Manufactured & Mobile Home Loans

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Manufactured & Mobile Home Financing

Financing a manufactured home can be different from financing a traditional site-built house.

The home's age, HUD certification, foundation, tie-down system, property classification, land ownership, whether the home has previously been moved, and whether you're purchasing an existing home or installing a brand-new manufactured home can all affect which mortgage programs are available.

Fairhope Mortgage offers financing for eligible manufactured homes using FHA, VA, USDA, conventional and other available mortgage programs.

We can also help qualified borrowers finance certain new manufactured homes and the land through construction-to-permanent or one-time-close financing.

We currently finance manufactured homes that qualify as real estate. Fairhope Mortgage does not currently offer chattel loans on manufactured homes that remain personal property.

Manufactured Home vs. Mobile Home: What's the Difference?

The terms “mobile home” and “manufactured home” are commonly used interchangeably, but they do not always mean the same thing for mortgage financing.

A manufactured home is generally a factory-built home constructed to the federal HUD Manufactured Home Construction and Safety Standards and built on a permanent chassis.

Homes constructed on or after June 15, 1976 can qualify as HUD-code manufactured homes when they meet the applicable requirements.

Homes constructed before June 15, 1976 are generally referred to as mobile homes and can have significantly fewer traditional mortgage financing options.

Modular homes are different. A modular home is generally built to applicable state or local building codes rather than the federal HUD manufactured-housing code and is typically financed similarly to site-built housing.

Freddie Mac, for example, specifically defines HUD-code manufactured homes separately from pre-June 15, 1976 mobile homes and modular housing. Freddie Mac

HUD Certification Labels and the HUD Data Plate

HUD identification is an important part of financing a manufactured home.

A manufactured home typically has both HUD Certification Labels and a HUD Data Plate.

HUD Certification Label

The HUD Certification Label—often called a HUD tag—is a metal label attached to the exterior of each transportable section of the manufactured home.

A double-wide manufactured home, for example, would generally have a certification label associated with each section.

HUD Data Plate

The HUD Data Plate is a paper document installed inside the manufactured home by the manufacturer.

It contains important information about the home, which can include the manufacturer, model, serial information, date of manufacture, applicable wind, roof-load and thermal zones, and the certification label numbers associated with the home.

The Data Plate may commonly be found inside a kitchen cabinet, electrical panel, utility area, bedroom closet or another interior location.

Fannie Mae's manufactured-housing definition specifically references the HUD Data Plate or HUD Certification Labels as evidence of manufactured housing. Fannie Mae Selling Guide

What If the HUD Tags or Data Plate Are Missing?

A missing HUD label does not necessarily mean the home cannot be financed.

For FHA financing, if the appraisal indicates that the HUD Certification Label is missing, the lender must obtain label verification from the Institute for Building Technology and Safety (IBTS). HUD

The important thing is to identify missing HUD documentation early in the mortgage process so that the necessary verification can be ordered before it delays underwriting or closing.

Engineering Certificate and Foundation Inspection

Manufactured homes frequently require additional foundation documentation that would not normally be required on a traditional site-built home.

For FHA financing, the lender must obtain a certification from a licensed professional engineer or registered architect confirming that the manufactured home's foundation complies with HUD's Permanent Foundations Guide for Manufactured Housing. HUD

This is commonly referred to as an:

Engineering Certificate
Foundation Certification
or
Manufactured Home Foundation Inspection

The engineer evaluates the home's foundation and applicable installation components to determine whether they meet the applicable requirements.

If the foundation does not comply, repairs or modifications may be required before the loan can close.

Does a Manufactured Home Need to Be Tied Down?

A manufactured home must be properly installed and secured in accordance with the requirements applicable to the home, foundation system and financing program.

Tie-downs, anchors and other components of the foundation or anchoring system help secure the manufactured home against forces such as wind.

Simply placing a manufactured home on blocks does not automatically mean that it meets mortgage-program requirements.

For FHA financing, the foundation must comply with HUD's Permanent Foundations Guide for Manufactured Housing, and the required engineer or architect certification documents that compliance. HUD

The exact corrective work required, if any, should be determined by the qualified professional evaluating the foundation rather than assumed before the inspection.

The Manufactured Home Usually Needs to Be Real Property

Traditional mortgage financing generally requires the manufactured home and land to be treated as real estate, rather than financing the home by itself as personal property.

For example, Fannie Mae requires the manufactured home and the land on which it sits to be legally classified as real property. The home must be attached to a permanent foundation, and applicable title requirements must be completed so the lender has an enforceable real-property lien. Fannie Mae Selling Guide

Freddie Mac similarly requires eligible manufactured homes to be titled as real property and permanently affixed to a foundation. Freddie Mac

VA also requires manufactured homes financed as real estate to be permanently affixed and classified as real property under applicable state law. Benefits

Do You Need to Own the Land?

For the manufactured-home mortgage programs offered by Fairhope Mortgage, the financing generally involves both the eligible manufactured home and the real estate on which it is permanently located.

That can mean:

• You already own the land and are financing an eligible manufactured home on it.

• You purchase an existing manufactured home together with the land.

• You purchase the land and a new manufactured home together as part of an eligible construction-to-permanent transaction.

If you already own the land, the land's value or existing equity may also be relevant to the financing structure, depending on the loan program and transaction.

If the manufactured home sits on rented land in a mobile home park and you are financing only the home as personal property, that generally requires a different type of financing, commonly called a chattel loan. Fairhope Mortgage does not currently offer chattel loans.

What Is a Chattel Loan?

A chattel loan generally finances a manufactured home as personal property rather than as real estate.

This is common when someone purchases a manufactured home but leases the lot where the home is located, such as in certain manufactured-home communities or mobile-home parks.

The home itself serves as collateral rather than the mortgage being secured by the home and land together as real property.

Chattel financing can have different:

• Interest rates
• Loan terms
• Down-payment requirements
• Title requirements
• Consumer protections
• Underwriting standards

Our manufactured-home financing is focused on eligible transactions where the home and real estate can meet the requirements of the applicable mortgage program.

There are other programs in the broader market that can address manufactured homes on leased lots—for example, HUD's Title I program permits qualifying manufactured homes on certain leased sites—but that is different from the real-property mortgage financing discussed on this page. HUD

Can a Manufactured Home Have Been Moved?

This is one of the most important questions to ask before applying for financing on an existing manufactured home.

A manufactured home may have been transported from the manufacturer or dealer to its original permanent site. That is normal.

The potential problem occurs when a home has been installed at one residential site and later moved to another site.

Loan-program requirements differ significantly.

FHA Loans and Moved Manufactured Homes

FHA requires an eligible manufactured home to have been directly transported from the manufacturer or dealership to the site. HUD

Therefore, a manufactured home that was previously installed at another location and subsequently moved to its current site generally will not qualify for standard FHA Title II manufactured-home financing.

This is an important distinction:

Transported from dealer/manufacturer to its original site: potentially eligible.

Previously installed somewhere else and later relocated: generally not eligible for standard FHA real-property financing.

USDA Loans and Moved Manufactured Homes

USDA also has restrictive requirements regarding relocated manufactured homes.

Current USDA manufactured-housing guidance states that the Agency will not guarantee the purchase of a unit moved from a site other than a dealer's lot. Rural Development

That makes the home's relocation history an important eligibility question before beginning a USDA manufactured-home transaction.

Conventional Loans and Previously Moved Manufactured Homes

Conventional manufactured-home eligibility is governed by the applicable agency and loan program.

Fannie Mae requires an eligible manufactured home to be permanently attached to an acceptable foundation and legally classified as real property, along with the applicable manufactured-home property and title requirements. Fannie Mae Selling Guide

Because requirements involving a home's installation history, title history, foundation and prior relocation can be highly specific, a previously relocated manufactured home should be reviewed individually before assuming it qualifies for conventional financing.

Contact Fairhope Mortgage before ordering an appraisal or making financing assumptions on a home that has previously been installed at another site.

VA Loans and Manufactured Homes

VA financing can be used for eligible manufactured homes and lots. VA's consumer guidance specifically identifies buying a manufactured home and/or lot as an allowable use of VA home-loan benefits. Benefits

For manufactured homes financed as real estate, VA requires applicable permanent-affixation and real-property requirements to be satisfied. Benefits

Because VA manufactured-home transactions can involve additional property, installation, title and appraisal requirements, we recommend reviewing any previously moved manufactured home individually before entering into a purchase contract based on assumed VA eligibility.

FHA Manufactured Home Loans

FHA can be an excellent option for eligible manufactured-home buyers.

An eligible manufactured home must meet FHA requirements concerning HUD certification, permanent foundation, installation, property classification and other applicable standards.

FHA financing may be particularly attractive because of its relatively low minimum down-payment requirements for qualifying borrowers.

Manufactured-home transactions can require additional documentation compared with site-built homes, including HUD identification and foundation certification. HUD

Conventional Manufactured Home Loans

Eligible manufactured homes can also be financed using conventional mortgage programs.

Fannie Mae defines an eligible manufactured home as a dwelling built on a permanent chassis, attached to a permanent foundation system and evidenced by HUD manufactured-housing identification. The home and land must be legally classified as real property. Fannie Mae Selling Guide

Freddie Mac also offers conventional financing for eligible manufactured homes and requires the home to be permanently affixed to a foundation and titled as real property. Freddie Mac

VA Manufactured Home Loans

Eligible veterans, active-duty service members and other qualified VA borrowers may be able to use VA financing to purchase a manufactured home and/or lot. Benefits

The property must meet VA's applicable manufactured-home, foundation, appraisal, title and occupancy requirements.

VA financing can therefore be worth evaluating before an eligible veteran assumes that a manufactured home requires specialty financing.

USDA Manufactured Home Loans

USDA financing can be particularly attractive for eligible manufactured homes because USDA's Single Family Housing Guaranteed Loan Program can provide up to 100% financing for qualifying borrowers and properties.

USDA permits eligible manufactured housing as a primary residence, subject to the program's borrower, household-income, property, construction and site requirements. Rural Development

USDA's manufactured-home rules include specific restrictions on previously moved homes, making the home's history important when evaluating eligibility. Rural Development

Buying a Brand-New Manufactured Home

Financing a new manufactured home can involve more than simply purchasing the home from a dealer.

The transaction can include:

• The manufactured home
• The land
• Site preparation
• Foundation construction
• Delivery
• Installation
• Utility connections
• Permits
• Other eligible improvements

Depending on the transaction and program, qualified borrowers may be able to finance the home, land and eligible construction costs through a construction-to-permanent or one-time-close manufactured-home loan.

One-Time-Close Construction Loans for Manufactured Homes

A one-time-close construction loan can potentially combine the financing for an eligible new manufactured home, land and construction or installation into a single transaction.

Instead of obtaining separate financing for the land, construction and permanent mortgage, an eligible one-time-close structure can simplify the process by establishing the financing before construction and installation are completed.

Depending on the program and transaction, financing may include eligible costs associated with:

• Purchasing the manufactured home
• Purchasing the land
• Site preparation
• Permanent foundation
• Delivery and installation
• Utility connections
• Required improvements
• Permanent mortgage financing

If you already own the land, the existing land value or equity may potentially become part of the transaction structure, subject to the selected program's requirements.

Because construction financing has additional requirements involving the builder/dealer, plans, specifications, permits, inspections, draws, foundation and completion documentation, it is important to structure the financing before ordering or placing the home on the property.

Already Own the Land?

Owning the land can create additional financing possibilities when purchasing a new manufactured home.

Depending on the program, your land equity may potentially be considered when structuring the transaction.

For example, someone who owns a suitable lot free and clear may have a very different financing structure from someone purchasing both the home and land simultaneously.

Before making a large deposit with a manufactured-home dealer, have the complete transaction reviewed—including:

• Land ownership
• Existing liens
• Home purchase price
• Site-work estimate
• Foundation
• Well and septic or utility connections
• Delivery and setup costs
• Construction budget
• Available loan program

This allows the mortgage and construction structure to be determined before substantial money is committed.

Buying an Existing Manufactured Home

If you're purchasing an existing manufactured home, try to determine the following as early as possible:

• What year was the home manufactured?
• Is the HUD Data Plate available?
• Are the HUD Certification Labels present?
• Is the home permanently affixed to the property?
• Is the foundation acceptable for the intended mortgage program?
• Will an engineering/foundation certification be required?
• Is the home properly secured and tied down?
• Is the home legally classified as real property?
• Is the manufactured-home title properly retired, surrendered or otherwise handled under applicable state law?
• Is the land included with the sale?
• Has the home ever been installed at another location and subsequently moved?

Finding these issues before appraisal and underwriting can prevent significant delays later.

What If the Manufactured Home Has Additions?

Manufactured homes frequently have additions such as:

• Porches
• Decks
• Carports
• Garages
• Room additions
• Patio covers

These improvements can create additional underwriting or engineering requirements.

For FHA financing, if an appraiser identifies additions or alterations to the manufactured home, the lender must ensure that applicable structural/foundation requirements are addressed. HUD provides specific requirements for situations where additions or alterations were not covered by an existing foundation certification. HUD

An addition should therefore be evaluated rather than assuming it is automatically acceptable simply because it has been attached to the home for many years.

Frequently Asked Questions About Manufactured Home Loans

Can you finance a manufactured home?

Yes. Eligible manufactured homes can potentially be financed using FHA, VA, USDA, conventional and other available mortgage programs.

Do you finance mobile homes?

We finance eligible HUD-code manufactured homes that meet the requirements of the applicable mortgage program. Homes built before June 15, 1976 can have substantially more limited traditional mortgage options.

Do you offer chattel loans?

No. Fairhope Mortgage does not currently offer chattel loans. Our manufactured-home financing is focused on eligible real-property mortgage transactions.

Can I finance a manufactured home in a mobile home park?

If you lease the lot and the home remains personal property, that generally requires chattel or another specialized manufactured-home financing program. Fairhope Mortgage does not currently offer chattel loans.

Does the manufactured home need a HUD tag?

HUD-code manufactured homes have HUD Certification Labels associated with the home's transportable sections. If required identification is missing, verification may be available depending on the loan program and circumstances. FHA specifically provides for IBTS label verification when a required HUD Certification Label is missing. HUD

What is a HUD Data Plate?

The HUD Data Plate is an interior document containing identifying and construction information about the manufactured home.

Do I need an engineering certificate?

Certain manufactured-home transactions require foundation certification. FHA specifically requires certification by an appropriately licensed engineer or architect that the foundation complies with HUD's Permanent Foundations Guide for Manufactured Housing. HUD

Does the home have to be tied down?

The home must satisfy the applicable installation and foundation requirements. Tie-downs and anchoring can be part of that system. The applicable inspection or engineering review determines whether the existing installation complies.

Can I get an FHA loan if the manufactured home has been moved?

FHA requires the manufactured home to have been directly transported from the manufacturer or dealership to the site. A home previously installed elsewhere and subsequently relocated generally does not meet that requirement. HUD

Can USDA finance a moved manufactured home?

USDA states that it will not guarantee the purchase of a manufactured unit moved from a site other than a dealer's lot. Rural Development

Can I finance a new manufactured home and land together?

Potentially. Depending on the loan program and transaction, a construction-to-permanent or one-time-close loan may allow an eligible new manufactured home, land and applicable construction/site costs to be financed together.

What if I already own the land?

Depending on the loan program and transaction, land already owned by the borrower may be incorporated into the financing structure and existing equity may be relevant to the transaction.

Should I order the manufactured home before getting financing?

It is generally better to have the proposed home, land, construction budget and financing reviewed before making substantial non-refundable commitments to a dealer or contractor.

Manufactured Home Financing Resources

HUD — FHA Single Family Housing Policy Handbook 4000.1

Fannie Mae — Manufactured Housing Guidelines

Fannie Mae — Manufactured Housing Legal Considerations

Freddie Mac — Manufactured Home Mortgage Requirements

VA — Home Loan Eligibility and Manufactured Homes

USDA — Single Family Housing Guaranteed Loan Program

About the Author

Tom Kalagher | Founder & Branch Manager, Fairhope Mortgage

Tom Kalagher is the Founder and Branch Manager of Fairhope Mortgage, LLC. Based in Fairhope, Alabama, Tom works with homebuyers and homeowners seeking financing for manufactured homes, including FHA, VA, USDA, conventional and eligible construction-to-permanent financing.

Tom works with borrowers throughout the Gulf Coast and helps evaluate the additional issues that can affect manufactured-home financing, including HUD identification, foundation and engineering requirements, land ownership, real-property classification, previous relocation of the home and financing for new manufactured-home construction.

His approach is to identify potential manufactured-home eligibility issues early in the process—before appraisal, underwriting or substantial commitments to a manufactured-home dealer whenever possible.

Tom Kalagher — NMLS #2028566
Fairhope Mortgage, LLC — NMLS #2561450
Fairhope, Alabama
Phone: (251) 391-5618
Website: Fairhope-Mortgage.com

Important: Manufactured-home eligibility varies by loan program, property, age, construction, installation, foundation, title status, land ownership and other factors. Engineering or foundation certifications, HUD identification verification, title work and other documentation may be required. Fairhope Mortgage does not currently offer chattel loans. Not all borrowers or properties will qualify. This information is provided for educational purposes and is not a commitment to lend.