and amenities with home prices in the $300,000-$500,000 range. Far from substandard.

On March 29, 2007, H.R. 1852 (the Expanding Homeownership Act of 2007) was introduced into the House of Representatives by Congresswoman Maxine Waters (D-CA). The bill has been referred to the Senate Committee on Banking, Housing and Urban Affairs. Passage of a compromise version by both houses of Congress is expected to pass by the first quarter of 2008. When The U.S. Congress passes the FHA Modernization bill, this bill will bring the benefits of reverse mortgages and comprehensive mortgages to homeowners that have been excluded for too long. HUD officials have given assurances that the logistics will be implemented quickly.

Some of the logistical issues on a manufactured home are as follows to secure an FHA insured loan.

Proof that the home is newer than June 15, 1976

Engineer’s Certification that the home is on a permanent foundation and that any attached buildings to not impact the structural integrity of the home and that the skirting enclosure is HUD compliant.

Certainly there are other issues pertinent to the loan but without the two above, FHA financing cannot be procured. On The Level General Contractors can assist both in the engineer certification process or if necessary retrofit the home to meet the HUD Handbook 1996 guidelines.