Converting a manufactured home to real property can offer a range of advantages for homeowners. The process of changing the legal status of a manufactured home from personal property to real property may seem like a daunting task. However, it provides a host of long-term benefits, including greater financing options, higher resale value, and improved home equity.
What Does It Mean to Convert a Manufactured Home to Real Property?
Converting a manufactured home to real property involves legally affixing it to a permanent foundation. This changes its status from personal property (like a vehicle or trailer) to real estate. The process is often required by lenders to offer traditional home financing.
When a manufactured home is converted to real property, it is treated much like a conventional home. This allows you to enjoy more advantages, such as access to better financing terms and increased marketability.
- Improved Financing Options
One of the key benefits is the access to more favorable financing options. Traditional home loans, such as FHA, VA, or conventional mortgages, often require that the home be affixed to a permanent foundation to qualify for financing.
Without this conversion, homeowners may only be eligible for personal property loans, which typically come with higher interest rates and shorter terms. Converting your manufactured home helps you access better rates, longer repayment periods, and the possibility of more stable monthly payments.
- Increased Property Value
This also significantly increases the property’s value. When a home is considered real property, it becomes eligible for traditional property appraisals. This tends to result in a higher valuation than personal property appraisals.
This can make the home more appealing to potential buyers, especially those seeking homes that are eligible for traditional financing. Eventually, the conversion can result in a higher resale value. It is a great advantage if you plan to sell your home.
- Enhanced Home Equity
You are also enhancing your home equity by converting your manufactured home into real property. The act of affixing your home to a permanent foundation and treating it as real estate allows you to build equity in the property.
Over time, as you pay down the mortgage or as the value of the property appreciates, you will find that your home’s equity grows. This is a significant financial benefit that can help you build wealth and even serve as collateral for future loans.
- Easier Access to Insurance
Manufactured homes that are not converted to real property may have limited insurance options. Often, insurers treat these homes as personal property and offer limited coverage.
However, once your manufactured home is converted to real property, you will have access to a wider range of homeowner’s insurance options. Many options come with better coverage and lower premiums than those available for personal property. This gives homeowners more peace of mind and greater financial security.
- Greater Marketability
Another key advantage is the increased marketability it provides. When selling a home, real property is far more attractive to potential buyers.
Homes that qualify for traditional mortgages tend to have a broader pool of interested buyers. Most buyers are more likely to secure financing for a property that qualifies as real estate. This can lead to a quicker sale and potentially a higher selling price.
How to Convert a Manufactured Home to Real Property
The process of converting a manufactured home to real property typically involves securing the proper permits, installing a permanent foundation, and removing the wheels and hitch from the home. Local laws and regulations may vary. Therefore, it is important to check with your county or municipal authorities to make sure you meet all necessary requirements.
In many cases, the conversion will also require that the home meets specific safety and structural standards. Once the conversion is complete, you can apply to have the home’s title changed from personal property to real property. This then opens the door to traditional financing, better insurance, and increased market value.
Connecting with Cambio Communities
Cambio Communities understands the importance of homeownership. We also recognize the various ways you can make your manufactured home work for your needs. If you are interested in finding out more about how converting a manufactured home to real property can benefit you, we encourage you to take a look at our available listings and find a community that fits your needs.
