As you begin looking for financing options for your manufactured home, you may have to classify your home as personal property or real property. Knowing the difference between these two classifications will help you determine your eligibility for different financing options.
At CIS, we want to dismiss the myth that affordable housing has to look different. We offer applicants the option to apply for our Just Home program or a chattel loan. We encourage you to contact us today to learn if a chattel home loan is the right financing option for you.
What Is a Chattel Loan?
A chattel loan is for manufactured homes that are not permanently attached to the land or other moveable pieces of property, such as heavy machinery or vehicles. Your movable property or chattel also serves as collateral in a chattel loan. Having your property as collateral means if you fall behind on your mortgage payments, your lender may take possession of your property and resell it to pay the loan. If you pay off your chattel loan, your property now belongs to you.
Chattel loans for manufactured homes offer numerous benefits for lenders, including:
- Short loan terms: With a chattel loan, a borrower may pay off their loans faster than they would with a traditional mortgage.
- Low processing fees: Lower upfront costs make it easier for borrowers to apply and pay for a new mortgage.
- Less restrictive credit requirements: Chattel loans from the FHA have less stringent credit requirements, making qualifying easier for low-income or financially vulnerable homebuyers.
What Are Chattel Loans Used For?
Chattel loans can finance the purchase of a variety of moveable property, including the following.
1. Manufactured Homes
With a manufactured home, contractors build the structure off-site before relocating the home to an area of the buyer’s choosing. The U.S Department of Housing and Urban Development divides manufactured homes into two categories depending on their construction date. All manufactured homes built before June 15, 1976 are considered mobile homes. Any home built after this time is a manufactured home and must adhere to strict building standards.
2. Modular Homes
A modular home resembles a manufactured home in appearance but is not moveable. Since most homeowners do not move their modular homes after placing them on a permanent foundation, buyers can apply for a conventional mortgage. Buyers who apply for a chattel loan to pay for their modular home must ensure their home adheres to the same local building codes as traditional housing.
How Are Chattel Loans Different From Traditional Mortgages?
The main difference between chattel manufactured home financing and a traditional mortgage is whether the borrower intends to finance a moveable or stationary property. Chattel dwelling loans are only for moveable property, while a traditional mortgage is for homes on permanent foundations. Unlike a conventional mortgage, which includes the house and land it sits on, a manufactured home chattel loan will only finance the property itself.
Chattel loans for manufactured homes are ideal for borrowers who don’t own the land where they want to place their manufactured home. For example, you can use a chattel loan to finance a manufactured home you wish to place in a land lease community, on a rental site, on family land or on land you are still paying off.
Our Interest Rates
As with any loan, your manufactured home loan’s rate depends on several factors. Your credit score, the type of manufactured home you are purchasing and whether you are buying the land will affect your loan rate.
At CIS, we offer competitive rates on manufactured home loans. During our over 50 years in business, we have helped countless people become homeowners in less time through streamlined application services. We are also a five-time winner of the prestigious Manufactured Housing Institute award.
We offer two types of loans for manufactured homes:
- Just Home: If you’re looking to purchase a manufactured home but don’t own the land, our Just Home program can help. This loan program is great for borrowers looking to place their manufactured home on family land or in a manufactured housing community.
- Home Turf: If you own property and want to purchase a manufactured home to place on this property, our Home Turf loan is for you. With our Home Turf Program, borrowers can use their land as a down payment to purchase a new manufactured home.
Apply for a Chattel Mortgage Loan From CIS Today
Since the creation of CIS, our goal has been to give everyone the chance to achieve the American dream of homeownership. To learn more about our low-income manufactured home loan options or apply for a manufactured home loan online, please contact us today!
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