Rates listed are for primary residence in manufactured home with a 25% down payment and borrower credit score of 740. APR (Annual Percentage Rate) is based on loan amount and interest rate. Example monthly payments quoted include principal and interest only. Actual payments may be higher if they include taxes and insurance. Rate, terms and fees are subject to change without notice. Subject to credit approval. Ask us about additional available loan programs.
If you’re considering purchasing a manufactured or mobile home, one of the most important factors to understand is chattel loan interest rates. As a unique form of financing for movable homes, chattel loans come with their own pricing structures. Navigating current market rates can be confusing, but is essential to get the best deal
In this comprehensive guide, we’ll break down everything you need to know about current chattel loan interest rates and how they are determined. Whether you’re buying new or used, understanding rate trends, loan terms, and credit’s impact can help you make informed financing decisions.
What Are Chattel Loans?
Chattel loans are a type of financing used specifically to purchase manufactured homes which do not sit on permanent foundations. These homes are considered personal property, not real estate, so conventional mortgages don’t apply.
With a chattel loan
- The home itself serves as collateral
- The loan is not tied to the land
- The home can be repossessed if loan terms are not met
Since the home can be moved, chattel loans allow more flexibility. However, they also come with higher interest rates than traditional mortgages.
How Chattel Loan Rates Work
Chattel loan rates function differently than real estate mortgage rates. Here’s what you need to know:
Loan Terms
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Chattel loans typically run 10-20 years as they are secured by homes with shorter useful lives.
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Mortgages run 15-30 years since site-built homes have longer lifespans.
Interest Rates
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Chattel loans carry higher interest rates due to increased risk.
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Mortgage rates fluctuate based on federal funds rates and bond market yields.
Costs
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Chattel loans feature lower origination fees but higher interest rates.
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Mortgages have higher closing costs but lower long-term interest costs.
Credit Impact
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Chattel loans rely heavily on applicant credit scores.
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Mortgages weigh credit along with debt, income, assets, and down payment.
Current Chattel Loan Interest Rates
Chattel loan rates vary by lender but are strongly influenced by current financial market conditions just like mortgage rates. Here are current rate ranges:
New Homes
- 8-12% for excellent credit
- 10-14% for good credit
- 12-18% for average credit
Used Homes
- 10-15% for excellent credit
- 12-18% for good credit
- 14-20% for average credit
In general, new manufactured homes secure better chattel loan rates due to reduced risk. Expect rates around 1-5% higher than mortgage rates for buyers with good credit.
What Impacts Chattel Loan Interest Rates?
Many factors affect the interest rate lenders will offer on a chattel loan. Key factors include:
Credit score – The higher your score, the better the rate. Scores below 620 may result in denial.
Down payment – Larger down payments reduce risk, allowing better rates.
Debt-to-income ratio – Lenders reward lower DTI with better rates. Keep your DTI below 40%.
New vs used home – New homes qualify for lower rates than used ones.
Loan term – Shorter terms (10-15 years) have lower rates than longer ones (up to 20 years).
Market rates – Chattel loan rates rise when mortgage rates and federal funds rates increase.
Lender – Compare multiple lenders to find the best rates for your financial profile. Local banks may offer lower rates than national lenders.
Chattel Loan Rate Comparison
Here is an overview of how current chattel loan rates compare based on different applicant credit and down payment scenarios:
| Credit Score | Down Payment | Rate (New Home) | Rate (Used Home) |
|
Why choose a manufactured home?
Modern manufactured homes offer several advantages and benefits over traditional housing that have increased their popularity among homeowners. They are customizable, affordable, energy efficient, and easy to maintain, making them an appealing option for everyone from first-time home buyers to retirees looking to downsize.
Some of the benefits include:
- Less expensive than most site-built homes
- HUD quality control requirements apply during the entire building process
- Upgrades are often available at a fraction of retail costs
First Fed directly offers conforming manufactured home loans. Our lending experts are here to walk you through the process and find the best terms for your property needs. Conforming manufactured home loans include homes that are:
- Two or more sections
- Title(s) eliminated or cancelled, treating home as real property
- On a permanent foundation
- Built after June 1976
- Applicant owns home and land
For manufactured homes on leased land or other properties, non-conforming manufactured home loans are available through our partner Triad Financial Services.
- One or more sections
- Title(s) not eliminated or cancelled, treating home as personal property
- May be on a non-permanent foundation system
- May be built before June 1976
- Applicant may rent or lease land/space home is located on
30-year Fixed Rate MH Purchase
15-year Fixed Rate MH Purchase
15-year Fixed Rate MH Refinance
Get a Custom Loan Quote
Please provide the following information so that we can provide multiple options tailored to your needs.
| Loan Term | Interest Rate | APR | Discount Points | Ex: Loan Amount | Ex: Monthly Payment |
|---|---|---|---|---|---|
| 30-year Fixed Rate MH Purchase | 7.625% | 7.676% | 0.000 | $300,000 | $2,123.38 |
| 15-year Fixed Rate MH Purchase | 7.375% | 7.456% | 0.000 | $300,000 | $2,759.77 |
Interest Rates Effective: 5/31/2024
Rates listed are for primary residence in manufactured home with a 25% down payment and borrower credit score of 740. APR (Annual Percentage Rate) is based on loan amount and interest rate. Example monthly payments quoted include principal and interest only. Actual payments may be higher if they include taxes and insurance. Rate, terms and fees are subject to change without notice. Subject to credit approval. Ask us about additional available loan programs.
Financing a Manufactured Home: What you need to know
FAQ
What are chattel loan interest rates?
Are chattel loans easier to get?
How long is the term on a chattel loan?
What is the debt to income ratio for a chattel loan?
Who offers chattel loans?
JCF offers mobile home financing and manufactured home refinancing to customers with good to excellent credit. Our specialty is a “Chattel Mortgage”, which refers to a mobile or manufactured home loan, where only the home will be financed. We can help with purchase or refinance, but only when the land is not invloved in the transaction.
Who offers chattel mortgages?
JCF Specializes in Chattel Mortgages, a term used when referring to a loan on a Mobile or Manufactured Home where the land is not a factor and only the Mobile Home will be financed. JCF is a home only lender and proud of it. From Craig to San Luis, to the Capital of Denver, JCF is here for you.
Is a mobile home considered chattel?
Mobile homes are financed using chattel mortgages. A chattel mortgage only covers personal movable property. The mobile home acts as collateral on the mortgage, even if it is moved to several different places throughout the length of the loan. A mobile home falls into the chattel category because it can be moved.
What is a chattel mortgage?
The term “chattel mortgage” refers to a type of loan that is principally used to fund the purchase of business assets. It is similar to a regular mortgage where a lender provides funds to purchase the asset (known as a Chattel) with the major difference that the asset, in this case, is movable or mobile.