Mobile Home

Mobile Home Loans: Options for Financing A Mobile Or Manufactured Home

Sidney Richardson6-minute read

December 22, 2021

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With home prices still climbing, some are seeking alternatives to traditional housing. One great option that may cost less than a traditional home without compromising much on necessary features is a manufactured home – which you might know as a “mobile home.” Contrary to a conventional home, which might sell for $200,000+, a manufactured or mobile home will typically cost $60,000 – $100,000.

Rocket Mortgage® does not offer financing for mobile or manufactured homes. It’s important to note that this housing option tends to be financed a little differently than your typical home – so if a mobile or manufactured home interests you, let’s look at how to secure a loan for your future home.

The Difference Between Mobile And Manufactured Homes  

Before we talk about financing, we should clarify the difference between a mobile home and a manufactured home – because they’re often used interchangeably. A mobile home is a prefabricated home structure built on a permanent chassis that was constructed prior to June 15, 1976.

A manufactured home is a very similar structure that was built after June 15, 1976. In 1976, the U.S. Department of Housing and Urban Development (HUD) put new safety standards into effect for mobile homes and changed the name of these structures going forward to “manufactured” homes rather than “mobile.”

The main difference between manufactured and mobile homes is that manufactured homes abide by the new safety regulations set in place by HUD while mobile homes were built prior to their implementation. Mobile homes were also often intended to be easily movable, whereas many manufactured homes are not built to move after they are assembled.

How To Qualify For Mobile Home Financing 

Financing a mobile or manufactured home is a little different from financing a house because most lenders do not consider these homes eligible for most types of mortgage. Some lenders will give you a loan for a manufactured home if it meets their specific requirements and rests on a permanent foundation, but often it is difficult or impossible for manufactured homes to be considered real property, especially if you don’t own the land under your home.

There are other ways to finance mobile and manufactured homes, however, such as chattel loans and personal loans, which we’ll discuss later. For now, let’s discuss a few ways you can prepare to qualify for a loan to pay for a manufactured or mobile home.

Check Your Credit Score

Your credit score is a key factor that lenders will consider when deciding whether to approve a mobile home loan. If you have a great credit score (typically 720+) and solid credit history, you will qualify for lower rates and better terms on most loans. Lower rates can save you thousands over the life of your loan, so it’s important to have your credit in order before applying. Different lenders will have different minimum credit score requirements, but it’s a good idea for any loan to make sure your score is as high as it possibly can be.

Save For A Down Payment

While it’s not always required, you may also want to think about saving for a down payment on your manufactured or mobile home. Many lenders will require a down payment of at least 3% of the loan, though putting a larger sum down (if you can) is usually a good idea as it will help lower your monthly payments.

Find The Right Lender

Once you’ve decided on a loan type, it’s important to research the pros and cons of each lender that you’re considering when shopping for a mobile home loan. The right lender can influence important factors like fees and interest rates on the loan. It’s best to compare apples to apples and try to find a loan with the lowest interest rate and fees. As a reminder, Rocket Mortgage does not offer financing for mobile or manufactured homes.

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Types Of Loans For Mobile Or Manufactured Homes 

For those looking to finance a mobile or manufactured home, you have a few options. Let’s explore each one and some of the requirements plus pros and cons that come along with them.

Conventional Loans

Most lenders will not give you a conventional loan for a mobile or manufactured home because these structures are not considered real property. If you have a manufactured home that meets some very specific criteria, however, conventional mortgage sources Freddie Mac and Fannie Mae do actually offer specialized loans.

Fannie Mae

While not all lenders finance manufactured homes, some may offer Fannie Mae’s MH Advantage® program, which allows buyers to finance manufactured homes over 30 years with down payments as low as 3%. To qualify, however, your home will need to fit very specific criteria. For instance, the home must be at least 12 feet wide, have a minimum of 600 square feet, cannot be on leased land, etc.

Freddie Mac

Freddie Mac also offers conventional loans for manufactured homes, granted they meet all of Freddie Mac’s requirements. These requirements are similar to Fannie Mae’s – the home must be built on a permanent chassis, must be considered real property, has to have at least 400 square feet of living space, etc.

Keep in mind that not all lenders will finance mobile or manufactured homes, but Fannie Mae and Freddie Mac do both offer loan options for qualifying properties.

FHA Loans

The Federal Housing Administration (FHA) 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. They also offer manufactured home loans called Title I and Title II loans.

Title I loans can be used to purchase manufactured homes but not the land on which they sit. There are a few stipulations, such as that the property must be your primary residence, it has to meet FHA guidelines before being placed on a rental site, must be connected to utilities, etc. These loans tend to have short terms (typically up to 20 years) and low loan limits.

Title II loans can be used to purchase both a manufactured home and the land it sits on jointly. These loans cannot be used in mobile home parks or on leased land. Mobile homes to do not qualify as it’s required that the home being financed was built after 1976. These loans also require that the manufactured home in question counts as real property.

VA 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. VA loans are only available to veterans and qualifying active duty service members through the Department of Veteran’s Affairs. There are many benefits that come with a VA loan, including the ability to put no money down and avoid paying mortgage insurance.

To qualify for a VA loan for a manufactured home, your home must be on a permanent foundation, meet HUD guidelines and must be purchased with the land underneath it; mobile homes do not qualify.

Chattel Loans

A chattel loan can be used to purchase different kinds of property like cars, boats and mobile homes. These loans typically have shorter terms and lower loan limits than traditional mortgages, and they also hold the property being financed as collateral for the loan. This means that if you default on payments, your home could be taken to satisfy the debt, which can be risky.

That said, they are a common financing choice for mobile, manufactured and even modular homes. 

Personal Loans 

If all else fails, a personal loan is also a financing option for your manufactured or mobile home. Personal loans don’t have the same types of restrictions on how your house is built, so you can likely qualify for a personal loan even if your house is a fully movable mobile home not attached to a permanent foundation. Some lenders will offer borrowers up to $100,000 for a personal loan, which may be more than enough to finance a manufactured home.

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).

The Bottom Line

Financing a mobile or manufactured home can be difficult, particularly if you want to do so with a mortgage. Since most lenders don’t consider manufactured or mobile homes real property, there are lots of requirements and stipulations you’ll have to meet if you want to qualify for a mortgage. If you can’t meet them, however, don’t panic – there are plenty of other financing options too, including personal and chattel loans. Before buying a manufactured or mobile home, be sure to research all your options to decide what’s right for you.

If a manufactured or mobile home is not for you and you’re interested in obtaining a traditional home loan, you can get started online today with Rocket Mortgage. For more information about the home buying process, check out our Learning Center.

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Sidney Richardson

Sidney Richardson is an intern writer covering homeownership, mortgage and lifestyle topics. She is a senior at Oakland University pursuing a degree in journalism and advertising.