Titling manufactured homes as real property
Today’s modern manufactured homes can help ease the affordable housing shortage in your community. They can also provide a business growth opportunity. To originate a mortgage for manufactured housing eligible for sale to Fannie Mae, it must be titled as real property in a process that varies from state to state. Click here for a PDF of this overview.
More detailed information about the process in the states in which you operate is available. Find your state’s titling requirements on this page, and consult legal counsel and title insurance agents. These resources can help you gain a more thorough understanding of the requirements in the states where you lend.
Certificates of Title
While each state has its own particular process for converting a manufactured home from personal property to real property, there are two general approaches:
- Many states require a document similar to a deed of conveyance for a manufactured home. This is frequently in the form of a Certificate of Title, although the name of the document varies from state to state. In states where this document is required, it generally must be applied for and then cancelled in order to title a manufactured home as real property for a “land home” mortgage loan transaction.
- In some states, a Certificate of Title is not required if the home is new and it will be permanently affixed to land. In those states, an affidavit of affixture will generally need to be filed with a state office.
Mortgage, closing, and title insurance
Once there is a surrender of the Certificate of Title to the manufactured home, or if it isn’t a requirement, lenders should record the lien on real property by way of a mortgage. It should include a description of the manufactured house in the mortgage. In addition, the legal description should include the make, model, vehicle identification number, and the language, “which is permanently affixed and attached to the land and is part of the real property.”
- Have closing instructions include requirements that the title company or closing agent will take all actions necessary to assure that the manufactured home has been permanently affixed to the land, that the lien is recorded, and that no Certificate of Title to the manufactured home has been issued, or that any issued Certificate of Title has been canceled.
- Order a manufactured housing endorsement (ALTA 7 or local equivalent) to the title policy as affirmative coverage that the manufactured housing unit(s) situated on the insured land is included in the policy definition of “Land.” This ensures compliance with the Selling Guide.
To learn about the process in the areas you serve, click on a state below.
Selling Guide B5-2-05 Manufactured Housing Legal Considerations, establishes certain eligibility requirements relating to mortgages on manufactured housing titled as real property. If there is any inconsistency between the guidance on this page, and the Selling Guide, the Selling Guide controls.
These summary descriptions of the titling process do not constitute legal advice, and Fannie Mae makes no representations or warranties as to their correctness, completeness, or suitability for any particular purpose. Therefore, lenders must consult their own legal counsel on issues concerning titling of, and obtaining liens on, manufactured homes.
Further, adherence to the summarized procedures will not excuse lenders from their representations and warranties required by the Fannie Mae Selling Guide and Servicing Guide, their MSSC, and any other contracts with Fannie Mae.