The California Dream For All Program offers a remarkable opportunity for first-time homebuyers to realize their dream of owning a home. However, many prospective buyers have questions about whether this program extends to manufactured homes. This guide will explore the eligibility of manufactured homes for the Dream For All loan and related aspects of CalHFA's government loan programs.

CalHFA First Mortgage Loan Requirements

The simple answer is yes, manufactured homes can be eligible for the Dream For All loan. However, the eligibility of these homes hinges on meeting specific criteria set by the California Housing Finance Agency (CalHFA).

To qualify for the Dream For All loan, your manufactured home must adhere to the requirements for CalHFA's first mortgage loans. Key requirements include:

  • Permanent Foundation: The manufactured home must be installed on a permanent foundation. This ensures stability and compliance with local building codes.
  • Ownership of Land: The home must not be situated on leased land. The borrower must own the land on which the home sits.

Prospective buyers should work closely with a CalHFA-approved lender to verify if their manufactured home meets these criteria.

What Constitutes a Permanent Foundation?

A permanent foundation for a manufactured home involves a system that securely anchors the home to the ground. This foundation must comply with local building codes and be designed to support the home, providing stability and resistance against natural forces such as wind and earthquakes. For further details and updates, visiting the official CalHFA website is recommended.

Why Ownership of Land is Crucial

CalHFA mandates that the land beneath the manufactured home be owned by the borrower. This requirement ensures that borrowers have complete control over their property and are not subject to the terms of a land lease. Ownership of the land also allows the borrower to build equity over time.

Additional Requirements for Manufactured Homes

Beyond the permanent foundation and land ownership stipulations, several other requirements must be met:

  • Home Condition: The manufactured home must be in good condition and meet all CalHFA guidelines, including those related to age and size.
  • Borrower's Financial Criteria: Borrowers must meet credit score, income, and debt-to-income (DTI) ratio requirements. Typically, a minimum credit score of 660 and a maximum DTI of 45% are required.

For more comprehensive information, prospective borrowers should consult their CalHFA-approved lender.

CalHFA Government Loan Programs and Manufactured Homes

CalHFA offers several government-backed loan programs, each with specific guidelines for manufactured homes. Here’s a detailed look at these programs and their stipulations.

CalPLUS FHA and CalHFA FHA Programs

Manufactured homes are allowed under the CalPLUS FHA and CalHFA FHA programs, provided they meet the following conditions:

  • Single-Wide Homes Excluded: Only multi-section manufactured homes are eligible.
  • Manual Underwriting Prohibited: Automated underwriting is required.
  • Minimum Credit Score: A minimum credit score of 660 is necessary.
  • Maximum DTI: The debt-to-income ratio must not exceed 45%.
  • Compliance with FHA Requirements: All homes must meet FHA 4000.1, Master Servicer, and CalHFA loan program requirements.

CalHFA VA Program

Unfortunately, manufactured homes are not permitted under the CalHFA VA loan program.

CalHFA USDA Program

Manufactured homes can be financed under the CalHFA USDA program, with specific parameters:

  • First Owner Requirement: Only new manufactured homes intended for the first owner are eligible.
  • No Single-Wide Homes: As with other programs, single-wide homes are excluded.
  • No Alterations: The unit must not have any modifications or additions post-construction (e.g., decks, porches).
  • Manual Underwriting Prohibited: Automated underwriting through the Guaranteed Underwriting System (GUS) is required.
  • Compliance with USDA and CalHFA Requirements: Homes must meet USDA 7 CFR 3550.73, Master Servicer, and CalHFA loan program standards.

For detailed information on these programs, refer to the CalHFA Government Loan Programs FAQ.

Eligibility Criteria for Borrowers and Properties

Borrower Requirements

To qualify for CalHFA's loan programs, borrowers must meet several criteria:

  • Primary Residence: The property must be occupied as the borrower's primary residence. Non-occupant co-borrowers are not allowed.
  • First-Time Homebuyer Status: While some programs are open to non-first-time homebuyers, many, including those with CalHFA subordinate financing, require all borrowers to be first-time homebuyers. Exceptions are outlined in the program handbooks.
  • Homebuyer Education: Completion of homebuyer education counseling through an approved organization is mandatory.
  • Income Limits: Borrowers must meet CalHFA income limits.

Property Requirements

Eligible properties must conform to several guidelines:

  • Type of Residence: The property must be a single-family, one-unit residence. Approved condominiums and PUDs (Planned Unit Developments) are also eligible.
  • Accessory Units: Guest houses, granny units, and in-law quarters may qualify.
  • Manufactured Homes: Permitted, provided they meet all specific requirements.

For more details, visit the CalHFA FHA Program guidelines.

Automated and Manual Underwriting

Automated Underwriting

For CalHFA government loan programs, automated underwriting is generally required:

  • Fannie Mae’s Desktop Underwriter (DU): Loans must receive an "Approve/Eligible" recommendation.
  • Freddie Mac’s Loan Product Advisor (LPA): Loans must receive an "Accept" recommendation.

Manual Underwriting

Manual underwriting is restricted and not permitted for manufactured homes under most CalHFA programs. Where allowed, parameters include:

  • Maximum DTI Ratio: 43%.
  • Minimum Credit Score: 660.
  • Credit Score Requirement: Borrowers without a credit score are not eligible.
  • FHA 203(h) and Section 184: Special conditions apply, with HUD approval required for Section 184 loans.

Debt-to-Income Ratios

The maximum allowable DTI ratios vary:

  • 50%: Credit score above 700, no manual underwriting.
  • 45%: Credit score 640-699, no manual underwriting, applicable to manufactured homes.
  • 43%: Manual underwriting allowed.

Loan Amounts and Limits

CalHFA imposes loan limits based on federal guidelines:

  • CalPLUS FHA and CalHFA FHA: Maximum loan amounts cannot exceed FHA loan limits for the county.
  • CalHFA VA: Limits align with VA loan maximums.
  • CalHFA USDA: Limits must conform to USDA guidelines.

High balance loans are subject to additional fees, as outlined in CalHFA's rate sheet.

Additional Considerations

Fees and Charges

CalHFA allows certain fees, including:

  • Origination Fees: Up to 3% of the loan amount or $3,000, whichever is greater.
  • Customary Fees: Such as credit report, appraisal, insurance fees, and others.
  • Funding Fees: $250 payable to CalHFA’s master servicer.
  • Tax Service and Flood Certificate Fees: $75 and $10, respectively.

Homebuyer Education

Required for one occupying first-time homebuyer. Education can be completed online or in-person through approved providers such as eHome America and NeighborWorks America.

Temporary and Permanent Buydowns

Temporary buydowns (e.g., 2-1, 1-1, 1-0) are allowed under certain conditions. Permanent buydowns are considered on a case-by-case basis.

Non-Occupant Co-Borrowers

Not permitted in CalHFA government loan programs. All borrowers must occupy the property as their primary residence.

Understanding the eligibility requirements and specific conditions for manufactured homes under the California Dream For All Program and other CalHFA government loan programs is crucial for prospective homebuyers.

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