If you are looking for an alternative to traditional housing, a mobile home may be perfect for you. Mobile homes cost less than a traditional home without having to compromise on necessary features. Also known as manufactured homes, these type of homes normally cost between $60,000 - $100,000.

A mobile home is a prefabricated home structure built on a permanent chassis that was constructed prior to June 15, 1976 (when the Department of Housing and Urban Development began regulating the safety of manufactured homes). Mobile homes are intended to be easily moved if the owner needs to change locations.

Financing for a mobile home is a little different from financing a typical house because many lenders do not consider these homes eligible for most types of mortgages. Mobile home loans must meet a specific set of requirements due to the land in which mobile homes sit on. But, not to worry. There are ways to finance a mobile home that we will discuss later on.

Ways to Prepare for Qualifying for a Mobile Loan

  • Check your credit score - your credit score is a major factor that lenders will consider when deciding whether or not to approve you for a mobile home loan. If you have a high credit score, you will qualify for lower rates and better terms on most loans. Lower rates can save you thousands of dollars over the life of the loan, so it is important to check your credit score before applying.
  • Start saving for a down payment - it is always good to start thinking about saving for a down payment for your mobile home. Many lenders may require a down payment of at least 3% of the loan, so saving now can help you afford the home in the future.

Types of Mobile Home Loans

  • Conventional Loans: most lenders do not offer conventional loans for a mobile home because these structures are not subject to the safety standards established by HUD. However, there are some Freddie Mac and Fannie Mae home loans that do offer specialized mobile home loans with very specific criteria.
  • Fannie Mae's MH Advantage Program: allows buyers to finance a mobile home over 30 years with low down payment requirements but with strict criteria. Freddie Mac offers conventional loans for mobile homes as long as they meet all of the requirements.
  • FHA Loans: the Federal Housing Administration offers home loans with fixed interest rates and lower credit and down payment requirements. They offer manufactured home loans called Title I and Title II loans.
  • Title I: these can be used to purchase mobile homes but not on the land in which they sit. The property must be your primary residence, must meet FHA guidelines before being placed on a rental site, and must be connected to utilities.
  • Title II: these loans do not have any association with mobile home loans.
  • Chattel Loans: These loans can be used to purchase different types of property, like mobile loans. These loans typically have shorter terms and lower loan limits than traditional mortgages. Chattel Loans are a common financing choice for mobile and manufactured homes.

In Conclusion

Financing a mobile home can feel daunting, but it is possible. Before you decide to buy a mobile home, do your research and decide if this is the right purchase for you.

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AnnieMac Home Mortgage strives to offer the best service for our borrowers and are here to help you achieve your goal of homeownership.