Purchasing a manufactured home is an affordable and flexible housing option for many would-be homeowners. However, securing a manufactured home loan can be a different process compared to financing a traditional site-built home. Understanding your manufactured home financing options will help you find the best loan terms and rates for your needs.
Whether you’re a first-time homebuyer or looking to right-size your life with a more flexible housing alternative, here are the top financing options available to make your manufactured home purchase a reality.
1. Traditional Mortgage Loans
For those looking to place their manufactured home on a permanent foundation, some lenders offer traditional manufactured home mortgage options. To qualify, the home must meet specific requirements. This includes being classified as real property rather than personal property. Conventional mortgage lenders may have stricter credit score and down payment requirements, but typically offer lower interest rates compared to other manufactured home loans.
2. Chattel Loans
Chattel loans are a common manufactured home financing option for manufactured homes that are not permanently affixed to land, such as those in a manufactured home community. These loans function similarly to vehicle loans, with the home serving as collateral. While chattel loans typically have higher interest rates than traditional mortgages, they offer flexible eligibility requirements. They may also have a faster approval process.
3. FHA Loans for Manufactured Homes
The Federal Housing Administration (FHA) offers insured loans for manufactured homes, providing more accessible financing options for buyers with lower credit scores or smaller down payments. FHA Title I loans are available for homes placed on leased land, while FHA Title II loans apply to homes on permanent foundations. These government-backed loans offer competitive interest rates and extended repayment terms.
4. VA Loans for Eligible Veterans
Veterans and active-duty military members may qualify for VA manufactured home loans to finance a manufactured home. These loans are backed by the Department of Veterans Affairs and typically require no down payment and offer lower interest rates. To be eligible, the home must meet VA property standards and be permanently affixed to a foundation.
5. USDA Loans for Rural Areas
The U.S. Department of Agriculture (USDA) provides loans for manufactured homes located in designated rural areas. These loans come with low-interest rates and no down payment requirements. This makes them an attractive option for eligible buyers. The home must be classified as real estate and meet USDA guidelines.
6. Credit Unions That Finance Manufactured Homes
Many credit unions offer specialized financing for manufactured homes. These loans often have lower interest rates and flexible terms compared to traditional banks. Credit unions may offer more personalized and have membership requirements. Checking with your local credit union to see what offers are like in your area.
7. Personal Loans and Seller Financing
In some cases, buyers may choose personal loans or seller financing as an alternative financing option. Personal loans are unsecured and often have higher interest rates. On the plus side, they provide flexibility for those who may not qualify for traditional loans. Seller financing, where the seller acts as the lender, can also be an option. Your terms will vary based on the agreement.
Making the Right Financial Choice for You
No matter your final choice, it’s important to understand your options so you can make an informed decision. If you’re ready to explore financing solutions, start by researching lenders that specialize in manufactured home loans.
Find the Perfect Manufactured Home Financing Option with Jacobsen Homes
Navigating financing for manufactured homes can be overwhelming, but you don’t have to do it alone. At Jacobsen Homes, we can connect you with local resources and experts to learn more about your financing options. Contact us today to connect with one of our team members. We look forward to helping you take the next step toward owning your dream manufactured home!