chattel mortgages for MOBILE HOMES
What exactly is a Chattel Mortgage? Without getting too deep into legal terminology the basic definition is that "A loan for a Mobile or Manufactured Home which is not affixed to real property (real estate)." In practice this translates out to mean that this is a personal property loan for a mobile home. Applying the word "Mortgage" to this type of transaction is really a misnomer since a mortgage really refers to a real property lien. The Chattel distinction is primarily important only from a lender's perspective. It determines whether you are applying for a true mortgage loan or a "Home Only Loan."
This is most common when the trailer is located in a Mobilehome Park, on Family Land, on a Leased MH Space, or even when the MH is located on your own land provided you are not affixing the land and home together in legal terms.
What do we mean not affixing the home to the land in legal terms? If you are not changing the way the home is titled from a registration at the Motor Vehicles Department to a Real Estate Deed of any form.
Unfortunately, there can be a great deal of confusion in the marketplace regarding some of these concepts. One reason for that is there are many different terms that are used to describe some of these situations and they tend to vary depending on where you live. Some of the more common one's we hear are:
- De-Title / Detitling a Mobile Home
- Retiring a MH Title
- Affixing the MH to Real Property
- Converting a Mobile Home to Real Estate
How do I tell if I need a chattle loan or a "conventional mortgage?"
If you live in a MH Park or otherwise pay a monthly lot rental fee separate from the payment on the house, your MH is classified as Chattel.
If you have the manufactured home on your own land, but have two different loans, one for the house and the other for the land, chances are your MH is still considered chattel by lenders.
If you are not 100% sure about whether your mobile home is still classified as Chattel one easy test is to determine how the MH is being taxed by your local City, County, or Town. If there are Separate Tax I.D. Numbers or Parcel I.D. Numbers (PIN) for the mobilehome and the land then they can be considered separately from a lending perspective. If there is only one Tax I.D. number for BOTH the MH and the Lot, then you must apply for a regular mortgage loan.
We hope this helps to clear up some of the confusion in the marketplace about how to properly talk to your mortgage broker or bank about a mobile home loan.