How To Finance A Mobile Home

Cassidy HortonPersonal Finance Reviewer and Writer

Cassidy Horton is a finance writer covering banking, life insurance and business loans. She has worked with top finance brands including NerdWallet, MarketWatch and Consumer Affairs. Cassidy first became interested in personal finance after paying off $18,000 in debt within 10 months of graduating college. She later went on to triple her salary in two years by ditching her 8-to-5 job to write for a living.

Cassidy Horton

Cassidy HortonPersonal Finance Reviewer and Writer

Personal Finance Reviewer and Writer

Colin BeresfordDeputy Editor, Personal and Business Loans

Colin Beresford is a writer and editor experienced in helping people make the best decisions with their money, whether it's buying a car or taking on a loan. He has written for Bloomberg, The Associated Press, NerdWallet, Car and Driver magazine, among many others covering various financial topics.

Reviewed

Colin Beresford

Colin BeresfordDeputy Editor, Personal and Business Loans

Deputy Editor, Personal and Business Loans

Reviewed

Published: Jun 20, 2024, 10:10am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

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With the average double-wide costing around $120,000 to $160,000, according to HomeGuide, financing your home may be the only way to afford it. Since mobile homes fall under different classifications, there are various financing options available.

Before choosing one loan over another, be sure to understand your options to find the right financing for your home.

What Are Mobile Home Loans?

Mobile home loans allow you to finance the purchase of a mobile, modular or manufactured home. These loans can be standard mortgages, government-backed loans, personal loans or chattel loans.

Unlike conventional houses that are built on-site, mobile homes are constructed in a factory and then transported. If the home is attached to a permanent foundation, it’s considered real property, similar to any other house. But if it’s not permanently attached, it’s considered personal property, like a vehicle. This classification affects the financing options available to you.

Whether you want to purchase a mobile, manufactured or modular home will also determine your loan options.

Mobile homes. If built before June 15, 1976, these pre-built homes are technically classified as “mobile homes.” Those built after are “manufactured homes.”
Manufactured homes. Intended as permanent residences, manufactured homes must meet certain safety and construction standards set by the U.S. Department of Housing and Urban Development (HUD) and are built after 1976.
Modular homes. More like traditional houses, modular homes are delivered in sections and assembled on-site. They must meet the same local building codes as traditional homes.

Current Interest Rates for Mobile Home Loans

Current interest rates for mobile home loans fluctuate based on credit score, down payment, loan type and other factors. At the time of publishing, on average, interest rates for mobile home loans are:

FHA. 7.50% for a 30-year term
Freddie Mac. 6.99% for a 30-year term; 6.29% for a 15-year term
Chattel. 9% to 12%
Personal. 15.80% for a three-year term; 19.31% for a five-year term

Where To Get a Mobile Home Loan

Loans for manufactured homes can come from federal loan programs, state agencies, private lenders and the manufacturers themselves.

FHA

FHA loans are insured by the Federal Housing Administration and issued by private mortgage lenders. These loans can help you finance a mobile home with lower interest rates and a smaller down payment.

For FHA loans, you can buy a manufactured home with a down payment as small as 3.5% of your home’s value. You typically need a credit score of at least 580 to qualify.

There are two main types of FHA loans for mobile homes: Title I and Title II.

Title I loans allow you to finance a mobile home even if you don’t plan on buying the land the home sits on. This loan can be a good option if you plan to live in a mobile home community.

Title I loans have maximum amounts of:

$69,678 for the home
$23,226 for the lot
$92,904 for both the home and the lot

Title I loan terms for manufactured homes are typically:

20 years and 32 days for just the home
15 years and 32 days for just the manufactured home lot
20 years and 32 days for a single-wide with a lot
25 years and 32 days for a double-wide with a lot

Title II loans are for purchasing both the home and the land. To qualify for a Title II loan, the home must be manufactured after June 15, 1976, at least 400 square feet and permanently attached to its foundation.

Fannie Mae

You can get a mobile home loan through Fannie Mae if it qualifies for the Standard Manufactured Housing (MH) or MH Advantage program. For both programs, you need a minimum credit score of 620.

Standard MH program. The Standard MH program is for buying a traditional single- or multi-width home. You need a 5% minimum down payment and a home that’s titled as real property.
MH Advantage program. The MH Advantage program is for buying a multi-width home from a participating manufacturer. These homes meet specific home design and site installation requirements, including having a driveway, sidewalk and a carport or detached garage. You need a minimum 3% down payment.

Freddie Mac

If you qualify for the Home Possible or CHOICEHome mortgage programs, you can purchase a manufactured home through Freddie Mac.

Home Possible program. The Home Possible program is for very low- to low-income borrowers. Down payments can be as low as 3%, and you can have a co-borrower who doesn’t live in your home.
CHOICEHome program. For anyone buying a CHOICEHome-certified manufactured home, you can finance your house through this program. These homes are titled as real property and meet specific standards, including having at least 1,000 square feet, a higher roof pitch, certain exterior features and a permanent foundation.

VA Loans

If you’re a member of the military, you may be eligible for a VA loan to finance a manufactured or modular home. These loans are backed by the Department of Veterans Affairs and offer several benefits, including no down payment and no private mortgage insurance.

To qualify, the home must be permanently affixed to land you own and classified as real property in your state. The loan terms vary depending on the size of the home, ranging from 20 years plus 32 days for a single-wide home with a lot to 25 years plus 32 days for a double-wide home and lot. You’ll often pay a VA funding fee, which can be as high as 3.3%.

Chattel Loans

Chattel loans, also known as personal property loans, are often used when buying a manufactured home that isn’t permanently attached to a piece of land. Since the structure is movable, it’s considered personal property. Borrowers often choose a chattel loan when purchasing a home in a mobile home community.

Interest rates on chattel loans are often 3% to 4% higher than current mortgage rates. The terms are also shorter, which can lead to high monthly payments.

Some lenders require a 5% minimum down payment, while others offer chattel loans with no down payment. You generally need a minimum credit score of 575.

Personal Loans

If you’re having trouble financing a mobile home, you could try for a personal loan instead.

You can use a personal loan for nearly any expense, including purchasing a mobile home. Loan amounts can range from $1,000 to $100,000, depending on the lender. They also have quicker approval times than most traditional home loans.

However, interest rates can range from 6% to 36%, and loan terms may only be up to seven years. Your interest rates largely depend on your credit score, income, current debt payments and the amount you’re looking to borrow.

If you pursue a personal loan to finance your mobile home, look for long-term personal loans or loans over $100,000.

How To Get a Loan for a Mobile Home

No matter which financing option you choose, you’ll generally follow these steps to get a mobile home loan:

Check your credit. Review your credit reports from Experian, TransUnion and Equifax. If needed, improve your credit before applying for financing and contact the credit bureaus to correct any mistakes on your credit report.
Consider your land options. Decide if you’ll buy just the mobile home or the land too. Owning the land opens the doors to more financing options.
Understand your home’s details. Research the specifics of the home you want, such as the age, size and specifications. This will determine the loans you’re eligible for.
Research financing. Explore different lenders and loan types to find the best rates and terms depending on the loans that you can qualify for. If possible, pre-qualify with different lenders to see which rates you could be offered. Pre-qualifying with a soft credit check has no impact on your credit score.
Submit a completed loan application. Apply with the lender of your choice and include a down payment if required. Most lenders run a hard credit check at this point, which can temporarily impact your credit score.

What To Consider When Getting a Mobile Home Loan

With many different options and loan types, financing a mobile home can be tricky. Keep these factors in mind as you narrow down your options:

Interest rates and loan terms. Chattel loans and personal loans have higher interest rates. Also, a fixed-rate loan has steady payments, whereas an adjustable-rate mortgage (ARM) has fluctuating payments.
Down payment requirements. For most mobile home loans, you’ll need a minimum down payment, often at least 3% or 5%.
Location and land. Each area has its own zoning laws. Make sure the land on which you’ll put your manufactured home is properly zoned and has the necessary utility hookups.
Home specifications. Find out if your new home is mobile, modular or manufactured and whether you’ll buy new or used.
Insurance and long-term costs. Don’t forget to factor in the cost of mobile home insurance. You may also need flood insurance if you live in a flood zone.