MANUFACTURED HOMES
Manufactured Homes and Mobile Homes are the last bastion of affordable housing in California. They have experienced rapid price increases to the point where many rival the price of stick-built (standard construction) homes.
Actually, there is little practical difference between manufactured homes built on or after 1985 and standard construction homes. The primary difference is the foundation. Most California standard construction homes have a concrete foundation whereas most manufactured homes are mounted on metal piers. Electrical, roofing, electrical, and plumbing are all similar to stick-built. Windows and doors too. Exteriors can also be similar.
The difference between a manufactured home, which can be financed with conventional, FHA and VA loans, and a mobile home which cannot, is year built and a specific kind of foundation.
The unit must be built on or after June 15, 1976 and it must be on a 433a certified foundation. A permanent foundation may or may not be 433a certified. if the unit is older than June 15, 1975 the law says it cannot be a 433a foundation regardless of how well it is built.
Laws in the mid-seventies were murky enough that a few non-433as slipped through and were financed by conventional lenders. But that does not mean they qualify. Lenders worth their salt today know the difference and will only finance units that qualify for 433a.
Mobile homes that do not qualify for 433a status can be financed with chattel loans with higher interest rates and shorter terms. For this reason, 433a manufactured homes sell for forty thousand or more dollars than their mobile home cousins.
Mobile homes in a mobile home park sell for much less because they have a monthly space rent ranging from $500 to $5,000 a month in Calfornia.
Manufactured Home Services
Determine and confirm 433a status
Obtain sufficient documentation from Housing and Community Development or Ibits to ensure status
For units that are eligible for 433a (built after June 15, 1975) obtain bids for installing a 433a ($4,000 to $12,000 to install. Bids are free)
Establish sale/purchase value based on 433a decisions
Comparative Market Analysis Report (CMA)
Price the property as 433a if Seller is willing to install prior to close of escrow
Ensure the property is accurately listed as either 433a or to be converted to 433a or not.
If the unit is in a rental park contact the park office to obtain a new rental rate after close of escrow. Even in rent-controlled parks, the monthly space rent can be increased without limitation on transfer of ownership.
Obtain rental application from park office. Escrow cannot close without park approval. Most parks require income of three times space rent to qualify.
Provide recommendations for escrow, title, home warranty, handyman, and other real estate-related professionals
Work with Buyer, Seller's agent, and escrow company to ensure timely close of escrow
