1. Eligibility criteria
In order to qualify for a construction loan for a manufactured home, borrowers must meet certain eligibility criteria. These criteria may include a minimum credit score, a stable income, and a low debt-to-income ratio. Lenders may also require borrowers to have a down payment, typically ranging from 10% to 20% of the total project cost.
2. Building plan and specifications
One of the key requirements for a construction loan is a detailed building plan and specifications for the manufactured home. This includes architectural drawings, floor plans, and a list of materials and finishes that will be used in the construction process. Lenders may also require proof of permits and approvals from local authorities.
3. Licensed contractor
Most construction loan lenders require borrowers to work with a licensed contractor for the construction of a manufactured home. The contractor must be experienced and have a good track record of completing similar projects on time and within budget. Lenders may also require a signed contract between the borrower and the contractor.
4. Loan repayment
Loan repayment is an important consideration for construction loans for manufactured homes. Lenders may require borrowers to make interest-only payments during the construction phase. Once the construction is complete, the loan will convert into a permanent mortgage, and borrowers will have to start making principal and interest payments.