Can You Buy a Mobile Home and Land Together?

Purchasing a manufactured home along with the land it occupies offers a more affordable path to homeownership compared to conventional housing options. However, this type of purchase involves unique considerations regarding property classification, financing mechanisms, and procedural steps. This article explores the integration of manufactured homes with land, available financing, and practical steps for a successful purchase.

Understanding Mobile Home and Land Integration

Manufactured homes are factory-built residences constructed to federal standards established by the U.S. Department of Housing and Urban Development (HUD) after June 15, 1976. These homes begin as personal property, much like a vehicle, possessing a title. When a manufactured home is placed on a permanent foundation on land the owner also possesses, its legal status can change from personal property to real property.

This reclassification is achieved through “de-titling” or “title elimination,” which legally marries the home to the land. De-titling involves surrendering the home’s original title to the appropriate state agency and recording an “affidavit of affixation” with the county’s land records office. This step ensures the manufactured home is treated as an integral part of the real estate. The change in classification affects how the property is taxed, making it subject to real estate property taxes rather than personal property taxes or vehicle registration fees.

When purchasing a manufactured home and land together, the land is owned outright, often referred to as “deeded land” or “fee simple,” providing full ownership rights to both the structure and the underlying parcel. This differs from leasing a home within a manufactured home park, where the land is not owned by the homeowner. Proper affixation to a permanent foundation and the de-titling process are prerequisites for most traditional mortgage financing options.

Financing Your Mobile Home and Land Purchase

Financing a manufactured home and land package involves specific loan types. Traditional mortgage options become available once the manufactured home is permanently affixed to the land and de-titled as real property. Lenders require the home to be built to HUD standards, meaning it was constructed after June 15, 1976, and displays a HUD certification label.

Federal Housing Administration (FHA) Title II loans are a common option, offering favorable terms. These loans require the home to have a minimum living area of 400 square feet and be installed on an approved permanent foundation. FHA loans have lower down payment requirements, often 3.5% for borrowers with a credit score of 580 or higher.

Veterans Affairs (VA) loans provide another avenue for eligible service members, veterans, and surviving spouses, often requiring no down payment. For manufactured homes, VA loans stipulate the home must be permanently affixed to a foundation and have a minimum of 700 square feet. VA loans do not finance manufactured homes moved from their original installation site.

Conventional mortgages, offered by private lenders, are also available for manufactured homes on owned land. Down payment requirements vary, with a typical minimum of 5%. A 20% down payment often avoids Private Mortgage Insurance (PMI). Lenders typically require a minimum credit score of 620 for conventional financing.

United States Department of Agriculture (USDA) loans, for eligible rural areas, can also finance manufactured homes with land. These loans offer 100% financing, meaning no down payment. Manufactured homes financed with USDA loans must be new units (built within 12 months, never installed or lived in) and permanently affixed to a foundation. USDA loans have income and property location requirements.

Navigating the Purchase and Ownership Process

The process of purchasing a manufactured home with land involves several distinct stages. Buyers should identify suitable properties, often including manufactured homes already situated on deeded land. Engaging a real estate agent experienced in these transactions can be beneficial for finding appropriate listings and navigating market specifics.

Once a potential property is identified, making an offer and entering into a purchase agreement commences the due diligence phase. This period involves various inspections and verifications. A professional home inspection assesses the manufactured home’s structural integrity, systems, and overall condition.

A land survey confirms property boundaries and identifies any encroachments. A title search verifies clear ownership and ensures no undisclosed liens or encumbrances. Zoning regulations and local building codes should also be reviewed to confirm the property’s compliance and suitability.

The closing process for a manufactured home and land package involves transferring legal ownership of both the land and the home. This includes recording the land deed and ensuring the manufactured home’s title has been properly de-titled and recorded as real property. The involvement of an attorney or a title company is customary to facilitate these legal transfers and protect the buyer’s interests.

After the purchase, securing appropriate insurance for the manufactured home on its own land is important. Manufactured home insurance policies are similar to traditional homeowners insurance, providing coverage for the physical structure, personal belongings, and liability. Lenders require proof of insurance as a condition of the loan. Coverage protects against perils such as fire, wind, hail, and theft, offering financial protection for the investment.