Mobile Home Financing: 2024 Guide to Buying a Mobile Home

By: Gina Freeman Updated By: Ryan Tronier Reviewed By: Paul Centopani
April 25, 2024 - 13 min read

An insider’s guide to securing the best used mobile home financing deals

Mobile home financing may seem intimidating, especially for first-time home buyers or those seeking to refinance.

Financing a mobile home comes with its own set of considerations, such as the home’s age, foundation, and tax status. Unlike traditional site-built homes, which typically appreciate in value over time, mobile homes tend to depreciate, much like vehicles. This depreciation makes it challenging to secure loans for used mobile homes built before 1976.

However, there is a silver lining: if you already own the land, you may be able to secure mobile home financing through a personal loan or a chattel loan instead of a mortgage. Fortunately, some mortgage companies specialize in both residential real estate and personal property, making it possible for you to obtain the mobile home loans you need.

Check your mobile home financing eligibility. Start here

>Related: Low-Income Mortgage Loans: Low Down Payment, Easy To Qualify

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Understanding the difference between mobile and manufactured homes

Mobile homes and manufactured homes are both types of prefabricated structures, but there are key differences between them that can affect financing options.

Mobile homes

A mobile home refers to a factory-built home constructed before June 15, 1976, when the U.S. Department of Housing and Urban Development (HUD) introduced new safety standards. These homes are built on a permanent chassis with wheels, making them potentially movable, even though they are often placed in a fixed location.

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Manufactured homes

In contrast, a manufactured home is a factory-built home constructed after June 15, 1976, adhering to the HUD Code’s strict safety and construction standards. Like mobile homes, manufactured homes are built on a permanent chassis, but they are designed to be transported to a site and installed on a temporary or permanent foundation.

Have a manufactured home? Read our guide on manufactured home mortgages.

Challenges with mobile home loans

One of the main reasons why mobile home financing can be challenging is that many lenders view these homes as personal property rather than real estate. This perception is due to the fact that mobile homes, especially those built before 1976, may not meet current safety and construction standards, making them riskier investments for lenders.

  • Mobile homes are often placed on leased land or in mobile home parks or manufactured home communities, which can make it difficult for lenders to secure their investment. In the event of a default, the lender may have difficulty repossessing or selling the home if they don’t have a claim to the land it sits on.
  • Mobile homes tend to depreciate over time, unlike traditional site-built homes that typically appreciate in value. This depreciation makes lenders more hesitant to offer competitive rates and terms for these types of properties.

However, in areas where more people own these types of homes, it’s generally easier to find mobile home financing. The darker areas in the map above indicate areas with a higher percentage of mobile units.

There are still lenders who are willing to provide mobile home loans, especially if they are permanently affixed to land. The lender may require a larger down payment or charge a higher interest rate to offset the risk.

Mobile home financing requirements

When seeking financing for a used mobile home, it’s important to understand the specific requirements you’ll need to meet. Whether you’re looking for a mobile home mortgage for a home on land or financing for the home only, there are several factors to consider.

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Down payment and credit score minimums

Lenders typically require a higher down payment for a used mobile home compared to a traditional home or a newer manufactured home.

Prepare to make a down payment of at least 10–20% of the purchase price. Additionally, a credit score of 580 or higher is generally needed to qualify for mobile home financing, although some lenders may have higher requirements. A better credit score can help you secure more favorable interest rates, loan terms, and more manageable monthly payments.

Age and condition

Lenders often have specific age and condition requirements for the mobile homes they finance. Some lenders may not offer loans for homes older than 20 or 25 years, while others may require a thorough inspection to assess the home’s condition and ensure it meets safety standards. Be prepared to provide detailed information about the property’s age and condition when applying for mobile home financing.

Mobile home financing on privately-owned land

If you’re seeking a mobile home mortgage for a home on land you own, you may have more financing options available. Lenders may be more willing to finance the home as real estate if it is permanently affixed to a foundation on your property.

However, if the home is on leased land or in a mobile home park, your financing options may be more limited.

Financing for the home only

When financing a used mobile home without land, you’ll need to explore specialized lending options. Many traditional mortgage companies do not offer financing for mobile homes that are not permanently affixed to land, as they are considered personal property rather than real estate.

Look for lenders who have experience in financing mobile homes and can guide you through the process.

Mobile home financing options

When it comes to financing a mobile home, it’s important to note that conventional loans backed by Fannie Mae and Freddie Mac are not available for true mobile homes. Similarly, government-backed mortgages, such as FHA loans, VA loans, and USDA loans, do not extend to mobile home financing.

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However, don’t be discouraged! There are still several financing options available for those looking to purchase a mobile home. From chattel loans, personal loans, and even seller financing, you have choices when it comes to making your mobile home dream a reality, whether it’s a new home or a pre-owned one.

Chattel loans

Chattel loans are a popular option for financing mobile homes, particularly when the home is not permanently affixed to land. These loans treat the mobile home as personal property, similar to a car loan. While chattel loans typically have shorter terms (15–20 years) and higher interest rates compared to traditional mortgages, they offer some unique benefits.

One advantage of chattel loans is that they are not subject to the same rules and regulations as traditional mortgages for single family homes. This means that borrowers may have more flexibility in terms of how they use their mobile home, whether it’s as a primary residence, a vacation home, or even a rental property.

Additionally, chattel loans do not require borrowers to pay mortgage insurance, which is often a requirement for traditional mortgages when the down payment is less than 20%. This can result in lower monthly payments, even with higher interest rates.

However, it’s important to keep in mind that chattel loans may have a lower maximum loan amount compared to other financing options, and the higher interest rates can result in paying more interest over the life of the loan.

Despite these potential drawbacks, chattel loans remain a viable and popular option for many mobile home buyers. They can be easier to qualify for and may have lower closing costs, making them an attractive choice for those who may not meet the requirements for traditional mortgages.

Personal loans

Personal loans can be a viable option for financing a mobile home, especially if you have good credit. These loans are unsecured, meaning they don’t require collateral, and they can be used for a variety of purposes.

Personal loan terms usually range from 1 to 7 years, and interest rates can be higher than mortgage rates. However, personal loans can provide a flexible financing solution for those who may not qualify for other types of loans.

Seller financing

In some cases, the seller of a mobile home may be willing to offer financing directly to the buyer. This is known as seller financing or owner financing. Under this arrangement, the seller acts as the lender, and the buyer makes payments directly to the seller.

Seller financing can be a good option if you have difficulty qualifying for other types of loans, but be sure to carefully review the terms and conditions of the agreement.

Remember, while mobile home financing may require some extra research and effort, there are still plenty of options available. Work with lenders who specialize in mobile home loans and be open to exploring alternative financing solutions. With persistence and the right guidance, you can secure the financing you need to make your mobile home ownership dreams a reality.

Banks that finance mobile homes with land

Specialized mobile home lenders often provide financing options that traditional banks might not offer. These lenders are familiar with the unique challenges of mobile home financing. Here are some examples of banks that finance mobile homes with and without land.

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  • New Horizon Mortgage Concepts specifically advertises financing for mobile homes built before June 15, 1976. They provide both purchase loans and cash-out refinancing options.
  • C&S California Capital also finances pre-HUD mobile homes (those built before 1976). They offer a range of financing options, including fixed and step rate programs, refinancing up to 90% of the home’s value, and cash-out refinancing. Their services include financing for homes located in parks, which do not require the home to be on owned land.
  • Cascade Financial Services offers chattel loans for homes that are not permanently affixed to real estate, making it a suitable option if you’re considering a mobile home in a park or leased land scenario​​.
  • CIS Home Loans provides chattel loans, known as “home only loans,” for all types of homes, including modular homes and manufactured homes.
  • CountryPlace Mortgage offers a variety of financing options, including chattel loans.
  • JCF Lending Group specializes in mobile home financing and refinancing without involving the land in the transaction, making them a good option for chattel loans​.
  • 21st Mortgage Corporation provides chattel loans with potentially no down payment required for qualified buyers.

Make sure to contact these lenders directly or visit their websites for the most accurate and detailed information about their loan offerings and eligibility criteria.

How to get mobile home financing

Financing a mobile home (pre-1976) can be a challenging process, as many lenders and resources focus primarily on manufactured homes. However, with the right information and guidance, you can find the best loan options for your specific needs. This section will walk you through the steps to obtain financing for your mobile home purchase.

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Step 1: Determine your budget

Before exploring your financing options, it’s key to establish a clear budget and determine the home purchase price you can afford. Consider factors such as your income, monthly expenses, and savings to ensure that you can comfortably manage the monthly payments associated with your mobile home loan.

Step 2: Research lenders and loan options

Look for lenders who specialize in mobile home financing, as they will be more familiar with the unique challenges and requirements associated with these types of loans. Compare different loan options, such as chattel loans, personal loans, and seller financing, to find the most suitable solution for your situation.

Step 3: Compare interest rates and loan terms

When evaluating mobile home financing, pay close attention to the loan term and interest rates offered by each lender. Mobile home loans often have shorter terms and higher interest rates compared to traditional mortgages. However, some lenders may offer more competitive rates and fixed-rate mortgages, which can provide stability and predictability in your monthly payments.

Step 4: Gather documentation

To apply for a mobile home loan, you’ll need to provide various documents to the lender. These may include proof of income, bank statements, identification, and information about the mobile home you intend to purchase. Having these documents readily available can streamline the loan application process.

Step 5: Submit your loan application and await approval

Once you’ve chosen a lender and gathered the necessary documentation, it’s time to submit your loan application. Be thorough and accurate when completing the application, as any discrepancies or missing information can delay the approval process.

After submitting your loan application, the lender will review your information and make a decision. If approved, you’ll proceed to the closing process, where you’ll sign the necessary documents and finalize the loan agreement.

Remember, while obtaining mobile home financing may present some challenges, it’s still possible to find suitable loan options. By understanding the process, researching lenders, and carefully evaluating your options, you can secure the financing needed to make your mobile home purchase a reality.

FAQ: Mobile home financing

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What determines if a mobile home is considered a vehicle or real property?

For a mobile home to be classified as real property instead of a vehicle, it must meet certain criteria set by the HUD. This entails having permanent utility connections, being accessible via an all-weather road, paying real estate taxes, and maintaining structural integrity while moving. If the mobile home meets these requirements and is not registered with the Department of Motor Vehicles (DMV), it can be considered real property. However, if homeowners pay annual taxes to the DMV, the mobile home is classified as a vehicle.

Can you finance a pre-1976 mobile home?

Yes, it is possible to finance a pre-1976 mobile home, although it may be more challenging than financing a newer manufactured or modular home. Some lenders offer specialized mobile home loans, such as chattel loans or personal loans, which can be used to purchase older mobile homes. However, these loans often come with higher interest rates and shorter loan terms compared to traditional mortgage options.

What credit score is needed to finance a mobile home?

It’s best to have a credit score of at least 580 before applying for manufactured home financing. Borrowers with credit scores of 620 or higher have more loan options. Personal loans may require higher scores since they’re not secured or insured.

What is a mobile home loan?

A mobile home loan is a type of financing specifically designed for purchasing mobile homes, which are factory-built homes constructed before June 15, 1976. These loans differ from traditional mortgages and may include options such as chattel loans, personal loans, or seller financing. Mobile home loans often have higher interest rates, shorter loan terms, and more stringent requirements compared to loans for newer manufactured or modular homes.

Can you finance a mobile home with an FHA loan?

No, you cannot finance a mobile home with an FHA loan. FHA loans, including Title I and Title II loans, are not available for mobile homes. However, you can use an FHA loan to finance a manufactured home or modular home that meets specific criteria, such as being built after June 15, 1976, and adhering to HUD’s Manufactured Home Construction and Safety Standards.

What is the loan term for a mobile home?

The loan term for a mobile home varies depending on the type of financing obtained. Chattel loans, which are commonly used for mobile homes, typically have shorter loan terms ranging from 15 to 20 years. Personal loans used for mobile home purchases may have even shorter terms, usually between 1 and 7 years. In comparison, traditional mortgages for manufactured or modular homes can have loan terms of up to 30 years.

Can you finance a mobile home with a conventional loan?

No, you cannot finance a mobile home with a conventional loan. Conventional loans, including Fannie Mae’s MH Advantage program and Freddie Mac’s Home Possible program, are not available for mobile homes. These loan options are designed for manufactured homes and modular homes that meet specific requirements. To finance a mobile home, you’ll need to explore alternative options such as chattel loans, personal loans, or seller financing.

Are you eligible for mobile home financing?

Pursuing homeownership through a mobile home purchase is an exciting journey.

While getting a mobile home loan may have its challenges, there are still many financing options available. Take the first step towards owning your mobile home by exploring your financing eligibility.

Click the link below to connect with mobile home financing experts who can guide you through the process and help turn your homeownership dreams into reality.

Time to make a move? Let us find the right mortgage for you

Gina Freeman
Authored By: Gina Freeman
The Mortgage Reports contributor
With more than 10 years in the mortgage industry, and another 10 years writing about it, Gina Freeman brings a wealth of knowledge to The Mortgage Reports as its Associate Editor. Gina works with a team of world-class real estate and finance writers to bring timely and helpful news and advice to the audience. Her specialty is helping consumers understand complex and intimidating topics.
Ryan Tronier
Updated By: Ryan Tronier
The Mortgage Reports Editor
Ryan Tronier is a personal finance writer and editor. His work has been published on NBC, ABC, USATODAY, Yahoo Finance, MSN Money, and more. Ryan is the former managing editor of the finance website Sapling, as well as the former personal finance editor at Slickdeals.
Paul Centopani
Reviewed By: Paul Centopani
The Mortgage Reports Editor
Paul Centopani is a writer and editor who started covering the lending and housing markets in 2018. Previous to joining The Mortgage Reports, he was a reporter for National Mortgage News. Paul grew up in Connecticut, graduated from Binghamton University and now lives in Chicago after a decade in New York and the D.C. area.