Manufactured Housing Units
A recent clarification made by the Texas Department of Housing and Community Affairs ("TDHCA") regarding personal property taxes as they relate to the conveyance of Manufactured Housing Units has been the source of great confusion to our industry. The clarification, issued May 5, 2008, details requirements set out
in Section 1201.206(g) of the Occupations Code.
TDHCA requires the following to issue a Statement of Ownership and Location ("SOL"):
- Payment of all personal property taxes;
- A statement from the tax assessor - collector that personal property taxes for the previous 18 months have been paid; and,
- Pre-payment of estimated personal property taxes to the tax office for the current tax year.
Please note: These particular TDHCA requirements only apply to resale transactions where the MHU is not in a retailer's inventory.
Old Republic has developed the following underwriting guidelines for sale and refinance transactions of an MHU:
1. The seller must obtain, in their own name, an SOL having designated the subject MHU as real property prior to closing the transaction.
2. The real property status must be perfected by filing a certified copy of the SOL in the real property records in the county in which the home is located. A copy of the filed instrument must be returned to TDHCA.
3. Copies of the recorded SOL must be sent to the tax assessor - collector for the property. The MHU must be removed from the personal property tax roll and added to the
real property tax roll as an improvement to the land.
4. All title commitments issued must show the foregoing as requirements.
Remember: Once an MHU is designated as real property and its status perfected, the MHU must continue to be treated as real property until such time as the designation is removed or the MHU is
For any loan transactions involving Homestead property, the company standard remains that a valid Mechanic's Lien Contract must have been entered into and filed for record prior to the delivery of materials or commencement of work. If there is not a
Mechanic's Lien Contract meeting this standard, then the transaction must be treated as a Home Equity.
Should you have any questions or require further information,
please contact Kindra Wessel, Agency Administrator.