The Federal Housing Administration (FHA) was set up in the year 1934 to offer mortgage insurance on loans via different lenders that are approved by the FHA. The agency insures mortgages on single and multi-family homes and some other approved purchases like manufactured homes. However, you should understand that the FHA does not issue the loan for new manufactured homes, but instead, they offer mortgage insurance on the loans.
The FHA mortgage insurance is very attractive for prospective lenders, as it will offer protection to the investment of the lender. If a manufactured homeowner goes into foreclosure or default on the mortgage, then the FHA will pay the lender. Those loans that are insured by the FHA features low down payments and the costs for the FHA mortgage insurance will be built into the payment for the mortgage. These costs will disappear after five years into the loan or when the mortgage loan reaches 78% of the value of the property (whichever comes first).
Many of the manufactured homeowners with adjustable rate mortgages face financial issues due to increase in current interest rates. In addition, foreclosure has become a bigger threat than ever, but luckily, the FHA is offering help with FHASecure Refinancing, a plan that allows manufactured and site-built homeowners, who have missed up to three payments in the last twelve months, to avoid foreclosure. Yet this will be allowed only under the circumstances pre-defined by the agency.
You do not need to have an existing FHA home loan to be eligible for an FHASecure Refinance loan for your manufactured home. This program is mainly aimed to help those homeowners without FHA loans to bag low payments, prevent foreclosure and default, and to protect their investment.
- Those homeowners (manufactured homes included) with current or delinquent non-FHA adjustable rate loans are eligible to take part in the program.
- The homeowner will not be automatically disqualified based on current loan delinquency.
- The owner should have a dependable income and should be able to make mortgage payments without default.
- If the owner is already in default, he or she should prove that the default or delinquency is due to result of the increase in interest rates and the resulting increase in the payments.
- If the owner is current in mortgage payments, any type of loan is eligible for FHASecure Refinancing.