Securing Mobile Home Loans With Land: A Complete 2023 Guide

Purchasing a mobile home and the land it sits on can be an affordable way to become a homeowner. With the right financing, you can make this dream a reality. Mobile home loans with land allow borrowers to buy both the home and property in one combined loan.

I’ll cover everything you need to know about getting a mortgage for a mobile home and land purchase This guide provides an overview of

• Mobile home loan options with land
• Requirements and eligibility
• Interest rates to expect
• The application process
• FAQs

Types of Mobile Home Loans With Land

Several loan programs let you buy a mobile home along with the land it occupies. Here are some of the most common options to consider.

FHA Title II Loans

FHA Title II loans are a popular choice for financing mobile homes plus land. As an FHA-insured loan, you can qualify with a credit score as low as 580 and with as little as 3.5% down. These government-backed mortgages come with competitive interest rates as well.

To use a Title II loan, the mobile home must be attached to a permanent foundation on land that you own. And it has to adhere to HUD construction guidelines from 1976 onward.

If your mobile home meets those specifications, a Title II loan can be a great fit. The FHA offers flexible credit requirements, and you may even be eligible for down payment assistance programs to reduce your costs further.

VA Loans

Veterans and military members may qualify for a VA loan to buy a mobile home with land. VA loans require no down payment or mortgage insurance.

As with FHA loans, the mobile home needs to be placed on a permanent foundation that you own. It must also meet HUD construction standards from after 1976.

VA loans come with low fees and some of the best rates out there. If you’re eligible, it can be a very affordable way to finance a mobile home with land purchase.

Conventional Loans

Some conventional lenders provide loans for mobile homes on owned land. Most have strict requirements, including:

• Home must be built after 1976 per HUD standards
• Home must be attached to a permanent foundation
• Land and home must be classified as real property
• Minimum of 600 square feet of living space

Interest rates may be slightly higher than a conventional mortgage for a site-built home. But you can still benefit from the predictability of fixed payments and potentially lower rates than government loans.

USDA Loans

For buyers in rural and some suburban locations, USDA loans are worth considering. They’re issued by private lenders but guaranteed by the US Department of Agriculture.

USDA loans allow for financing new mobile homes along with land without requiring a down payment. You must meet income limits and other eligibility criteria tied to location and home specifications.

Personal Loans

If you plan to place an older mobile home on land you already own, a personal loan may work. With a personal loan, the lender evaluates you as a borrower but doesn’t assess the value of the home.

While quick and convenient, interest rates on personal loans tend to be much higher than mortgages — think credit card levels. You’ll also miss out on the tax benefits of mortgage interest deductions.

Mobile Home Loan Requirements

When applying for a mobile home loan with land, you’ll need to meet both borrower qualifications and home eligibility standards.

Borrower Requirements

As the borrower, you must meet these criteria to qualify:

• Credit score – Each loan program has a minimum score. FHA loans start at 580, while conventional mortgages often want 620+

• Debt-to-income ratio – Your total monthly debt payments, including the new mortgage, should equal less than 43% of your gross monthly income

• Down payment – Expect to put 3-20% down depending on the loan type. Certain USDA and VA loans feature 100% financing

• Homebuyer education – Many programs require completion of an approved homebuyer education course

Mobile Home Requirements

The mobile home itself must meet standards related to its age, quality, size, and foundation. Common requirements include:

• Construction date – Most loans mandate the home be built after 1976 when HUD implemented safety regulations

• Quality – The home must be in good condition with no significant defects

• Size – Typically at least 400 square feet of living area

• Foundation – Must be attached to a permanent foundation on land that you own

• Title considerations – The mobile home must be classified as real property, not personal property

Always confirm specific requirements with lenders before applying. Criteria can vary across different loan programs.

Interest Rates on Mobile Home Loans

Interest rates on mobile home loans with land tend to run slightly higher than mortgages for site-built homes, but remain reasonable. Here are a few averages:

• FHA loans – Around 5.5% as of March 2023

• VA loans – Approximately 5.25% currently

• USDA loans – In the 5-6% range right now

• Conventional loans – May be 0.5 to 1 percentage point higher than a conventional mortgage for a site-built home

• Personal loans – Can range from around 9% up to 36%

Always shop around between multiple lenders. Comparing loan estimates and rate quotes can help you secure the best financing deal. Consider both fixed-rate and adjustable-rate mortgages.

How to Apply for a Mobile Home Loan

Applying for financing on a mobile home and land purchase follows a similar path to getting a traditional mortgage with a few extra steps.

1. Check your credit and finances

Review your credit reports and scores. Gather tax returns, bank statements, and other files to verify income and assets. This financial picture allows lenders to assess your ability to handle payments.

2. Evaluate the mobile home

Research the mobile home’s age, condition, square footage, and other specifications. This ensures it will satisfy the loan program’s property requirements.

3. Choose potential lenders

Compare multiple lenders that offer mobile home loans – banks, credit unions, and specialized lenders. Weigh factors like rates, fees, loan options, and customer service.

4. Complete the loan application

Submit all required paperwork including financial documents, identification, and home details. Be ready to pay for credit checks and appraisal fees.

5. Get pre-approved

Ask lenders to pre-approve you using preliminary home and income numbers. This shows sellers you’re a serious buyer.

6. Make an offer

With pre-approval in hand, you can confidently make an offer on a mobile home with land. Submit your purchase agreement contingent on securing financing.

7. Finalize loan approval

Provide updated tax returns, income statements, home appraisal, and other verifications needed to confirm your eligibility and finalize loan approval.

8. Close on the home and land

Once approved, you’ll sign final loan documents and can close on the mobile home and land purchase!

FAQs About Mobile Home Loans With Land

Consider these commonly asked questions when seeking financing for a mobile home and land.

Can you get a mortgage for a mobile home and land?

Yes, there are several mortgage options for financing a mobile home along with land, including FHA, VA, USDA, and certain conventional loans. Personal loans are also a possibility.

What is the easiest way to finance a mobile home with land?

FHA and VA loans likely offer the easiest path thanks to low down payments, flexible credit requirements, and features like no mortgage insurance on VA loans.

Do mobile home loans require 20% down?

Not necessarily. FHA loans allow down payments as low as 3.5%. USDA and VA loans sometimes offer 100% financing too. But conventional mortgages may ask for 20% down.

Can you use a VA loan for a used mobile home and land?

Yes, VA loans can potentially finance used mobile homes on owned land. The home must meet HUD construction standards after 1976 and be placed on a permanent foundation.

What credit score is needed for a mobile home loan?

Requirements vary, but you can qualify for an FHA loan with a 580 credit score or higher. Conventional mortgages often look for at least 620. VA and USDA have no minimum score.

Find the Right Mobile Home Loan

Financing a mobile home along with land opens an affordable path to homeownership. With an array of loan programs available, you can chart the right course for your financial situation. Be sure to choose an experienced lender who can explain all the ins and outs of mobile home loans with land.