A Mobile Home Secured to the Ground Qualifies for What Loan?

Mobile homes are often financed with personal property loans, similar to vehicle financing. However, when a mobile home is permanently secured to the ground, it can qualify for traditional real estate loans. This provides access to more favorable financing options, including conventional mortgages and government-backed programs.

Defining Real Property Mobile Homes

To be recognized as real property, a mobile home must transform from personal property into a permanent structure. This involves installing it on a permanent foundation, such as a concrete slab or block piers. All elements of mobility, including wheels, axles, and the towing hitch, must be removed.

The home must be on land owned by the homeowner. Its title must be converted from a vehicle title to a real estate deed. This reclassification is completed by filing documentation, such as an affidavit of affixture, with local or state authorities, integrating the home’s record with the land deed.

The home must comply with local building codes and zoning regulations. Manufactured homes built after June 15, 1976, must adhere to the federal Manufactured Home Construction and Safety Standards (HUD Code). Compliance is shown by a visible HUD certification label on the exterior and a data plate inside. Once these criteria are met, the home is legally classified and taxed as real estate.

Types of Real Estate Loans for Mobile Homes

Once a mobile home is permanently affixed and legally recognized as real property, it can qualify for various real estate loans.

Conventional Loans

Conventional loans, offered by private lenders, are an option for permanently affixed manufactured homes. These loans require the home to be permanently attached, its vehicle title eliminated, and built after June 15, 1976. A minimum credit score of 620 is common, with down payments often 5% or more.

Federal Housing Administration (FHA) Loans

FHA loans are government-insured mortgages. They offer lower down payments (3.5%) and may accept lower credit scores (500-580). Eligibility requires the home to be at least 400 square feet, on an FHA-approved permanent foundation, and have a HUD certification label (built after June 15, 1976). It must be the borrower’s primary residence with approved water and sewer systems.

VA Loans

VA loans offer zero down payment for eligible service members, veterans, and surviving spouses. Manufactured homes must be on a permanent foundation, meet VA property requirements, and adhere to HUD safety standards. Lenders often require a credit score of 620 or higher. The home must be the borrower’s primary residence on land they own.

USDA Loans

USDA loans offer zero down payment for homes in eligible rural areas. For manufactured homes, the unit must be new, permanently affixed, meet HUD standards, and be classified as real estate for tax purposes. Lenders often look for a credit score of 640 or higher, and income limits apply.

General Loan Qualification Requirements

To qualify for a real estate loan on a permanently affixed mobile home, both the borrower and the property must meet specific criteria.

Borrower Eligibility

Borrower eligibility includes credit score, which varies by loan type. Debt-to-income (DTI) ratio is also considered. Stable and verifiable income is required. Down payment requirements vary by loan type.

Property Eligibility

Property eligibility requires a permanent foundation. The age and condition of the home are considered. A HUD certification label and data plate must be present. The borrower must own the land, and an appraisal is required.

The Mobile Home Loan Application Process

The application process begins with pre-qualification or pre-approval. This involves reviewing income, credit, and debt to estimate borrowing capacity.

After pre-qualification, select a lender. Submit the formal loan application with documentation like proof of income, credit history, employment verification, asset statements, and personal identification.

The loan then moves into underwriting. The lender reviews documentation and orders a property appraisal and title search. Loan closing involves signing documents and funding the loan.