Exploring Mortgage Options for Financing a Manufactured Home

When it comes to financing a manufactured home, whether it’s a single-wide or a double-wide, you’ll find several mortgage options available. However, the availability of these options can vary depending on factors such as your location, credit history, and the specific lender you choose. Let’s take a closer look at some common types of mortgages designed for financing manufactured homes.

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all photos – Champion Homes

1. Chattel Mortgage:

  • Common Choice: A chattel mortgage is one of the most frequently chosen financing options for manufactured homes.
  • Personal Property Loan: In this type of mortgage, the home itself is considered personal property rather than real estate.
  • Terms and Rates: Chattel mortgages often come with shorter terms and higher interest rates compared to traditional mortgages for site-built homes.
  • Ownership: It’s important to note that with a chattel mortgage, the homebuyer typically owns the structure but not the land it’s situated on.

2. FHA Title I Loan:

  • FHA Assistance: The Federal Housing Administration (FHA) offers Title I loans specifically designed for financing manufactured homes.
  • Comprehensive Support: These loans are intended to assist with the purchase or refinancing of a manufactured home, including the home itself and its installation.
  • Credit Consideration: FHA Title I loans may be a more accessible option for those with less-than-perfect credit, although they are generally designed for smaller loan amounts.

3. FHA Title II Loan:

  • Combined Real Estate Package: While Title I loans focus on the home itself, Title II loans encompass both the land and the home as a combined real estate package.
  • Versatile Use: Borrowers can use Title II loans to purchase or refinance both the manufactured home and the land it sits on.
  • Favorable Terms: These loans often come with more favorable terms and lower interest rates compared to chattel mortgages.
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4. Conventional Mortgage:

  • Lender Option: Some lenders offer conventional mortgages for manufactured homes, particularly if the homes meet specific criteria such as being permanently affixed to a foundation and considered real property.
  • Better Terms: Conventional manufactured home mortgages generally offer better terms and interest rates compared to chattel mortgages.
  • Requirements: Be aware that lenders may have stricter requirements for creditworthiness and property conditions.

5. USDA Rural Development Loan:

  • Rural Support: The U.S. Department of Agriculture (USDA) provides loans for the purchase of manufactured homes in eligible rural areas.
  • Affordable Options: These loans, part of the USDA’s Rural Development program, can be more affordable with low or no down payment options.
  • Eligibility: Borrowers must meet specific income and location eligibility criteria to qualify.
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6. VA Loan:

  • Military Benefit: Veterans and active-duty military personnel may be eligible for VA loans, which can be used to finance manufactured homes meeting specific VA requirements.
  • Favorable Terms: VA loans often offer favorable terms, including no down payment options and competitive interest rates.

7. State and Local Programs:

  • Regional Assistance: Some states and local governments offer specialized loan programs or grants to assist with manufactured home purchases.
  • Variety of Options: These programs can vary widely in terms of eligibility requirements and benefits, so it’s crucial to research what’s available in your area.

Financing a manufactured home involves a range of mortgage options, each with its own set of terms, conditions, and eligibility criteria. To make an informed decision, it’s essential to research and compare the different financing options available, taking into consideration your financial situation, credit score, and the specific requirements of the manufactured home you intend to purchase.


Gary Fleisher

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Gary Fleisher

Gary Fleisher, “The Mod Coach”, has been entrenched in the offsite construction industry for most of his life. Having started his career in the lumber industry, Gary spent decades working with manufactured and modular home producers and homebuilders. For the past 15 years his blog and LinkedIn postings have introduced thousands to the benefits of factory-built construction and have served as a forum for industry professionals to share insights and perspectives. Gary lives in Hagerstown, MD with his wife, Peg.

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