A mobile home is usually more affordable than a traditional home, but you still might need financing to buy one. Here’s more about how mobile home financing works and how to get a loan that suits your needs.
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U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.
To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. For mortgage lenders, we take into account each company’s customer service ratings, interest rates, loan product availability, minimum down payment, minimum FICO score and online features.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.
To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.
Homefinity launched in 2018 as the online lending division of Fairway Independent Mortgage. It offers a variety of mortgage products, including conventional mortgages, Federal Housing Administration and Veterans Affairs mortgages, and mortgage refinancing.
Caliber Home Loans of Coppell, Texas, offers mortgage products nationwide. Options include conventional, adjustable-rate, jumbo, refinancing, Federal Housing Administration, U.S. Department of Agriculture and Department of Veterans Affairs loans. Caliber has been in business since 2008, and is solely focused on home lending products.
Carrington Mortgage Services, founded in 2007, offers an array of mortgage and refinancing options to borrowers seeking conventional or government-backed loans. Its California-based parent company, Carrington Holding Co., was established in 2003 and provides a range of real estate services. Carrington Mortgage Services is based in California and also has offices in Arizona, Connecticut, Florida, Indiana and Maryland.
Pentagon Federal Credit Union, widely known as PenFed, offers borrowers access to many types of mortgages: conventional, adjustable rate, jumbo and Department of Veterans Affairs, plus refinancing loans and home equity lines of credit. The financial institution, which serves 2.5 million members, was established in 1935 and is based in McLean, Virginia.
North American Savings Bank, or NASB, is a Missouri-based bank and lender founded in 1927 that offers home mortgages nationally. NASB provides a variety of mortgage options, including conventional, Federal Housing Administration and Department of Veterans Affairs loans, and products for borrowers who might otherwise have trouble getting a mortgage.
Headquartered in Charlotte, North Carolina, Truist Bank was formed in 2019 after SunTrust and BB&T banks merged. Truist Bank offers a variety of mortgage products, including refinancing and home equity lines of credit.
Chase, one of the world’s largest banks, was founded in 1799 in New York and offers fixed-rate, refinance and other mortgage loans.
AmeriSave Mortgage Corp. is an online lender that has been in business since 2002. It was one of the first to offer an offsite digital mortgage experience for customers. The company says it has financed more than 664,000 borrowers since it began operating. With headquarters in Atlanta, AmeriSave services loans in 49 states and Washington, D.C.
Simmons Bank was founded in Arkansas in 1903 and can now be found across six states. It offers mortgage products such as conventional and jumbo loans, federal-government-backed loans and state-approved down payment assistance programs.
A mobile home loan is different from a regular mortgage because it typically refers to financing for several types of homes largely assembled in factories. Mobile homes aren’t the same as traditional “stick-built” or “site-built” homes, which are built directly on top of their permanent foundation.
Getting a mobile home loan may be different from taking out a traditional mortgage. The right loan will depend on the specific characteristics of your home. A home with wheels is considered a vehicle or personal property, which means you’ll need a chattel or personal loan to finance it.
Your home may be considered real property – a property that is permanently attached to land – and qualify for financing if it meets certain requirements, such as:
- The home needs to be at least 400 square feet.
- It should have its wheels removed and be permanently affixed to a foundation.
- You need to own the land under it.
- The home must meet strict age and condition guidelines.
What Do You Need to Get Approved for a Mobile Home Loan?
Whether you want a mobile home loan, chattel loan or personal loan, you will need to show that you’re a trustworthy borrower to qualify and to get the best terms possible.
“There is usually a slightly higher loan cost with manufactured homes on a permanent foundation, and the financing rules are slightly stricter,” says Khari Washington, a mortgage broker and owner of 1st United Realty & Mortgage of Riverside, California. “To get approved for a mobile home loan, a person needs the same things they need for any other home.”
These are the major requirements:
- Down payment. If your home meets the standards for real property, you can get a loan with as little as 3% to 5% down, depending on the loan type and lender requirements. However, some properties, such as single-wide homes or investments, may be ineligible for a conventional mortgage.
- Credit score. Generally, you’ll need a credit score in the mid-600s to qualify for a conventional mobile home loan. However, the best interest rates and loan terms are reserved for borrowers with scores of more than 650. If you finance using a Federal Housing Administration loan, you may qualify with a score as low as 500, provided you a 10% down payment.
- DTI. Your debt-to-income ratio measures how much of your monthly gross income goes toward paying off debt. Most lenders prefer that your back-end DTI, which includes your potential home loan payment along with all other debt obligations, be no more than 43%. Some lenders allow up to 50%. Lenders may require a lower DTI when financing a manufactured home.
You don’t have to own land for your manufactured home or have plans to purchase land to get a loan.
You can look at leasing a mobile home plot. Most mobile homes are on leased land, says Dawn Pfaff, president of My State MLS, a nationwide multiple listing service.
Financing for land is also available from many lenders, but the home must be on a permanent foundation and qualify as real property.
What to consider when choosing a mobile home loan:
- Classification of your home. What type of loan you qualify for will depend on a number of factors about the home, including size, wheels and land ownership. If your home doesn’t meet certain conditions, you will have to get a personal loan instead.
- Interest rates. As the Federal Reserve has raised interest rates in 2022, the rates for mobile home loans have also increased.
- Product selection. Find lenders with the mortgage options you need, such as FHA or VA loans.
- Total loan costs. Loans may require a large deposit. Make sure you consider all costs.
A good interest rate for a manufactured home on a permanent foundation is slightly higher than the average for a 30-year fixed-rate loan, Washington says.
Pinpointing the average mobile home rate can be difficult because mobile home loans are not as common as traditional mortgage loans. The interest rate you’re offered will depend on many factors, including your creditworthiness, property type and loan size.
Shop around and compare offers from several lenders to ensure that you’re getting the lowest rate possible.
Pros
- Pay lower interest rates. Mobile home loans tend to have lower interest rates than personal loans or chattel loans.
- Cover your entire purchase. A manufactured home loan may include financing for the land, and borrowers may qualify for larger loan amounts compared with other loan options.
- Get more time to pay. Some mobile home loans can have terms of up to 30 years, and others may be 15 to 20 years.
- Qualify for federally backed loans. If your manufactured home meets certain conditions, you may be able to qualify for federally backed mortgage loans from the Department of Veterans Affairs, Department of Agriculture or FHA. These loans tend to allow for lower down payments and longer loan terms compared with personal or chattel loans.
Cons
- Financing may be difficult to secure. You must meet numerous conditions to qualify for a mobile home loan. Factors such as home size, whether the home has wheels and whether you own the land it sits on can affect loan qualification.
- You will likely pay more. Mobile home loans tend to have higher interest rates and fees than traditional home loans.
- Some lenders may require a low DTI ratio. This means that less of your income can go toward paying off debt compared with a traditional home loan.
The FHA offers two types of mobile home loans: Title I and Title II.
The FHA Title I program is designed for the purchase or refinance of a home or a lot. Pfaff notes that the amount you can borrow under the Title I program is determined by use:
- The limit for a manufactured home is $69,678.
- The limit for a manufactured home lot is $23,226.
- The limit for a manufactured home and lot is $92,904.
The maximum loan repayment term also depends on the property type:
- A manufactured home or a single-unit manufactured home and lot is 20 years.
- A manufactured home lot loan is 15 years.
- A multiunit manufactured home and lot is 25 years.
The FHA Title II program is for mobile homes that qualify as real property: That’s property that can’t easily be removed from the land. Loans cover manufactured homes with the land.
Generally, mobile homes are more affordable than traditional stick-built homes.
The average sale price of a new manufactured home was $131,800 as of July 2022, according to the U.S. Census Bureau. Compare that with an average sales price of $544,000 for homes sold in October 2022.
Still, certain factors, such as customizations, can drive up the cost of a manufactured home. Another variable to consider is whether you will also need to finance the land purchase.
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.
- Chattel mortgage. This is a loan for movable property. Chattel loans typically have lower fees than their traditional counterparts, but they cannot cover the cost of land.
- Installment agreement. An installment agreement allows you to finance directly from the mobile home dealership or seller. You will not deal with a bank, but you will still need to do your due diligence to ensure you own the home outright.
- Cash purchase. If you have the funds available, you can buy the mobile home in cash and avoid taking on debt.
Best for VA loans
Veterans United Home Loans
Veterans United Home Loans offers mortgages in all 50 states and Washington, D.C., and specializes in Department of Veterans Affairs loans. Since 2016, Veterans United Home Loans has generated the largest number of VA purchase loans per year in the nation. The lender was founded in 2002 and is based in Columbia, Missouri.
PNC Bank is one of the largest banks in the United States, serving more than 9 million customers in all 50 states. A full-service mortgage lender, PNC offers most mortgage loan product types.
PrimeLending is a Dallas-based mortgage lender in operation since 1986. The company offers several mortgage loan options, including conventional loans, jumbo loans, government-backed loans and refinance loans. The lender is a subsidiary of PlainsCapital Bank.
Real Genius is a division of FirstBank, a publicly traded bank based in Nashville, Tennessee. Real Genius, formerly known as ConsumerDirect Mortgage, offers both home purchase and refinance loans.
New American Funding is a mortgage lender offering a variety of home loan options to homebuyers and homeowners nationwide except for Hawaii. The company, founded in 2003 and based in Tustin, California, has originated $61.9 billion in mortgages to date.
Guild Mortgage is a San Diego-based lender established in 1960 and focused on residential home loans. Guild Mortgage offers buyers in 43 states a full suite of mortgage products, including conventional loans, government-backed mortgages and jumbo loans.
SoFi is an online lender founded in 2011 and headquartered in San Francisco that offers fixed-rate mortgages. Refinance, jumbo and home equity loans are also available.
CMG Financial, a trade name of CMG Mortgage Inc., is a privately-held mortgage banking firm operating nationwide and based in San Ramon, California. Founded in 1993, the lender offers a range of products, including conventional, government and specialty mortgages, like jumbo loans.
Founded in 1990 and headquartered in Mount Laurel, New Jersey, Freedom Mortgage is a full-service mortgage company. It’s the fifth-largest mortgage provider in the country and is licensed to operate in all 50 states. Freedom Mortgage offers a variety of mortgage options, including conventional loans, refinancing and first-time homebuyer friendly programs such as FHA loans.
LoanDepot is a mortgage lender that operates nationally with more than 200 branches and delivers both a digital experience and face-to-face service. The lender offers fixed- and adjustable-rate conventional mortgages, Federal Housing Administration and Department of Veterans Affairs loans, as well as refinance and renovation loans. The company was founded in 2010 and is based in Foothill Ranch, California.
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