Manufactured Home Loan Insurance

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There are a variety of US government loans provided to the citizens to support various activities related to human endeavor, including housing loans. Agriculture, Business and Industrial Activities with respect to the welfare of rural communities, Disaster relief, Education, Housing, and Veteran Programs are the major areas where the government loans are given to help people to sustain their activities. A sub-category of government loans, Manufactured Home Loan Insurance is one of the many types of housing loans enabled by the US Federal Government’s Housing and Urban Development (HUD) organization.

Under this Manufactured Home Loan Insurance scheme, HUD makes reasonable financing possible for purchasing manufactured homes. In this program, housing loans lent by private financing institutions for financing the purchase of a new or used manufactured home are insured by HUD or allowed private insurance companies. The basic requirements for the prospective buyers to qualify for this program are that the applicants should meet some minimum credit requirements and that they should use the home as a primary place of residence.

By protecting mortgage lenders against the risk of default, HUD’s insurance methodology has encouraged them to finance the manufactured homes which had been traditionally financed as personal property through relatively high interest, short term consumer installment loans. The Manufactured Home Loan Insurance scheme is operative since 1969. Thus the program facilitates the home purchase at long-term lower interest housing loans and at the same time insures lender against loss from default on such loans. The buyer must agree to make the required down payment and meet credit guidelines. The interest rate is negotiated between the borrower and lender. The borrower pays an upfront insurance premium along with annual premium based on the delivery balance of the government loan. The maximum loan term is 20 years.

With Manufactured Home Loan Insurance scheme the issues involved in manufacturing a house like access, stable soil, proper foundation system including the anchoring system, perimeter enclosure, utility hookups, dryer-vent discharge etc. come under the Model Installation Standards on the installation of Manufactured Homes. The installation could be done by retailers or contractors chosen by the buyers. There are approved inspection agencies to certify the installation. If the house is damaged during installation, then the retailer is the first contact person for the installation-related problem. Otherwise the hired installation contractor had to look into these problems.

Thus, the US Federal government ensures housing, education and development of business opportunities for its citizens through many of its government loans programs.