Manufactured Homes: Mortgage Options

Believe it or not, obtaining a mortgage for your manufactured home isn’t difficult. Even if your home was originally transported to its current location, it more or less falls into the same category as a traditional home if it stands stationary after arrival.

If your manufactured and stabilized home is at least 400 square feet, sits on an approved, non-moving foundation and is taxed as stationary property, you can apply for conventional or government-backed mortgages.

Manufactured Home Mortgage Options

If your manufactured house was built off-site, transported and then installed in a permeant location, you can finance it with a mortgage. In many cases, that mortgage will come from Fannie Mae, Freddie Mac, or a government-backed mortgage program that offers special packages for these specific circumstances.

Fannie Mae Mortgage

Fannie Mae offers several home loan programs, including its MH Advantage for manufactured homes. The program offers 30-year, fixed-rate mortgages or adjustable-rate mortgages with lower interest rates than might be associated with a retail installment contract. For purchase transactions, you loan-to-value ratio can be as high as 97 percent.

Fannie Mae has certain requirements you must meet before you can qualify:

  • The home must title with the land, and you must own the land.
  • Your home must be 12 feet wide and have a minimum of 600 square feet.
  • The dwelling must have a permanent framework and be installed on a concrete foundation.
  • You must take out mortgage insurance.

Freddie Mac Mortgage

Freddie Mac offers its own programs for manufactured homes. The manufactured home loans in this case can tie the loan into additional programs generally suited for traditional homes.

Here are some of Freddie Mac’s manufactured home loan requirements:

  • You must own the land the home sits on and it must be taxed as real property.
  • The home must have a Housing and Urban Development Certification Label and it must be built on a permanent foundation.
  • 7/1 and 10/1 adjustable-rate mortgages are allowed.
  • You must make at least a 5 percent down payment and it has to come from your personal funds.

FHA for Manufactured Homes

If you own the land on which your manufactured home sits, you might qualify for financing under the Title 1 program from an FHA-approved lender. Although the FHA does not provide the actual loan, the agency insures your loan in the event you default.

Here are some of the FHA Title 1 program requirements:

  • Your home must be a single-family dwelling and must be your primary residence.
  • The “HUD seal” must be affixed to the home certifying its compliance.
  • If your credit scores is 500 or lower you must make a 10 percent down payment, though there’s no minimum credit score to qualify for the program.
  • If your credit score is above 500, you must make at least a 5 percent down payment.

USDA Manufactured Home Loans

The U.S. Department of Agriculture offers several home loan programs with up to 100 percent financing. The only caveat is the home must be located in a rural area.

Here are some of the USDA manufactured home loan requirements:

  • Manufactured homes must be less than one year old.
  • The unit can’t be less than 400 square feet.
  • The home must sit on a permanent, FHA-approved foundation.
  • You must own or finance the land on which the home sits.

Personal Loans for Your Manufactured Home

Oftentimes, home loan programs come equipped with a set of guidelines (a few of those we mentioned above). If you happen to purchase a home that doesn’t meet the traditional requirements of one of the aforementioned programs or otherwise, you still have the option of applying for a personal loan.

If you choose to apply for a personal loan, and are later qualified, transactions are set in motion quite swiftly – you might even receive funds to purchase, fix up, or refinance your manufactured home the next business day.

Typically, to receive a personal loan, you must be a U.S. citizen or permanent resident with a social security number, have steady income and sustainable credit history. Maximum loan amounts range from $35-50k for most lenders. But some lenders can approve loans up to $100,000.

The wonderful point here is that you, as a new or continuing homeowner, have options. Whether traditional or personal, there are several means for obtaining a mortgaging loan for your manufactured home.

Where we come in?

AMHA members, manufacturers, retailers, finance companies, service suppliers, insurance companies, installers, and communities work together to educate the public and improve the image of factory-built housing. The Alabama Manufactured Housing Association is a non-profit organization dedicated to providing members with tools and information to shape a successful business environment and provide manufactured housing and modular housing for Alabama and the Nation.

To learn more about AMHA,  click here.