Can You Get an FHA Loan for a Mobile Home? Everything You Need to Know

This type of financing can put mobile home ownership within reach for many Part of the Series Federal Housing Administration (FHA) Loans Understanding FHA Loans

Despite the relatively modest cost of a manufactured home (commonly referred to as a mobile home), it can be harder to qualify for a mortgage for one of these dwellings than for conventional houses.

Fewer lenders are in the business of providing loans for manufactured homes, which are built off-site and affixed to a permanent chassis. As a result, would-be mobile homeowners simply don’t have many financing choices.

However, those interested in a manufactured home do have some options if they don’t meet conventional mortgage standards. One is a Federal Housing Administration (FHA) loan, which can be used to cover the home itself, a suitable lot to build it on, or both.

Getting an FHA loan for a mobile home is possible, but there are specific requirements and limitations borrowers need to be aware of. In this comprehensive guide, we’ll walk through key considerations for financing a mobile home with an FHA loan, including loan limits, down payment options, requirements for the mobile home itself, and more.

What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA) Some key features of FHA loans

Low down payments, typically as low as 3.5%
Lenient credit requirements – minimum 580 FICO score
Low monthly mortgage insurance premiums
Limits on seller concessions and down payment assistance

FHA loans help make homeownership accessible for borrowers who may not qualify for conventional loans that require higher credit scores and down payments.

FHA Loan Limits for Mobile Homes

The first thing to understand is that FHA places limits on the maximum loan amount for mobile homes based on whether you are financing just the home, just the land, or both.

Mobile Home Only: Up to $69,678
Land Only: Up to $23,226
Mobile Home + Land: Up to $92,904 total

These county-specific FHA loan limits for mobile homes are lower than limits for standard single-family homes. You can check FHA loan limits by county here

What Types of Mobile Homes Qualify for FHA Loans?

Not just any mobile home can qualify for FHA-insured financing. The mobile home must meet the following criteria:

HUD Certification Tag The mobile home must have an affixed HUD Certification Label that verifies the home was constructed to FHA standards, This metal tag is located on the exterior of each transportable section of the mobile home
Minimum Size: The home must be at least 400 square feet.
Built After June 1976: FHA requires mobile homes to be constructed after this date to ensure adequate safety and construction standards are met.
Permanent Foundation: The mobile home must be erected on a permanent foundation system, like a concrete slab or footer system. It can’t just be sitting on blocks or piers. Proper skirting is also required.
Affixed Wheels: The wheels/axles must be removed and the mobile home affixed permanently to the foundation.

Meeting all these requirements qualifies the home as a “permanently affixed” mobile home eligible for FHA financing.

Can I Get an FHA Loan for a Used Mobile Home?

Yes, you can get an FHA loan for a used mobile home as long as it meets the age, certification tag, foundation, and size requirements above. Many buyers opt for used mobile homes as a more affordable option.

Here are some extra tips for financing a used mobile home with an FHA loan:

Inspect thoroughly: Carefully examine the home for defects and ensure all systems are in working order. Be present for the appraisal.
Check permits: Verify the mobile home, foundation, and any additions were permitted properly. FHA requires this.
Assess foundation: Ensure the foundation is permanent and structurally sound. FHA mandates mobile homes be “permanently affixed.”

A reputable FHA lender can guide you through used mobile home financing to ensure requirements are met.

What is the Maximum Loan Term on an FHA Mobile Home Loan?

For mobile homes, FHA loans are limited to a maximum 20-year term. However, loan terms up to 25 years may be allowed if you are financing both the mobile home and land together.

The shorter loan term offsets some of the risk of financing an asset that may depreciate faster than a site-built home. It helps borrowers build equity quicker as well.

How Much is the Down Payment on an FHA Mobile Home Loan?

Just like with standard FHA loans, the down payment on an FHA mobile home loan is typically 3.5%. However, keep these points in mind:

If financing just the mobile home (not the land), FHA requires a minimum 10% down payment.
If financing the mobile home and land together, the minimum down payment reverts to the standard 3.5% rate for FHA.
The down payment cannot be from the seller or any other interested third party. It must come from your own funds or from a qualified source like a family gift.

What Credit Score is Needed for an FHA Mobile Home Loan?

The minimum credit score for an FHA loan is 580. So if your credit score is 580 or above, you can qualify for an FHA mobile home loan assuming other requirements are met.

The better your credit score, the lower your interest rate and overall costs will be. Aim for a score of at least 620 if possible. Our FHA lenders can advise you on improving your credit score to get the best deal.

Can I Get an FHA Loan for a Mobile Home with No Down Payment?

While FHA allows down payments as low as 3.5%, alternative options like these to get an FHA mobile home loan with limited funds:

Seller Credits: The seller can credit up to 6% of the purchase price toward your closing costs and downpayment.
Down Payment Assistance: State and local programs may offer down payment help in the form of grants, loans, or deferred payments.
VA Loan: If you are a veteran, a VA loan requires no down payment and more flexible credit guidelines.

Talk to a loan officer to go over programs and options to buy a mobile home with minimal cash out of pocket.

What are Mortgage Insurance Requirements for an FHA Mobile Home Loan?

With any FHA loan, you will be required to pay mortgage insurance premiums (MIP). On mobile homes, annual MIP is 0.85% of the base loan amount.

For example, on a $60,000 FHA mobile home loan, you would pay:

Upfront MIP: 1.75% of loan amount = $1,050
Annual MIP: 0.85% of $60,000 = $510/year

MIP is required for the life of FHA loans exceeding 15 years. On mobile home loans under 15 years, MIP drops off after 11 years.

Can I Get Cash Back with an FHA Mobile Home Loan Refinance?

Yes, FHA allows you to tap into your home equity when refinancing to take cash out. You can use cash-out proceeds for any purpose.

Here are a few quick cash-out refi tips:

Must have at least 15% equity in the mobile home based on appraised value
Maximum cash-out limited to 85% loan-to-value
Full home appraisal required
Credit score and debt-to-income requirements apply

Talk to one of our FHA loan officers to discuss cash-out refinancing your mobile home.

Next Steps to Getting an FHA Mobile Home Loan Pre-Approval

Now that you know the guidelines and requirements, here are some suggested next steps:

Review mobile homes for sale and select potential options that meet FHA criteria
Get pre-qualified – fill out a quick form with basic financial details to determine if you may qualify and at what amounts
Compare mobile home lenders and loan offers
Officially apply and provide required documentation (income/employment verification, credit report, etc.)
Complete the full underwriting process and get a clear to close!

Our experienced FHA mortgage lenders are ready to guide you through getting pre-approved and closing on an FHA-insured loan for your mobile home. We can make financing simple and stressful. Connect with us today to get started!

Cons

There are limits on how much you can borrow.
FHA mortgages will require mortgage insurance, both up front and annually, and often for the entirety of the loan term.

Pros and Cons of FHA Loans

There are several advantages and a few disadvantages to keep in mind when getting an FHA loan.

FHA Mobile Home Requirements

FAQ

Will an FHA loan cover a manufactured home?

With the FHA Title I loan program: You can finance a new or used manufactured home, even if you don’t own the land it’s sitting on. You can finance a site for a manufactured home to sit on. You can finance repairs or improvements to a manufactured home you already own, as long as you own the lot it sits on.

What is the loan term for a mobile home?

It depends on the lender. However, if you’re financing a mobile home on a permanent foundation, you’ll likely encounter loans with terms ranging from 15 to 30 years. However, if you’re using a chattel or personal loan, you’ll likely have a shorter repayment term.

What is the oldest mobile home that can be financed?

FHA loans are a core financing option for first-time and low- to moderate-income homebuyers, and they can be used for many manufactured homes through the Title I program. (Note that the FHA does not issue mortgages on mobile homes built before June 15, 1976.)

What is the difference between mobile homes and manufactured homes?

The Difference Between Mobile and Manufactured Homes According to HUD, a factory-built home prior to June 15, 1976 is a mobile home and one built after June 15, 1976 is a manufactured home.

Can a mobile home be approved for an FHA loan?

Mobile homes that are not FHA loan program approved have some unique requirements. One of them is the manufactured-by rule, according to HUD 4000.1, which states that mobile homes manufactured before June 15, 1976 cannot be approved for an FHA mortgage. There’s also a size restriction–your new home cannot be too small.

Can you get a mortgage for a mobile home?

Yes, many banks and credit unions finance mobile homes on land and these are usually considered real property loans. Some government-backed loan programs, like FHA Title II loans and certain VA loans, also allow for the financing of mobile homes along with the land they sit on.

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. You may also use the loan to buy a plot of land for the home to sit on. It is called an FHA manufactured home loan by the FHA, but you might know the type of house as a ‘mobile home’.

What are the FHA guidelines for mobile homes & manufactured homes?

The FHA guidelines for mobile homes and manufactured homes have loan limits plus foundation and appraisal rules that must be followed. FHA eligible manufactured homes must be occupied as a primary residence and must have been built after June 15, 1976 on a permanent foundation.