Finance Info

You have questions about financing a manufactured home and we have answers.

Let’s start out with a little basic information regarding credit scores, down payments and debt to income ratios.   

Credit Scores….

The credit score required for financing manufactured homes varies from company to company.  As a general rule, financing is available for credit scores above 640(+).

How do you find out what your credit score is without having to join a monthly credit service?  We recommend that you go to www.annualcreditreport.com where you can get a copy of your credit report for free.  You will have to pay a small fee to get your credit score, but your score will not drop if you pull your own credit.  Your score WILL drop, for example, if your credit is pulled by X, Y & Z Company. 

www.myfico.com also has good information for understanding your credit score.

It is a good idea to review your credit report and make sure that the information on it is accurate.  Any ‘unpaids’ hurt your credit score and lenders do not like to see them, they also do NOT want to see late pays.

If you happen to find out that any of the information is not accurate on your credit report, dispute it.  If it cannot be proven that the debt belongs to you, it will have to be removed. 

What if I need help disputing a credit issue?

We would recommend that you go to www.equifax.com.  Equifax is the credit reporting agency for the West Coast and they are who most lenders are going to contact regarding your credit if you live on the west coast.  Equifax can help you with disputing any credit issue.  You can also obtain your credit report from them or join their credit monitoring service if you choose.

Down Payments….. 

Down payment requirements vary from lender to lender, but a minimum, 5% (+) down payment is required by all lenders.  So, if you wanted to purchase a $40,000.00 home, for example, the minimum down payment would be $2,000.00.  (.05 x 40,000 = $2,000.00) 

This amount can vary from lender to lender and it is dependent upon credit worthiness, debt to income ratio, etc.  So, in the best case scenario, if you did not have a minimum of $2,000.00 to put down, you would not qualify for the home. 

Debt to Income Ratio….. 

What is debt to income ratio and how is it calculated? 

Debt to income ratio, simplified is, the amount of debt you have in proportion to the amount of income you make. 

Most lenders want to see your debt to income ratio at 45% or under.  Meaning all of your debt only equals 45% of your gross income per month(see Countable Gross Income below). 

Debt would include:  the house payment, park rent, credit card payments, student loan payments*, car payments and any other kind of personal loan payment you may have.  (Utilities are not counted) 

*Student loan payments are generally counted even if the loan is in deferral, because a lender figures eventually you will be required to pay it back. 

So, let’s say that you make $2,500.00 gross wages per month.  Your total debt per month could not be greater than $1,125.00 for house payment, park rent, car payment, credit cards, etc. (2,500 X .45 = $1,125.00) 

What happens if your debt was $1,200.00 per month?  Then the amount of your down payment would need to be increased so that the amount of your house payment would be decreased, or some small debts could be paid off, etc.

Countable Gross Income…..

What counts as allowable gross income? 

Verifiable wages you receive from your employer. (check stubs and W2's will be asked for - note, if you can't verify the income, a lender will NOT count the income) Social Security payments, payments from pensions, retirement payments and child support payments.  Please note to count child support payments, you will need proof that you have received payments for 1 year and you will continue to receive payments for an additional 3 years.  You will also need to provide either a copy of your divorce decree or information from the county or state verifying the amount of child support awarded.

What happens if you do not have a minimum 640 credit score, or you have recently filed bankruptcy? 

As far as bankruptcies are concerned, most lenders want the bankruptcy to be discharged for a minimum of 5 years.  They want a proven track record of payments made since, with absolutely no late pays. 

The exception to that rule would be if you have 35% down payment (no bankruptcy) or 40% down payment with a bankruptcy.*

At CMS Homes we have taken the time to become appointed with Lenders who specialize in manufactured home loans to be able to offer financing to you.  Applications and lender specific requirements are available at our office. 

Do you have other options? 

Yes, you do.  If you belong to a Credit Union, they can be a great source of loans for used manufactured homes in parks. 

Bank of the West also loans on used manufactured homes in parks.  Bank of the West requires a minimum 680 credit score and minimum 20% down.

You also have the option, if your credit is good enough, to take out a personal line of credit with your bank and pay for the home that way.

What if you want to purchase on Land? 

If you have questions regarding financing a manufactured home on land, feel free to give us a call we are appointed with lenders who can help.

What about refinancing?

We are appointed with lenders who offer refinancing, cash out programs and debt consolidation,** so give us a call.

We offer this information as a general overview to financing a manufactured home.  Requirements vary from lender to lender and change periodically.  If you have any further questions, feel free to call our office 503-794-1100.

*Lender will make the determination on the exact down payment amount required and if an applicant can be accepted with a credit score below 640.

**on approved credit, must meet lender qualifications.

This information is deemed accurate, but not guaranteed to be accurate and is subject to change.