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 manufactured or mobile home can be an affordable alternative to a site-built house. But financing these factory-built homes often requires jumping through some extra hoops. Luckily FHA loans make it possible for buyers with imperfect credit to purchase a manufactured home.
In this comprehensive guide, we’ll explain everything you need to know about getting an FHA loan for a manufactured home, including:
- What is an FHA manufactured home loan?
- FHA manufactured home loan requirements
- How to qualify for an FHA manufactured home loan
- Finding the best lenders for FHA manufactured home loans
- Pros and cons of FHA loans for manufactured homes
What is an FHA Manufactured Home Loan?
An FHA manufactured home loan is a government-backed mortgage insured by the Federal Housing Administration (FHA) These loans help buyers with damaged credit or low savings purchase affordable manufactured housing
The FHA offers two main programs for financing manufactured homes:
- FHA Title II – For new manufactured homes permanently attached to land the borrower owns.
- FHA Title I – For manufactured homes on leased land or used homes. Title I has more flexible requirements.
Manufactured homes must meet HUD construction standards to qualify for FHA loans This includes having at least 400 sq ft of living space, HUD certification labels, and a permanent chassis.
FHA Manufactured Home Loan Requirements
Both the property and borrower must meet certain criteria set by the FHA and lenders to qualify for a manufactured home loan.
Property Requirements
The manufactured home and land must meet these FHA guidelines:
- Home is permanently affixed to the site according to local codes
- Property has access to water, sewer, electricity, and gas utilities
- Site has all-weather road access
- Foundation inspection performed
Additionally:
- For FHA Title II loans, the home must be on land the borrower owns
- FHA Title I loans allow manufactured homes on leased land
Borrower Requirements
As the borrower, you’ll need to meet these qualifications:
- Credit score – At least 500 for FHA loans. Most lenders require 580.
- Down payment – 3.5% of purchase price for borrowers with 580+ credit score. 10% down required for 500-579 credit scores.
- Debt-to-income ratio – Below 43% in total monthly debt payments.
- Occupancy – You must use the home as your primary residence.
- CAIVRS check – Make sure you have no outstanding federal debts.
FHA loans also come with loan limits on the amount you can borrow.
How to Qualify for an FHA Manufactured Home Loan
Follow these steps for the best chance of approval on an FHA manufactured home loan:
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Boost your credit score. Give yourself several months to improve your credit before applying. On-time payments and lowering balances can raise your scores.
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Save for a down payment. FHA loans need as little as 3.5% down, but more can help your interest rate.
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Lower your DTI. Pay down debts, close unused credit cards, and try to reduce monthly obligations.
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Find an eligible property. Make sure the home and land meet all FHA requirements before making an offer.
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Get pre-approved. Having a pre-approval letter from a lender makes your offer stronger.
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Know the process. Expect extra steps like foundation inspections that are required for manufactured housing.
Finding the Best Lenders for FHA Manufactured Home Loans
Shopping around helps you find the best rates and terms on an FHA manufactured home loan. Here are some tips:
- Search HUD’s list of approved lenders in your state
- Get rate quotes from multiple lenders
- Ask about the loan officer’s experience with manufactured housing
- Compare fees, mortgage insurance rates, and interest rates
- Read online reviews to learn about others’ experiences
Online lenders, credit unions, and community banks are good places to look beyond big banks.
Pros and Cons of FHA Loans for Manufactured Homes
FHA manufactured home loans offer several advantages:
Pros
- Low down payments, starting at 3.5%
- Available to buyers with lower credit scores
- Allows alternative property types
- Lower monthly mortgage insurance than conventional loans
Cons
- Require mortgage insurance (upfront and annual)
- Strict underwriting and property guidelines
- Loan limits on borrowing amounts
- Slower process than conventional mortgages
For buyers who qualify, FHA loans provide an affordable financing option for manufactured home purchases. But conventional mortgages can also be used if you meet eligibility requirements.
The Bottom Line
Purchasing a manufactured home with an FHA loan opens homeownership opportunities to buyers across the credit spectrum. Just make sure you understand the eligibility and process to give yourself the best shot at approval. If you’re ready to move forward, connect with reputable FHA lenders to explore your financing options.
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
FHA Mobile Home Requirements
FAQ
Will an FHA loan cover a manufactured home?
What is the oldest manufactured home for FHA?
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 that can be financed?
Can I get an FHA loan for a manufactured home?
When pursuing an FHA loan for a manufactured home, you must decide between the Title II FHA loan program and the FHA Title I program. The FHA Title I loan program doesn’t require your manufactured home to be attached to the land. However, the FHA Title II FHA loan program does require the home to be permanently attached to land that you own.
Can you finance a mobile home through FHA?
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.
What is the loan limit for a manufactured home?
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.
Can you get a mortgage on a manufactured home?
Yes, you can get a mortgage on a manufactured home. There are several options, including FHA loans, VA loans, and certain conventional loans. The home usually needs to meet specific requirements, such as being on a permanent foundation and classified as real property. Can you get a reverse mortgage on a manufactured home?