Page 278
13.12 LOAN CLOSING FOR MANUFACTURED HOUSING
Loan closing procedures are the same whether the guarantee is made for the purchase of a manufactured home or another type of single-family home. However, the lender should be aware of the following requirements.
A. Warranty Requirement
A dealer must provide the borrower with a copy of all manufacturer warranties. The warranty must identify the unit by serial number. A copy of all warranties and certifications will be retained in the lender’s permanent loan file.
B. Lien Release Requirements
The dealer must furnish a manufacturer's certificate of origin indicating that the unit is free and clear of all legal encumbrances. A copy of the manufacturer’s statement or certificate of origin will be retained in the lender’s permanent loan file.
C. Real Estate Tax Requirement
As required by the local taxing authority, the unit and site must be classified, zoned, and taxed as real estate. Certificate of title to the manufactured home must be surrendered to the appropriate state government authority if state law permits.
D. Title and Lien Requirements
The mortgage must be insured by a standard real property title insurance policy. Refer to title insurance policy requirements outlined in Chapter 16 of this Handbook.
Page 279
Additionally, both the unit and the site must be evidenced by a recorded mortgage or deed of trust. A combination of a chattel and real estate mortgage is not acceptable. If the certificate of title cannot be surrendered, the lender must indicate its lien on the certificate of title.
SECTION 3: MODULAR HOMES
Modular homes are sectional prefabricated houses that consist of multiple modules or sections which are typically manufactured in a remote facility and delivered to their site of intended use. They differ from manufactured homes largely in their absence of axles or frame. Modular dwellings are commonly transported to their site by means of flat-bed trucks and set in place with the assistance of a crane. Modular homes, whether “off frame” or “on frame”, are considered stick-built homes; therefore, the guidance outlined in Chapter 12 of this Handbook will be followed for new and existing modular homes.