Mobile Home Loans from CountryPlace Mortgage

Mobile Home Loans

Chances are, if you’re reading this then you’re likely in the market to buy what’s referred to as a factory-built home. But did you know that you’re likely looking for a “manufactured” home loan and not a “mobile” home loan? The reason for this is that these types of homes stopped being referred to as “mobile homes” back in 1976.

That’s when a new federal law went into effect across the nation that regulated the construction and installation of what were then being called mobile homes due to poor construction and safety issues plaguing the mobile home industry at that time. These new guidelines significantly increased safety and construction standards for all factory-built housing. That is why today, anything built before 1976 is still called a “mobile home” (sometimes referred to as a “pre-HUD” home by lenders). While anything built after 1976 is now called a “manufactured” or “modular” home.

Three Types of Factory Built Homes

While each of the three types of factory-built homes are constructed in pieces and then transported elsewhere, there are key differences. Here you’ll find those differences, which will help you better understand the financing options available to you.

   Mobile Homes

• To be considered a “mobile home” it must have been constructed before June 15th, 1976. Again, mobile homes are now universally referred to as “manufactured” homes due to HUD policy changes.

Manufactured Homes

• Built after June 15th, 1976 and must meet a specific set of standards and building codes created by the Department of Housing and Urban Development (HUD). Part of these codes require the home to be constructed in a quality and climate-controlled factory, meeting standards for safety.
• Each section of the home is individually built on a permanently attached metal frame, or “chassis,” that is connected to wheels. Once complete, the sections are towed to the homesite using those chassis and assembled there.
• Upon arrival, the wheels can be removed, but the chassis is required to stay in place, per HUD building codes.
• Generally considered to be the most affordable home type in mobile (manufactured) home financing.

Modular Homes

• Also built in sections and transported to the homesite, but must meet a different set of codes, called the International Building Code (IBC). This code is also the same used for most traditional home construction.
• Constructed without a chassis and are transported in sections on a truck rather than on their own wheels, then deposited onto a foundation. However, there are some modular homes that also have a chassis and remain on wheels but are built in accordance with the IBC.

Manufactured Home Loans

Now that we’ve covered the common terms used regarding mobile (now being referred to as manufactured) homes, let’s dive into your loan type options. Manufactured homes can be an excellent and affordable solution for many home buyers. Whether you’re a first-time home buyer, retiree, or simply seeking a lower maintenance lifestyle.

For the most part, the Federal Housing Administration (FHA) doesn’t lend directly to those seeking a manufactured home loan. Instead, buyers work directly with manufactured home mortgage lenders. Our hope is that after you finish reading this, you’ll feel more confident in making an informed decision about your manufactured home financing options.Generally, manufactured home loans have a higher interest rate than traditional home loans, usually around 5% higher.

However, manufactured home loans have significantly lower down payments (sometimes as low as 3.5%) while traditional home loans require a down payment of up to 20%. Manufactured home financing also features shorter terms compared to the traditional 30-year term.Similar to traditional financing, manufactured home loans will require some closing costs. Closing costs include the fees for ordering the appraisal of your new property and/or home, pulling your credit report, as well as tax services and various certifications that may be required in your area. We are happy to sit down with you and discuss what you can expect.

Four Different Structures of Manufactured Home Loans

1. Loan for a Manufactured Home Only – You have land, either through leasing or owning, and now you need a home. This is called a chattel loan, where we finance a manufactured home without land. HUD requires at least a three-year lease when you’re financing a mobile home and planning on leasing land. The Federal Housing Administration (FHA) allows loans up to the amount of $69,679 for purchasing a manufactured home on its own.
2. Land and Manufactured Home Loan – You’re looking for the whole package, both the land and the structure. The FHA allows loans up to the amount of $92,904, and a maximum loan term of 20 years for a single section manufactured home, and 25 years for multi-section manufactured homes.
3. Land Only Loan – Do you already have the perfect manufactured home but looking to move it onto your own property? You can finance a piece of land, with a maximum loan amount of $23,266 and a maximum loan term of 15 years.
4. Manufactured Home Construction Loan – Construction loans are combined with either an FHA or conventional loan (permanent loan). The construction loan terms are in place during the construction period (usually 4-6 months), and then changed to the terms of the FHA or conventional loan once the construction is done, construction lenders will either do a one or a two-time close.

Manufactured & Mobile Home Loan F.A.Q.

Here you’ll find answers to frequently asked questions about manufactured home loans.

Can I get a V.A. loan for a manufactured home?

Military borrowers can finance manufactured homes through lenders approved by the U.S. Department of Veterans Affairs (VA). CountryPlace offers VA loans on existing manufactured and modular homes as well as VA construction loans for manufactured and modular homes.

Is it hard to get a loan for a mobile home?

A mobile home built before 1976 can be difficult to get a loan for because very few lenders offer these types of loans. However, getting a manufactured or modular home loan isn’t any more difficult than getting a traditional home loan. Manufactured home loans may not be as abundant as traditional home loans, but they are available from several lenders. Also, government-backed loan programs can make it easier to qualify and keep costs low.

Do manufactured home loans have closing costs?

Yes. Like traditional home loans, manufactured home loan closing costs may include things such as appraisal, credit report, tax service and flood certification.