Can You Get an FHA Loan on a Manufactured Home

Mobile homeFor qualifying homebuyers and suitable properties, the Federal Housing Administration (FHA) offers home loans for modular, prefabricated, and mobile homes. A traditional FHA home loan is the most popular method to finance a prefabricated house. Typically, the land and the prefabricated house are purchased at the same time. The homebuyer(s) must satisfy the standard approval criteria. Nonetheless, the FHA home-loan program remains one of the most straightforward methods to fund a house purchase. The down payment is just 3.5 percent, and it may be "given" by a qualified donor (i.e. parents, siblings, and under certain conditions, a close friend). The seller may pay a portion of the buyer's closing expenses.
Read more about FHA home-loans

FHA manufactured, modular and mobile home-loan guidelines

Because FHA prefabricated house loans are guaranteed by the FHA, certain conditions must be fulfilled. Among them include, but are not limited to:

  1. The house must be constructed after June 15, 1976.
  2. The smallest size that may be funded is 400 square feet.
  3. Each piece must have the red HUD label attached.
  4. The home must be permanently connected to an FHA-approved foundation.
  5. The location of the prefabricated house must be specified or authorized.
  6. The Model Manufactured Home Installation Standards must be met by the home.

    The house must be utilized as the owner's main residence.

FHA Title I loan

The FHA's title 1 lending program encourages the purchase or refinancing of a prefabricated home. A Title I loan may be used to buy or refinance a mobile home, a developed land on which to build a manufactured house, or a combination of the two. The house must be utilized as the borrower's primary residence.

Manufactured Homes Placed on a Leased Lot

Borrowers are not required to purchase or own the land on which their prefabricated house is located for Title I insured loans. Borrowers may instead lease a lot, such as a site lot in a manufactured home neighborhood or mobile home park. When the land/lot is leased, HUD mandates the lessor to offer the manufactured homeowner a three-year initial lease term. Furthermore, the lease must state that the homeowner will be given at least 180 days' written notice if the lease is to be terminated. These lease provisions are intended to safeguard residents in the event that the lessors sell the property or shut the park.

Maximum Loan Amount

Manufactured home only - $69,678
Manufactured home lot - $23,226
Manufactured home & lot - $92,904

Maximum Loan Term

20 years for a mobile home loan or a single-section manufactured house and lot loan

15 years for a loan on a prefabricated home lot

A loan for a multi-section prefabricated house and land with a term of 25 years
SOURCE: Department of Housing and Financing

The USDA and manufactured housing

The United States Department of Agriculture (USDA) will allow a manufactured home mortgage for the purchase of an eligible new unit, shipping and set-up expenses, and the acquisition of an eligible site (if not already owned by the applicant).

Prospective house purchasers must satisfy the standard qualifying criteria, which include income, duration of work, credit, monthly income, and monthly debt commitments.  Read more about USDA qualification

A loan to finance the following may be guaranteed if the unit and location are covered by a real estate mortgage or deed of trust.
Work on a location that meets the requirements of the state and local governments. Purchase of an eligible new unit, transportation and setup costs, and the purchase of an eligible site if the applicant does not already have one. Manufactured units must be less than a year old, uninhabited, and comprise the site. The purchase agreement must be executed within one year after the unit's manufacture date as stated on the plat. An eligible unit for SFHGLP guarantee meets the following criteria:

To qualify, the new unit must have at least 400 square feet of floor area. The prefabricated house must be built in accordance with the Federal Manufactured Home Construction and Safety Standards (FMHCSS). The unit must be placed on a permanent foundation that meets FHA requirements in effect at the time of certification. HUD-4930.3G, “Permanent Foundation Guide for Manufactured Housing,” is now accessible at http://www.huduser.org/portal/publications/destech/permfound.html.

The foundation design was certified in compliance with HUD Handbook 4930.3, "Permanent Foundations Guide for Manufactured Housing (PFGMH)."

The foundation certification must be given by a licensed professional engineer or registered architect who is licensed or registered in the state where the manufactured home is located and can attest to current PFGMH requirements. The certification must be site specific and contain the engineers' or registered architects' signature, seal, and/or state license/certification number.   Read more

 Questions and Answers regarding Manufactured Home Loans

Q. Can I get approved for a mobile home with bad credit?
A. The Federal Housing Administration (FHA) will finance a mobile home provided the structure meets the FHA guidelines (see above) and the applicant(s) meet the customary FHA credit and income criteria. The FHA will allow an applicant with a credit score as low as 500 (to 579), however, the FHA requires a 10% down payment. At 580 or greater, the minimum down payment is 3.5%.

Q. How do I get an FHA mobile home-loan?
A. Simply make application to any approved FHA lender

Q. How long does it take to get approved for a mobile home-loan?
A. Obtaining pre-approval or loan approval can take as little as one or two days, provided that the applicant has the necessary documents (i.e. W-2's, pay stubs, bank statements, etc.).

Q. How much do you have to put down on a mobile home?
A. As stated earlier, a down payment of 3.5% is required for an applicant with a credit score greater than 580.

Q. Is it hard to get approved for a mobile home?
A. Loan approval is very easy compared to other mortgage loans

Q. Do manufactured homes qualify for FHA loans?
A. Probably. Most companies understand the FHA construction guidelines and strive to meet the specifications.