The Federal Housing Administration (FHA) is committed to providing access to safe, affordable housing for low- and moderate-income Americans, particularly those underserved by conventional lending programs. Manufactured housing is a source of safe, affordable housing for a significant number of Americans, especially in rural areas. The majority of conventional loan programs do not finance manufactured loans, leaving a gap in the market, which the FHA fills. However, to qualify for FHA financing, a manufactured home must meet certain guidelines for eligibility.
Manufactured Home Eligibility
The FHA has property eligibility guidelines for manufactured homes, as well as minimum standards. All FHA-eligible manufactured homes must have a minimum floor space of 400 square feet (doublewide), be constructed to federal quality and safety standards for manufactured homes, and not have been constructed prior to June 15, 1976. They must also have a permanent foundation that attaches to the subject property for the loan. The homes and property must be taxed as real property, not personal property. They must have permanent utility attachments. An FHA appraiser provides certification of eligibility before the FHA loan's final approval.
Placement on a permanent foundation is one of the primary qualifications for most municipalities when it comes to taxing a manufactured home as real property. Until it is attached to land, a manufactured home has wheels and an undercarriage that allow it to move to another location. This portability makes it personal property, much like an RV, trailer or car. The U.S. Department of Housing and Urban Development (HUD) describes a permanent foundation for a manufactured home as one “engineered for safety and long-term satisfactory performance ... designed specifically for use with manufactured homes.” While a manufactured home can be placed on a basement, most are placed on a crawl-space-style foundation.
Site preparation is important for foundation stability. HUD guidelines mandate that the homesite feature grading that drains water away from the home and foundation, but maintains the natural drainage pattern of the land. Gutter and downspout flow must be part of this overall plan. The homesite grading should keep the home at or above the 100-year flood elevation.
Crawl-space areas should be from 18 to 24 inches high and have a permanent skirting around the foundation. The chassis, or supporting beams, of the home cannot be removed, but the wheels, axles, hitches and undercarriage must be. Footings of masonry, concrete or treated wood have to provide the necessary support. The type of soil under the home and the weather conditions in the area determine the depth of the footings. Bracing is spaced to evenly and adequately support the home and to prevent tipping due to wind and weather conditions.
After the appraiser visits the site, but before loan approval, a licensed, professional engineer—preferably a structural engineer familiar with manufactured homes and HUD guidelines—or a certified architect has to inspect the home and its foundation. He must certify that the foundation is properly constructed, safe and meets guidelines. Until this inspection and certification is complete, the home is not eligible for FHA financing. There are retrofit foundation systems available that meet HUD guidelines.