A manufactured home has a few distinguishing features
- It is build offsite and shipped to the property location. It may be shipped in one piece or in multiple pieces and assembled onsite.
- It is not permanently affixed
- A manufactured or mobile home may have an address permanently attached
Manufactured homes are not typically eligible for conventional financing. The FHFHA (Fannie Mae, FHA) offers limited finance options for manufactured homes. To fit into this category among other things the home needs to be at least 12 feet wide. The minimum required square footage is 600. The land which the manufactured home sits on needs to be owned. Leased land is not eligible.
What are other options available to finance a manufactured home?
There are lenders that will finance all types of manufactured homes. You can finance a manufactured home through these sources regardless of the property being owned or leased.
Chattel Loan
A chattel loan is a loan in which the manufactured home is used as collatarel. These are typically short term loans. Short term loans will carry higher monthly payments than a longer term loan.
401k Loan
If you have enough money in your 401k account. If the property is going to be your primary residence, this type of loan may be an option. A 401k loan is typically a lower rate than a personal or chattle loan. The benefit of a 401k loan is that you pay yourself back with each payment. There are restrictions and potential tax consequences with a 401k loan. It is always in your best interest to check with your plan provider before borrowing against your 401k
Personal Loan
A personal loan is an option available for manufactured housing. Since the home is not used for collateral on a personal loan the interest rate will be higher than a chattle of 401k loan. With a higher interest rate, expect a higher monthly payment as well.