Banks That Offer Manufactured Home Loans – A Complete Guide for 2023

Manufactured homes formerly known as mobile homes provide a more affordable way for many people to achieve homeownership. With site-built home prices rising, factory-built manufactured housing presents an appealing option. However, securing financing for a manufactured home through a mortgage lender can be tricky. Not all banks and lenders provide loans for these types of properties.

In this comprehensive guide, we’ll cover everything you need to know about getting a manufactured home loan, including:

• What are manufactured homes?
• Manufactured home loan options
• Lenders that provide manufactured home loans
• Loan requirements and qualifications
• Interest rates and down payments
• The mortgage application process
• Pros and cons of manufactured home loans

Let’s dive in and find the perfect lender and loan program to finance your manufactured home dream!

What Are Manufactured Homes?

Manufactured homes are factory-built residences assembled in sections and installed on site. Also known as modular or prefabricated homes, they provide an affordable alternative to site-built houses.

These factory-built homes must adhere to a federal building code administered by the U.S. Department of Housing and Urban Development (HUD). This HUD Code outlines strict construction standards and quality control. Homes built according to the code will have a red certification label located on the exterior of the home.

Manufactured homes differ from mobile homes, which were built before 1976 when the HUD Code went into effect. Mobile homes are built to looser regulations and are more likely to be moved from place to place

Manufactured Home Loan Options

You have several options when it comes to financing a manufactured home

• Conventional loans – Provided by private lenders and conforming to standards set by Fannie Mae and Freddie Mac. Down payments as low as 3%.
• FHA loans – Insured by the Federal Housing Administration with low down payments and flexible credit requirements.
• VA loans – Offered by private lenders but guaranteed by the U.S. Department of Veterans Affairs. For qualifying veterans and service members. No down payment required.
• USDA loans – Provided by the U.S. Department of Agriculture for low-income buyers in rural areas. No down payment required.
• Personal loans – Unsecured loans that can be used for any purpose, including buying a manufactured home. Tend to have higher interest rates.
• Chattel loans – Specifically for financing manufactured homes and the land underneath. Tend to have shorter repayment terms.

The specific loan program you choose will depend on your financial situation, credit score, the type of property, and whether you own the land. Always compare multiple lenders to find the best rates and terms.

Top Lenders Offering Manufactured Home Loans

While not all lenders provide financing for manufactured houses, many top banks and lenders offer loan programs. Here are some of the best manufactured home lenders to consider:

LoanDepot

LoanDepot is one of the largest nonbank lenders in the U.S. They offer a full range of loan products including:

• Conventional loans conforming to Fannie Mae standards
• FHA, VA, and USDA government-backed loans
• Jumbo loans up to $3 million
• Renovation loans

They have over 200 locations nationwide.

Guild Mortgage

This national lender headquartered in California offers conventional, FHA, VA, and USDA loans. They have options for manufactured homes on private land as well as in mobile home parks.

Guild Mortgage has over 250 branch locations and has been in business for over 60 years.

Fifth Third Bank

Fifth Third is a large regional bank operating primarily in the Midwest and Southeast. They offer conventional mortgages for manufactured homes through their Affordable Housing Program.

The homes must be on private land and meet certain requirements related to foundation, roof, siding, and size. Fifth Third has over 1,100 branch locations.

U.S. Bank

U.S. Bank is one of the largest banks in America and provides lending in all 50 states. They offer manufactured home loans, including FHA, VA, and USDA options. No minimum credit score is specified.

U.S. Bank has over 2,700 branch locations nationwide.

PNC Bank

PNC is another huge commercial bank that offers mortgages for factory-built homes. They have conventional loans conforming to Fannie Mae standards for qualified properties.

Homes must be built after 1976 and meet foundation requirements. PNC Bank has a presence in over 20 states with around 2,200 branches.

New American Funding

This private mortgage lender based in California provides financing for manufactured houses of all types. Their loan programs include FHA, VA, USDA, and even jumbo loans up to $4 million.

New American Funding lends in 47 states and has over 120 branch locations.

Manufactured Home Loan Requirements

While requirements vary by lender, here are some common standards for qualifying for a manufactured mortgage:

• Credit score – Most lenders require a minimum score in the high 500s or 600s. The higher your score, the better the rates and terms you can qualify for.
• Down payment – Typically at least 3-5% down. Loans like FHA, VA, and USDA may need 0% down.
• Debt-to-income ratio – Your total monthly debt divided by gross monthly income. Usually capped at around 50%.
• Home requirements – The home must have been built after 1976 to HUD Code standards. It also must be attached to a permanent foundation on land you own.
• Title and land ownership – The home must be classified as real rather than personal property. You must own the land or have a long-term lease.

Providing pay stubs, tax returns, bank statements, and other financial documents can help strengthen your application. Having a down payment and emergency savings on hand are also beneficial.

Interest Rates and Down Payments

Interest rates and down payment requirements for manufactured home loans are generally higher than for site-built homes. Here are some examples:

• Conventional loans – Rates start around 5-6% on a 30-year fixed-rate mortgage with 5% down.
• FHA loans – Rates start around 4.5% with 3.5% down payment.
• VA loans – Rates start around 4% with no down payment for qualified borrowers.
• USDA loans – Rates start around 3.25% with no down payment requirements.

Focus on improving your credit score and debt-to-income ratio to qualify for the best possible rates. Compare multiple lender quotes for the lowest rates.

The Manufactured Home Loan Process

The application process is similar to getting a conventional mortgage. Here are the basic steps:

1. Compare lenders and pre-qualify to see potential loan amounts.

2. Formally apply by submitting financial documents and paying any fees.

3. The lender will appraise the home and underwrite the loan based on your application.

4. Once approved, you will receive a Loan Estimate outlining the costs.

5. Next is the home inspection, title search, and securing homeowners insurance.

6. You’ll receive a Closing Disclosure 3 days before closing and can then sign the final loan documents.

Having an expert loan officer guide you through the documentation, appraisal, and underwriting intricacies is key. Be prepared to explain details about the home’s construction, permitting, and certification.

Pros and Cons of Manufactured Home Loans

There are some important benefits, as well as drawbacks, to weigh when considering a manufactured mortgage:

Pros

• More affordable than site-built homes
• Lower down payments required
• Loan programs for lower-income borrowers
• Quick construction timelines

Cons

• Higher interest rates than site-built mortgages
• Stricter home requirements to qualify
• Shorter loan repayment terms
• Loans not available from all lenders

If you take the time to find the right lender and loan program for your situation, a manufactured home can be an affordable way to start building equity and achieve the dream of homeownership.

Find the Best Manufactured Home Lender

Purchasing a manufactured home can provide homeownership opportunities for buyers lacking the budget for site-built houses. But finding the right financing can be a roadblock.

Be sure to check lenders like LoanDepot, Guild Mortgage, Fifth Third Bank, U.S. Bank, and New American Funding that offer manufactured home loan options. Compare interest rates, terms, fees, qualifications, and down payment requirements.

With proper research and guidance from a knowledgeable loan officer, you can secure the ideal financing solution and start enjoying life in your comfortable, affordable new manufactured home.