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How to get a manufactured or mobile home loan

Gina Pogol
The Mortgage Reports contributor

Financing your manufactured home

Is it hard to get a loan for a mobile or manufactured home?

No, but it is different.

Some lenders offer conforming mortgages for manufactured homes, which are the standard for traditionally built homes.

FHA loans, plus financing backed by the USDA and VA, are other avenues to finance a manufactured home. And personal loans can work, too.

What’s available to you depends on your eligibility as a borrower, the type and age of the structure, and whether it’s considered ‘real’ or ‘personal’ property.

Here’s how to find the best financing for your manufactured house.

Find out if you qualify for a mortgage. Start here (Dec 3rd, 2020)

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Who can get a manufactured home loan?

Getting a loan for a manufactured home is different than getting a traditional home loan.

There are a few basics you should know before diving into mobile home financing options:

  • Not all manufactured homes are considered “real estate”
  • If the home is on wheels or you pay fees to the DMV, the home is considered a “vehicle”
  • There are strict rules about property condition and age

To qualify for traditional home financing or refinancing options, a home must be classified as ‘real estate.’ But not all manufactured housing is considered real estate.

If your mobile home is at least 400 square feet, on an approved permanent foundation, and taxed as real property, you can apply for conventional or government-backed mortgages.

If you pay annual fees to the DMV, or the building is still on wheels, then the property is a vehicle, not a house. In this case, it will not qualify for a mortgage loan. Mobile homes often fall into this category.

You may be able to get a mobile home loan for ‘personal property’ instead of real estate if you have at least 5 percent down and the home is reasonably new.

Also know that many manufactured home loan programs have strict guidelines about the property’s condition and age. That’s because manufactured housing tends to depreciate in value, while traditional home values tend to increase over time.

Financing for moveable homes

Unless your home qualifies as real estate, you won’t be able to finance the home purchase with a conventional or government-backed mortgage program.

That’s okay, though. Moveable mobile homes can still be financed, just not with home mortgages.

There are a few different loan options if you can’t get traditional mortgage financing for your mobile home.

 FHA Title I program

Manufactured housing loans for personal property — homes that are not classified as real estate — are readily available if you have at least 5 percent down and the home is reasonably new.

The Federal Housing Administration (FHA) backs loans for mobile home vehicles with its Title I program.

Interest rates are negotiated between borrowers and private lenders that offer this loan type. Keep in mind the typical home lender might not offer this type of loan.

Also, interest rates for these loans are higher than mortgage rates because loans for a moveable property are riskier for lenders.

The interest rate is fixed for the entire loan term, and there are maximum loan amounts based on whether you’re financing a home purchase, buying the land for the home site, or both.

Current FHA Title I loan limits:

  • Manufactured home: $69,678
  • Manufactured home lot: $23,226
  • Manufactured home & lot: $92,904

There are also maximum loan terms.

  • 20 years for a manufactured home or a single-wide home and lot
  • 15 years for a manufactured home lot loan
  • 25 years for a loan on a multi-wide manufactured home and lot

An FHA Title I loan can be used for refinancing a manufactured home as well as purchasing one.

Not all lenders offer this program, so you’ll need to call around and/or search online for lenders who offer FHA Title I financing.

Chattel loans

A chattel loan offers an in-between option for mobile home financing. This loan resembles an auto loan in that the home serves as collateral for the loan.

You may be able to get a chattel loan if you don’t plan to buy the home site, which is often the case in a mobile home community.

And you’d need at least 5 percent down to get one. Because the home’s value provides security for a chattel loan, these loans are less risky than personal loans and can offer more competitive rates.

However, rates will still be several percentage points higher than a traditional fixed-rate mortgage. That, combined with a chattel loan’s shorter loan term, often results in higher monthly payments.

Personal Loans

Personal loans may be a good alternative to a traditional mortgage loan. If your manufactured home is still on wheels, or is not financeable for some other reason, this option can be worth looking into.

The most attractive thing about personal loans is that there is absolutely no property approval involved.

The loan is based on you, not the property, so the mobile home can be in poor shape or too old to finance, and you could still be approved based on your credit history and debt-to-income ratio.

A personal loan won’t have competitive rates compared to a mortgage loan. But financing is fast. In a week or less, you can have the funds to help purchase a home.

Check my rate for a manufactured home loan (personal loan) up to $100k * (Dec 3rd, 2020)

*TheMortgageReports and/or our partners are currently unable to service the following states – MA, NV

Financing for foundation-secured “real” property

If your manufactured house is classified as real property, you can finance it with a mortgage. Most likely, that’s a Fannie Mae, Freddie Mac or government-backed mortgage program.

The loans work almost exactly the same as financing for traditional “stick-built” houses.

With Fannie and Freddie loans, you can put as little as 5 percent down. There are extra risk-based loan fees for manufactured housing, so rates are slightly higher.

FHA loans work the same way for manufactured or traditional homes: the required down payment is 3.5 percent if your FICO score is 580 or higher, and 10 percent if it’s between 500 and 579. The home must have been built after June 15, 1976, and it cannot be located in a flood zone.

The VA loan program for manufactured housing requires 5 percent down, and the loan terms are shorter – between 20 and 25 years, depending on the property.

USDA (Rural Housing) loans require no down payment, but the manufactured home must be brand new and borrowers must meet income-eligibility guidelines.

Check your home loan eligibility (Dec 3rd, 2020)

Getting a personal loan on your manufactured home

Many manufactured home loan programs have fairly strict guidelines about the property condition and age. That’s because manufactured housing tends to depreciate, while traditional home values tend to increase over time.

If you’re set on purchasing a home that doesn’t meet lender requirements, there are always personal loans.

You’ll need a decent credit score to get an unsecured personal loan, because it’s not attached to your property.

Funding is fast. Once approved, you could receive money to purchase, fix up, or refinance your manufactured home the next business day.

Typically, to receive a personal loan, you must be a U.S. citizen or permanent resident with a Social Security number, have steady income, and a good credit history.

Maximum loan amounts are around $35,000 to $50,000 for most lenders. But some lenders can approve loans up to $100,000.

In addition, a lot of lenders now offer an online loan application process for personal loans.

Check my rate for a manufactured home loan (personal loan) up to $100k * (Dec 3rd, 2020)

*TheMortgageReports and/or our partners are currently unable to service the following states – MA, NV

Mobile home loan FAQ

What is the significance of June 15, 1976?

The federal government enacted the National Manufactured Housing Construction and Safety Standards on June 15, 1976. The law was designed to protect consumers by requiring mobile homes to meet safety standards enforced by the Department of Housing and Urban Development (HUD) Code.

Homes manufactured before June 15, 1976, may not meet these requirements, so mortgage lenders won’t finance them.

Do mobile home retailers provide financing?

Yes, a mobile or manufactured home dealer may offer financing just like a car dealer does. However, you should do your own home financing research. The FHA Title 1 program could offer lower monthly payments through a lower interest rate and/or a longer loan term.

Do mobile home loans require mortgage insurance?

If you get a loan backed by the FHA or USDA, you’ll be required to buy mortgage insurance which protects the lender in case you default on the loan. Mortgage insurance premiums will add to your monthly payments and upfront costs.

Despite this extra cost, a government-backed loan with mortgage insurance may still cost less than using an unsecured personal loan to finance your home.

What is the difference between a mobile, manufactured, or modular home?

This distinction refers to the method of home construction. A modular home is built in pieces in a factory, and then assembled on a permanent foundation at the home site. A manufactured home is built in a factory and placed on a permanent foundation with no intention of further mobility. A mobile home is built in a factory and normally has wheels; it can be placed on a permanent foundation. 

Does my manufactured home qualify for a mortgage?

To qualify for a traditional mortgage, a manufactured home must be at least 400 square feet and placed on a permanent foundation.

By this definition, select mobile homes, manufactured homes, or modular homes could all qualify for financing. But the property must meet the above standards as well as the mortgage lender’s requirements.

Smaller homes or mobile homes without a permanent foundation will require a personal loan or possibly a chattel loan.

Do you have to buy the mobile home site as well as the home?

No. A homeowner could buy the manufactured home separately from the lot or along with the lot.

What are today’s rates?

Today’s interest rates are low, and that’s helping more renters become homeowners. For many, manufactured housing is an affordable first step to homeownership.

Verify your new rate (Dec 3rd, 2020)

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