The Types of Mortgages Available for Manufactured Homes
While it is possible to get a loan to buy a manufactured home, it doesn’t work the same as when you’re purchasing a traditional home. Because manufactured homes tend not to be attached to the land they are on they may be considered personal property rather than real estate. Here’s a look at the types of mortgages available for manufactured homes.
Conventional Mortgage Options
Depending on a few factors, you may be able to apply for the same kinds of financing as any other kind of house. According to the FHA, to qualify as real estate and for FHA mortgage insurance, your manufactured home must:
- Be certified it was built after 1976 with red HUD label
- Have more than 400 square feet of floor space
- Be your primary dwelling
- Have a designated, approved lot
- Be attached to the property through a permanent foundation, thus making it a permanent dwelling
If these things hold true, you can qualify for a home loan through several different places. The FHA offers manufactured home loans with a 3.5-10% down payment, depending on your credit score. FHA provides home loans specifically for manufactured homes through private lenders, along with insurance. FHA can be a great option for potential buyers with a bad credit history or minimal down payment.
Cascade is a leading lender for manufactured homes available in more than 30 states. They are also willing to create specialized loans that are appropriate for your circumstances and home. For veterans, the VA has a program to help make it easier to get a new home. Many loan companies will work with the VA to provide 0% down payments and low interest rates.
Personal Property Loans
If the manufactured home has wheels, is not permanently affixed, or is registered through the DMV, it is considered personal property and not real estate. Because of this, you cannot get a mortgage on these types of manufactured homes; you may be able to get a chattel loan.
The downside of a personal property loan as opposed to a mortgage is that interest rates tend to be higher. This is because homes that are not affixed to the ground via a firm foundation are a much riskier option for a company to give a loan on. While traditional mortgages tend to be spread out over about 30 years, personal property manufactured home loans are generally much less than that. However, manufactured homes also tend to be much less expensive than traditional homes, making it less overwhelming to pay the loan back over a shorter period.
The FHA has programs for these types of loans, as do many other companies. In general, these loans require at least 5% down and the home must be fairly new. Interest rates tend to still remain fixed, as with a traditional mortgage. According to The Mortgage Report, the maximum loan and maximum term for these loans tends to be as follows:
- Manufactured home: $69,678
- Manufactured home lot: $23,226
- Manufactured home & lot: $92,904
- Manufactured home/Single-wide home and lot: 20 years
- Manufactured home lot loan: 15 years
- Multi-wide manufactured home and lot: 25 years