It is quite possible to obtain a Home Equity Conversion Mortgage, or reverse mortgage, for a manufactured home. However, the level of difficulty in obtaining one depends on the type of manufactured home you currently own. There are no restrictions on a modular home. It is considered the same as any single family residence.
Mobile homes are another matter. They, like your car, are considered personal property and are taxed as such. In order to qualify for a reverse mortgage you must have the DMV (Department of Motor Vehicles) title removed, and get your mobile home recorded by the county and taxed as real estate. The home must be a 1976 or later model and have no less than 400 square feet of living space. It can be moved only once, from the dealership to its permanent location, and must be mounted on a basement or permanent foundation.
Your home will need to be appraised so that the amount allowed by your reverse mortgage can be determined. An inspection will be made to see that the home meets FHA requirements.
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A reverse mortgage is a way of drawing on the equity in your home to obtain a sum of money. You can receive it in monthly payments or a lump sum. Applicants must be at least 62 years old or over. The amount of money you are allowed varies depending on your age. The maximum is around 80% of your equity, but not to exceed a limit determined by HUD (The Department of Housing and Urban Development). This limit is currently set at $625,000.
In order to qualify the applicant must own the property or have a large amount paid on the loan. It cannot be delinquent in taxes or debt. You must occupy the property as your principle place of residence. All expense are the responsibility of the owner, including maintenance and repairs, taxes, insurance, and any association fees.
A reverse mortgage is actually a loan. But this loan is not repaid until the last surviving homeowner moves from the house or passes away. In either of these events, the homeowner or the estate must sell the home, or do what is necessary, to pay off the loan within 6 months. If the loan is not repaid, the home automatically passes to the mortgage company. The mortgage company will then sell the property. If proceeds from the sale of the home are larger than the amount of the loan, the overage is returned to the estate. Should the home sell for less than the amount of the loan, the estate is not liable for remaining balance.
In many cases it’s a win/win opportunity. If you’re retired and need additional money to supplement your retirement income, want some cash to finance that much desired trip you’ve always wanted to take, or just want to get rid of those pesky monthly house payments, a reverse mortgage might be the answer.
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