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The available options when purchasing a home are practically endless but many people forget about the option of buying a manufactured or mobile home. These smaller homes are perfect for placement on already owned lots or to purchase with a lot already included. However, regardless of mobile home ownership benefits, it is important to research the financing options for these types of homes.

FHA Home Loans for Mobile Home Ownership

While the FHA (Federal Housing Administration) does not actually loan out money, the program does insure loans. This means that should a future homeowner meet the criteria for FHA insurance, they will have an easier time receiving a loan from an approved lender because the loan is federally insured. You can read more about FHA insurance here. This is true for all home buying opportunities including the purchase of mobile/manufactured homes.

FHA Manufactured Home Requirements

The FHA program for mobile homes is called the Title 1 manufactured home loan program and when a homeowner is looking to receive an insured home mortgage for this type of home through the FHA, there are a few requirements that need to be met.

The borrower must meet all FHA standards as well as

  • Have enough funds available to pay the required down payment at closing
  • Meet income requirements verifying payments and other expenses can be met
  • Show intention to live in the home as the principal resident
  • Have a lot already purchased or leased. If lease or ownership is not available, the homeowner must have a place where the home can be placed. This can include a rental piece of land on a manufactured home park as long as the park meets FHA guidelines.

While the borrower must meet certain requirements, as does the home that is up for purchase. The FHA requires that all FHA insured mobile homes meet the following standards:

  • If the home is newly manufactured, it must carry a one-year manufacturer’s warranty
  • Be installed on a property or home-site that meets the FHA standards for living. This includes meeting local regulations for suitability as well as for water and sewage.
  • The home must meet all Model Manufactured Home Installation Standards.

What Can I Use Mobile Home Loan Money For?

medium_3837529598The purpose of a home loan is to finance the total cost of a home. In some cases a mobile home with a lot can be bought or refinanced even, but the FHA Title 1 program that is used to purchase a manufactured home is not meant for financing furniture or landscaping. However, should a homeowner wish to finance the installation of wall-to-wall carpeting or appliances to be built in, there are financing options available for that.

Loan Minimum and Maximum Amounts

The loan caps for an FHA Title 1 manufactured home loan vary depending on the home and property for sale. If a homeowner is purchasing only a manufactured home (a lot is already available or leased) the cap is set at $69,678. If a homeowner is wishing to buy a mobile home with an accompanying lot, the cap cost is set by the FHA at $92,904. In higher cost areas, the FHA does permit an increase up to 85% of these amounts.

FHA Home Loan Terms

Most home loans are categorized as 15 or 30 year home mortgages but with the Title 1 manufactured home program, the FHA allows three unique loan terms. For a loan consisting of just the cost of a mobile home, the loan term is set for 20 years but for the purchase of just a lot for a home to be placed on in the future, the term of the loan is designated at 15 years. Mortgages that finance the cost of a new home and an accompanying lot have a term length set by the FHA at 25 years.

Your Mobile Home Purchase

The available options when purchasing a home are practically endless but many people forget about the option of buying a manufactured or mobile home. Through the FHA Title 1 Program, you can complete your mobile home purchase and financing.

Photo Credit: Jessica Wilson

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