Suggestions for the best type of loan for home purchase

We have lived in a rental house for almost 30 years. A couple of years ago the landlord offered us the opportunity to purchase the house at a price well below the value.

The house is on 1.5 acres in a rural area. It qualifies for a USDA loan. So far so good, right? Here’s the problem, many years ago a portion of the land was set up as a mobile home lot and the landlord rented the space. Several years ago someone rented the lot space and moved the mobile home to the land. When this person decided to move they sold the mobile home to a third party without the approval of the landlord. Two years ago the purchaser of the mobile home passed away and his grandson and family moved into the mobile home.

In addition to this occupied mobile home there is also an old mobile home on the lot that is in very poor condition. This mobile home is owned by the landlord and was used for storage. Currently, the only thing holding it up are a couple of trees that have grown up on either side.

I have talked with several mortgage lenders and when I tell them there are mobile homes on the land they tell me that they can’t provide me with a mortgage. I am looking for alternative financing.

The house is more than 60 years old and needs new wiring, plumbing, HVAC and insulation. The roof also needs replacing. I am wondering if I would be better off getting a rehab loan to purchase the property, rehab the house, remove the trailers and other outbuildings and then sell for a profit.

Our credit is good I have a car loan that will be paid off in about 10 months. I have one bank credit card with a zero balance because I pay it off every month that I use it unless I have made a big purchase that is paid off within the time frame for no interest charges. I also have two store credit cards also with zero balances. The only problem is that we don’t have a long credit history. We don’t buy things we don’t need, we keep our vehicles until they are no longer serviceable. My husband drives a 2007 Kia with close to 200,000 miles. I have a 2014 Nissan with less than 40,000 miles.

Suggestions anyone? By the way we are 72 years old and 64 years old, my husband still works full time and I am on disability.

I wish I could offer some advice, but I am not knowledgeable about real estate/investments. But good luck, it must be a lovely area to want to remain after more than 30 years. (I miss living in the country!)

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If the house is on 1.5 acres, are the mobile homes on that same acreage? I’d start with your zoning classification; is that property even zoned for mobile homes? Your county/city zoning dept is a place to start. If your county/city has zoning maps online, you might be able to determine from that. If you do not own the property yet, your landlord would be responsible for removing the mobile homes, however you may be opening a can a worms the landlord won’t be happy about. This appears to be a title problem and may be why you cannot get a mortgage from a bank. I can think of several issues with mortgage lenders so you have to get to the root of the status of the property the mobile homes sit upon.

You might even be able to subdivide the property and sell that portion of the land to the tenant living in the mobile home currently, there can be tons of title issues however, like ingress and egress easements to those mobile homes.

If you cannot find private investors to finance the property, I’d hire a real estate attorney to investigate your options. I can’t be sure without more information, but this could be a title problem that could prohibit the current owner selling to only a cash buyer.

You really need to look into this if you are serious about purchasing, just to make sure do don’t inherit a problem that burdens you.

The mobile homes are on the 1.5 acres. The property originally was owned by the landlord’s parents and back when there were few if any restrictions on how people used their land, their daughter put a mobile home on part of the land. She lived there for a while with her husband and children until they bought land and built a home. Many years later the county grandfathered in existing mobile homes and regulated that only double wide mobile homes could be set up on land in the county. Other than that there are no regulations.

The landlord has no problem with someone moving the vacant mobile home and the dilapidated storage building. Because the occupied mobile home is owned by a third party, they have the right to move it any time they want to. The only other option on the occupied mobile home is for the landlord to give them notice that they have to move it.

I have talked with numerous lenders and so far everyone I have talked to says they do not do loans that have a mobile home on the property. That’s even before I tell them about the fact that the mobile home is owned by a third party.

I have researched the land records and the property is shown as one parcel with only the brick house I live in. There is a separate mailing address for the occupied mobile home. The landlord talked about subdividing the land and selling me the part with the house on it and keeping or selling the other part. However, because the landlord lives several states away I believe they just want to sell it all and be done with it.

I would like to purchase the land because it is behind a high school and I see potential for selling it to the school system in the future for expansion. The school is busting at the seams and running out of land to build on for expansion.

Thank your for your suggestions.

Depending on your state laws, it appears to me the third party should be required to move their mobile home that they own; are they leasing the land from the current owner. Is the current owner reluctant to ask them to move the mobile home off the property?

I believe so because they are getting $200 a month lot rent from them. Although, they have been late numerous times. The landlord was surprised when I said I would give them a move date once I took possession of the property. I personally don’t want the hassle of taking care of the septic system for the mobile home.

I have even spoken with the tenant about buying the property and the problem I am having because of the mobile homes on the land. They said if that was a problem they could move the trailer. Unfortunately, I don’t think they have a place or the money to move the mobile home.

This is why I wonder if there is some type of alternative financing I could use to purchase the property and leave the mobile home alone for now.

I can’t guide you on non-comforming financing but a good, experienced mortgage broker might be able to help you. They would not be working for bank financing departments but instead look to mortgage companies where there are usually a lot more options for types of financing. I don’t suppose the current landowner would be willing to hold a mortgage note? At least until the mobile home owners can move the mobile home. It is kind of you to keep their concerns in mind but I have a feeling you will run into more problems trying to keep the mobile home on the property. Not just financing, but I think you will run into not being able to obtain clear title as well. Mortgage companies and banks are going to require title insurance and the title underwriters will look at things like “multiple family” dwellings on the property, ingress and egress to the mobile home without a specific easement. If you are truly interested in purchasing this property, I think a counsel with a good real estate attorney would be worth your time, money and effort. Find out what problems are involved and what solutions are available to you.

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Thank you for your suggestions and incite on my issues.