Financing a manufactured or mobile home

Real property or personal property?

If you own the land and the home is permanently attached to it and titled as real estate, it can usually be financed with a regular mortgage that covers both the home and the land.

If the home sits on rented land, such as a lot in a community, or isn't titled as real estate, it's usually financed with a personal property loan, also called a chattel loan. A chattel loan is secured by the home but not the land under it. The CFPB has found chattel loans generally have higher interest rates and fewer consumer protections than mortgages.

Check the HUD code date

Manufactured homes built after June 15, 1976 have to meet HUD's federal construction and safety standards. Each section carries a certification label, often called a HUD tag, on the outside.

Look for that label before you buy. An FHA mortgage under Title II can't be used for a home built before that date, and lenders will want to see that the home meets the code.

FHA loans: Title I and Title II

FHA has two kinds of insured loans for manufactured homes.

• Title I can cover the home only, a lot only, or the home and lot together. The home can be personal property or real estate, and it has to be your main home. If you lease the lot, the lease has to meet certain terms.
• Title II is a regular FHA mortgage. The home and land are financed together as real estate, and the home has to be on a permanent foundation that meets FHA rules, be at least 400 square feet, and be built after June 15, 1976.

VA, USDA and conventional loans

HUD notes manufactured homes can be eligible for VA loans and USDA Rural Housing loans, too. Each has its own rules about the home, the land and the foundation, so ask a lender that makes these loans whether your home qualifies.

If you own the land and the home is titled as real estate, some conventional programs may work. Fannie Mae's MH Advantage is for homes with certain site-built-style features on land you own, with down payments as low as 3%. Freddie Mac's CHOICEHome is for homes built to its specifications, and the loan has to be secured by real property.

Where to look for a lender

Not every lender makes manufactured home loans. Credit unions, banks that offer FHA or VA loans, and lenders that focus on manufactured housing are all worth asking. The retailer selling the home may suggest a lender, but you're free to shop around.

HUD recommends talking with a HUD-approved housing counseling agency before you start looking. Call 800-569-4287 to find one.

Compare the total cost, not just the payment

Rates on manufactured home loans can vary a lot depending on whether it's a mortgage or a chattel loan, whether you own the land, and the age of the home. Get quotes from more than one lender, and compare the APR, fees, loan length and the total you'll pay over the life of the loan.

If you'll rent the lot, add the lot rent to your monthly budget, along with insurance and any taxes. Our loan calculator and mortgage calculator can help you compare offers side by side.