If you’re looking for an alternative to a traditional, site-built home, you may want to consider financing a mobile home through the FHA manufactured home loan program. Sometimes called an FHA loan for a mobile home, this government-backed mortgage option allows borrowers with imperfect credit to purchase an affordable home.
Purchasing a manufactured home can be an affordable way to become a homeowner. With an FHA loan you may be able to finance a manufactured home purchase even if you have imperfect credit or limited funds for a down payment. In this comprehensive guide we’ll explain everything you need to know about getting an FHA loan for a manufactured home.
What is a Manufactured Home?
The term “manufactured home” refers to a home that is constructed in a factory and then transported to a site where it is installed. Manufactured homes used to be known as “mobile homes” but the term was changed to highlight that these types of homes are meant to be permanent residences, not temporary housing.
To qualify for an FHA loan, a manufactured home must:
- Be built after June 15, 1976 when stricter federal manufacturing standards went into effect
- Have a HUD certification label on the exterior showing it meets HUD’s Manufactured Home Construction and Safety Standards code
- Have a minimum of 400 square feet of living space
- Be attached to a permanent foundation
- Be taxed as real estate (not personal property)
Manufactured homes that meet these criteria are eligible for FHA loans. Older mobile homes or recreational vehicles that don’t meet the HUD standards are not eligible.
How FHA Loans Work for Manufactured Homes
FHA loans are government-backed mortgages insured by the Federal Housing Administration. These loans make homeownership more accessible since they require lower credit scores and down payments than conventional mortgages. There are two types of FHA loans that can be used for manufactured homes:
Title I Loans Can be used to finance just the manufactured home or the home plus the land/lot The home does not need to be attached to a permanent foundation
Title II Loans The manufactured home must be classified as real estate and permanently affixed to land owned by the borrower Title II loans have higher borrowing limits than Title I
At our company, we offer Title II FHA loans for qualifying manufactured homes. The benefits of Title II FHA loans include:
- Down payments as low as 3.5% for borrowers with credit scores of 580+
- More flexible credit requirements – scores as low as 500 may qualify
- Lower monthly mortgage insurance premiums than Title I loans
- Higher borrowing limits up to $970,800 depending on location
Manufactured Home Loan Requirements
To be eligible for a Title II FHA loan for a manufactured home, you’ll need to meet certain borrower, home, and land requirements:
Borrower Requirements
- Credit score of at least 500
- Debt-to-income ratio under 57%
- Meet FHA guidelines for income, employment, and credit history
Home Requirements
- HUD certification label verifying home was built after 1976
- Permanently attached to foundation
- Taxed as real estate, not personal property
Land Requirements
- You must own the land the home sits on
- Land has access to utilities and community services
- Land meets HUD site suitability standards
The home must also have a foundation inspection in accordance with FHA’s Permanent Foundations Guide for Manufactured Housing.
Pros and Cons of FHA Loans for Manufactured Homes
FHA loans have several benefits that make them advantageous for financing a manufactured home:
Pros
- Lower downpayment requirements
- More flexible credit standards
- Lower monthly mortgage insurance costs
- Fixed interest rates and stable monthly payments
However, there are some potential drawbacks to be aware of too:
Cons
- Requires upfront and annual mortgage insurance premiums
- Limited availability for higher loan amounts over $970,800
- Slower loan approval process than conventional mortgages
- Must meet additional manufactured home requirements
While FHA loans have stricter home and land requirements, they provide an affordable financing option if you qualify. The low down payment and fixed interest rate help keep monthly housing costs reasonable.
How to Apply for an FHA Manufactured Home Loan
If you’re interested in purchasing a manufactured home with an FHA loan, here are the steps to follow:
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Find the home and land: Search for a HUD-approved manufactured home and land owned by you. Confirm the home has the proper certification label.
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Check your finances: Review your credit, income, expenses, and down payment funds to see if you may qualify. FHA loans allow gift funds for down payments.
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Get pre-approved: Apply with a lender like our company for pre-approval so you know the loan amount and terms you qualify for.
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Make an offer: With pre-approval, you can confidently make an offer when you find the right manufactured home.
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Complete loan application: Work with your lender to complete the full loan application by submitting required documents.
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Close on home: Once approved, you’ll finalize the purchase, sign closing documents, and get the keys to your new manufactured home!
Purchasing a manufactured home with an FHA loan opens the door to affordable homeownership. Our experienced loan officers can guide you through every step of the process and determine if you qualify. Reach out today to learn more and start your journey to owning a manufactured home!
What is an FHA manufactured home loan?
An FHA manufactured home loan is a mortgage backed by the Federal Housing Administration (FHA) that you can use to purchase a home built in a factory. If you need to, you can also use the loan to buy a plot of land for the home to sit on.
You may know this type of house as a “mobile home,” but that isn’t the term used by the FHA today. FHA-eligible mobile homes are typically called manufactured homes and have to follow standards set in 1976 by the U.S. Department of Housing and Urban Development (HUD). Homes built before June 15, 1976, aren’t eligible for FHA financing.
You need to meet FHA minimum mortgage standards as a borrower, and your manufactured home and the land it sits on have to meet special property and construction requirements, all explained in more detail below.
Construction requirements for FHA manufactured home loans
FHA-approved lenders will need to verify the following:
- The home site has access to water and sewer facilities
- The site has all-weather access
- The living area is at least 400 square feet
- The home has an approved HUD seal visible on the exterior
- Whether the home is permanently attached to land according to local building guidelines
FHA Mobile Home Requirements
FAQ
Will an FHA loan cover a manufactured home?
What is the oldest manufactured home for FHA?
Who is the best lender for manufactured homes?
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Company
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Starting Interest Rate
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Loan Terms (range)
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Manufactured Nationwide Best Overall
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Varies
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15, 20, or 30 years
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ManufacturedHome.Loan Best for Good Credit
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Varies
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Varies
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21st Mortgage Corporation Best for Bad Credit
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Varies
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Varies
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eLend Best for Low Down Payment
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Varies
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Varies
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Why is it hard to get a mortgage on a manufactured home?
Can you finance a mobile home through FHA?
If you’re looking for an alternative to a traditional, site-built home, you may want to consider financing a mobile home through the FHA manufactured home loan program. Sometimes called an FHA loan for a mobile home, this government-backed mortgage option allows borrowers with imperfect credit to purchase an affordable home.
What is the loan limit for a manufactured home?
If you’re buying a home and land, your loan limit is $92,904. If you’re buying just a manufactured home, your loan limit is $69,678. If you’re buying just a lot, your loan limit is $23,226. An FHA manufactured home can be placed on land you own, but it’s not required.
What is an FHA manufactured home loan?
An FHA manufactured home loan is a mortgage backed by the Federal Housing Administration (FHA) that you can use to purchase a home built in a factory. If you need to, you can also use the loan to buy a plot of land for the home to sit on. You may know this type of house as a “mobile home,” but that isn’t the term used by the FHA today.
Can a mobile home be too small for an FHA loan?
Then there’s a size restriction–your new home cannot be too small. HUD 4000.1 says your manufactured home must have a floor space of 400 feet or more to be approved for an FHA mortgage. And what about FHA loan limits for mobile homes?