Thinking about buying a manufactured home but unsure if you can use an FHA loan? You’re not alone—many first-time buyers are searching for affordable housing options and want to know what loans are available.

This question matters because manufactured homes often offer more value for your money, but not all lenders treat them the same as traditional houses. Knowing your financing options can open doors to homeownership.

In this article, we’ll answer whether FHA loans cover manufactured homes, outline the requirements, and share tips to help you through the process.

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Does FHA Allow Loans for Manufactured Homes?

Yes, FHA loans allow financing for manufactured and mobile homes, provided these homes meet certain standards set by the Federal Housing Administration (FHA). Whether you’re buying a new manufactured home, purchasing an existing one, or even buying both the home and the land it sits on, an FHA loan can be a practical path to homeownership. However, there are specific guidelines and requirements you must follow to qualify.

Let’s break down what this means, the steps involved, and important information you need to know if you’re considering this option.

Understanding FHA Loans for Manufactured Homes

FHA loans—backed by the Federal Housing Administration—are popular for their low down payment options and flexible credit requirements. Traditionally associated with site-built homes, FHA loans are also available for certain types of manufactured homes. But there are important differences between manufactured, modular, and mobile homes:

What Counts as a Manufactured Home?

• Manufactured Home: Built in a factory after June 15, 1976, and meets standards set by the U.S. Department of Housing and Urban Development (HUD).
• Mobile Home: Typically refers to homes built before June 15, 1976, not subject to HUD standards—most lenders won’t finance these.
• Modular Home: Assembled in sections in a factory, but placed on a permanent foundation and treated more like a site-built home by lenders.

Note: For FHA financing, your home must be a manufactured home built after June 15, 1976, and must display a HUD certification label.

Two Main Types of FHA Loans for Manufactured Homes

1. FHA Title I Loan: For purchasing or refinancing a manufactured home, with or without the land.
2. FHA Title II Loan: For financing both the manufactured home and the land as real estate.

FHA Manufactured Home Loan Requirements

To qualify for an FHA loan on a manufactured home, both the buyer and the property must meet specific criteria.

Home Requirements

• Built after June 15, 1976: Must display a HUD label.
• Permanent Foundation: Home must be permanently affixed to a foundation that meets FHA guidelines.
• Size Minimum: At least 400 square feet of living space.
• Site Location: Many lenders require the home to be on land you own or are purchasing with the home.
• Compliance: Home must comply with HUD’s Manufactured Home Construction and Safety Standards.
• Installation: Must be installed on the site according to manufacturer’s instructions and HUD requirements.

Borrower (Your) Requirements

• Credit Score: Minimum score usually around 580, though higher scores may help you get better terms.
• Down Payment: As low as 3.5% for those who qualify.
• Debt-to-Income Ratio (DTI): Typically should not exceed around 43%, but some flexibility may apply.
• Stable Income: Verifiable history of income and employment.
• Primary Residence: The home must be your main residence.

Property Requirements

• Land Ownership: For Title II loans, you must own the land or buy the land with the home.
• Zoning: The property must be in a location zoned for residential use.
• Appraisal: A licensed FHA appraiser must determine the home’s value and compliance with FHA guidelines.

Steps to Get an FHA Loan for a Manufactured Home

1. Check Your Eligibility
2. Review your credit score and compare it to minimum FHA requirements.
3. Calculate your DTI ratio.

4. Make sure the manufactured home meets HUD standards.

5. Find FHA-Approved Lenders

6. Not all lenders offer FHA loans for manufactured homes, so seek out specialists.

7. Get Pre-Approved

8. Provide financial documents: pay stubs, bank statements, tax returns.

9. Understand possible loan amounts and interest rates.

10. Select Your Home and Land

11. Ensure the manufactured home is built post-1976 and has the HUD label.

12. Decide if you’re buying just the home, just the land, or both.

13. Apply for the Loan

14. Complete the full FHA application with your chosen lender.

15. Complete Home Inspection and Appraisal

16. The home must pass FHA appraisal and, in some cases, a separate inspection.

17. Loan Processing & Underwriting

18. Lender reviews your application and verifies all information.

19. Closing

20. Finalize the loan, sign documents, and receive the keys to your new home.

Benefits of FHA Loans for Manufactured Homes

• Low Down Payment: You may qualify with as little as 3.5% down.
• Flexible Credit Standards: More lenient than many conventional loans.
• Fixed or Adjustable Rates: Choose the option that fits your budget.
• Financing for Home and Land: Possible to finance both with one loan.
• Loan Assumability: FHA loans can be transferred to future buyers.

Potential Challenges and Considerations

• Limited Lender Options: Not all lenders offer FHA financing for manufactured homes—expect to shop around.
• Strict Home Requirements: Foundation, age, and condition restrictions can limit eligible homes.
• Additional Costs: You may need to pay for a permanent foundation or upgrades to meet HUD standards.
• Location Limitations: Some communities or local ordinances restrict where manufactured homes can be placed.
• Potential for Higher Rates: Interest rates might be slightly higher than for site-built homes.
• Title Issues: A clear title is required. Homes in mobile home parks or on leased land may require Title I financing, which has different terms.

Practical Tips & Best Practices

• Work with Experts: Partner with real estate agents and lenders who specialize in manufactured or mobile homes.
• Verify the HUD Label: Look for the HUD certification plate, usually found in a closet or under the kitchen sink.
• Check Local Zoning Laws: Make sure your preferred location allows manufactured homes.
• Budget for Foundation and Setup: If the home isn’t already on a permanent foundation, include this in your costs.
• Get Pre-Approved Early: This helps you shop with confidence and strengthens your offer.
• Compare Lenders: Different lenders have different fees, interest rates, and loan processing times.
• Consider Future Resale Value: Homes on permanent foundations and owned land often have better resale potential.

Frequently Asked Questions (FAQs)

1. Can I use an FHA loan to buy a used manufactured home?
Yes, as long as the home was built after June 15, 1976, and meets HUD and FHA guidelines, including being on a permanent foundation and having the required HUD certification label.

2. Do I need to own the land under my manufactured home?
Not always. If you’re using an FHA Title I loan, you can finance the home without owning the land (for instance, in a mobile home park). However, for FHA Title II loans, you must buy or already own the land.

3. What types of manufactured homes are not eligible for FHA loans?
Homes built before June 15, 1976 (commonly called mobile homes), homes without a HUD label, or those not installed on a permanent foundation are not eligible.

4. How much down payment is required for an FHA manufactured home loan?
The minimum is usually 3.5% of the home’s purchase price for those who qualify. Some borrowers may need to pay more depending on their credit status.

5. Are interest rates for FHA manufactured home loans higher than for traditional homes?
Rates can be slightly higher due to the perceived risk, but many borrowers still find FHA loans affordable compared to other financing options, especially if they have lower credit scores.

Summary

FHA loans make homeownership possible for many buyers, including those interested in manufactured homes. While special rules and requirements apply, FHA financing can be a flexible, affordable solution if you take the right steps and do your research. Review the guidelines carefully, seek experienced professionals, and don’t be afraid to ask questions—your path to owning a manufactured home may be easier than you think!