Construction Loans for Modular Homes

A construction loan for a true modular home built to local and state building codes will offer the same interest rate compared to traditional construction loans. There is no difference in the rate or term of the loan, they are the same. So, you may be asking yourself, what is a true modular home? A true modular home or sometimes referred to a system built home is a custom built home, built in a factory out of the weather compared to a stick-built home constructed on site.

The modular units when completed are delivered to site and assembled in a matter of days. When the work is completed the total balance of your line of credit will be converted to a standard residential mortgage. You may also find a lender of construction loans for Modular Homes who will agree to include the amount of interest you pay during the construction and cover any cost overruns. On average a modular home only takes 90-days to complete, which reduces interest costs dramatically, compared to a stick built home which can take 12-months or longer.

How Construction Loans for Modular Homes are Disbursed
Funds are distributed when certain work on your property has been completed. For example when the foundation is finished the bank will send someone to inspect the job site to verify the foundation is done. Once verified the bank will distribute funds to either the home owner or contractor. As certain property improvements are completed funds are distributed in a timely manner.

Most lenders will fund the cost of the modular home once it arrives at the home-owners property and is inspected. Funds are allocated to the builder or manufacturer and then the modular home builder will start attaching the home to the foundation. Once this work has been completed funds will be distributed for the installation of the home. If you need to ask for additional money above your original construction loan amount your lender may charge you additional fees.

When talking with a modular home builder, be sure to clarify when funds will be distributed. Many builders and manufacturers require payment once home has arrived to the job site. Some lenders will not fund at this stage of the game and only fund once the home is completely installed. This lending practice is looked down upon in the modular home industry and many builders will not accept this payment method.

Qualifying for Construction Loans for Modular Homes
Like traditional mortgages, construction loans for modular homes will require you to come up with a 10% to 20% down payment. The chances of this will be higher if you are requesting a very large loan, or don't own the lot on which your home will be constructed. The days of 100% financing are long gone since the economic melt-down in September.

With any construction loan you should establish a budget and stick with it. Be aware that the temptation to keep asking for extras as your modular home is being designed, can throw your entire budget for the project out of whack and make it more difficult for you to qualify for a construction loan.

Modular Home Book Resources
Popular Buying Guides for Modular Homebuyers

	Modular Home Ratings Guide – Over 80 Builders Rated List Price:  39.95 Our Price:  29.95 When trying to select a modular home the first place to start is at the factory level. Knowing which factories deliver to your area is the first step in understanding your options. The second and most important step is determining how the factories compare to each other in the areas of: Quality Construction, Design/Style, Appraised Value and Price. Click Here to Learn More!
	Manufactured Home Ratings Guide – Over 65 Builders Rated List Price:  39.80 Our Price:  29.95 The manufactured housing industry has made some serious improvements in recent years regarding quality construction and residential appeal. With modern day technology and assembly line techniques, the industry is overcoming the misconception that manufactured homes are poorly built and don’t measure up to stick-built homes. Click Here to Learn More!
	How To Secure The Best Modular Home Loan List Price:  19.95 Our Price:  9.95 Knowing your financing options is the first step to securing a good deal. We have spoken with hundreds of modular home lenders and Mr. Eaton the author has gone through the process himself. Learn from his insight and you can avoid some common mistakes people make when financing their home. Click Here to Learn More!
	How To Negotiate with Your Modular Home Builder List Price:  19.95 Our Price:  9.95 On average 80% of homebuyers pay too much for their modular home. Not surprising with all the choices one must make from negotiating with your builder to purchasing property and site-improvements. This resource will reveal important negotiating secrets and dealer profit margins that will give you an edge when negotiating with your builder. Click Here to Learn More!
	How To Spot A Well Built Modular Home List Price:  19.95 Our Price:  9.95 Most modular home builders have display models for potential home buyers to walk through. These models are professionally decorated to impress buyers with elaborate decorations, elegant furniture and dazzling floorplans. Aesthetics are important but would you purchase a modular home based on looks and compromise structural integrity? Don’t be fooled by appearances and miss what really matters; “Quality Construction.” Click Here to Learn More!