Can You Get an FHA Loan for a Mobile Home in 2022?

Mobile homeThe Federal Housing Administration (FHA) provides house loans for modular, prefabricated, and mobile homes to qualified homeowners and eligible properties. The most common way of financing a prefabricated house is by a regular FHA home loan. Typically, both the land and the prefabricated home are acquired together. The prospective homeowner(s) must meet the basic approval requirements.

The FHA home loan program continues to be one of the simplest ways to finance a home purchase. The down payment is just 3.5 percent and may be "donated" by a qualifying donor (i.e. parents, siblings, and under certain conditions, a close friend). The seller may cover some or all of the buyer's closing costs.
Read more about FHA home-loans

FHA manufactured, modular and mobile home-loan guidelines

Due to the FHA's guarantee of FHA prefabricated home loans, certain standards must be met. Among them are the following, but not limited to:

  1. The residence must have been built after June 15, 1976.
  2. 400 square feet is the minimum size that may be financed.
  3. Each item must have the red HUD label.
  4. The house must be permanently attached to a foundation that has been approved by the FHA.
  5. The prefabricated house's location must be allowed.
  6. The house must adhere to the Model Manufactured Home Installation Standards.
  7. The residence must be the owner's principal residence.

FHA Title I loan

The Federal Housing Administration's title 1 lending program promotes the purchase or refinancing of prefabricated homes. A Title I loan may be used to purchase or refinance a prefabricated home, developed property on which to construct one, or a combination of the two. The borrower's principal home must be the dwelling.

Placement of Manufactured Homes on a Leased Lot

Borrowers are not required to own or own the property on which their prefabricated home is situated in order to qualify for Title I insured loans. Alternatively, borrowers may lease a lot, such as a site lot in a manufactured home community or mobile home park.

When the land/lot is leased, HUD requires the lessor to give a three-year initial lease term to the manufactured homeowner. Additionally, the lease must stipulate that if the lease is to be terminated, the homeowner must be given at least 180 days' written notice. These lease stipulations are designed to protect residents if the lessors sell the land or close the park.

Loan Amount Maximum

Only manufactured house - $69,678
Lot for manufactured house - $23,226
Manufactured house and land for sale - $92,904

Loan Term Maximum

20 years for a mobile home loan or a manufactured home and lot loan in a single portion
15 years for a prefabricated house land loan
A 25-year loan for a multi-section prefabricated home and land
SOURCE: Department of Housing and Financing

The USDA and manufactured housing

The United States Department of Agriculture (USDA) will permit the use of a manufactured home mortgage to finance the purchase of an eligible new unit, shipping and setup costs, and the acquisition of an eligible site (if not already owned by the applicant).

Prospective homeowners must meet normal qualification standards, which include income, employment length, credit, monthly income, and monthly debt obligations.  Read more about USDA qualification

If the unit and location are secured by a real estate mortgage or deed of trust, a loan to fund the following may be guaranteed.

Work on a site that complies with state and local government criteria. Purchase of a new eligible unit, transportation and setup fees, and the acquisition of a new eligible site if the applicant does not already own one. Manufactured units must be less than a year old, unoccupied, and entirely contained inside the site.

The purchase agreement must be performed within one year of the manufactured date of the unit, as shown on the plat. A unit that is qualified for the SFHGLP guarantee must fulfill the following criteria:

To qualify, the new unit must have a minimum floor space of 400 square feet. The prefabricated home must adhere to Federal Manufactured Home Construction and Safety Standards (FMHCSS).

The unit must be permanently installed on a foundation that complies with current FHA regulations at the time of certification. HUD-4930.3G, "Manufactured Housing Permanent Foundation Guide," is now available online at http://www.huduser.org/portal/publications/destech/permfound.html.

The foundation design was approved to meet the requirements of HUD Handbook 4930.3, "Permanent Foundations Guide for Manufactured Housing (PFGMH)."

The foundation certification must be issued by a licensed professional engineer or registered architect who is licensed or registered in the state in which the manufactured house is situated and can certify that the manufactured home complies with current PFGMH criteria.

The certification must be site-specific and include the signature, seal, and/or state license/certification number of the engineers or registered architects.  Read more

 Questions and Answers regarding Manufactured Home Loans

Q. Can I receive a mobile home loan with terrible credit?
A. The Federal Housing Administration (FHA) will finance a mobile home if the structure complies with FHA specifications (see above) and the applicant(s) fulfills FHA's standard credit and income requirements. The FHA will accept applicants with credit scores as low as 500 (up to 579), but will need a 10% down payment. The minimal down payment on a home with a credit score of 580 or above is 3.5 percent.

Q. How can I apply for an FHA-insured mobile home loan?
A. Simply submit an application to an FHA-approved lender.

Q. How long does it take for a mobile home loan to get approved?
A. Obtaining pre-approval or loan approval may take as little as one or two days, providing the applicant has the required documentation (i.e. pay stubs, W-2 forms, bank statements, etc.).

Q. How much down payment is required on a mobile home?
A. As previously indicated, a 3.5 percent down payment is needed for applicants with a credit score better than 580.

Q. Is it difficult to get financing for a mobile home?
A. Loan approval is quite simple in comparison to other types of mortgage loans.

Q. Are prefabricated houses eligible for FHA financing?
A. Most likely. The majority of firms are aware of the FHA's building criteria and make every effort to adhere to them.