Are you considering converting a manufactured home to real property? If yes, then know that you are not alone! Several other homeowners are realizing the benefits of increasing their property value as well as their financing options.
Converting a manufactured home to a piece of real estate brings along a lot of benefits, especially if you want to lean towards securing your investment or legal side of things. If you are feeling overwhelmed, that is completely normal.
Everyone has head changes once they read the guide for step-by-step information, and that is precisely why we are prepared to guide you in this process.
What Does It Mean To Convert A Manufactured Home To Real Property?
Converting a manufactured home to real property means changing its legal status from personal property to real estate that’s permanently attached to land. If your home is not connected to the land and doesn’t have a permanent foundation, it’s called personal property (like a car).
To change that, you will need to securely place it on the ground and meet the state’s requirement for manufactured housing. Once it’s known as real, you can get better financing options (like regular home loans) and even pay lower property taxes. This makes you feel like your traditional property.
Can You Turn A Manufactured Home Into A House?
Yes, you can definitely turn a manufactured home into a real property. But ensure you follow all the steps to make it your house. When opting to convert a house, ensure it is permanently affixed to the land with a permanent foundation.
It means that it meets all local zoning and building code requirements. If you don’t have land, you’ll first need to purchase it; otherwise, it will stay as personal property. Filling out a document similar to it with a title company is vital to updating the legal status.
Once your home is converted to real property, you’ll gain access to better financing options such as FHA, USDA, Conventional, and VA loan programs. It will take some time, but long-term benefits make it a smart move.
Key Requirements For Converting A Manufactured Home To Real Property
Converting a manufactured home to real property isn’t as a complicated process as it sounds. But it involves lengthy steps to ensure your home is totally affixed to land and legally recognized as real estate. Whether you do it for eligibility for financing options or to enhance your home’s value, here’s a step-by-step process to make it happen:
Own The Land
Before you can convert your manufactured home to real property, you need to own the land it sits on. If the home is in a manufactured home park or on rented land, it remains personal property and won’t qualify.
Some states require long-term leases in specific cases, but owning the land makes the process much easier.
Install A Permanent Foundation
The home must be permanently fixed to land with a permanent foundation that meets state and local building codes. This usually involves removing wheels and axles, securing the home with anchors, and ensuring it’s stable.
Hiring a contractor who specializes in manufactured housing foundations can help you meet the legal requirements.
Check Local And State Regulations
Each state has different rules for converting a manufactured home to real property. Some states require additional inspections, permits, or certifications before you can proceed.
It’s important to check with your county office or local title company to ensure you’re following the right process.
File An Affidavit Of Affixture
This is an important legal step that officially records your home as part of the real estate. The affidavit of affixture (or a document similar) must be filed with the appropriate local office.
This document proves that your manufactured home is now permanently part of the land and is no longer a moveable structure.
Surrender The Certificate Of Title
If your home was originally registered as a vehicle, you’ll need to give up its certificates of title. This is done through your local DMV or title company.
Surrendering the title removes its status as personal property and makes it officially part of the real property records.
Update Tax And Legal Records
Once your home is legally classified as real, your local tax office needs to update its records.
You’ll likely see changes in how your home is taxed since real estate is often taxed differently than personal property to real conversions. Be sure to get a new property tax assessment to reflect its new status.
Secure Financing And Insurance
Now that your manufactured home is recognized as real property, you can apply for better financing options like traditional home loans with lower interest rates. You’ll also need to update your homeowner’s insurance policy to ensure proper coverage as a real estate property.
If you’re considering remodeling manufactured homes, this might also be the perfect time to upgrade or make improvements.
Benefits Of Converting A Manufactured Home To Real Property
While converting your manufactured home to real property, the process provides several financial and practical benefits to you. Below are some of these benefits:
- Access to Better Financing: When your home is classified as real estate then you can achieve more financing options. This could include lower-interest rates mortgages than personal property loads. This financial support can save you thousands of dollars over time.
- Higher Home Value: Although, the price of modern manufactured homes is high. But a home that’s permanently connected with the land gains more attention from the buyers which enhances property value if furnished well.
- Reduced Tax Burden: Several properties named as manufactured homes contain enhanced tax rates. When it’s considered as real property then all the taxes will be reduced and you can reduce the burden from your head more easily.
- Improved Insurance Options: When your home is legally named as real property that is connected to the land then you can switch your insurance to standard homeowner’s insurance. It will provide better coverage options and lower premium rates.
- Easier Selling Process: If your home is connected with the land then it contains an easier selling process. You will have all the documents and information in hand and can show the necessary documents to potential buyers who are interested in buying your home.
- Long-Term Security: Once your home is permanently located on your land and has its own foundations then it gains legal stability and protection. This enhances long-term security and ensures that you are following zoning laws and local regulations for building a home.
- Meets State Compliance: Some states require that homes be legally converted to qualify for certain benefits, loans, or tax advantages. Meeting these rules can prevent future legal or financial headaches.
How To Tell If A Manufactured Home Is On A Permanent Foundation?
When you’re selling your home and want to update your buyers that your manufactured home is on a permanent foundation, it becomes a little bit trickier. Especially when you don’t know the terms and conditions of it. Here are a few ways to tell:
- Look for a HUD Certification Label: Find out the HUD certification label as every manufactured home must have this label. If the house is affixed it will have a HUD data plate that contains all foundation details.
- Check for a Permanent Attachment to Land: Inspect whether the home is appropriately foundation and securely attached to the land. It doesn’t have visible wheels, axles, or hitches instead it has a concrete or masonry base then it’s permanently attached.
- Review the Property Title: Check for the property title on the documentation or other legal papers. If the home still has a title such as a vehicle then it may not be known as real property.
- Inspect the Crawl Space or Basement: Keep in mind that a permanently connected home to the land will have a foundation and basement system that prevents it from shifting. If you see crawl space and basement then it’s a good sign of real property.
- Check with Local Authorities or a Title Company: To establish that a foundation is by local building codes, some states require either an official inspection or an affidavit. The county office or title company can provide records of the verification of its status.
- Look at Loan Eligibility: It is most likely that if the residence qualifies for a conventional mortgage, it is on a permanent foundation. Manufactured homes defined as personal property do not typically qualify for conventional home loans.
Common Challenges And How To Overcome Them
- Each state’s regulations are different, which makes the process confusing and time-consuming.
- The permanent foundation of the land costs you more, which requires financial planning.
- Getting the title transfer delays occurs, which needs legal updates and verification.
- The lenders may still classify your home as personal property and need to inspect it thoroughly.
- Unexpected structural issues can arise at any time, which requires proper inspection and repairs.
- The issues regarding resale value can be lessened, which demands upgrades and proper documentation.
- The insurance rates change, which may require updates after classification approval.
Conclusion
Converting a manufactured home to real property is considered a smart move that brings several financial benefits and long-term value. By following the steps mentioned above you can plan a smooth way of converting your home into a real property.
Although it takes some time it has long-term benefits to its owner as traditional homeowners have. Just ensure you work with professional dealers to make each step documented as legal.
At Spark Homes, we have communities that contain several properties as manufactured homes. If you want to convert any manufactured home to real property you’ll have to contact us at (830) 251-2110 first and we will guide you through it.
FAQs
Can I convert my manufactured home to real property if I don’t own the land?
Without owning a land you can’t convert it to real property. Most states require land ownership for better conversion.
How long does the conversion process take?
The span depends on state regulation. Generally, it takes a few weeks to a few months which includes overall inspection and paperwork.
Will my property taxes increase after conversion?
It depends on whether your home is classified as real property after that you can achieve the benefits.
Can I reverse the conversion later?
Yes, you can reverse it, but the process is a little complicated and requires legal steps.
Do I need a lawyer to complete the process?
You don’t need it. However, a real estate attorney can indeed help with a legal document to ensure a smooth transfer of the process.