Buying a modular or prefabricated home can be an excellent idea. They are cost effective, high quality and are available in many wonderful communities throughout Ontario and Canada.

If you require mortgage financing for the purchase of a prefab or modular home, it can sometimes be tricky. There are many lenders that will consider an application, and that will enthusiastically approve the mortgage on a modular or prefabricated home with as little as 5% down payment at some of the lowest mortgage rates in the market. However, generally, lenders will adhere to specific property guidelines that you should be aware of when making an offer.

Owned Land. Often modular homes will be placed on leased land. This is the first thing to look out for. If the land is leased, it will be exceptionally difficult if not impossible to approve a traditional mortgage on the modular home property. The land needs to be purchased and owned with the home. A regular bank loan may apply to a leased situation.

Secured to a Foundation. The home should be secured to a permanent foundation. This should either be a customized poured foundation or concrete block foundation. Homes that are resting on metal posts or wood are not likely to be approved since the asset is not as fixed in place. A regular bank loan would likely apply to a property that is not fixed in place.

Good Overall Condition. The prefab home mortgage can be approved for applications where the structure is newer and in good condition. Modular homes built in the early 1990s or in the 1980s are not as likely to be built to the same standards as more recent homes. Also, the remaining life of older structures becomes a bigger question to lenders who may be considering a 20 or 25 year mortgage. No structural damage, water damage, mold, electrical or plumbing issues can be seen in the home.

Permanent Heating Source. The home should have a furnace or other non wood fired permanent heating source.

Year Round Access. The home needs to have year round, plowed access. Also, the more remote the property, the less likely a lender is going to approve. The property does not need to be in an area like Kitchener Waterloo, but should have easy accessibility to all amenities.

Hooked up to Services: The property should be hooked up to electricity, water and sanitation services that pass all government standards.

As long as this checklist is considered alongside the purchase of a prefab home in Kitchener Waterloo or Ontario, and credit is good – then it should be smooth sailing and a happily ever after move in.