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.
Buying a mobile home can be an affordable way to achieve the dream of homeownership. With an FHA loan, you may be able to finance up to 95% of the purchase price and take advantage of low down payments. However, FHA loans for mobile homes do come with specific requirements.
In this comprehensive guide, we’ll cover all the key details you need to know about FHA mobile home loan requirements, including:
- What is an FHA loan for a mobile home?
- FHA mobile home loan types
- FHA mobile home loan limits
- FHA mobile home down payment and credit requirements
- Mobile home construction and land requirements for FHA loans
- How to find an FHA lender for mobile home financing
- Alternatives to FHA mobile home loans
Let’s dive in!
What Is an FHA Loan for a Mobile Home?
An FHA loan for a mobile home is a government-backed mortgage insured by the Federal Housing Administration. It allows borrowers to finance the purchase of a factory-built home, also known as a manufactured home or mobile home.
With an FHA mobile home loan, you can also finance the purchase of land to site the home on if needed. FHA mobile home loans make financing more accessible for buyers who may not qualify for conventional mortgages.
The FHA has specifications mobile homes must meet to be eligible for FHA financing. Your home must have been built after June 15, 1976 and have the HUD seal visible on the exterior.
Types of FHA Loans for Mobile Homes
There are two main types of FHA mobile home loans:
FHA Title II Loans Allow you to finance a new manufactured home transport and installation costs. You must own the land the home sits on. Can also refinance an existing FHA mobile home loan.
FHA Title I Loans: Can finance a new or used mobile home even if you don’t own the land. Can also finance just the land or a site in a mobile home park. More flexible but lower loan limits than Title II.
Title I is the most common type used by mobile home buyers who rent a lot in a mobile home park
FHA Mobile Home Loan Limits
The maximum FHA loan amount you can borrow depends on whether you get a Title I or II loan,
Title II Loan Limits: Follow standard FHA loan limits based on the county where the home is located. In 2023, the standard limit for a single-family home is $726,525 in most U.S counties. High-cost areas have higher limits.
Title I Loan Limits:
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Mobile home & land: $148,909 (single section), $237,096 (multi section)
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Mobile home only: $105,532 (single section), $193,719 (multi section)
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Land only: $43,377
Title I has much lower limits, especially for financing just a mobile home or land.
FHA Mobile Home Down Payment and Credit Requirements
To qualify for an FHA mobile home loan, you’ll need to meet these key eligibility standards:
Down Payment: At least 3.5% down payment required. You can finance closing costs into the mortgage.
Credit Score: Minimum 580 FICO score required for 3.5% down payment. 500+ scores may qualify with 10% down.
DTI: Your total debt-to-income ratio must be below 43%. Include your new mortgage payment.
Mortgage Insurance: Upfront and annual mortgage insurance premiums required. Add to costs.
Meeting these requirements is essential. But the good news is FHA mobile home loans allow lower credit scores and down payments than conventional mortgages. This helps more buyers qualify.
Mobile Home Construction and Land Requirements
For your mobile home to be eligible for FHA-financing, it must meet HUD construction standards, including:
- 400 square foot minimum living area
- HUD seal attached to exterior
- Built after June 15, 1976
- Installed per HUD standards
- Permanently affixed if you own the land
FHA mobile home loans don’t require you to own the land your home sits on. But you’ll need:
- Land that allows mobile homes
- Lease of at least 3 years if renting
- Proper access, utilities and zoning
These requirements ensure your home and land are suitable for FHA financing.
How to Find an FHA Lender for Mobile Home Loans
The key is finding a lender that actively provides FHA mobile home loans. These steps can help:
- Check HUD’s list of approved FHA lenders in your state
- Compare loan estimates from 3-5 potential lenders
- Ask about the loan officer’s specific experience with FHA mobile home loans
Working with a lender familiar with these loans can smooth the process. Mortgage brokers can also help you shop multiple lenders.
Alternatives to FHA Mobile Home Loans
An FHA loan is not your only option for financing a mobile home. Here are two other routes to consider:
Conventional Loans: May offer better rates and terms for borrowers with good credit and 20% down payment or more. Ask lenders about conventional mobile home loan programs.
Mobile Home Dealer Financing: Many dealers offer their own in-house financing. Can be easier to qualify but higher rates. Be sure to compare costs.
The Bottom Line
The bottom line is FHA loans can be a great option for purchasing a mobile or manufactured home. Just be sure to understand the specific FHA mobile home loan requirements upfront. This includes limits on loan amounts, credit score and down payment requirements, and construction standards.
Shopping around with a few lenders familiar with FHA mobile home loans is key to getting the best financing deal. With the right loan, you can join the millions of Americans living affordably in a mobile home they own.
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.
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