Hope for mobile home buyers

Friday, Aug. 15
Posted 2 p.m. EDT
STEADY: This has been a relatively tranquil week for mortgage rates. They haven't varied much. In Bankrate's weekly survey, the 30-year fixed was unchanged from the previous week at 6.74 percent. That's about where it stands now.

ANGUISH: A reader named Marilyn e-mails that "I can't find anyone to take a chance on me to let me get a place of my own." She and her husband have rented the same place for at least 15 years, and they have steady jobs. She has saved money for a down payment on a home. She adds: "My credit has gotten really bad, but things have happened I could not control. I still am making payments but just need to get caught up and I will eventually."

Marilyn writes:

There was a single-wide trailer with 5 acres for $65,000 and no one would loan me the money. I lost my chance to get the land I have always wanted. How come they can't see if I have the down payment and have lived in the same house and have been at my job for a long time that I wouldn't pay for a house to be mine? I am very upset and disappointed. I think I will always be in the rent house. I am 54 and know I have not got much time left to buy a house. There has got to be one company to help me. I have seen people file bankruptcy and still get things and never pay for things and still get houses and cars. It is not fair.

I don't know Marilyn. Maybe she talks a good game, but never follows through on her promises. But that's not the impression I get from this e-mail. She says she has had her job for 11 years and her husband has had his job for 19 years. She doesn't sound flaky.

Marilyn wanted to buy a manufactured home and the land under it, but she couldn't get approved for a loan because of a poor recent credit history. The housing bill, which was passed last month, will help people in situations similar to hers.

A few years ago, there was a meltdown in the business of lending money for manufactured homes. Lenders became overcautious. It didn't help that the FHA wouldn't insure a loan of more than $48,000 on a manufactured home. That limit had been in effect since 1992. The new law raises that limit to $70,000, and the limit is indexed to inflation.

The limit was raised to accommodate higher prices for land and manufactured homes. Another reason for raising the limit was to allow more people to buy double-wide homes instead of single-wides.

The law directs Fannie Mae and Freddie Mac to come up with new loan products and flexible underwriting standards for manufactured homes. That should help people such as Marilyn, too.

The FHA is geared to help people with troubled credit histories. After Marilyn catches up on her delinquent payments, she might be able to finally buy a home. That was Congress' intention.


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