We believe that it is necessary to surrender the certificates of title for the mobile homes, among other required steps, in order to extend a mortgage loan secured by a manufactured (or mobile) home as real property (with the underlying land). There is no exemption from these required steps for mobile homes located in a mobile home park.

The Illinois Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act (Act) establishes a process for a manufactured home to be deemed real property if the home is located outside of a mobile home park or the owner of the manufactured home and the real property it is affixed to are identical. The home must be attached to a permanent foundation, and the owner: (1) must execute and record an “affidavit of affixation” with the county recorder, which must be filed with the Illinois Secretary of State, and (2) surrender the certificate of title (or Manufacturer’s Statement of Origin, if applicable) to the Illinois Secretary of State. When these steps have been completed, a mortgage can attach to a manufactured home as if it were real property.

If the owner of the manufactured home does not surrender the certificate of title — or fails to follow the other required steps, such as affixing the home to a permanent foundation and recording or delivering an affidavit of affixation — the home will not be deemed to be real property, and your mortgage might not attach to the home. Consequently, we recommend requiring the potential loan customer to ensure that the owner of the manufactured homes in the mobile home park surrenders the titles and fulfills the other required steps in the Act before extending a mortgage loan to be secured by the manufactured homes as real property (with the underlying land).

For resources related to our guidance, please see:

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-5 (“For the purposes of this Act, ‘manufactured home’ means a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code. . . . For the purposes of this Act, a manufactured home is ‘affixed to a permanent foundation’ if the wheels, axles, and towing hitch are removed, and it is anchored to real property by attachment to a permanent foundation and connected to residential utilities (such as water, gas, electricity, or sewer or septic service). The certification of a certified residential real estate appraiser, a certified general real estate appraiser, a licensed manufactured home installer, or a licensed professional engineer that the home is affixed to a permanent foundation shall establish conclusively that the home is affixed to a permanent foundation.”)

• Illinois UCC, 810 ILCS 5/9-102(a)(53) (“‘Manufactured home’ means a structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein. The term includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States Secretary of Housing and Urban Development and complies with the standards established under Title 42 of the United States Code. The term ‘manufactured home’ does not include campers and recreational vehicles.”)

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-30 (“A manufactured home shall be deemed to be real property when all of the following events have occurred: (1) the manufactured home is affixed to a permanent foundation as provided in Section 5-5 of this Act; (2) an affidavit of affixation conforming to the requirements of Section 5-15 of this Act has been recorded; (3) a certified copy of the recorded affidavit of affixation has been delivered for filing to the Secretary of State as provided in Section 5-25 of this Act; and (4) the requirements of Section 3-116.1 or 3-116.2 of the Illinois Vehicle Code, as applicable, have been satisfied. A conclusive presumption shall arise that the averments of the recorded affidavit of affixation establish that, for all purposes, the manufactured home is real property.”)

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-35 (“Upon the satisfaction of the requirements of Section 5-30 of this Act and the requirements of Section 3-116.1 or 3-116.2 of the Illinois Vehicle Code, as applicable, such manufactured home shall be deemed to be real property; any mortgage, deed of trust, lien, or security interest that can attach to land, buildings erected thereon, or fixtures affixed thereto shall attach as of the date of its recording in the same manner as if the manufactured home were built from ordinary building materials on site; title to such manufactured home shall be transferred by deed or other form of conveyance that is effective to transfer an interest in real property, together with the land to which such structure has been affixed; and the manufactured home shall be deemed to be real property and shall be governed by the laws applicable to real property.”)

• Illinois Vehicle Code, 625 ILCS 5/3-116.2(a) (“The owner (all, if more than one) of a manufactured home that is covered by a certificate of title, including, if applicable, a certificate of title issued in accordance with subsection (b) of Section 3-109, and that is permanently affixed to real property as defined in the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, or which the owner intends to permanently affix to real property as defined in the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, may surrender the certificate of title to the manufactured home to the Secretary of State by filing with the Secretary of State an application for surrender of title containing or accompanied by: . . .”)

• Illinois Vehicle Code, 625 ILCS 5/3-116.1(a) (“The owner (all, if more than one) of a manufactured home that is covered by a Manufacturer’s Statement of Origin and that is affixed to a permanent foundation as defined in the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, or which the owner intends to affix to a permanent foundation as defined in the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, may surrender the Manufacturer’s Statement of Origin to the manufactured home to the Secretary of State by filing with the Secretary of State an application for surrender of Manufacturer’s Statement of Origin containing or accompanied by: . . .”)

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-10 (“The owner of a manufactured home that is personal property or a fixture may, but need not, cause that manufactured home to be deemed to be real property by satisfying the requirements of Section 5-30 of this Act and the requirements of Section 3-116.1 or 3-116.2 of the Illinois Vehicle Code, as applicable. To convey or voluntarily encumber a manufactured home as real property, the following conditions must be met: . . . (2) the ownership interests in the manufactured home and the real property to which the manufactured home is affixed must be identical, or, if the manufactured home is not located in a mobile home park as defined in Section 2.5 of the Mobile Home Park Act, and if the owner of the manufactured home, if not the owner of the real property, is in possession of the real property pursuant to the terms of a lease in recordable form that has a term that continues for at least 20 years after the date of execution, then the consent of the lessor of the real property must be given;. . . .”)

• Mobile Home Park Act, 210 ILCS 115/2.5 (“‘Mobile home park’ means a tract of land or 2 or more contiguous tracts of land upon which contain sites with the necessary utilities for 5 or more independent mobile homes for permanent habitation either free of charge or for revenue purposes, and shall include any building, structure, vehicle, or enclosure used or intended for use as a part of the equipment of such mobile home park. Separate ownership of contiguous tracts of land shall not preclude the tracts of land from common licensure as a mobile home park if they are maintained and operated jointly. Neither an immobilized mobile home nor a motorized recreational vehicle shall be construed as being a part of a mobile home park.”)