California residents looking for affordable housing options should consider manufactured and modular housing. Manufactured homes, also known as mobile homes, offer portability and affordability. Modular housing, which is also factory-built, provides the ability to have a budget-friendly home on a foundation.
Financing manufactured and modular housing differs from traditional housing, but many options are available to suit your needs. Chattel loans on a manufactured home by itself are popular and loans that cover a manufactured or modular home, plus land and improvements like garages, depending on the situation. Heres how California residents can benefit from the various financing options available for manufactured and modular housing.
If you’re considering purchasing a mobile or manufactured home in California, financing will likely be an important piece of your homebuying process. Mobile and manufactured homes can be an affordable housing option, but not all lenders provide loans for these types of properties. The good news is that there are lenders who specialize in California mobile home loans, and understanding your options will help you find the best loan for your needs.
In this comprehensive guide I’ll walk through key information on mobile and manufactured homes financing options, loan requirements, and tips for securing the ideal mobile home loan in California. My goal is to explain mobile home loans in simple terms, so you can make an informed decision when it comes to purchasing your new home. Whether you’re a first-time homebuyer or you already own a mobile home and want to refinance, you’ll find the details you need to move forward with confidence.
What Are Mobile and Manufactured Homes?
Before diving into financing, it’s helpful to understand exactly what mobile and manufactured homes are
Mobile homes are factory-built homes that are produced on a chassis with wheels that allow them to be towed to different locations. They can be placed in designated mobile home parks where space is leased or situated on private land.
Manufactured homes are also prefabricated in a factory and then transported to a site where they are installed on a permanent foundation. While constructed off-site, manufactured homes comply with local building codes and are often indistinguishable from site-built houses.
Both mobile and manufactured homes offer affordable alternatives to traditional site-built houses They come in single, double, or multi-wide floorplans and many modern models include luxury finishes and amenities
Mobile Home Loan Options in California
Specialized lenders provide loans for both new and existing mobile and manufactured homes in California. Here are some of the common mobile home loan programs available:
-
Chattel loans – Financing for just the home itself (the “chattel”), not the land it sits on. This is used for homes in mobile home parks.
-
Land/home loans – Combines financing for both the home and land it sits on. This is used for manufactured homes on private property.
-
FHA loans – Government-backed loans that allow low down payments around 3.5%.
-
VA loans – Zero down payment loans for veterans and service members. Limited to certain property types.
-
USDA loans – No down payment loans for low-income borrowers in rural locations.
-
Conventional loans – Loans that are not government-backed, offered by private lenders.
Shopping rates from multiple lenders helps find the right loan program for your particular home and financial situation.
Mobile Home Loan Requirements
While mobile home loans are accessible, you’ll need to meet certain requirements to qualify:
-
Down payment – Typically 15-20% minimum required. Can be as low as 3.5% with some loan types.
-
Credit score – A minimum score around 650 is usually required, but 700+ scores get the best rates.
-
Debt-to-income ratio – Your total monthly debt payments, including the new loan, should not exceed 43% of your gross monthly income.
-
Loan-to-value ratio – The loan amount is capped at a percentage of the home’s value, typically 80-95% depending on loan type.
-
Home requirements – The home must meet minimum age, size, and condition standards. Location and permanent utility connections also factor in.
Meeting these requirements shows lenders you’re financially ready to take on a mortgage, which translates into better chances for approval.
How To Get The Best Mobile Home Loan in California
Follow these tips when shopping for a competitive California mobile home loan:
-
Compare multiple lenders – Rates, fees, and options vary, so check with several lenders. Local banks and credit unions are worth considering.
-
Check your credit – Review your credit reports and fix any errors. Maintain low credit card balances and pay bills on time to boost your scores.
-
Save for a down payment – Lenders look for a 20% down payment. Save enough to reach that 20% threshold.
-
Know the value – Get an appraisal done to confirm the home’s value. This also provides critical info to lenders.
-
Evaluate loan types – Consider FHA, VA, and USDA loans to potentially lower your down payment and interest rate if you qualify.
-
Consider seller financing – If available, financing from the seller themselves can provide more flexible terms.
With some savvy preparation, you can uncover the perfect financing option for purchasing your dream mobile home. The freedom to choose new or used homes in desired locations makes mobile home ownership an appealing choice in high-cost California real estate markets.
Frequently Asked Questions
Can I get a 30 year loan on a mobile home?
Yes, it’s possible to get a 30-year mortgage for a mobile or manufactured home. Loan term options vary by lender and loan types. FHA loans allow 30-year terms while chattel loans usually max out at 20 years.
How much down payment is needed for a mobile home?
Down payment requirements fall somewhere between 3.5% to 20% typically. FHA loans allow 3.5% down. Conventional loans require around 15-20% down. The more you put down, the better the loan terms will be.
What is the easiest mobile home loan to get?
FHA, VA, and USDA loans are the easiest to get thanks to low or no down payment requirements and flexible credit guidelines. Conventional chattel loans and land/home loans have more stringent requirements.
Can I get a mortgage for a used mobile home?
Yes, it’s possible to get financing for both new and used mobile homes. Loan availability depends on the age and condition of the home. Personal loans or seller financing are options if you can’t get a mortgage.
How much do mobile home payments cost?
Mobile home loan payments vary based on the loan amount, interest rate, loan term, property taxes, and insurance costs. However, they are typically lower than payments on conventional site-built homes.
Ready to Explore California Mobile Home Loans?
Low Money Down Mobile Home Financing Options
If youre looking for a loan on a mobile home in California, several low-money down options are available, including:
California VA Loans: These loans for eligible military veterans offer 100% financing options. These loans are earmarked for veterans specifically, though some active-duty military personnel and surviving spouses of deceased veterans may also qualify.
California FHA Loans: California FHA loan programs are suitable for a variety of home financing needs. These are loans backed by the Federal Housing Administration.
Some of the advantages of the California FHA specialty loan include:
- Favorable pricing: FHA loans have competitive interest rates.
- A low down payment: Qualified buyers can purchase a manufactured home with as little as 3.5% down.
- Easier qualifying: Even if you have issues with your credit history and credit score, you may still qualify for a home loan from Cascade Loans.
California Chattel Loans: Chattel loans are unique in this respect, as most other loans that you can obtain for a manufactured home are also available for site-built homes in one form or another.
How Is Financing Manufactured Homes Different From Traditional Mortgages?
Manufactured and modular housing loans offer more flexibility than traditional mortgages. Financing can cover the home only or include land and other improvements like garages, basements, and driveways.
Manufactured home loans offer shorter terms and smaller loan sizes. Government-backed manufactured home loan options like FHA and VA offer low down payments and lower rates. FHA and VA loans for manufactured homes may have higher down payment requirements than for traditional site-built homes.