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Financing Modular Homes:
My fist step in setting up the financing for my modular home was to shop
rates for a 30 year fixed rate construction loan. I soon found out that many lenders in
my area did not know what a modular home was and confused them with manufactured
homes. (Borrowing money for modular homes is the same as borrowing money
for a site built home in that the land and home are legally looked at as one
unit. That is not the case with a manufactured home, since it can be
moved and is considered property and not real estate.)
At this point I contacted the company that I was going to be purchasing the
modular home from and they were able to recommend a lender near them that they
worked with frequently. In the end, I went with a national lender with
offices in the St. Louis area. Although this lender has over 100 branch
offices
in the St. Louis area, I was directed to deal with an office over 100 miles away
because they had experience handling loans on modular homes. This turned out to be a
blessing in disguise because I then dealt with the Vice President of this office
and he gave us
wonderful service.
Additional Costs:
Prior to securing financing, I needed to know how much
the whole project would cost. After determining how much the home would cost, I
needed to know the costs of the following: (these were my costs in
2006)
- Tree Removal Cost: clearing trees and stumps on lot (I did myself - one
year later I still have one pile of stumps I am slowly cutting up and burning)
- the cost of this varies widely depending upon building site
- Surveying Cost: the 5 acre lot was
surveyed for $1000 when purchased. Layout of the lot prior to excavation (I staked out
where house would go and had a surveying company stake the site with the
setback stakes - called the "foundation spot") - $175
- Drainage Installation Cost: French
drains, culverts, shaping of yard, etc may be required to keep rain water
runoff from settling around your home and leaking into your basement.
This cost varies with building site.
- Water Hookup Cost: water line and hook up fees (if you have very far to go,
the cost of copper can make this very expensive) - varies widely depending on
distance the copper needs to be run - I ran a 3/4" K-copper line 450' up to
the main water line on my road and the water company charged me $1,500 for
hookup fees, labor, tap on fee and meter deposit. In addition, the water
company's contractor took my extra copper line which exceeded the length he
needed. This does not include $1200 in copper or the labor to install it
450'.
- Gas Line Cost: varies upon the
distance to be run
- Foundation Excavation Cost: excavation associated with digging the basement and
grading the lot - Approximately $3000 to dig a basement although I needed
extensive excavation and a retaining wall in addition to this due to the
building site. At a total of $400 per hour for a track hoe and a highlift,
this gets very expensive quickly. Most building sites would not require this
degree of excavation.
- Foundation Cost: pouring the footer and foundation - $15,000 for 172' of
9' tall x 10" thick wall, pier pads for the jackposts and a 14' long frost
wall and a concrete pump
- Foundation Waterproofing Cost: foundation waterproofing and drain tile - $1,200
- Rough Plumbing Cost: This is the
drain system which is installed under the basement floor prior to doing the flat work in the
basement. I had them do the rough in for a bathroom in the basement
also. - $1,200
- Sump Prep Cost: gravel up to footer on top of rough plumbing - $200 - I
shoveled in a load of gravel.
- Flatwork Cost: flat work in the basement (the basement floor - not all
contractors pour the foundation and do the flatwork because of the time delay
between the two jobs) - $4,100
- I-Beam Cost: I-beam down center of basement (using an 8" - 35# per
foot wide flange beam allows you to use fewer jackposts in basement) - $1770
for an 8" - 35# a foot wide flange beam 54' 8" long with in two pieces so
that the seam is over a jackpost
- Sill Plate Cost: sill plate materials and installation - I did this
myself for the cost of the 2" x 8"s and sill gasket material.
- Septic System Cost: septic system engineering and installation - $800 for
engineering and $12,800 for an alternative system which has an aerator and a
pump since the drain field is above the pump
- Site Cleanup Cost: trash removal after house is set - I disposed of waste
building materials myself.
- Finish Plumbing Cost: hooking the
house's plumbing to the plumbing in the basement floor - $2200
- Hot Water Heater Cost: purchase
and installation (cost is included in finish plumbing cost above)
- Finish Electrical Cost: electrical work in basement (8 lights,12 outlets and 2
sets of two way switches) and wiring from the house's fuse box out to and
including the stack for the electric company to hook into - $3,480
- Furnace and Air Conditioner Cost: furnace and air conditioner and installation - included
in the cost of my house
- Kitchen Appliances and Installation
Cost: other than hooking
the gas to the stove, this was included in the cost of my house
- Contingencies: add at least 15% for the
unplanned things that arise such as interest costs accrued due to rain
(excavation companies do not want to bring a 90 ton crane into a mud hole to
lift a house, each half weighing 35,000 pounds!)
Once I had a handle on the total cost for the home, I was
ready to begin securing financing. Purchasing a modular home gives you a
benefit in this area. When the appraisal is done, a modular is appraised
side by side with site build homes. Since you will be paying about 25%
less than a site built home, you come out ahead when the bankers start looking
at how much equity you will have in the completed home versus the final value of
the home.
You may be told by
some modular home sales people that
there is not too much to handling this project yourself. Compared to a stick
built home, these responsibilities are very small, but for someone working full
time it can be challenging. I work Monday through Thursday and this allowed me
to meet with contractors on Fridays. Without having a four day work week and
the freedom to take time off work on short notice, I do not believe that I would
have been able to manage this project.
I hope this information helps
you in determining the cost of your project or reminds you of something that you
had not planned on yet. There is more than one thing on the list above that I
had not planned on when starting this project.
One last note: In acting as
the general contractor, I handled all the disbursements for the project.
If you handle your project in this manner, always be sure to get a lien waiver
when paying a contractor.
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