That’s a loaded question. Let’s start with 3 items and loosely define them for clarity.
Manufactured Home – Manufactured homes are homes built after 1976 in compliance with the HUD Code. Built in an indoor climate-controlled home building facility, then transported in one or multiple sections. It is built on a permanent chassis that allows the home to be placed and supported on a foundation system.
Mobile Home – Often used interchangeably with manufactured homes, these two types of homes are actually a little different. Mobile home refers to a prefabricated home built prior to 1976 before the HUD Code was put into place.
Equity – The amount that the value of your home (what you could sell it for) exceeds the amount you owe on your home. Equity comes from by either paying down the amount you owe or the value of your home increasing or a combination of both. (Ex: If home value is $80,000, and you owe $30,000, your home has $50,000 of equity.)
People often assume that manufactured homes don’t appreciate. However, this isn’t always true. While homes that are titled as personal property usually do not appreciate, those that are attached to land may, depending on the circumstances. It’s also important to note that the value of your home is not the only factor that determines whether you build equity. Let’s dig in.
So, is there equity with a manufactured home?
There can be if it’s attached to land that has kept or increased its value and the home is maintained well. Remember equity is not guarantee. Keeping up with the interior and curb appeal of your home can aid in this, but if property values fluctuate, so will home equity.
What are some of the specific situations in which a mobile home may gain equity?
- If it’s attached to land and titled as real property, and the land value increases
- If it’s attached to land and titled as real property and the land value stays the same, but you pay down the mortgage principal balance
What’s the value of equity?
Most homeowners don’t actually benefit from equity until they sell their home. Equity can be used to buy your new home, maybe to help with a hefty down payment. In certain situations, it can be borrowed against to fund different things in life that pop up.
Where can I learn more?
We love that question, every time.