With the median price of homes exceeding $412,000, mobile homes, also called manufactured homes, can be more cost effective while offering more flexibility. The average manufactured home sells for about $127,250, according to the Manufacturing Housing Institute.
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That said, financing the purchase of a mobile or manufactured home may require more digging than purchasing a traditional home. That&#;s because most mortgage lenders don&#;t offer financing for these types of properties due to the lower costs and depreciating value. Still, there are some options available.
Because traditional mortgages may not be a viable mobile home financing solution, you may need to seek out other types of loans. Consider these options for financing a mobile home.
The Department of Housing and Urban Development (HUD) offers mobile home loans through the Federal Housing Administration (FHA) loan program. This includes Title I and Title II loans.
A Title I manufactured home loan can be used in several ways, including to finance the purchase of a new or used manufactured home, refinance a manufactured home purchase, to buy the developed lot where you will locate this type of home and for a combination purchase of both the lot and the home itself. These funds can also be used to alter, repair or improve a manufactured home.
Lenders can offer Title I mobile home loans even if the buyer doesn&#;t own or isn&#;t planning to purchase the land on which the manufactured home will stand. These homes will typically be placed in a manufactured home community or mobile home park. If the borrower doesn&#;t own &#; or isn&#;t buying &#; the land, they must provide a signed lease for a mobile home plot with an initial term of at least three years.
The loan program has other requirements relating to the terms of the loan.
Maximum loan amount:
- Manufactured home only: $105,532 for single section, $193,719 for multisection.
- Manufactured home lot: $43,377.
- Manufactured home and lot: $148,909 for single section, $237,096 for multisection.
Maximum loan term:
- Manufactured home: 20 years, plus 32 days.
- Single-wide manufactured home and lot: 20 years, plus 32 days.
- Manufactured home lot: 15 years, plus 32 days.
- Multiunit manufactured home and lot: 25 years, plus 32 days.
This loan program insures loans that borrowers can use to finance a qualifying manufactured home, along with land, as long as it meets the requirements. For example, you can only use a Title II loan if you plan to live in the manufactured home as your primary residence.
Other requirements for the home include:
- Have a minimum floor area of 400 square feet.
- Be constructed after June 15, .
- Be classified as real estate but not necessarily for state tax purposes.
- Be built and remain on a permanent chassis.
- The loan must cover the home and the land on which it stands.
Title II loans cannot be used for manufactured homes on leased land in manufactured home communities or mobile home parks. Down payments on a Title II loan can go as low as 3.5 percent, and terms can last as long as 30 years.
Some lenders offer Fannie Mae mortgages to borrowers who wish to finance a manufactured home through the MH Advantage program. The loans come with 30-year financing and down payments as low as 3 percent. As an added benefit, interest rates on MH Advantage mortgages tend to be lower than those of most traditional loans for manufactured homes.
To qualify, you need to satisfy a number of eligibility criteria, including installing the home with a driveway and a sidewalk that connects the driveway, carport or detached garage. The home must also meet certain construction, architectural design and energy efficiency standards similar to site-built homes.
You may be able to obtain conventional financing for a manufactured home through the Freddie Mac Home Possible mortgage program. You may be able to secure a loan with as little as 3 percent down and, in some cases, use gifted or grant money to help cover your down payment.
Freddie Mac also offers manufactured home financing through their CHOICEHome Mortgage program. To qualify, homes must meet the same requirements as site-built homes and meet certain eligibility factors.
If you belong to the military community, you may qualify for a loan insured by the U.S. Department of Veterans Affairs (VA). You can get a VA loan to buy a manufactured or modular home and put it on land you already own, buy both the home and land simultaneously or refinance a home you plan to transport to land you own.
Lenders can offer up to 100 percent financing on manufactured home loans. You&#;ll need an affidavit of affixture, which proves the property is attached to land you own and meets certain local and VA requirements.
Loan terms can range from:
- Lot for a manufactured home you already own: 15 years plus 32 days.
- Single-wide manufactured home: 20 years plus 32 days.
- Single-wide manufactured home and lot: 20 years plus 32 days.
- Double-wide manufactured home: 23 years plus 32 days.
- Double-wide manufactured home and lot: 25 years plus 32 days.
A chattel loan is a special type of personal property loan you can use to purchase a mobile home. These mobile home loans are designed for financing expensive vehicles like planes, boats, mobile homes or farm equipment, where the property guarantees the loan.
Some lenders offer chattel loans for manufactured home purchases that are insured by the FHA, the VA and the Rural Housing Service (RHS) through the U.S. Department of Agriculture. Additionally, the closing process for chattel loans is usually faster and less restrictive than what you would experience with a traditional mortgage.
Chattel loans also have disadvantages to be aware of. They typically have higher interest rates than traditional mortgages. Chattel loans also have shorter terms which means their monthly payments will likely be higher than a traditional mortgage.
Mobile homes are far cheaper than traditional homes, so you may be able to finance your purchase through a personal loan. Because personal loans are flexible, you can use them for almost any purpose &#; including mobile home loans.
However, personal loan interest rates tend to be higher than those of other types of loans, such as mortgages or auto loans. The trade-off is you don&#;t have to provide any collateral &#; which means you won&#;t lose your home if you default on a personal loan &#; and the application process tends to be shorter and involves less paperwork.
Another important advantage of personal loans over mortgages is they&#;re typically inexpensive or free to set up, says Steve Sexton, CEO of Sexton Advisory Group. &#;There&#;s no costly title, escrow or appraisal fees. And the lender has zero interest in or control over your home because the loan is not secured.&#;
Personal loan lenders usually offer maximum loans of $25,000 to $50,000, though some lenders will let you borrow $100,000 or more. If you see a lender offering a personal loan large enough for financing a mobile home, it might be a good way to borrow the money that you need. Your credit will need to be in good shape to qualify, and excellent credit personal loan rates can start around 7.50 percent.
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Bankrate's take
When you compare mobile home financing options, consider the type of home you want to buy, how much money you need to borrow, when you plan to pay back your loan and what type of interest rate you prefer.
If you&#;re wondering how to buy a mobile home and get the best financing, there are a few steps you should follow first.
Whenever you apply for any financing, a lender will consider your credit as part of your loan application. Clean credit histories and solid credit scores make securing loans with better rates and terms easier.
If you find mistakes when you check your credit reports, you can dispute them with the appropriate credit bureau &#; Experian, TransUnion or Equifax. The bureau will have up to 30 days to respond to you.
Why it&#;s important: The better your credit score and history, the lower your interest rate will likely be. This can save you thousands of dollars over the course of the loan.
When you&#;re financing a mobile home, the stability of the asset being financed is important, Sexton says. If you own the land and your mobile home has had the axle and wheels removed, it&#;s less likely that you&#;ll pick up and move. This may make more lending institutions open to financing a mobile home.
Why it&#;s important: If you plan to rent a plot for your home, you&#;ll be eligible for fewer loans than if you plan to purchase the land the home will be placed on.
The type of home you&#;re looking for will affect the loans you may be eligible to receive. For example, if you want to buy a double-wide manufactured home that costs $200,000 or more, you won&#;t be eligible for an FHA loan. In addition, older mobile homes may not qualify for certain types of financing at all.
Why it&#;s important: All lenders have specific lending criteria based on the type and value of your home.
Choose the type of loan you&#;ll use and compare different lenders&#; offerings. Mobile home interest rates and manufactured home loan rates and fees can vary widely between lenders, so take the time to shop around. Try to find a loan that has low fees and interest rates so you can spend as little as possible over the life of the loan.
Why it&#;s important: Doing your research and shopping around can save you thousands of dollars over the life of the loan and help you secure more favorable loan terms. In addition, searching for financing options early will help ensure a loan is available to help you make the purchase.
You&#;ll want to ensure that your application is as complete and transparent as possible. In addition, many lenders require a down payment, so be prepared to make one when you complete your application.
Why it&#;s important: Being able to submit a complete application will improve your odds of qualifying and keep the process running smoothly.
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Takeaway
Make sure you&#;re well prepared to finance a mobile or manufactured home. Doing so makes you more likely to secure the best rate and most favorable terms while expediting the process.
As with any loan, mobile home interest rates and manufactured home loan rates will vary based on several factors. Your credit score, down payment amount and type of home and whether you&#;re buying the land will affect the amount you pay.
To qualify for low mobile home interest rates, make sure your credit score is at least 700. You&#;ll need a score of 750 or higher to qualify for the absolute best rates available. The average rates presented are accurate as of August 9,
You&#;ll often hear the terms mobile, manufactured and modular used interchangeably when discussing these similar types of homes. While they are related, there are some important differences between these homes.
A mobile home is built at a factory before it&#;s brought to a property for setup. It may or may not use metal tie-downs in place of a traditional foundation. However, this explanation can apply to manufactured homes as well.
Like mobile homes, manufactured homes are built in a factory. They can be set up at their permanent location on blocks, metal piers or a permanent foundation. Unlike mobile homes, manufactured homes are not intended to be moved once they&#;re set up. They are usually more expensive than mobile homes with an average sale price of $118,000 in March , according to the U.S. Census Bureau.
Similarly to mobile and manufactured homes, modular homes are built in a factory and shipped to the land where they will be set up. However, modular homes are more similar to traditional homes. They often include crawlspaces and basements and use a traditional foundation. They can cost between $180,000 and $360,000, according to Angi.
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Bankrate's take
Before you shop, understand the difference between a mobile, modular and manufactured home, so you can choose the option that makes the most sense for you.
Now that you know how to buy a mobile home or manufactured home, you&#;ll want to consider a few factors to make sure you select the best option, including location, size and whether to buy a new or used property.
Before you think about anything else, figure out where you will install your mobile home. The location you choose will have a big impact on the rest of the process.
&#;Purchasing a mobile home and finding the right location is just like buying a home,&#; Sexton says. &#;A good neighborhood is important.&#;
You can choose to install the home on a piece of land you already own, buy the land where your mobile home will be located or rent a plot of land in a mobile home community. If you choose to buy land, consider zoning regulations and necessary utility hookups.
Mobile homes and manufactured homes come in various sizes, so you&#;ll need to decide in advance what size home you want. Larger homes are more expensive and require larger lots. As a result, you may need to borrow more if you want a larger home.
Mobile homes are usually classified by their width. Both classifications are usually about 70 feet long. The classifications you&#;ll typically see are:
&#;Many towns don&#;t allow single-wide mobile homes in their town or city limits,&#; Sexton says. &#;Make sure you research the rules that might apply to your situation.&#;
Unlike traditional real estate, mobile and manufactured homes tend to lose value over time. That means you can get a discount if you buy a used mobile home. The trade-off is that used mobile homes will often have signs of age unless they&#;ve been maintained very well.
Some locations also won&#;t allow the placement of homes produced before a specific date, which limits your options. And purchasing an older mobile home may require some expert insight to check the condition of the home.
When you purchase a mobile or manufactured home, one of the expenses to consider is the cost of mobile home insurance. Similar to standard homeowners insurance, this type of policy offers you protection if your home is damaged or requires repairs.
Often, mobile home policies will cover the dwelling itself as well as your personal belongings if items were damaged or stolen. You may also obtain policies that include liability coverage, which protects you if someone is injured on your property and you are held liable.
Standard mobile home insurance does not typically include or may require an add-on to cover hurricanes, earthquakes and flood events. And, like traditional homes, the cost of mobile home insurance policies varies based on your coverage level.
Mobile and manufactured homes can be much more affordable than a traditional site-built home. But if you plan to purchase one, research to find out what financing options are available and understand the eligibility requirements. You&#;ll also want to ensure the home is not too old to qualify for a loan or mortgage and that you have a suitable location.
For years, I repeatedly and loudly proclaimed, "I am never living in a trailer ever again. Never ever." Well, sometimes never comes pretty quickly. I moved from the wilds of Western New York state into a suburb of Winston-Salem, North Carolina, a few years back. While I'm very glad to be "back down south" again, I am once again living in a mobile home.
I also did one of the things that you should never do when buying a mobile home, especially an older one (mine is a ). I entered into the agreement pretty much sight unseen. I'm not irresponsible with my money when it comes to paying bills (I clarified because I think I have 14 pairs of flip-flops), but even I knew that this could possibly end badly. I was in a situation where my decisions had to be made quickly, and inspecting the home prior to moving was not something I had the luxury of doing.
I got lucky. Yes, my trailer is kind of ugly on the outside. It's a two-tone brown and tan number, and there are some cosmetic issues on the inside as well as some serious problems that are in the process of being repaired, but it could have been a whole lot worse.
Though they are now technically referred to as "manufactured" homes, many of us still call these boxy residences trailers or mobile homes. Here are some things to consider before buying an older one. I've divided these considerations into physical characteristics and logistical concerns, and each is discussed in much greater detail below. Also included is a short history of mobile homes.
First, let's go over some important things to keep in mind about the trailer itself. Before you take the plunge and purchase an aging mobile home, be sure to check out the following.
A lot of the newer models have all kinds of frills, but many of the older trailers do not. Be aware before you even begin your journey that you are most likely not going to find skylights, wood flooring, drywall, or many of the finer things that some folks expect from newer manufactured homes. You'll probably find awful wallpaper, wood paneling, and linoleum&#;and lots of it!
If you're a fan of the retro look, then great! If not, you may have some serious redecorating projects and renovations on your hands. This is one of many reasons why it's a good idea to check out any trailers you are considering in person before handing over the cash.
Believe it or not, most older trailers have plumbing fixtures that are not industry standard for regular homes. Your pipes, drains, and even some of your fixtures are likely to have been made for mobile homes only, and replacement parts may be hard to come by and/or expensive.
Also, it is rare for a mobile home with any kind of age on it to have shut-off valves for sinks, tubs, and toilets. If you have to make a repair, you'll likely have to shut off the water to the entire trailer.
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Just like with the plumbing, doors, doorknobs, and windows are difficult to replace on older-model mobile homes because they were specially made for trailers. These parts are getting harder and harder to find, and some enterprising sellers have realized this, causing the prices of some things to go through the roof. My advice is to know in advance where you will be able to find affordable parts for your trailer.
Unless your new home is sitting on a foundation, which most older mobile homes are not, it will likely be up on cinder blocks or other structures to make it stable. This is not a bad thing, but it does make for an interesting thunderstorm experience&#;these things can shake pretty good. Also, someone jumping up and down on the floor on one end of the house could bounce you right out of bed. This is another reason why a walkthrough of any new trailer you are considering is definitely advisable.
Most of the windows on older-model mobile homes are not the same as those on regular houses. They've got little levers that you have to press to open or close them, and the storm windows are often put into place on the inside and held in with little plastic clips that can break easily.
Most older trailers do not have the drywall used in most ordinary houses. Many are outfitted with cheap wooden paneling that has absolutely nothing behind it. This can make hanging things on your walls difficult. The studs that you will have to use to hang heavier decorations may be too thin to support them in some cases.
A lot of the older mobile homes on the market are heated with oil or an oil-kerosene blend. This can get extremely expensive in the winter months, especially if you live in a colder location. Central heating and air conditioning are popular features, so be sure both are in working order before you sign on the dotted line. I didn't check this and found out by accident that my central air didn't work. Fortunately, the owner of the park had it fixed the next morning at his expense. If that burden had fallen to me, my central air system would probably still be in need of repair!
Scroll to ContinueNow that we've covered the physical aspects of older trailers, let's dive into some of the more situational factors you need to consider before sealing the deal and deciding to move.
If you buy a mobile home that has to be moved, be aware that this is no small expense. It can cost up to thousands to move a trailer from one location to another, and moving it can cause expensive damage to the structure&#;especially the roof. If the trailer is what's called a "double-wide" or bigger, your move will cost even more because the home will need to be taken apart so that the pieces can be transported separately. The bigger the trailer is, the more it will cost to move. Don't forget to consider the cost of having your new home hooked up to electric and water/sewer at its destination as well.
Most banks will not finance a loan for an older model mobile home. This is primarily because these homes do not appreciate in value. By the time you make your final payment, the home may be worth half the price you paid for it. This makes it difficult for the bank to recoup their money if you default on the loan. Be prepared to pay for your "new" old home upfront.
Whether you are buying or renting a mobile home, if it sits in a mobile home park, you will be paying the park a fee each month to rent the land on which it sits. Obviously, when you pay for the trailer, you won't have any more payments to make, but the lot rent will continue as long as you live on the property. In every mobile home park I've ever rented from, water, sewer, and trash have been included in the lot rent, but be sure to check on that upfront before committing.
Know where you and your visitors are allowed to park, and ask your neighbors who have unused parking spots if you may have your guests use them. Don't just assume because they can (and often will&#;just out of spite) have your friends' cars towed.
This may sound kind of comical, but I've had some issues with it. Most trailer parks have their homes set up in a specific order. My home is on a corner lot, and for some reason, my front door is on the opposite side as everyone else's in my row.
While this may seem like a minor inconvenience, I've had the post office leave packages on my back porch. If I know to look for them, I keep an eye out. If not, I can be in trouble. My AT&T modem sat out there for who knows how long, and I've had folks bring packages to the front door for me if they see them before I do.
A lot of parks have very specific guidelines about what you can throw away and how trash must be disposed of. My park has a dumpster at the end of each row. All of our trash has to be bagged, which means I can't clean out my baby sister's car and throw a McDonald's cup directly in the dumpster. Instead, I have to clean out the car and add its contents to an existing trash bag that must later be brought to the dumpster.
Many trailer parks do allow pets, but some have breed and/or size regulations. Some do not allow certain exotic pets like snakes and ferrets, and others require yearly proof of vaccinations and local licenses.
If you have any pets, make sure you are clear on any animal rules before you move in. Most parks demand that dog owners carry bags for their "doggy dirt." Nobody wants to step in it, and it can smell really bad in warmer weather.
If you allow your license and/or registration on your car to expire, many parks will demand that you either rectify that or remove the vehicle from their property. Also, some parks do not allow residents to make repairs on their vehicles inside of the park beyond changing tires. Most parks do not allow residents to wash their cars on the property, especially if water is included with lot rent.
This one is entirely subjective, but in my experience, some folks in trailer parks can be real busybodies. Though I'm over 40 and single with no kids, I almost always feel eyes on me when I'm out roaming around on the property, and it's probably not paranoia on my part.
Some folks watch everything, just waiting for some juicy bit of gossip or something they can use to call the park manager or owner and "tell on me." Though I plan to give them neither, this can be a real big issue, so watch yourself!
The modern mobile home phenomenon began with travel trailers, or what we now refer to as RVs (recreational vehicles&#;think Winnebago). They started out as small, single-room dwellings that could be towed behind cars or trucks, thus eliminating the need for hotel rooms while on vacation. They were designed to be more secure and comfortable than camping tents.
Travel trailers began production in , and by the late s, some enterprising folks figured out that they could make travel trailers that could also serve as permanent and affordable homes. First came the single-wide, which could be as large as 18 by 90 feet. Next came the double-wide, which is about the same length but double the width.
Essentially, with the exception of the newer homes, most trailers do still have axles and wheels attached to the underside unless the home has been put on a foundation. This makes it easier to haul it wherever it needs to go.
Mobile homes are now manufactured in all kinds of crazy ways, and some folks prefer the term "prefabricated" (prefab) or "modular" to "mobile." They even make mobile homes with multiple stories now!
Prices have changed dramatically as well. What once was touted as an industry that made housing affordable is now producing double and triple wides that can cost in excess of $80,000. Though that might seem like a deal, the ongoing cost of lot rent must also be considered. Additionally, it's important for prospective buyers to know that their new mobile, prefab, or modular home will never increase in value like other types of property often do.
This article is accurate and true to the best of the author&#;s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© Georgie Lowery
David on April 04, :
I bought my 8x55 just over a year ago for $29,000 yes it needed work but the Fleetwood was all original with the original birch interior It also has a great patio that has been enclosed and on the other side another bedroom and bathroom still have to tile the bathroom but it&#;s worth around $130,000 it&#;s in a 55 plus park and the space rent is $495 can&#;t get a room in someone&#;s house for that plus it&#;s in the best part of Palm Springs with million dollar houses all around it I&#;m greatful to be here
Teena on May 14, :
Lee, Get rid of that place! You have three kids to think about. That old home would need to be gutted and totally made over to feel and be safe. I would not even have a pet in there. Sell,sell,sell! You can get a newer home that is in great condition for not much money.....you just need to look.
Deborah J. on November 11, :
Mobile Homes can be a great place to live if you have a well built home. I prefer the Modular Homes. If you are fussy about little issues about Mobile Homes. Buy a regular home instead.
Anon on June 12, :
If you're considering a mobile home, look into a modular home instead. They are very similar to "regular" homes, and are usually stick built in segments at the factory and shipped to the site to be reassembled. It's basically the best of both worlds.
Barri Blasing on February 07, :
I guess I must have hit the right park and home. As I read through all of these things I just keep telling myself I must be blessed. This is my 6th new manufactured home and the second park area. Both to this point have been awesome places. The trash is picked up every week at the driveway. We have drives for every home and can also park on the wide streets if needed. As for my home I purchased new again and found that each on I purchase gets just a little better each time. I won't even look at one that isn't quote unquote standard. Been through the "trailersized" issues. But as for the busy bodies I think that is everywhere, I have never lived anywhere, where they weren't looking out of the corner of the window watching you every step of the way.
Lee on December 08, :
I meant to say windows and a whole new " roof "
Lee on December 07, :
I just bought a 43 year old mobile home and it needs major work. I have three kids and am worried about mold, faulty or old wiring and the weakening of the structure itself. Multiple rooms need new subfloor,drywall,insulation, windows and a whole new room. I'm seriously considering selling it because I think it won't be safe to live in even after all the renovations I eventually make. Any thoughts?
Bonnie on November 10, :
Trying to buy an old mobile home on its own lotis impossible because the banks dont give loans even for the lot. They say it has to be on a foundation but an older mobile home that is already settled on jacks is not worth building a foundation. sadly I cant get a refinacne loan because the lot is still just a lot and I cant get any financing . I am sad.
Alfonzia on March 25, :
I nevr live in a mobile home. I thought ever thing was the same like a house the wiering I thanking on moving in home.
zea on February 01, :
We got an older home 20 years ago.Lived in it 7 years.We now have a brick home.I realy think parts of it was bigger than whats in my house.
Bob on January 06, :
Ever hear of a mobile home manufacturer Holiday Manor ? I have one but can't find any info on it.
ocfireflies from North Carolina on May 01, :
Great information. A topic so often overlooked. I would love to work on HGTV renovating non-stick built homes. Voted up.
Diana L Pierce from Potter County, Pa. on April 29, :
This hub is very informative. I've lived in a trailer for years. We live in the country on our own 1.6 acre lot. Our first trailer was four years old back in the day when not all of them were insulated well. We remodeled the entire home and added more insulation and needy things like better light fixtures and plumbing. We bought a new mobile home twenty years later. That was fifteen years ago. Although we have a heavy duty, thicker wall model things still wear out and remodeling is in progress once again. We paid the price of a house for this home expecting it to last as long. I truly wish we had bought a house instead. I am glad though the thicker walls have saved us plenty on our heat bills. Good hub. Voted up.
Jamie Sykes from Lewisville, North Carolina on April 28, :
That reminds me, I was going to growl at him to fix it or I'd sick a weasel on him...
Georgie Lowery (author) from North Florida on April 27, :
catfish33:
My problems are all plumbing. I'm lucky in that the person who owns the park is not charging me to fix anything, but it sure is taking a long time. I have lived here two months now and I still can't use the big bathtub - but at least I have another bathroom.
I hope all is well in yours!
Thanks for taking the time to comment, I appreciate it. :)
Jeffrey Yelton from Maryland on April 27, :
I also live in a trailer park, bought my model in for $8,000. I've since had to do major plumbing work and I use room air conditioners during the summer, which, ironically, save me what I would've spent on central air. The heat part of it still works, though.
I find your comments dead on about all the problems of older trailers, but mine's okay for now.
Georgie Lowery (author) from North Florida on April 27, :
There may be an old coffee pot in there one day soon. ;)
Jamie Sykes from Lewisville, North Carolina on April 27, :
I've, ahem, totally thrown stuff in the dumpster without it being in a bag. If you've ever looked in the dumpster, you would be amazed at what people throw in there. I only say this because I've seen some weird stuff in there...and some stuff that totally shouldn't be in a regular dumpster.
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