FHA Loan Limits Nearly $313,000 in California

FHA has raised the maximum loan limits to $312,895 for many California counties. FHA is becoming the only financing option for many manufactured home buyers. FHA has always been the financing option for affordable housing and I think they will be the major financing option for the industry.

Many dealers do not like FHA financing because of the additional requirements FHA places on them. The biggest one is the foundation system. In most cases a dealer would prefer to use a simple post and pier foundation. FHA requires a permanent foundation that is designed by an engineer and inspected by an approved FHA foundation inspector before they will approve the borrower's loan. This foundation can add more than $4,000 to the cost of the home.

Financing for manufactured homes is contininuing to be more difficult. Conventional (Fannie Mae and Freddie Mac) as well as sub prime lenders all look at manufactured housing in a very poor light. Fannie and Freddie want to finance safe (low LTV, high FICOs) loans. They don't want to be the affordable housing source. Recently, Ameriquest Mortgage (and its wholesale lender, Argent) decided to pull out of lending on MH properites. They did this with no warning and they left a lot of customers clamoring for alternatives that don't exist.

When it comes to financing manufactured homes for the affordable housing market, FHA is the only way to go.