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.
A manufactured home, sometimes called a mobile home, can be a more affordable way to buy a house. These factory-built homes are constructed to federal standards and can be financed with a Federal Housing Administration (FHA) loan. Here’s what you need to know about using an FHA loan to buy a manufactured home.
What is a Manufactured Home?
A manufactured home is a housing structure built in a factory in accordance with the federal Manufactured Home Construction and Safety Standards code. It is then transported to the home site in one or more sections.
To qualify for FHA financing a manufactured home must
- Be built after June 15, 1976 when the federal code went into effect
- Have at least 400 square feet of living space
- Be attached to a permanent chassis
- Have the towing hitch and wheels removed
- Be designed as a single-family home
- Have the HUD certification label visibly attached
Manufactured homes may also be called mobile homes or modular homes A mobile home is typically built to the same federal standards but is not permanently fixed to a foundation.
FHA Loan Options for Manufactured Homes
FHA loans can finance the purchase of both new and existing manufactured homes through two programs:
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Title II – This program finances manufactured homes on land owned by the borrower. The home must be permanently affixed to a foundation on the land.
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Title I – This program can finance a manufactured home on leased land, such as in a mobile home park. The lease term must be at least 3 years longer than the loan term.
For both programs, the FHA treats manufactured homes the same as traditional site-built homes when determining eligibility and underwriting. This makes FHA loans one of the easiest financing options for manufactured housing.
Manufactured Home FHA Loan Requirements
To qualify for an FHA loan on a manufactured home, certain criteria must be met:
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Credit score – A minimum credit score of 580 is required. Borrowers with scores between 500-579 can qualify with a 10% down payment.
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Down payment – At least 3.5% down payment is required for borrowers with a 580+ credit score. 10% down is needed for 500-579 credit score borrowers.
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Debt-to-income ratio – Your total monthly debt payments, including the new mortgage, cannot exceed 43% of your gross monthly income.
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Home inspection – A home inspection by a licensed inspector is required to ensure the home meets HUD standards.
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Foundation certification – An engineer’s certification is needed to verify the permanent foundation meets FHA requirements.
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Primary residence – You must intend to use the manufactured home as your primary residence.
In addition to these requirements, the general FHA mortgage insurance and underwriting standards apply.
The Pros and Cons of an FHA Manufactured Home Loan
FHA financing has several benefits that make it one of the best loan options for financing a manufactured home:
Pros
- Low down payments, starting at just 3.5%
- Available for lower credit scores starting at 580
- Low mortgage insurance premiums
- Can finance homes not on owned land
- One loan finances home and land
Cons
- Requires mortgage insurance
- Lower loan limits than conventional loans
- Slower process than conventional loans
- Home options can be limited by age requirements
While FHA financing is very flexible for manufactured housing, conventional loans that allow manufactured homes tend to have higher loan limits. An FHA loan can only finance up to $92,904 for both home and land.
Using an FHA Loan to Buy Land for a Manufactured Home
If you want to buy land to place a manufactured home on, an FHA loan can finance the land purchase separately. The maximum loan amount for just the land is $23,226. Or you can get one FHA loan for both the land and home up to $92,904 total.
With an FHA construction loan, you can even finance the land purchase and placement of the manufactured home in a single loan. This is known as a one-time close construction loan.
Finding an FHA Lender for Manufactured Home Loans
The FHA allows manufactured homes as eligible properties. But not all mortgage lenders offer FHA loans for manufactured housing.
Banks and credit unions sometimes limit lending only to doublewide homes over a certain age. Online and non-bank lenders are more likely to have flexible guidelines that allow singlewide homes and older models.
Working with a lender familiar with manufactured home lending can make the mortgage process much smoother. Comparing multiple lenders is wise to find the best rates and terms.
The Bottom Line
FHA loans open up homeownership opportunities for buyers of manufactured homes. If you’re considering a manufactured home as your next residence, an FHA loan can provide flexible financing options. Just be sure to find an approved lender experienced with underwriting FHA loans for factory-built housing.
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.
How to qualify for an FHA manufactured home loan
The minimum down payment is 3.5%, and the home purchase and installation costs can be added to the loan amount.
The FHA accepts scores as low as 500 with a 10% down payment. Borrowers making a 3.5% down payment will need at least a 580 credit score.
The FHA caps your debt-to-income (DTI) ratio — which measures the portion of your gross monthly income that goes toward debt payments — at 43%. This will include your new FHA mortgage payment. However, you may still qualify with a higher DTI if you have a high credit score or extra cash reserves.
FHA manufactured home loans require two types of FHA mortgage insurance: an upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium (MIP). The UFMIP is equal to 1.75% of your loan amount and can be paid in full at closing or rolled into the loan amount. The annual MIP ranges from 0.15% to 0.75% of the loan amount and is added to your monthly payments in 12 installments each year.
HUD sets different lending guidelines for each loan program.
For Title II loans, the FHA loan limits that apply to all FHA loans also apply. These are set each year based on national median home prices. In 2024, the FHA loan limit is $498,257 for a single-family home in most U.S. counties.
For Title I loans, your loan limit depends on what you’re buying with the loan:
- 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. If you’re leasing land, the lease typically needs to be for three years or longer. The lease must also stipulate that you’ll receive at least 180 days notice if the landlord plans to terminate your lease.
The home must be your primary residence for at least one year.
The government maintains a database of borrowers with delinquent federal debts called the Credit Alert Interactive Verification Reporting System (CAIVRS). Your lender will run a CAIVRS check to ensure you don’t owe any outstanding debts to the federal government. If you do, you’ll be ineligible for an FHA manufactured home loan.
Can You Get an FHA Mortgage on a Manufactured Home? | Mobile Home Financing
FAQ
Will an FHA loan cover a manufactured home?
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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What is the oldest manufactured home for FHA?
Does FHA require tie-downs on manufactured homes?
Can I get an FHA loan for a mobile home?
Like borrowers purchasing traditional homes, borrowers seeking an FHA loan for a mobile home will apply for an FHA loan through an FHA-approved lender. The major difference is that the manufactured home in question must meet the specific building and construction requirements set by the FHA.
What are the different types of FHA manufactured home loans?
There are two types of FHA manufactured home loans: the Title II FHA loan program and the FHA Title I program. With the Title II FHA loan program: You can finance a new manufactured home, the cost of transporting it to its permanent location and any costs associated with installation.
Can I buy a manufactured home with an FHA mortgage?
Buying a manufactured home with an FHA mortgage is definitely an option for those who qualify. But the home must meet minimum FHA requirements as well as state or local code. FHA home loan rules for manufactured housing don’t just list the credit score requirements and other financial qualifications needed to approve the loan.
What are the FHA loan limits for manufactured homes?
These are offered for manufactured homes by Rocket Mortgage. Loan limits match FHA limits for your county. In most areas, that’s $498,257, but can be as high as $1,149,825 in high-cost areas. There are special limits in Alaska and Hawaii of up to $1,724,725.