Numerous mobile home financing options are available when purchasing a mobile or manufactured home. These include conventional, FHA, and government-backed loans; however, each has specific requirements based on the type of house and where it will be situated.
Private lenders specializing in mobile or manufactured home financing are known as hard-money lenders. They may be especially helpful for borrowers with bad credit who might find it difficult to obtain conventional loans. These loans usually offer lower interest rates and repayment terms than their conventional counterparts, though they may require more effort to qualify.
When selecting a lender for mobile home financing, your credit history and score are the most crucial factors. Having clean credit records demonstrating timely payments can help you obtain competitive interest rates and loan terms.
Once your credit is in order, it’s wise to research different loan types and see which one best suits your needs. Doing this will guarantee you get the most advantageous financing and avoid paying more than necessary in the long run.
Conventional Mortgages
Banks and other traditional lenders provide mortgages that can cover manufactured homes, provided they meet certain criteria. This includes meeting specific size requirements, owning rather than leasing the land, having a permanent chassis, and whether the home is titled as real estate for tax purposes.
These loans typically feature fixed or adjustable interest rates and terms of up to 30 years and can be used to purchase an existing home or construct a new one. Note that these aren’t meant to replace other types of home loans; rather, they serve an additional purpose.
USDA Single Family Housing Guaranteed Loans
These programs are available to low-to moderate-income homebuyers looking to purchase a mobile or manufactured home. The homes can be located on either leased or owned land, and the loan requires at least a 3% down payment with no minimum credit score requirement.
Fannie Mae Standard MH Financing
Some lenders, such as Fannie Mae, offer special loans that allow manufactured homes to be financed with no down payment or minimum credit score requirement. These are known as the MH Advantage program, and they’re available in most states with down payments starting at 3%.
Freddie Mac Manufactured Home Loans
Traditional loans can be used to finance manufactured homes. However, they must meet specific criteria like being single- or double-wide on an unleased lot and having a permanent chassis.
Other manufactured home loans include chattel and personal, secured loans that focus on the mobile or manufactured home itself. These are also personal property loans and may be ideal for buyers who cannot qualify for conventional mortgages or don’t possess enough credit to receive one.
