Are you one of the thousands of New Mexico homeowners paying thousands in extra interest every year just because your home is considered a "vehicle" and not real property?
In Santa Fe, Glorieta, and the surrounding communities, manufactured homes offer essential affordability. Yet, many of these homes are financed with costly chattel loans (personal property loans) that carry interest rates far higher than a traditional mortgage.
The solution is the legal process of de-titling (or Affixture), which converts your home into real estate. The best part? For many New Mexico homeowners, this entire process—the legal fees, the inspection costs, and the loan fees—can be handled with ZERO MONEY OUT OF POCKET.
As a licensed MLO with a C2 Financial Branch, I specialize in structuring these no-cash-to-close refinances, leveraging the competitive wholesale market to put thousands of dollars back in your pocket annually.
What is De-Titling, and Why Does It Cost You Money Now?
De-titling is the formal procedure of permanently surrendering your manufactured home’s vehicle title (issued by the Motor Vehicle Division) to legally reclassify it as permanent real property, permanently affixed to the land.
The Problem: The Chattel Loan Trap
When your home is titled as a vehicle, it is subject to a chattel loan. Lenders view chattel loans as high-risk because the home is technically movable. This risk results in:
-
Sky-High Rates: Chattel loans carry notoriously high Annual Percentage Rates (APRs)—often 4 to 6 percentage points higher than a mortgage—making refinancing your most immediate and profitable financial goal.
-
Depreciating Asset: The home is treated like a car for financing purposes, inhibiting its ability to appreciate in value alongside the land.
De-titling is the definitive legal step that allows us to replace that expensive chattel loan with a long-term, low-interest mortgage.
Why De-Titling Must Be Done Now (The Zero-Cost Opportunity)
The incentive to de-title today is purely financial. As a homeowner, you want to eliminate high-interest debt and preserve your cash.
1. The Power of the Rate Spread: Funding Your Closing Costs
The enormous difference between your current chattel loan interest rate and a new conventional or government mortgage rate (secured through lenders like UWM) is the key to achieving a no-cost closing.
The Broker's Strategy: Lender Paid Compensation (LPC)
To eliminate out-of-pocket costs, we structure the new mortgage with a slightly higher interest rate than a fee-based loan. In exchange for this slight increase in rate, our wholesale lender (UWM, for instance) provides a large Lender Credit. This credit is the magic key that covers all the de-titling and closing costs, including:
-
The Structural Engineer's Fee.
-
MHD Permit and Inspection Costs.
-
Title/Escrow/MVD De-titling Fees.
-
All Standard Loan Closing Costs (Appraisal, Origination, etc.).
Essentially, the dramatic savings from escaping the high chattel rate allow the new loan to absorb the cost of the process, resulting in zero cash needed at the closing table for the homeowner.
2. Immediate Equity Access (Refi and HELOCs)
Once the home is de-titled, it's real property. This qualifies you for:
-
Cash-Out Refinances: Accessing your accumulated equity with a conventional loan up to 80% LTV (or higher on a VA loan), allowing you to pay off credit cards, fund repairs, or invest—all at the lower mortgage rate.
-
Home Equity Lines of Credit (HELOCs): Accessing a revolving line of credit that utilizes your home’s value, preserving your low first-mortgage rate if you don't want to replace it.
3. Maximum Home Value Retention
De-titling officially turns your home into a real estate asset, making it eligible for the same financing (Conventional, FHA, VA) as a site-built home. This ensures your property’s value appreciates over time and sells to the largest possible pool of qualified buyers in the Santa Fe market.
The New Mexico De-Titling Steps: How We Get to No-Cash-to-Close
Successfully executing the de-titling process requires precise knowledge of the sequential steps required by three New Mexico agencies. We handle the financial structuring—you prepare the property.
The Key Prerequisite: The owner(s) on the home's title and the land's deed must be identical.
Phase 1: Certify the Structure (Manufactured Housing Division – MHD)
The home must be verified as a permanent structure on the land.
-
Engineer’s Report: The homeowner must hire a NM certified structural engineer to inspect and certify the foundation meets all HUD code requirements for a permanent foundation. This fee is covered by the Lender Credit at closing.
-
MHD Permitting: Submit the engineer’s report to the MHD with a Foundation Permit Application.
-
MHD Inspection & Green Tag: After a successful inspection, the MHD issues a Green Tag (or equivalent documentation).
Phase 2: Change the Tax Status (County Assessor/Treasurer)
The County must legally change how it taxes the property:
-
Tax Release: Pay all current property taxes and obtain a Mobile Home Tax Release from the County Treasurer.
-
Assessor Certification: Take the tax release to the County Assessor’s Office and complete the "Request to Change Valuation Status" (Affidavit of Affixture). This certifies the home will be taxed as real property moving forward.
Phase 3: Deactivate the Title (Motor Vehicle Division – MVD)
This is the final, essential step to remove the home’s vehicle status, completed at or just after closing.
-
Chattel Loan Payoff: The new mortgage funds pay off the old high-interest chattel loan, releasing its lien.
-
Title Submission: The title company submits the Original Title, the Lien Release, and the signed Assessor’s Request to the MVD.
-
Deactivation: The MVD deactivates the title and issues a new Inactive Title.
Once the MVD issues the inactive title, the home is legally recognized as real property, and the mortgage we secured (with UWM or another C2 Financial partner) is properly recorded as a lien on your real estate.
5 Things You Must Know About Your No-Cost Refinance
-
You Do Not Need the MFA: You do not need to deal with the slow, restrictive NM MFA programs. Your broker relationship provides direct access to superior financing options like UWM's MH Advantage, which achieve the same goal faster and with more options.
-
Chattel Lenders Don't Compete: The high cost of your current chattel loan is due to a lack of competition. Your MLO (broker) status allows us to shop over 50 lenders, forcing the market to give you the lowest possible real estate rate.
-
All Costs Are Capitalized: The interest rate on the new mortgage is chosen specifically to generate enough Lender-Paid Credit to cover all de-titling, third-party fees, and closing costs, resulting in zero cash due at the closing table.
-
UWM's Technology is Your Ally: Wholesale lenders like UWM offer tools (like the TRAC+ title alternative and quick underwriting) that ensure your complex de-titling loan closes quickly and efficiently—a major advantage over large retail banks.
-
This is an Investment: By eliminating high-interest debt and converting your home into a real estate asset, you are making one of the most profitable financial moves possible for a manufactured homeowner in New Mexico.
Don't let the high cost of a chattel loan hold your family back. Contact me today for a complimentary review to see exactly how much your zero-cost refinance and de-titling conversion can save you.
As a licensed MLO in New Mexico working through a C2 Financial Branch, Fred Richardson specializes in complex financing solutions for Santa Fe, Glorieta, and Pecos homeowners.