If you want to buy a mobile home, you may have a tougher time obtaining financing. A mobile manufactured home loan can be approved if you follow the right steps.
Mobile homes have unique characteristics that make them risky. The fact that they are ‘mobile’ as the name suggests makes many lenders shy away from the mobile manufactured home mortgage because of the risk of default.
But, with the right qualifications, you may be able to get a mortgage for a mobile home. Check out the basic guidelines below to help qualify you for a mobile manufactured home loan.
Mobile Home Property Loan
First, you have to prove that the mobile home is ‘real’ property. Only homes permanently affixed to the ground are ‘real property.’ In other words, if you can drive the mobile home away from its current location, it’s not real property and won’t be eligible for a home loan. Instead, you’d need a personal loan. Most mobile homes on private land are attached to the land if you discover your home is not there are ways to fix that. You will first need to figure out if you have the title to the mobile home or just a property deed.
For more information on this visit our article Mobile Home Deed or Title.
If the mobile home is permanently affixed to the ground and you own the land that it’s on, you can get a mortgage. Depending on your qualifications, you may qualify for a conventional (Fannie Mae or Freddie Mac) or a government-backed loan (FHA, USDA, or VA loan).
Loans for Mobile Homes in a Park
If you have a mobile home that sits in a mobile home park you can still get financing for the home.
One of your best bets is to check with the mobile home park office. The office is located on the grounds of the mobile home park. If you have found a mobile home that you are interested in buying in a park this should be your first stop.
Best Manufactured Home Lenders
The manager there should be able to help you and give you paperwork to fill out. Not only will. you have to be approved for the loan but you will have to be approved to live in the mobile home park. It is mandatory that the mobile home parks do a screening on any tenant looking to live in the park. This will involved a credit check and also a background check.
These background checks can take a couple weeks to perform. If you know the park you want to live in and can’t find a home be sure to at least get the paperwork out of the way. Make sure the park manager knows you are looking for a home within the park to buy.
You might check out our article on How Much Housing Can I Afford for more help.
Another option would be to discuss with the park to see if they have any mobile homes that are available to Rent. Check out our article on Renting a Mobile Home for more information.
Manufactured Home Financing
Getting financed for a mobile home is not easy sometimes. Another option would be to check with the seller to see if they are interested in financing the home for you. This is called a land contract and they are quite popular now a days.
Mobile Manufactured Home Loan : Mortgage Programs
If you’ve established that you have ‘real property,’ the following loan programs may be available to you:
Fannie Mae or Freddie Mac Loans
Borrowers need between a 3% and 5% down payment, ‘good’ credit (usually around a 680), stable employment history, and a decent debt-to-income ratio. The home must be at least 600 square feet and 12 feet wide. Fannie Mae and Freddie Mac offer loans up to 30 years and require PMI on loans over 80% LTV.
Mobile Home Financing
FHA loans offer flexible guidelines for mobile homes, just as they do for site-built homes. Borrowers need a minimum 580 credit score with a 3.5% down payment. Some lenders may allow a credit score as low as 500, but with a 10% down payment. The FHA offers terms up to 20 years for single-module homes.
VA loans offer flexible guidelines for veterans of the military. Unlike site-built homes, the VA requires a 5% down payment because of the risk of default on a mobile home. The VA also offers a term of 20 years and 32 days for a single-wide and 23 years and 32 days for double-wide manufactured homes. Many VA lenders have stricter credit and debt ratio guidelines than they do for site-built homes too.
The USDA offers 100% financing on USDA-approved mobile homes. The home must be brand-new and you must not make more than 115% of the average income for the area to qualify for it. The USDA charges mortgage insurance, but it’s less than what the FHA charges.
Credit Repair and Purchasing a Mobile Home
Before you purchase a mobile home make sure you know what your credit score is. If your credit score is high this will help you obtain a more attractive loan with lower APR that will save you money in the long run. If you have bad credit there are many companies that offer free credit repair. Sometimes waiting just 3 to 6 months to fix your credit can lower your payment significantly.
Mobile Home Lenders
If you are looking to apply for a new or used mobile manufactured home whether on land or in a mobile home park. There are a few loan companies that can help. One of the first ones to look into is 21st mortgage. This company typically finances mobile homes on land and in mobile home parks. A loan specialist will get back to you quickly.
Mobile Home Refinancing
When rates are affordable it is a good time to start shopping around for refinancing. Just refinancing your mobile home and saving 1% can make a difference in saving thousands of dollars over the course of your loan. It doesn’t cost anything to shop around and compare rates. Check out our mobile home loan calculator for more details on this. Its fun to adjust the numbers and see just what you can afford and how to save money.