Ways to Finance Modular Home Construction in Michigan

Basically, there are three ways to finance the construction of a modular home in Michigan. These resources for modular home construction are the private funds, lending institution, and the general contractor or modular home company loan.

Private Funds of Modular Home Buyer

If you are fortunate enough to have access to enough private funds to build your own modular home, you probably won’t be reading this page.  However, you may not know that you can use the equity in your current home to build a new modular home.  If you are already a homeowner, and you have enough equity in your current home, you may be able to take out a home equity loan to pay for the construction of your modular home.

Lending Institution for Modular Home Construction

You may borrow directly from a lending institution, which specializes in modular home construction.  Lenders provide loans, for modular home construction, that are very similar to conventional stick built home construction loans.  There are a few options for how to best deal with your personal circumstances.  You may want to get a loan to purchase the land only.  This would be useful if you are using other sources to build your home, but need money for the land.  You may just want to buy the land, and then take some time to decide on how you want to proceed with construction and/or save for construction.  If you need to finance the modular home construction, you will need a construction loan, and then you will need a mortgage, once the modular home is complete.

General Contractor Construction Loan

The general contractor or modular home dealer loan is a loan for the construction of the modular home.  The modular home dealer is more likely to finance the loan if he is the contractor, and especially if he owns the land on which the home will be set.  This would make it easier to take possession of the modular home should you be unable to pay for it.  Once the construction is completed, you would need to obtain a mortgage. This would be a more conventional purchase.  The lender would pay off the construction loan and issue you a mortgage, as with any other home purchase.

Regardless of which way you choose to finance your home, unless you are paying out-right for it, you will need to have enough personal funds to make a down payment and to show that you will be able to make payments.