Construction Loans For Modular Homes

Modular Homes are built in sections, in the controlled environment of a factory, which assures a quality standard, and then shipped in sections to the building site where they are assembled on a permanent foundation. Most people are not very clear about the difference between a modular homes and a manufactured home. The two terms are very often used interchangeably, and yet the two are very different. A manufactured home is normally built to the Federal Construction Safety Standards Act and referred to as HUD approved manufactured home. They are built in box like sections on a steel frame and transport to the site where they are anchored to a permanent foundation, which is land they may be leased or purchased. Some cities have zoning restrictions on Manufactured Homes, which will only permit them in certain areas or have specific anchoring requirements. Check with your local authorities to find out if such restrictions apply in your community. A further complication with manufactured homes is the fact that most lenders will not loan on them, limiting your choice of lenders. Lenders that do finance manufactured homes will require an appraisal of the property that will use other manufactured home sales in the area as comparables. Modular Homes, on the other hand, have for most part no financing restrictions. They are treated just like a conventional stick built home by local authorities, construction lenders and mortgage companies. Modular home construction loans normally do not require the appraiser to use other modular homes as comparables..Advantages of Modular Homes·Highly engineered, with better insulation and fit. ·Built in a factory environment, eliminated timber warp resulting in improved fit all around.·Efficient building process and material usage saves on costs.·Energy efficient as a result of controlled building process and engineering.·Speed of construction cuts down the time frame tremendously, yielding interest savings on your construction loan.·Built to meet or exceed local standards.Construction Loans for modular Homes Construction Loans are first and foremost reimbursement loans. This means that the construction lender makes payments at various stages of completion of the project. A modular home is delivered to the site in one delivery and the manufactures will typically need a substantial down payment before shipping. You must make sure that the construction lender that you are choosing will accommodate that, as some lenders will not allow deposit payments.

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