Manufactured Home Requirements

HUD FHA Manufactured Home Foundation Inspections

Mfg home

Starting around 2000, the mortgage banking industry began to require that a licensed local engineer certify that a manufactured home is sitting on a permanent foundation in order to approve a loan. This started only with loans required to meet HUD (Housing and Urban Development) guidelines which includes FHA and Rural Housing loans. In late 2005, it became federally mandated that all government guaranteed loans on manufactured housing have these engineering certificates.

Now that many first time buyer are finding that HUD FHA backed loans are the best product for them we are seeing a resurgence in these inspections. Beware that most home inspectors are not qualified to provide these inspections as they cannot provide the engineering certificate the HUD /FHA requires.

The reason for this requirement is to establish a national standard of consistency amidst inconsistent state installation standards. While manufactured homes have standardized preemptive structural, plumbing, and electrical standards that need to be met before leaving the factory, installation standards vary from county to county, state to state. Additionally, manufactured homes are unique in that they can either be titled either as personal property (chattel) or real property. In some states the distinction between personal and real property is determined by the type of foundation and underpinnings that support the home. In other states, the classification of "personal" or "real" property is determined by how the property is taxed. Since the individual jurisdictional requirements vary signficantly, the Engineer Certification Letter helps to provide a standard for excellence. This is generally an underwriting requirement for all FHA insured loans, which also include Reverse Mortgages.

If an existing home is already on a foundation, a licensed local engineer can provide a certification attesting to the fact that the home meets the guidelines. If it does not meet the HUD guidelines, there are a variety of proprietary or approved engineered foundation systems that can be retrofitted in combination with the existing structural components. A licensed local engineer can assist in the engineering certification process.

Manufactured Homes: Eligibility and General Requirements - Title II

A Manufactured home is a structure that is transportable in one or more sections. In traveling mode, the home is eight feet or more in width and forty feet or more in length. A Manufactured Home is designed and constructed to the Federal Manufactured Construction and Safety Standards and is so labeled. To be eligible for FHA mortgage insurance, all manufactured home must comply with the following:

	have a floor area of not less than 400 square feet;
	be constructed after June 15, 1976, in conformance with the Federal manufactured home construction and safety standards, as evidenced by an affixed certification label in accordance with 24 CFR Section 3280.8; (manufactured homes produced prior to that date are ineligible for insured financing);
	be classified and subject to taxation as real estate;
	the mortgage must cover both the manufactured unit and its site and shall have a term of not more than 30 years from the date amortization begins;
	built and remains on a permanent chassis;
	designed to be used as a dwelling with a permanent foundation built to FHA criteria; and
	the finished grade elevation beneath the manufactured home or, if a basement is used, the lowest finished exterior grade adjacent to the perimeter enclosure, shall be at or above the 100-year return frequency flood elevation.

Modular construction is also a factory-built home, but is treated the same as stick-built housing.

For information on FHA Insurance under the Title II Program, see HUD Handbooks 4150.2 Chapter 8; HUD Handbook 4145.1, Rev-2, Section 3-4 and Appendix 11; and Permanent Foundations Guide for Manufactured Housing (HUD-7584), dated September 1996 (Mortgagee Letter 1997-36). The latter is a revision of HUD Handbook 4930.3G, dated August 1989. The guide and software may also be obtained by calling: 1-800-245-2691.