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
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
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. You also have the option of
www.creditchecktotal.com to check all 3 of your credit bureaus.
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
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 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
*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
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
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
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
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
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.
We are appointed with lenders
who offer refinancing, cash out programs and debt consolidation,** so give us a
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