Manufactured home swaps in Florida

Two titles: the one you cancel and the one you retire

Florida titles a mobile home through the Department of Highway Safety and Motor Vehicles, much like a car. When the old home is dismantled or destroyed, section 319.30 requires the owner named on its title to surrender that title to the department, which cancels it with the consent of any lienholder shown on it. If the old home’s title was already retired to the land, the department’s procedure treats the home as conveyed with the land by deed instead.

The new home arrives with a title of its own, and the point of a swap is to retire it. Section 319.261 lets the owner of a mobile home permanently affixed to land owned by that same person retire the title, so the home becomes part of the real property. The original title, a lienholder’s release, the legal description and a sworn statement that the home is permanently affixed are recorded with the clerk of court, and the department then retires the title.

• The title has to be in the landowner’s name before it can be retired, under the department’s procedure.
• An RP decal must be issued to the home first.
• The department charges no fee to retire a mobile home title.
• Once retired, the home is conveyed by deed with the land, and it can only be secured as part of the real property through a mortgage.

The RP decal and the tax roll

Section 193.075 taxes a mobile home as real property when the owner of the home also owns the land and the home is permanently affixed, which the statute describes as tied down and connected to the normal and usual utilities. A home taxed that way is issued an RP series sticker, and the department requires that RP decal before it will retire the title.

Property is assessed as it stands on January 1 under section 192.042, and an improvement not substantially complete on that date carries no value for that year. On a swap, the tax bill follows the calendar: the year the old home comes off and the year the new home is set and connected can be assessed quite differently.

A licensed installer, and Florida’s installation standards

Under section 320.8249, anyone who installs a mobile home in Florida needs a mobile home installer’s license from the state, carries liability insurance and a bond, and the regulation of installers is reserved to the state rather than to counties. A set crew without that license is a problem for the permit, the title retirement and the loan alike.

The installation itself follows uniform standards the department adopts by rule under section 320.8325, which require a permanent foundation that resists wind, flood, flotation, overturning, sliding and lateral movement.

Wind Zone II or Wind Zone III

Manufactured homes are built to a federal code with wind zones of their own, and Florida has two of them. After Hurricane Andrew struck in 1992, the federal standards were amended, effective in July 1994, adding Wind Zone III for the most severe winds. The department’s own damage assessments describe Wind Zone II homes as designed for winds up to 100 miles per hour and Wind Zone III homes for up to 110.

The new home has to be built for the zone of the county it is set in. A home built before July 1994 was built to the older standard, which is one reason the replacement is worth funding rather than repairing.

• Wind Zone III: Broward, Charlotte, Collier, Miami-Dade, Franklin, Gulf, Hendry, Lee, Martin, Manatee, Monroe, Palm Beach, Pinellas and Sarasota counties.
• Wind Zone II: every other Florida county.

Flood zones apply to manufactured homes too

In the federal flood program’s A zones with a mapped base flood elevation, a manufactured home placed on a site has to be elevated on a permanent foundation so its lowest floor is at or above the base flood elevation, and anchored against flotation, collapse and lateral movement, under 44 CFR 60.3. The Florida Building Code adds that installation in a flood hazard area is also subject to the local floodplain management ordinance, on top of the state’s installation rules.

A community can require more than the federal minimum, so ask the county floodplain administrator for the required elevation before ordering the home, because the height of the piers changes the set and the steps.

The septic system was sized for the old home

A swap rarely replaces like with like. County health departments in Florida require approval of the existing septic system when a building is expanded or its sewage flow increases, and adding bedrooms triggers an evaluation of the existing system that can require bringing it up to current standards. A two bedroom single section replaced with a four bedroom multi section home can need a larger system, and any modification needs a permit under section 381.0065.

Price that answer before the home is ordered. A septic upgrade discovered after the old home is gone is a cost that arrives at the worst moment in the project.

Florida closing costs on a swap

If the land is bought in the same transaction, the deed is taxed at 70 cents per $100 of price, or 60 cents plus a 45 cent surtax in Miami-Dade on anything other than a single-family residence. The loan is taxed at 35 cents per $100 on the note and mortgage, and debt secured by Florida real property carries a one-time 2 mill intangible tax.

The title retirement is what makes a single mortgage work: once the title is retired, the home is part of the land and is secured through the mortgage on the land rather than as separate personal property.

Funding a Florida swap

Entrusted Capital funds Florida manufactured home swaps as one loan against the lot, with its own capital: the removal of the existing home, the site work the new unit needs, and the purchase and set of the new home, up to 80% loan-to-cost. The borrower owns the land or buys it in the same transaction, the new home is retired to the land, and every loan is for business purposes on non owner occupied property.

• The lot: deed or purchase contract, survey, and the flood zone.
• The old home: its title, or the recorded documents if it was already retired.
• The new home: the order, the wind zone it is built for, and the licensed installer.
• The septic answer: the existing system approval, or the permit for a new one.