Buying a mobile home can be an affordable way to achieve homeownership, especially for first-time homebuyers. With the average price of a new mobile home around $115,000, these factory-built homes are significantly less expensive than site-built houses. However, coming up with even a small down payment can be challenging for some buyers. The good news is that there are mobile home loans available with no down payment required.
In this article. we’ll explain everything you need to know about getting a mobile home with zero down including
- What are mobile homes?
- Pros and cons of mobile home ownership
- Types of mobile home loans
- Tips for getting approved with no down payment
- Lenders offering no down payment mobile home loans
What Are Mobile Homes?
Mobile homes, also known as manufactured homes, are prefabricated houses that are built in a factory and then transported to a site. They come in different sizes, from single-wide to multi-section homes. Mobile homes are often more affordable than site-built houses because of factory efficiency and materials used.
Unlike traditional houses, mobile homes are classified as personal property rather than real estate. This means the home itself is not permanently fixed to the land. In most cases, you own the home but rent the land it sits on. However, it is possible to place a mobile home on land that you own.
Pros and Cons of Mobile Home Ownership
Mobile homes offer many benefits, especially when it comes to affordability. Here are some of the key pros and cons to weigh when considering mobile home ownership:
Pros
- Lower upfront cost – New mobile homes average around $115,000, used ones even less
- Speed of move-in – Homes are factory built for quick installation
- Flexibility – Mobile homes can be moved to a new location
- Home customization – Floor plans and finishes can be personalized
Cons
- Depreciation – Mobile homes tend to depreciate over time
- Geographic limits – Not all areas allow mobile home parks
- Site fees – Park rental fees apply if you don’t own the land
- Financing challenges – Loans harder to get than traditional mortgages
While mobile homes fill an important niche for affordable housing, they aren’t necessarily the best fit for every buyer. Make sure to carefully weigh the pros and cons for your situation.
Types of Mobile Home Loans
Since mobile homes are classified as personal property, you can’t get a traditional mortgage to finance them. Instead, there are several types of mobile home loans:
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Chattel loans – Also known as personal property loans, these are specifically for financing mobile homes without land. Terms are usually shorter, around 15 years.
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Land-home loans – Finance both the home and land in one loan. Requirements are similar to traditional mortgages if land is owned.
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FHA loans – Government-backed loans that allow low down payments, as little as 3.5%.
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VA loans – Offered to eligible veterans and allow 0% down payment.
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USDA loans – For low-income buyers in rural areas, these also have zero down payment options.
The type of loan you qualify for will depend on your down payment, credit, and whether you own land. Loans that require less cash up front typically have higher interest rates and costs.
Tips for Getting Approved with No Down Payment
While zero-down mobile home loans exist, qualification standards are higher than financing with a down payment. Here are some tips to boost your chances of getting approved for no down payment:
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Have good credit – Lenders will be looking for credit scores of at least 620 or 640. The higher your score, the better.
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Lower your debt – Reduce credit card balances and other debts to improve your debt-to-income ratio before applying.
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Use home loan programs – Opt for government-backed loans like FHA, VA, and USDA that allow little to no down payment.
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Bring gifts or grants – counted as down payment funds. Some non-profits and housing agencies offer these.
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Offer a co-signer – Adding someone with better credit can help you qualify if your credit is limited.
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Shop multiple lenders – Compare quotes from different lenders to find the best rates and programs for your situation.
Lenders Offering No Down Payment Mobile Home Loans
While most lenders require at least some down payment, there are several that offer mobile home loans with zero down financing. Here are some top options:
Manufactured Home Loans
This lender offers a variety of loan programs including FHA and VA loans with no down payment requirements. They have flexible credit guidelines starting at 580 score. Learn more…
21st Mortgage
They provide lending for new and used mobile homes with no credit score minimum. Down payments as low as 0% available but will depend on your credit profile. Learn more…
Vanderbilt Mortgage
As a branch of Clayton Homes, they partner to offer mortgages on new Clayton mobile homes. 100% financing available with approved credit. Learn more…
USDA Direct
This government-backed loan program offers zero down payment loans for low-income buyers in rural areas. Have flexible credit requirements starting around 640 score. Learn more…
Newrez
National lender offering a full range of mobile home loan programs including FHA, VA, and USDA with zero down payment options. Learn more…
Be sure to check personalized rates from multiple lenders. This will help you find the right loan program and interest rate for your situation.
The Bottom Line
While saving up for a down payment can be a hurdle, there are ways to buy a mobile home with zero down financing. Government programs through FHA, VA, and USDA allow no down payment loans if you meet credit, income, and other eligibility requirements. There are also some private lenders like Vanderbilt Mortgage that offer no down payment options, particularly on new homes.
If your credit score is on the lower side, take some time to boost your credit and save up a small down payment to expand your loan options. Be sure to shop rates from multiple lenders to find the most affordable mobile home loan for your needs. With the right financing, you can still achieve the dream of homeownership, even with limited funds.
How to qualify for a manufactured home mortgage
To get a mortgage loan for a manufactured home, you’ll have to qualify as a borrower by meeting the minimum credit score, income, and down payment requirements, just like you would if you were buying a traditional home.
The manufactured home will also have to qualify for the mortgage. Along with following HUD’s post-June 15, 1976, safety regulations, the home must:
- Be “real property” and not “personal property”
- Have at least 400 square feet of living space
- Be permanently attached to a foundation and on land that you also own
Let’s look at these criteria a little more closely before you start making loan applications.
Get rate quotes from several lenders
Even for the same type of loan, different lenders can have very different terms and rates. So you should shop around for the best deal. Keep in mind, though, that each lender will pull your credit report, and too many hard inquiries can negatively impact your credit score. To mitigate this, try to do all your rate shopping within a short period of time, typically 14 to 45 days.
Lastly, submit your application and wait for a response from the lender. Before approving your loan, they will consider your creditworthiness, the value of the manufactured home, and your proposed down payment.
NEW! FHA up to 100% Financing NO MONEY DOWN Program
FAQ
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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How much down payment do you need for a mobile home?
Alternatively, FHA loans provide a down payment as low as 3.5% if the borrower’s credit score is 580 or higher; for scores between 570 and 579, a 10% down payment is required. Can you get a conventional loan for a mobile home?
Can you get a loan for a mobile home?
Financing a mobile or manufactured home may be a little different from financing a house. That’s because most lenders don’t consider these homes eligible for most types of mortgage loans. However, some lenders will give you a loan for a manufactured home if it meets their specific requirements and rests on a permanent foundation.
Can I get a mobile home loan if I have bad credit?
Or maybe you’re a contractor with a customer that wants a manufactured home but needs to secure a loan. No matter what your reason is, let Acorn Finance help you secure a mobile home loan or financing solution today with zero hassle. Check offers for financing for a brand new manufactured home for up to $100,000, even with bad or average credit.
Can you buy a mobile home with no down payment?
Buying a mobile home with no money down can be challenging, but certain programs may allow it. For example, VA loans often require no down payment and are available to service members, veterans, and eligible surviving spouses. Also, USDA loans, designed for rural and suburban homebuyers, may offer no-down payment options.
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.
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.