Here, we draw on our 25 years of experience to attempt to answer some of the most asked questions.

1. Loans for mobile homes are “consumer loans” not “real estate” loans and are treated as such by the state. There are no special programs for borrowers such as “First Time Home Owners” or “Veterans.”
   
   
2. Loan Approvals are issued in a different manner than conventional real estate. In conventional real estate a borrower is approved for a specified dollar amount and then looks for a home within those parameters. With mobile homes the borrower must first find a home and then the approval is issued for that specific home only.
   
   
3. In June 1976 HUD (Housing and Urban Development) instituted regulations for the manufacture of mobile homes. Thus, homes built June, 1976 or before are called “Pre-HUD” homes and those built after are “HUD.”
   
   
4. Generally, homes built 1970 or after can be financed in California whether in a park or on land, on or off a foundation. Single wide homes over 15 years old cannot be financed.
   
   
5. Down payments. There are no “0” down programs. Down payments are dependent on age of home and FICO score. Pre-HUD homes normally require a 20% down payment. FICO guidelines for HUD homes: 700+ = 5%, 660 to 700 = 10%, 630 to 660 = 20%, 600 to 630 = 30% or 40%, below 600 = 40%, 50% or more. These are guidelines only and can vary depending on circumstances.
   
   
6. Interest rates. In general, rates are higher than conventional real estate rates. The age of a home will often determine the rate and Pre-HUD homes carry higher rates than HUD homes. Of course, other factors, such as FICO scores and DTI will affect rates. At the present time, rates can be as low as 8.5% and as high as14-15%.
   
   
7. FICO (Fair Isaac) credit scores. We use Experian credit reporting agency and their scores can be between 450 and 850. In general, a score below 600 will disqualify a borrower, however occasionally a lower score can be approved with a large down payment and other extenuating factors. Click here for an informational PDF document explaining FICO.
   
   
8. Stated Income is designed to allow those who have income that is difficult to verify such as self-employed to qualify for a loan. Applicants are not required to prove their income but it requires a 700 plus FICO score and a minimum 20% down.
   
   
9. DTI (Debt to Income ratio). Sometimes called “Back End Ratio”, this refers to the percentage of borrowers gross monthly income required to service all contractual obligations. Normally, the maximum allowed is 45% but sometimes that can be increased with a large down and/or a high FICO. When determining the DTI always include the estimated payment for tCreated on 9/23/2005 4:01 PMhe new home plus the space rent. Example: Gross monthly income = $3000. New home payment $700, space rent $500, auto payment $450, credit cards minimum payment $300. Total contractual payments = $1950. DTI ($1950 divided by $3000) = 65%. In this case, the maximum allowed is 45% so this borrower would not qualify.
   
   
10. Combining incomes to meet the 45% DTI requirement. Although any person can be added to the loan as a Co-Applicant, in most cases only husband and wife can combine their incomes to satisfy the DTI. In certain rare instances two relatives who have established credit together over several years can combine incomes. All others must stand alone.
    
    
11. HR (Housing Ratio). Sometimes called “Front End Ratio”, this is determined by the lender and usually ranges from 30% to 35%. It is calculated by adding the new home payment to the space rent and dividing the total by gross monthly income.
    
    
12. Term. In general loans are for 15 or 20 years depending on factors such as down payment, FICO score and age of home. Occasionally, higher loan balances will qualify for a 25 year term.
    
    
13. Applications. We require no paperwork prior to obtaining an approval. The 10 minute application can be taken over the phone, faxed in or filled out online at www.santiagofinancial.com/klogan. Usually we can give you an answer in 2 to 3 working days. Applications must contain the complete home information.
    
    
14. Processing It usually takes 3 to 4 weeks after borrowers acceptance of the approval to gather the required documentation, process through escrow and then be funded by the lender. If it takes longer, or if the approval expires (45-90 days), it is almost always caused by the failure of the borrower to provide the required documentation in a timely manner.
    
    
15. Comparable Sales All sales of mobile homes in California are required to be reported to the State. The State compiles lists of these sales by Park showing first sold price, last sold price, date of sale and age and size of home. These lists are called “comps” and appraisers use this information in determining the value of a mobile home. In states where comps are not available the appraiser must rely on the “book” value of the home. The “book” is compiled by the N.A.D.A. (National Automobile Dealers Association) and is similar to the “Blue Book” for autos.
    
    
16. LTV (Loan to Value). Most loans require an appraisal and usually the bank will stipulate the LTV after reviewing the appraisal. The amount of loan approved by the bank is almost always subject to the lesser of the sales price or the appraisal including the comps report. 90% of appraised value is common.
    
    
17. Decal Number is equivalent to a license plate on a car and it is important because both the bank and the escrow company use it to search title. It can often be found on a plate attached to the front or back of the mobile home and on the Title and Registration of the home. The decal number consists of three letters and four numbers and usually starts with an “A” or “L.” Example: ARW2798 or LGB7035. In some rare cases the decal will start with “JP.”
    
    
18. Refinancing. Both Rate/Term and Cash Back (debt consolidation) require at least a 640+ FICO score. Two refinance programs are available depending on FICO score. The first will finance no more than 80% of the original purchase price. (Not the current appraised price) while the second will finance up to 65% of current appraised value. Also, in most cases, the bank won’t return cash to the borrower; they will pay third party debt only.

Rev. 9-26-05