Best Mobile Home Loans | Find the Best Loan for You

A mobile home is usually more affordable than a traditional home, but you still might need financing. Learn more about how mobile home financing works and how to get a loan that suits your needs.

Mobile homes aren’t the same as traditional “stick-built” or “site-built” homes, which are built directly on top of the site where they’ll stand. Instead, mobile homes, also known as manufactured homes, are prefabricated and then moved to the location where the owner wants to live.

Getting a mobile home loan may be different from taking out a traditional mortgage. It will depend on the specific characteristics of your home. For instance, if you pay fees to the state department of motor vehicles or the mobile home still has wheels, it’s considered a vehicle or personal property. If that’s the case, you’ll need to rely on a chattel loan or personal loan to finance the mobile home purchase.

If your mobile home meets certain requirements, it may be considered real property and can qualify for mobile home financing.

Whether you’re looking to get a mobile home loan, chattel loan or personal loan, lenders will expect you to meet certain qualifications. You’ll need to show that you’re a trustworthy borrower in order to qualify for a loan and 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:

Whether you need to be a landowner or not depends on the type of loan you are going to get. Most mobile homes are on leased land, says Dawn Pfaff, president of My State MLS, a nationwide multiple listing service. In those instances, the home is considered chattel, or personal property, and you’d get a corresponding chattel or personal loan.

“When you buy a mobile home on land that you own, as long as that home is permanently affixed to the land, the terms are much different,” Pfaff says. In this case, you can borrow a mobile home loan that works essentially the same as a mortgage. However, not all mortgage lenders approve loans for mobile homes, so you’ll need to find one that offers this type of financing.

Because mobile home loans are not as common as traditional mortgage loans and the terms tend to be a bit stricter, it’s difficult to pinpoint the average mobile home rate. The interest rate you’re offered will depend on a number of factors, including your creditworthiness, the type of property, the size of the loan and more.

That said, for a mobile home on a permanent foundation, a good interest rate would be around 3%, according to Washington. That’s just slightly higher than the average mortgage rate for a 30-year, fixed-rate loan.

When shopping around for a mobile home loan, it’s important to compare offers from several lenders to ensure you’re getting the lowest rate possible.

The FHA offers two types of mobile home loans.

The FHA Title I program is designed for homes that are considered personal property and not real estate. To get a Title I loan, you don’t need to purchase or own the land the mobile home will be sitting on. Pfaff notes that the amount you can borrow under the Title I program is capped, depending on the use:

There are also maximum loan repayment terms, depending on the property type:

The FHA Title II program is for mobile homes that qualify as real property and are taxed as real estate. It works the same way for mobile homes as it does for traditional homes. You can put down as little as 3.5% if your credit score is at least 580, or 10% if your score is between 500 and 579. You will be required to pay a mortgage insurance premium, regardless of the down payment amount. The home must also be your primary residence, and the repayment term can last up to 30 years.

Though mobile homes can be more cost-effective than traditional stick-built homes, they are still pricey. The average sale price of a new manufactured home was $98,100 as of March 2021, according to the U.S. Census Bureau. Opting for a double-wide or a home with certain customizations can drive that price much higher. If you don’t have the cash saved up for the full purchase price of a mobile home, it may be worth taking out a loan to cover the cost.

Another factor to consider is whether you will also need to purchase the land that the home will sit on. If you don’t already own a plot of land, but you want a mobile home that qualifies as real property, you may need to finance the land purchase along with the mobile home purchase.