Mortgage rates on mobile homes are dependent on various factors, such as which mortgage option you get. Here is everything you need to know
For many prospective home buyers, breaking into the housing market remains out of reach. This is where mobile homes—also referred to as manufactured homes—can provide a more affordable and flexible alternative. After all, the average cost of a mobile home in the US was just under $88,000 at the end of 2022.
Mortgage rates on mobile homes depend on how much you put down as collateral, your home loan terms, and your FICO score. Mortgage rates can be anywhere from 4% and 24%.
To help you determine your mortgage rate, it is important to understand the definition of a mobile home and which home loans are available to you.
The definition for mobile home is determined by when it was constructed. Homes built in factories before June 15, 1976, are known as mobile homes. That was when the US Department of Housing and Urban Development (HUD) enacted the National Manufactured Housing Construction and Safety Standards Act.
The average cost of a mobile home is between $10,000 and $50,000. Key features of mobile homes include the following:
Buying a mobile home can be an affordable way to achieve the dream of homeownership. With mobile homes costing roughly half as much as site-built homes, it’s easy to see the appeal. However, financing a mobile home purchase can be tricky Mobile home loans often come with higher interest rates and stricter eligibility requirements compared to mortgages for traditional homes.
In this comprehensive guide we’ll walk through everything you need to know to find and qualify for the most competitive mobile home loan rates available.
An Overview of Mobile Home Loans
Mobile homes, also known as manufactured homes, are factory-built residences constructed on non-removable steel chassis. They are transported to sites in sections and installed on leased or privately owned land.
Mobile home loans help buyers finance the purchase of the home itself, whether on owned or rented land. These loans are also used to finance financing home-and-land packages.
It’s important to understand that mobile home financing options differ from conventional mortgages in a few key ways:
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Higher interest rates – Mobile home loans tend to have interest rates ranging from 0.5% to 2% higher than comparable conventional mortgages.
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Shorter terms – Mobile home loan terms max out at 20 years, while traditional home loans go up to 30 years.
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Stricter requirements – Mobile home loans can have more stringent credit score, down payment, and debt-to-income requirements.
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Limited options – Only some lenders offer mobile home financing, so shopping around is critical.
Factors That Impact Mobile Home Loan Rates
Several elements determine the interest rates and terms you’ll be offered when applying for mobile home financing. Being aware of these factors puts you in a better position to get the lowest rate possible.
Credit Score
As with any type of mortgage, your credit score significantly influences the loan terms lenders will offer. The higher your score, the lower the rate you can expect to qualify for.
Here’s a look at average mobile home loan rates by credit score:
- 760+ score – Around 4% interest rate
- 700-759 score – Approximately 5% interest rate
- 640-699 score – Around 6% interest rate
- 580-639 score – Approximately 8% interest rate
Improving your credit score can potentially save you thousands of dollars in interest charges over the loan repayment period.
Down Payment Amount
Mobile home lenders generally require higher down payments than what’s expected for conventional mortgages. Putting down 20% or more upfront if you can swing it lets you avoid private mortgage insurance and qualify for the lowest rates.
Loan Term
Shorter loan terms mean paying the money back faster, so you end up paying less interest over time. But this also results in higher monthly payments.
Longer terms spread payments out but increase the total interest paid. Evaluate whether lower payments or long-term savings are more important.
Home Value
The lower the home value, the higher the loan interest rate will likely be. Newer mobile homes in great condition tend to get better rates.
Land Ownership
Owning the land the home sits on is viewed favorably by lenders and can result in a lower interest rate than if you’re financing the home only.
Types of Mobile Home Loans
There are several varieties of financing available for mobile home buyers. Being familiar with the pros and cons of each helps guide you to the best option.
Chattel Loans
Chattel loans allow you to finance just the mobile home. They don’t require you to purchase the land.
Pros
- Quick approval decisions
- Low eligibility standards
- Finance older mobile homes
Cons
- Higher interest rates
- Short 5 to 20 year terms
- Loan amounts under $100K
Conventional Loans
Conventional mortgages can be used to buy certain manufactured homes meeting specific requirements.
Pros
- Lower interest rates
- Long repayment terms
- Finance land purchase
Cons
- Stricter eligibility standards
- Require permanently affixed home
- Limited lender options
FHA Title I Loans
FHA’s Title I program provides financing for just the mobile home and not the land.
Pros
- Low down payments (5-10%)
- Finance older mobile homes
- Lower credit score requirements
Cons
- Short loan terms up to 20 years
- Higher interest rates
- Home can’t be in mobile home park
FHA Title II Loans
FHA’s Title II loans allow financing the mobile home and land combined as real property.
Pros
- Low down payments (3.5%)
- Competitive interest rates
- Long 30 year terms
Cons
- Limited to newer mobile homes
- Home must be attached to land
- Stricter credit requirements
Personal Loans
Personal loans provide a lump sum of cash that can be used to purchase a mobile home.
Pros
- Quick funding potential
- Fewer eligibility requirements
Cons
- Much higher interest rates
- Large origination fees
- Short 1 to 5 year repayment terms
VA Loans
These zero-down payment loans are for eligible veterans looking to buy mobile homes attached to owned land.
Pros
- No down payment required
- Competitive interest rates
- Can include closing costs
Cons
- Strict credit score requirements
- Home must be on permanent foundation
- Limited to owner-occupied primary home
Tips for Getting the Best Mobile Home Loan Rate
Use these strategies to boost your chances of qualifying for affordable financing when buying a mobile home:
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Compare multiple lenders – Rates for the same loan type can vary, so shop around for the best deals.
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Ask about promotions – Some lenders offer special discounted rates for first-time home buyers.
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Improve your credit – Reducing debt and fixing errors on your credit report can significantly boost your score.
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Save for a larger down payment – Putting down 20% or more gives access to the lowest rates.
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Consider a shorter term – Opt for a 15 or 20 year loan instead of a 30 year to get a lower rate.
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Buy instead of renting land – Loans for home and land combined often have more favorable terms.
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Purchase new construction – Brand new mobile homes qualify for better financing than older ones.
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Bring a co-signer – Adding a co-signer with strong credit can help you qualify for prime rates.
Is Buying a Mobile Home Right for You?
Mobile homes offer a more affordable path to homeownership. But these loans have their own unique requirements. Assess your financial situation to determine if mobile home financing aligns with your goals and budget.
The key is getting pre-approved first before falling in love with a home. This shows you real payment estimates and helps match you with the optimal loan program.
Buying and financing a mobile home is a big decision. But armed with the right information, you can navigate the process with confidence. Do your homework, shop around for the best rates, and you’ll be on your way to owning your own slice of the American dream.
Frequency of Entities
- mobile home loans: 21
- interest rates: 10
- down payment: 5
- credit score: 5
- loan term: 4
- land ownership: 3
- mortgage insurance: 1
- home value: 1
- loan types: 1
Mortgage rates on mobile homes: Current interest rates
As with any home loan, mobile home mortgage rates vary based on several factors. Some of these factors depend on the wider economy. Others are based on factors under your control such as your credit score, downpayment amount, and type of home. Whether you are buying the land will also affect the amount you pay.
After deciding on your mobile home’s features and where you want to place it, you will have to determine how to pay for it. When financing a mobile home, there are some options to consider.
You can, for instance, get a home loan from the same sources as traditional mortgage, like FHA loans and VA loans. You can also seek out specialized manufactured home loans through Fannie Mae and Freddie Mac.
Some of these mobile home financing options give you longer repayment terms. If you take a less traditional path—chattel or personal loans—you may get a shorter term, depending on your situation. Let’s look at the different mortgage options for mobile homes:
- FHA loans
- Fannie Mae
- Freddie Mac
- VA loans
- Chattel loans
- Personal loans
Here is a closer look at each:
HUD offers mobile home loans through the FHA, or the Federal Housing Administration, loan program. This program includes Title I and Title II loans.
This home loan can be used to finance the purchase of a new or used manufactured home and refinance a manufactured home purchase, among others. It can also be used for a combination purchase of both the home itself and the lot. You can use these funds to repair, alter, or improve a manufactured home.
This loan program insures loans that you can use to finance a qualifying manufactured home and the land, if you meet certain requirements. For instance, a Title II loan can be used if you live in the manufactured home as your primary residence. Title II loans cannot be used for manufactured homes on leased land in mobile home parks or manufactured home communities.
To qualify for the Fannie Mae MH Advantage program, you must meet certain construction, architectural design, and energy efficiency standards, similar to site-built homes. These home loans come with 30-year financing. You might also be able to secure them with a down payment as low as 3%. And compared to most traditional loans for manufactured homes, interest rates on MH Advantage mortgages are usually lower.
Freddie Mac offers conventional financing for manufactured homes through its Home Possible mortgage program.
One option you have here is a fixed-rate mortgage of either 15, 20, or 30 years.
Another option is a 7/6 or 10/6 adjustable-rate mortgage.
You might also be able to secure a home loan with as little as a 3% down payment. In some cases, you may be able to use a gift or grant money to help you cover your down payment.
If you are part of a military community, you might qualify for a VA loan. This is a loan insured by the Department of Veterans Affairs.
You can get a VA loan to purchase a manufactured home and put it on land you already own.
Other options include buying the home and land at the same time or refinancing a home you plan to transport to land you own. Lenders typically offer up to 100% financing on manufactured home loans if you meet certain requirements.
This is a special type of personal property loan you can use to buy a mobile home. These loans are designed for financing costly vehicles such as boats, planes, farm equipment, and, yes, mobile homes, where the property guarantees the loan. You do not have to own the land that your home will be on. This is another reason why chattel loans are a popular option for home buyers who want to rent a lot in a manufactured home community.
Because mobile homes are considerably cheaper than traditional properties, you might be able to finance your mobile home purchase through a personal loan. They are also quite flexible.
But be careful: interest rates on personal loans tend to be considerably higher than other loan types like auto loans or mortgages. The upside is that you will not have to provide collateral, meaning you will not lose your home if you default. The application process also tends to be shorter.
While it depends on the terms you can secure, most mobile home loans have a maximum repayment term of 20 years (for single-wide home and lot).
The average credit score needed to buy a mobile home is between 620 and 680. In fact, most mortgage lenders require a minimum credit score of 580 to 620 to purchase a mobile home. Most of the time, 580 is the minimum credit score for manufactured home loans. However, you may still be able to get financing with a special program and lower score, although these often require a larger down payment.
Typically, mobile homes built after 1976 can be financed. To meet mortgage lending guidelines, manufactured homes must have HUD tags. These tags are certifications stating that the manufacturer has complied with safety standards created by the HUD.
The HUD tags came into law on June 15, 1976. While HUD is the only agency that has this requirement, most lenders also follow the HUD guideline.
Before the law in 1976, manufactured homes were prone to safety issues such as wiring and electrical problems that could cause home fires.
Financing a Manufactured Home: What you need to know
FAQ
Why are mortgage rates higher for mobile homes?
How long are most mobile home loans for?
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Type of loan
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Average rates
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Typical terms
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Fannie Mae
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Varies
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Up to 30 years
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Freddie Mac
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Varies
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Up to 30 years
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Chattel
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7.60%
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Up to 20 years
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Personal
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11.53%
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Up to 84 months
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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 lowest down payment for a mobile home?
How do I get a mobile or manufactured home loan?
There are also mortgage lenders that specialize in mobile and manufactured home financing. The most straightforward solution, though, is to go through a standard mortgage lender that offers the loan you’re looking for. What Is The Minimum Credit Score Needed For A Mobile Or Manufactured Home Loan?
Can you get a mortgage on a mobile home?
Yes, many banks and credit unions finance mobile homes on land. 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. Can you get a mortgage on a manufactured home?
What is a manufactured home loan?
ManufacturedHome.Loan is unique because it will finance a mobile or vacation home that is situated on leased land. The company finances and refinances both new and used mobile home purchases. ManufacturedHome.Loan also offers chattel loans for mobile or manufactured homes that are not affixed to the land.
Can you finance a mobile home with a conventional mortgage?
If you want to finance a manufactured home, a conventional mortgage is one of many options, including a: Personal loan. If your mobile home is classified as a vehicle or personal property, then it qualifies for a personal loan. But personal loans may not provide as much financing and tend to have higher interest rates.
Can I finance a mobile home with a personal loan?
Why we chose it: If you plan to finance your mobile home with a personal loan, AmeriSave offers approval in just minutes, zero origination fees, fixed rates and loans from $5,000 to $50,000. AmeriSave has a simple, user-friendly application process that can be completed from any mobile device.
Which mortgage company is best for mobile homes?
21st Mortgage Corporation is best for mobile homes in a community or park, Amerisave is best for fast approval, and Caliber Home Loans is best for veterans. Mobile homes may be more affordable than traditional homes, but purchasing one still often requires a loan. However, the types of mobile home loans offered by each lender may vary.