Since its inception in the 1960s, many homeowners across the country have benefited from an inverted mortgage. Can you get a reverse mortgage on a manufactured home?
What is an inverted mortgage?
A reverse mortgage is a loan available to homeowners aged 62 or older that allows them to take equity in their home and convert it into cash payments.
Reverse mortgages are also known as equity conversion mortgage (HECM).
Google defines a reverse mortgage as a financial agreement in which the homeowner gives up equity in exchange for regular payments, usually to top up retirement income … unlike traditional mortgages, which decrease as the loan is repaid, the reversal of mortgages increases over time accruing interest on the loan.
The loan does not have to be repaid until the house is sold or sacked. This is very popular among pensioners with limited incomes who need help to cover basic living costs or help to cover healthcare costs.
Manufactured home requirements for inverted mortgages
The Home Equity Conversion Mortgage Program (HECM) provides an extensive list of qualified home requirements to qualify for a reverse mortgage.
There are a number of requirements that a manufactured home must meet to qualify for an inverted mortgage. AAG (American Advisor’s Group) provides a full list of specifications for obtaining a reverse mortgage on a manufactured home:
- A HUD seal must be affixed to your home outside of your home, which confirms that your home complies with Federal Home Construction and Safety Standards as per the HUD code.
- Your home must be produced after January 1, 1990.
- Your home must be taxed and classified as real estate and must be designed as a flat with a solid foundation built in accordance with FHA requirements.
- Your home must be in its original location. The only move the house had to meet was to move from the factory to the seller and then to the site. Being on the site, she had to stay there permanently.
- Your home must have a minimum area of 800 square feet.
- Your home may not be in a condominium relationship.
- Your home must be built and must remain on a fixed chassis.
- Remove all wheels, axles or hitch from your home.
- Your home must be permanently attached to the property.
- Your home must have an acceptable perimeter cover (a skirting board is a must).
- Under your home, the finished class must be equal to or higher than 100 years of flood.
- Your home must have an engineer certificate stating that the foundation meets the HUD guidelines.
- Your home must have permanently installed frost-proof tools.
- Your home must have a HUD tag or rating plate attached, and the appraiser must attach the serial number to the assessment report.
- Your home must be double wide or larger.
- Your mortgage must cover both the entity and its party.
- You must own the land on which the house rests.