Prefabricated homes have undergone a transformation in recent years. Once factory built housing was 'homes for heroes', a cookie-cutter answer to the housing shortage after the Second World War. Then factory build prefabricated homes became a quick fix solution to providing shelter for people left homeless after natural disasters. Now factory-built pre-fabricated homes come in a quality and upmarket designs. This means that financing on pre-fabricated homes has got a whole lot easier to find!


Don't Confuse Prefabricated Homes With Traditional Mobile or Trailer Homes!

When looking at information on factory built home mortgages, don’t be put off by statements from lenders that they don’t finance mobile homes. Prefabricated homes are not the same as mobile trailer homes. The modern quality prefabricated homes look just as good as a traditional home built with studs and come in a wide range of designs, from Colonial and Southwestern to Ultra-Modern.


Be Persistent, Be Choosy

It pays to shop around when looking for a mortgage for any home, and this is especially true of factory built home mortgages. Financing options for factory built prefab housing have still to catch up with the quality and variety of these homes now available, but persistence is the key word for mortgage seekers.  It is true that some lenders are reluctant to lend money for prefabricated homes, but will often offer other types of financing, such as construction loans, so don’t be afraid to ask.


Builder Financing

Some prefabricated homebuilders offer financing to buyers, and the cost of the financing may be included in the home price package. Alternatively, many pre-fabricated factory built home companies work closely with loan companies to provide attractive mortgage and home loan packages to their customers. Be sure to inquire about the fees and other costs associated with these packages and make sure you meet the lenders criteria before signing on the dotted line to buy your factory built home.

The wise homebuyer will keep a sharp eye on all the fees and charges that occur. When the fees are included in the cost of the prefabricated home package, then you will have more money to spend on furnishing and finishing your home but your mortgage amount might be slightly higher.

Be aware that your builder will probably have to get bank financing for the project. These are probably at a higher rate than the mortgages being offered, and that higher rate will be passed on to you. While taking up a mortgage as part of your pre-fabricated factory built home package may seem attractive at first glance, it is well worth seeking out other sources of funding for comparison. As with all financing packages, make sure you know the rate you are being offered. A slightly lower rate over 30 years can save you literally thousands of dollars.


Go Green and Save Dollars!


Speaking of the benefits of a lower mortgage rate, you can include a variety of energy efficient options in your factory-built home to lever a better mortgage deal. With today's greater emphasis on environmental concerns, it makes sense to look for a home that is upgraded to modern energy efficient standards. This can even save you cash on your mortgage! Ask your lender and builder about an EEM, or an Energy Efficient Mortgage. These mortgages are available in every state in the US but it's up to the customer to tell the bank or lender if you want to access this. Here's how it works: the lender decides what percentage of your income you can afford to spend on housing when deciding on the amount of mortgage you can afford. With an energy efficient home you will be spending less on utilities, so you can afford a higher monthly payment – and so you can borrow more. If you can qualify for a mortgage, you can qualify for an EEM, provided you are purchasing energy efficient pre-fabricated home.

Beware No Cost Loans

If you are finding it difficult to get a lender who will mortgage a factory built prefabricated home, you might be tempted to apply for one of the loans advertised as 'no cost loans'. These tend to have higher rates and you should be careful – check that the APR and the advertised rate are the same. If there's a discrepancy it probably means you're paying high fees on the mortgage.

There's Always Ginnie Mae.

If you need a mortgage for your prefabricated home and are finding it tough to get a lender interested, there may be help from the government. The Government National Mortgage Association (GNMA, also known as Ginnie Mae) is a wholly owned corporation within the United States' Department of Housing and Urban Development (HUD). It was set up in l968 to help low to moderate income home buyers access financing. See the link below.