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Question DetailsAsked on 12/29/2017

Manufactured homes guideline HUD permanent foundation guide for homes dated September of 1996

Recently trying to re-finance and have never had to have this inspection until now, never heard of this foundation guideline. Are there any mfg. homes that are grandfathered in because they older than 1996?

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Here is a FEMA reference page with some explanation of that - though I wonder about the date you gave. Latest general revision guide I have is May 2013 with latest amendment December 13, 2017, so the 1996 date is either way out of date or refers to the initial date of the law requiring it.

Generally an existing building does not have to be retrofitted to the regs to CONTiNUE to be insurable or to CONTINUE an existing mortgage/loan. Though I understand there is a current court case about this arguing that since FEMA/HUD insurance is paid annually, so technically each renewal gives them the opportunity to require compliance with current regs even on existing non-compliant homes. Time will tell on that one and would certainly impact tens of millions of existing homes if they start applying the rules that way, requiring retrofitting to stay insured.

But certainly if rebuilt or a major natureal disaster repair claim is paid on it (lots of rules on when that does and does not apply) they do then require retrofit to meet the regs on having a permanent foundation with tiedowns and on lowest floor elevation relative to flood level. Hence lots of homes along the Gulf coast are being elevated on pilings or on non-water tight (floodable) supporting foundations as part of repairs after the last few year's hurricanes.

However, in your case you are talking new financing which is a related but different case - in which case compliance with FEMA floodline clearance and wind/ hurricane/tornado protection tiedowns and "permanent" foundation are universally required for the property to be eligible for any federally guaranteed type loans. FEMA, HUD, VA, FNMA, GNMA, etc all generally use the same foundation reg, as I understand it - as do some state housing finance and government-funded housing assistance programs. So if you want the loan, you generally have to have a foundation certificate (generally has to be signed by a licensed professional civil or structural engineer) on file with them before the loan can be approved. Many banks/lenders are now playing by the same rules for all loans issued by them, too.

This is their method of avoiding giving loans on properties more prone to damage, so an older home is not exempt. This could well kill your refinance attempt, or make you pay typically several thousands to as much as $10,000 - 30,000 depending on unit size. Hopefully this is a noney-saving attempt on your part (trying to get a lower monthly payment or interest rate) and not because of a balloon loan payment coming due, because without the permanent foundation (and FEMA compliance if required) it may be you will have to either stay with your existing (presumably higher monthly payment) loan, or refinance at a higher rate with a loan which is not government backed.

Note the "permanent" foundation requirement does NOT stipulate a particular type of foundation but does mandate permanent structural tiedowns - but slab-on-grade, strip footing, poured or block concrete wall, grouted masonry pier, steel support, pin piles, and other methods of foundations can all be used - but NOT wood cribbing or stacks of pallets, loose stacked cinder block, etc.

One other thing - though can be dangerous to ask your property insurer because that might bring the issue to their attention, is that some homeowner insurance / landlord insurance companies are also requiring compliance with the same standard just to renew your insurance, so even if you refinance successfully without it some year down the road your insurer might surprise you by requiring the same compliance for renewal.

And be aware that MANY banks / lenders require this before writing a loan or mortage, so is likely to come up if you ever go to sell too. Could well end up with you losing a significant number of potential buyers because of their inability to get a loan - and that is likely to come up well down the road in a sale transaction, so you could think you have a deal then the buyers come back saying they cannot get a loan on your property - and as that time likely to be too late to get the work done without the buyer backing out of the deal even if you DO pay to have a permanent foundation and tiedowns put in.

Ande before you ask - yes, normal homes require permanent foundations and tiedowns too - just usually the tiedowns are anchor bolts embedded in the foundation walls extending through the bottom plate of the walls (more/high capacity in flood inundation and high seismic areas), so you do not see or hear about them and they are a negligable additional cost during foundation construction.

Here are links to a few related questions on trailer/manufactured home foundations, with answers, FYI:

Answered 2 years ago by LCD

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