||May 24, 2006|
Reverse Mortgages . . .
with Laura Strickler
Laura Strickler -
Your Reverse Mortgage Specialist
I have received many calls from seniors who live in manufactured homes. While a reverse mortgage may be obtained on a manufactured home, there are quite a few more requirements on the property than on a "stick built" home.
The FHA Reverse Mortgage program (HECM) is the only program that accepts manufactured homes. The Fannie Mae program does not accept manufactured homes. FHA has the following requirements:
1) The home must be constructed after June 15, 1976.
2) The home must not have been installed or occupied previously at another location.
3) The home must be classified and subject to taxation as real estate.
4) The home must be built and remain on a permanent chassis.
5) The home must be on a permanent foundation built to FHA guidelines. A foundation inspection must be performed by a licensed engineer prior to the appraisal.
6) The home must have an affixed HUD seal, the appraiser must show the serial number on the appraisal.
7) The axles and tongue must be removed.
8) Permanent utilities must be installed.
9) Permanent skirting must be installed around the perimeter.
10) The finished grade elevation beneath the home must be at or above the 100 year return frequency flood elevation.
11) The home cannot be located in a "condominium" home owner's association.
Many seniors living in manufactured homes cannot take advantage of the reverse mortgage program because of number 11 above. If your development is a condominium development, you are not able to get a reverse mortgage due to FHA's guidelines. I constantly get calls from seniors living in a manufactured home and I have to give them the bad news that their property doesn't qualify. If you are unsure whether or not your home is in a condominium development, a call to a title company for your legal description will typically answer the question. I do this for many seniors. There are some developments in North San Diego County that qualify and I have worked with quite a few seniors to get their reverse mortgage.
Number 5, listed above, states that you must have a foundation inspection performed by a licensed engineer. That adds to your cost of getting the reverse mortgage. There are not many engineers who will do this inspection. This inspection fee can run anywhere from $350 to $550, and more, depending on what the inspector wants to charge. If the engineer determines that your home is not on an FHA approved permanent foundation, you may have it done and paid through the close of your loan. That is, if the installer agrees. That cost can run from $2,000 and higher. But, the procedure for installing the permanent foundation can be done in one day.
In addition to the requirements listed above, you must also have an FHA appraisal performed and a termite inspection completed. Any treatment required by the termite inspector must be completed prior to your loan documents being drawn. Any other repairs may be made after your loan closes, you just need to submit the repair estimates. The repair estimate, $100 to $1000, will be multiplied by 3 plus $100. For example, if your repair estimate is $500, the amount of money withheld in your repair set-aside will be $1,600. Once the repair is completed, you will submit the contractor's invoice and he will be paid. The balance will be refunded to you, either to your line of credit or in a check. You can make those repairs yourself, then have the contractor come back to inspect.
Please call me at 518-9839 if you have any questions. Or you can e-mail me at email@example.com. I am also available to speak to your organization. I look forward to helping you with your questions about this very important transaction.
Your Local Reverse