BOCA - Building Officials and Code Administrators InternationalI
CBO - International Conference of Building Officials
SBCC - Southern Building Code Conference
Mobilehomes were constructed to comply with standards promulgated by the American National Standards Institute ("ANSI Code") in effect for mobilehomes prior to the federal preemptive HUD Code which became mandated June 15, 1976. The ANSI Code currently sets construction standards of Recreation Vehicles.
FEDERAL STANDARDS AND FACTORY INSPECTION
All manufactured homes built since June 15, 1976, must conform to the HUD Code, a building code administered and enforced by the U.S. Department of Housing and Urban Development. Manufactured homes are the only form of housing constructed to comply with a national building code.
The code regulates home design and construction, strength and durability, fire resistance and energy efficiency, as well as the installation and performance of heating, plumbing, air conditioning, thermal and electrical systems.
The HUD Code mandates that each factory adopt an approved quality control program. This includes a system for testing and inspecting each home constructed. In California, this inspection system covers review of the blueprint of the home and the construction of the home as it moves through the factory. The building code is enforced by the National Conference of States on Building Codes and Standards in cooperation with the California Department of Housing and Community Development (HCD). A final inspection of the home occurs when the state or local government issues a mandatory certificate of occupancy, which is an inspection of the installation of the home. A Manufactured Home is considered personal property and not real property unless the owner complies with local building codes to attach the home to the land.
THE MANUFACTURED HOME AS REAL ESTATE
In order to determine the eligibility of the Manufactured Home transaction as real estate (Land/Home Transaction), the land and home must represent a single real estate transaction and financing must be evidenced by a recorded mortgage or deed of trust. Additionally, the mortgage amount cannot include financing of furniture, life, property or any other kind of insurance. The borrower must acknowledge that the unit be a fixture and a part of the real property securing the mortgage.
The type of real estate being either Fee Simple, such as on private property or in a Manufactured Home Subdivisions, Condos, Planned Unit Development or etc.; or a Ground Lease that conforms to standard Real Estate Guidelines.
APPRAISAL CONSIDERATIONS
The foundation and type of foundation are key aspects that allow Manufactured Home to be classified as real estate. Appraisers must comment about the foundation. In doing so, the Appraiser should be well informed about manufactured housing foundations and should comment if the foundation is typical to the area. Also, the Home should have all wheels, axles and hitches removed and conform to Safety Standards mandated by June 1976 evidenced by appropriate HUD Certification Label permanently affixed to each transportable section of the home.
TYPES OF COLLATERAL
TYPE I. Real Estate - the Manufactured Home is a fixture improvement to the underlying real property.
(Outside California) Detitling, Decertification or Conversion of Manufactured Home to real property.
(California Only) Requires a recorded HCD Form 433 OR a 433 to be recorded through Escrow.
TYPE II. Chattel (Personal Property)- the Manufactured Home is a fixture by virtue of its own weight and mass, but is not an improvement (removal of the Manufactured Home will change the use of the underlying real property, and that the Manufactured Home will remain for an indefinite period of time). The Manufactured Home is installed on posts, piers or other type of acceptable foundation system in accordance with manufacturer's instructions. Additional documents must be filed through the Closing Agent. Escrow or Closing Instructions will reflect instructions to file such document(s) at the close of Escrow.
Some local governments require manufactured homes be on a specific foundation or meet other requirements. Thus, local government restrictions override any other collateral considerations.
Further considerations are that like Manufactured Homes be used as comparables for purposes of determining appraised value.
The appraisal should be on a URAR, Mobile or other FNMA/FHLMC form. If the unit is on rented land, the appraiser should use the Mobilehome Appraisal Report. The Appraiser must complete a "Manufactured Homes Checklist". Appraisals must be completed by appraisers familiar with the Manufactured Home and Land transaction. Properties may be subject to an on site inspection prior to close of escrow.
RENTAL COMMUNITIES AND CONVERSION TO SUBDIVISIONS
Home owners in land rental communities are concerned about rising rents. Also, available sources of financing for Rental Communities and Cooperatives are becoming scarce. As a result, existing rental communities are converting from rental communities and cooperatives to Subdivisions. P.S. Home Loans works with community owners, residents and tenant groups to provide financing for resident purchase of Subdivided lots. In some cases, communities must meet specific criteria to qualify for acceptance. MANUFACTURED HOME SUBDIVISIONS represent the most affordable means of fee ownership for Manufactured Homes.
MANUFACTURED HOME SUBDIVISIONS
A manufactured home subdivision is a subdivision that is developed with manufactured homes rather than residences stick built on site. Several types of manufactured home subdivisions are found today:
SUBDIVISIONS - the resident owns the lot.
PLANNED-UNIT DEVELOPMENTS - the resident owns his lot and a fractional interest in certain common areas;
COOPERATIVES - also know as Corporations or Non-Profit Corporations have not been subdivided. The residents as a group have acquired the park as a whole and participating residents own a fractional interest in the entire project and an exclusive right to occupy a particular space for manufactured home purposes. Cooperatives do not provide fee ownership to the resident and by far are the most difficult to obtain financing.
CONDOMINIUMS as stated in part by Section 783 of the California Civil Code are "...an estate in real property consisting of an undivided interest in common in a portion of real property together with a separate interest in space in...real property..." The condominium in essence is a reduced version of a planned unit development. Minimum lot size in a planned unit development is 5,000 square feet, however, a condominium, qualifying under the Mobile Home Parks Act, allows minimum lot sizes to 3500 square feet. Thus, "Lot" costs in a Manufactured Home Park Condominium can be 30% less than planned unit developments and other types of fee ownership.
PROJECT ACCEPTANCE
P. S. Home Loans processes each Manufactured Home Community to obtain Project Acceptance. Each community must stand on its own merit. The Process can take up to 6 weeks and is recommended that the process begin prior to receipt of the DRE white slip for new conversions P. S. Home Loans is not a Conversion Group and does not facilitate the conversion process.
Rental communities that have converted to Neighborhoods, Subdivisions or Planned Unit Developments usually need not meet special criteria. Condominiums where the Homeowner's have been in control of the project for more than three years are usually not subject to criteria imposed for newly converted Manufactured Housing Condominiums. However, newly converted Manufactured Housing Condominiums must meet specific guidelines. Manufactured Housing Condominiuns converted within the last three years are considered only on a case-by-case basis.
MORTGAGE INSURANCE FOR MANUFACTURED HOMES
In the past, MI coverage has been difficult to obtain if the property was a manufactured home. However, MI companies are beginning to show new interest in this type of property. A survey of the MI companies regarding their acceptance of manufactured homes for insurance shows that Guidelines and definitions vary widely. The MI companies expect three of the comparables to be manufactured homes, similar to the subject.
