Web Article: Lending Institutions "Banking" on Modular
Affordability, custom-design and time-efficient construction are just a few
reasons behind a steady increase in the sale of modular or factory-constructed
homes – grounds for popularity that the banking industry is taking into account
when offering construction loans for new houses.
The high quality of today’s modular homes has opened the lending doors to a
growing number of potential homebuyers who recognize the many values to owning a
factory-constructed house. And it is those very same values – and most
specifically the static costs of modular construction – that has captured the
interest of lending institutions that recognize the potential of a good return
on a modular investment.
From a lender’s standpoint, providing funding for a home that is essentially
complete upon arrival allows for quicker collateral achievement. As an
investment, modular homes increase in value at the same rate as comparable
stick-built homes in their area, a factor that comes into play during the
appraisal process.
Property appraisers adhere to the same formulas when inspecting a modular home
as they would when conducting a traditional property. Gross living area
estimates, interior and exterior condition and overall quality of construction
weigh in during an appraisal. Perhaps equally important to determining valuation
is a tour through the neighborhood, which is conducted by an appraiser to look
for comparable properties that have sold within the last year.
The banking industry is becoming more accepting of modular homes evidenced by
the increased number of large national lenders now developing construction loans
for modular homebuyers – concrete acknowledgment that factory constructed
housing is on the rise.
Back