Before you complete a loan application , verify whether your modular home lender will let you act as general contractor.
A Customer’s Unfortunate Experience with a Modular Home Lender
Recently a young couple decided to act as their own GC so they could save money. They went to their favorite local lender who told them that the general-contracting work on their home had to be supervised by a professional GC. They said they understood and proceeded with their application. About a month after they applied, the modular home lender asked for a copy of the GC’s insurance policy and contractor’s license, which is required in the customers’ home state. (Not surprisingly, neither of the customers had a license or contractor’s insurance for themselves, since they were not involved with the building trades.) After asking around for a couple of weeks, my customers found a licensed GC who was willing to assume the official role of general contractor for a fee of a few thousand dollars. He also agreed to allow them to complete most of the work and hire their own subcontractors.
Unfortunately, the modular home lender was not satisfied. It now wanted written quotes for all of the work. My customers were surprised by that requirement, since they intended to do much of the carpentry themselves with the help of family and friends. When they finally secured written estimates, the lender said the total cost of the project was now greater than what it could lend them, so they were turned down for the loan.
Verify Whether Your Modular Home Lender Will Let You Act as GC
Fortunately, I was able to recommend a modular home lender who allowed them to act as their own GC and complete some of the work. But, as you would expect, my customers lost a couple of months and incurred a great deal of unnecessary stress. To avoid this problem, be sure to verify whether your modular home lender will let you act as GC before selecting it.
For more information about why you should verify whether your modular home lender will let you act as GC, see Financing a Modular Home in my book The Modular Home.