Modular Home Financing
the fact that a modular home is different than a mobile home or other manufactured home that is built to HUD
standards. A modular home is built to the standard of the state and locality that it is built on, so a modular home
loan is treated the same as a loan for a site built home that would be built in the same location.
Therefore, modular home financing options are exactly the same as they would be for a traditional site built
home. The purchase of an existing modular home requires a traditional mortgage just like you would have with a
site built home. If you are building a modular home on your land, your modular home financing will consist of a
Modular Home Construction Loan
A modular home construction loan is essentially the same as a construction loan for a site built home, but there
are a couple areas that may differ slightly. In a loan like this, the borrower submits the plans and proof of land
ownership and enters into a loan for the total amount needed to build the home.
The builder is paid in draws at different stages as construction is completed. The loan payment would be
calculated on the amount of that has been paid to the builder at each interval, although the borrower usually
doesn't make their first payment until the completion of the house.
One difference of modular home construction is that a modular home takes much less time to complete, which
means that there will probably be less draws. Another difference is that since the majority of the construction of
a modular home takes place at a factory while the remaining work is done by an independent builder, the
company that manufactures the modular home will often expect a payment for the entire amount of the home at
the time that it is delivered to the site.
Once the home is completed, the construction loan used in financing your modular home can be converted to a
traditional home mortgage.
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