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To get the best manufactured home loan rates, look for a home that qualifies for a traditional mortgage and shop around with at least three different lenders. As with Freddie and Fannie loans, you may need to shop around to find a lender that underwrites FHA Title II manufactured home loans. As with conventional financing, FHA Title II loans work only for homes permanently attached to land you own (or land you’re buying). Private lenders throughout the nation offer Fannie and Freddie products, but you may have to shop around to find one that offers these manufactured home loans. Similar to a Title II FHA loan, if you want to buy a manufactured home and the land it sits on, you can also get a VA loan.
With Fannie Mae and Freddie Mac conventional loans, you can put as little as 3 percent down. There are extra risk-based fees for manufactured home loans, so rates are slightly higher. But, even if the manufactured home you’re buying was built to HUD’s standards, it may not qualify for a traditional mortgage.
Manufactured home vs. modular home
If the home can’t clear a few more qualifying hurdles, you may need an alternative form of financing. While it’s not always required, you may also want to think about saving for a down payment on your manufactured or mobile home. Rocket Mortgage requires a down payment of at least 5% of the loan on manufactured homes, though putting a larger sum down is usually a good idea as it will help lower your monthly payments. However, to qualify for a conventional mortgage, the home must be permanently affixed to your land. Unfortunately, many borrowers miss this detail and end up stuck in more expensive chattel mortgages with no foreclosure protections. Fortunately, the percentage of borrowers with this loan type improved dramatically, according to a CFPB report from 2021 that lists the rate of borrowers with chattel loans at 42%.
In addition, conventional mortgages can also cover the purchase of the land on which the manufactured home will go, so make sure to compare options before signing on to a chattel loan. The loan will be covered by consumer protection laws that apply to conventional mortgages, including various state foreclosure and repossession laws that don’t apply to property loans. Mortgage loans also have much lower interest rates than chattel mortgages, starting at 5.99% for well-qualified borrowers. Tiny houses, travel trailers in which people live, and converted vans are all technically mobile homes. Department of Housing and Urban Development code standards were established in 1976 are mobile homes. Manufactured homes built after standards were introduced are just manufactured homes as far as HUD and most lenders are concerned, but people still refer to them as mobile homes.
Triad Financial Services, Inc.
Exact personal loan qualifications vary by lender, but most will usually review your credit score, income and other financial details. Low- to moderate-income homebuyers in rural areas who want to finance a manufactured home, or a home and lot, may qualify for a USDA Single Family Housing Guaranteed Loan. These loans offer flexible qualification requirements including no minimum down payment and no minimum credit score. We already mentioned the FHA’s Title II loan for manufactured homes that qualify as real estate. The FHA also offers Title I loans for personal property which includes homes that are not classified as real estate. The Federal Housing Administration offers home loans with fixed interest rates and lower credit, debt-to-income ratio and down payment requirements that are popular with first-time home buyers.
A homeowner could buy the manufactured home separately from the lot or along with the lot. Or, if using a chattel or personal loan, the homeowner could place the home on rented land. 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.
Are Manufactured Homes Harder To Finance?
Forbearance is a form of repayment relief involving the temporary postponement of loan payments, typically for home mortgages or student loans. Again, those with dinged credit can expect to see significantly higher rates. A mortgage calculator can show you the impact of different rates on your monthly payment. Manufactured homes aren’t always eligible for a conventional mortgage because the prospective homeowner doesn’t own the land on which they are located.
In either case, upon arrival, the home will need to be attached to a permanent foundation before it qualifies for a conventional loan or for most government-backed loans. Keep in mind, however, if you have bad credit, this option may cost you. Personal loans can have higher interest rates for those with poor credit (north of 20%, in some cases). Before taking out a loan on a manufactured home, it’s important to know your options and make sure that you apply for the most favorable type of financing. You can use a home loan to purchase both a mobile, manufactured, or modular home and the land at the same time. Some lenders remain reluctant to lend to someone they identify as "the kind of person who lives in a trailer park."
Mobile Home Loans: Options for Financing A Mobile Or Manufactured Home
The VA, FHA and USDA all have manufactured home programs, but each loan option has different rules. In this case your loan would work almost exactly the same as financing for traditional “stick-built” houses. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners. If you decide to buy property, it’s vital to first check the local zoning restrictions for these types of structures. There may also be restrictions on land use, which could dictate the size of the home or prevent you from using it to run a business.
The Federal Housing Administration offers fixed-rate mortgages with lower credit, debt-to-income ratio, and down payment criteria, which are popular among first-time purchasers. Like any other type of loan, manufactured home loans come with their own rules and regulations — things like property requirements, fees, and closing costs. If you’re considering getting a manufactured home loan for your future purchase, there are some important things you should know.
However, this explanation can apply to manufactured homes as well. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site.
According to April 2020 data, the average cost of a new single-wide manufactured home was $64,500, while the average cost of a new double-wide was $120,300. For one, the actual home cost can range depending on the size of the home. For example, you can select a single-, double- or triple-wide floor plan and up to several rooms if you wish. If you’re wondering how to buy a mobile home and get the best financing, there are a few steps you should follow first.
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