Financing a Mobile Home Different Types of Loans and How to Pick the Right One

Table of Content

• Best for Manufacturer’s Financing
• Read lender reviews
• Differences Between Modular And Manufactured Homes
• Financing your manufactured home
• How to Get a Loan for a Mobile Home in 5 Easy Steps
• Why should I use this website to find a lender?
• FHA Title II Loans
• Manufactured home financing for a used mobile home

While manufactured homes can technically be moved from one place to another, it is frequently cost-prohibitive. Here's how to compare lenders' mortgage programs, interest rates, how taxes fit in, and what to do if you're in debt or self-employed. To get a loan from a lender to buy property, you need a good credit score, decent debt-to-income ratio, and a handle on how much house you can really afford.

As with personal property loans, you're financing only the home itself, not the land it sits upon. What you call a “mobile home” is probably a “manufactured home,” even though the home is—or once was—mobile. Either term works, but most lenders avoid lending on properties that are categorized as mobile homes. VA loans can be used for manufactured homes if the home is attached to a foundation, and you are purchasing the land as well, among other criteria. Justin Pritchard, CFP, is a fee-only advisor and an expert on personal finance.

Best for Manufacturer’s Financing

Veterans and military members interested in manufactured housing should check with lenders at the outset about whether they make loans for this property type. If you had your heart set on a site-built home but want to take a more cost-conscious and efficient approach, a modular home might be the way to go. After all, once theyre assembled, modular homes are essentially the same as site-built homes, sitting on a permanent foundation. The Federal Housing Administration provides mortgage insurance to FHA-approved lenders. Selling your car could put thousands of dollars in your pocket to either pay for your mobile home repairs or reduce your total loan amount. But do the math and make sure your near-term windfall won’t cost you more down the road.

However, despite the difference, the terms “mobile home” and “manufactured home” are often used interchangeably. Mortgage brokers can be very useful when you’re looking for a hard-to-find specialist loan, including VA mobile home loans. Ask around among friends, families, and colleagues to find one with a good reputation.

Read lender reviews

However, you'll need to understand the financing options that work with the type of property you want to buy. You'll also need to make sure the mobile home isn't too old to qualify for financing, since some loans only apply to manufactured homes built after 1976. Because most personal loans are typically unsecured, this type of financing can be obtained without collateral to purchase mobile homes, manufactured homes with a lot and other types of property.

Our content is intended to be used for general information purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances and consult with your own investment, financial, tax and legal advisers. Mobile homes are less expensive than traditional properties, although prices vary depending on the type of mobile home, where it's located and how the property the home sits on is treated. If you are unsure you should get independent advice before you apply for any product or commit to any plan. Read Finder’s BoC Interest Rate Report for forecasts from some of Canada’s brightest minds in economics and learn more about how recent rate increases could affect Canada’s real estate market.

Differences Between Modular And Manufactured Homes

These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. In several states, they can assist with a down payment on a mobile home or the land on which it will go.

Can you make adjustments to lower costs in energy, NBN or phone plans? Even a couple of dollars here and there can create a buffer to help you keep making those repayments. They use their own money to issue the mortgage, which provides more flexibility.

Financing your manufactured home

The National Manufactured Housing Construction and Safety Standards took effect on June 15, 1976. The law requires that new homes meet the Department of Housing and Urban Development’s safety codes. Homes made before June 15, 1976, may not meet HUD safety codes, so mortgage lenders won’t finance them.

Generally, sections of a modular home are built in a factory and then shipped to a home site. From there, the pieces are assembled by professional contractors, much like a traditional, stick-built home. Modular homes must meet local or state building codes rather than federal guidelines.

Make sure you have proof of income and a demonstrated history of earning income over time. Then, contact your lender about the process for establishing a home valuation report to determine the current value of the property. Keep in mind, however, if you have bad credit, this option may cost you.

Your lender will look at all those when it decides whether you can afford the loan you want. So get your head around them before finding a lender to apply for VA mobile home financing. There are FHA loan maximums for mobile home loans, up to just under $93 thousand for a manufactured home and lot combination. That maximum is subject to revision in areas where costs run high-lot loans and combination loan maximums can be raised as much as 85% in these areas. The lenders we’ve reviewed have loan amount ranges from $75,000 to $3 million for jumbo loan programs. The debt-to-income ratio ceiling for most lenders is in the low 40s.

Conventional loans are not insured by a federal agency so borrowers with stronger credit profiles tend to get the most competitive rates. A chattel mortgage is a loan used to purchase an item of movable personal property, such as a vehicle, which then serves as security for the loan. Department of Agriculture loans, and Federal Housing Administration loans are available on manufactured homes.

The good news is that FHA-approved mortgage providers are willing to take on borrowers who have a slightly higher risk profile. Talk to your current lender to see if you can refinance your mortgage loan. Doing so can potentially lower your monthly mortgage payments, putting more money in your pocket to make repairs without having to take out a loan against your property. Borrowers receive a lump sum payment for the loan amount and make fixed payments thereafter over the term of the loan — similar to fixed-rate mortgages.