Manufactured homes offer an affordable and flexible housing solution for many buyers. However, securing financing for these properties can be more complex than for traditional site-built homes. Understanding the mortgage loan options available for manufactured homes is crucial for making an informed decision.

What Is a Manufactured Home?

Manufactured homes, formerly known as mobile homes, are factory-built residences constructed to federal building codes (HUD Code) rather than local or state standards. They are typically transported to a permanent or semi-permanent location, such as a private lot or a manufactured home community.

Types of Mortgage Loans for Manufactured Homes

1. FHA Title I & Title II Loans

The Federal Housing Administration (FHA) offers two loan programs for manufactured homes:

Designed for borrowers who own the land where the home will be placed.

Available for homes classified as real property (permanently affixed to a foundation).

Both options feature competitive interest rates and lower down payment requirements (as low as 3.5%).

2. VA Loans

For eligible veterans and active-duty service members, the U.S. Department of Veterans Affairs (VA) provides loans for manufactured homes, including:

Covers both the home and the land it sits on.

Allows the purchase of land before placing a manufactured home.

VA loans require no down payment and offer favorable terms.

3. Conventional Loans

Some lenders offer conventional mortgages for manufactured homes if they meet specific criteria:
– The home must be permanently affixed to a foundation.
– It must be classified as real estate, not personal property.
– Borrowers typically need a higher credit score (620+) and a larger down payment (5-20%).

4. Chattel Loans

If the home is not permanently attached to land (e.g., in a rental community), buyers may need a chattel loan, which treats the home as personal property. These loans often have higher interest rates and shorter terms.

Key Considerations When Applying

Loans are easier to secure if you own the land.

Permanent foundations improve loan eligibility.

Ensure the home meets federal standards.

Strong credit and stable income improve approval chances.

Conclusion

While financing a manufactured home differs from traditional mortgages, multiple loan options exist to fit various needs. By researching lenders and loan types, buyers can secure affordable financing and achieve homeownership with a manufactured home.

Would you like assistance in finding lenders specializing in manufactured home loans? Let us know how we can help!