Can You Get a 30-Year FHA Loan on a Manufactured Home?

The Federal Housing Administration (FHA) offers mortgage insurance programs designed to make homeownership more accessible for a wider range of individuals. These programs help approved lenders provide loans with favorable terms, particularly for those who might face challenges qualifying for conventional mortgages. Manufactured homes represent a significant segment of affordable housing, offering a pathway to homeownership for many. Understanding FHA financing for these homes is important for prospective buyers.

Manufactured Home Eligibility Requirements

For a manufactured home to be eligible for FHA financing, including a 30-year loan term, it must meet specific criteria. The home must have been built after June 15, 1976, and comply with Department of Housing and Urban Development (HUD) Manufactured Home Construction and Safety Standards, indicated by a visible HUD certification label on each section. The living area must also be at least 400 square feet.

A permanent foundation is an FHA requirement for manufactured homes. It must be constructed of durable materials like concrete, treated wood, or mortared masonry, and designed to permanently support the structure. An engineering certification from a licensed professional engineer or registered architect is required to confirm the foundation meets HUD’s Permanent Foundations Guide for Manufactured Housing (HUD-7584). Key elements include piers on reinforced concrete footings below the frost line, a permanent perimeter enclosure, and adequate tie-downs anchored to the footings.

The land must also meet specific FHA guidelines. The home must be placed on land owned by the borrower or subject to a long-term leasehold interest. Converting the home’s title from personal property to real property is necessary for FHA loan eligibility.

The home’s condition is assessed during appraisal to ensure it adheres to FHA minimum property standards. The site must have permanent access to FHA-approved water and sewer facilities, and all-weather road access. FHA loans for manufactured homes can cover both the home and the land. Homes built before June 15, 1976, are not eligible for FHA financing.

Borrower Qualification Criteria

Individuals seeking FHA financing must satisfy specific financial criteria to qualify for the loan. FHA loans feature more lenient credit requirements compared to conventional mortgages. Borrowers need a minimum FICO credit score of 580 for the lowest down payment of 3.5%. If a credit score falls between 500 and 579, a 10% down payment is required.

Lenders evaluate a borrower’s debt-to-income (DTI) ratio, which compares monthly debt payments to gross monthly income. FHA guidelines allow a DTI ratio up to 43%. Some lenders may approve higher ratios, up to 50% or 57%, in certain circumstances, especially if the borrower demonstrates compensating factors like substantial cash reserves or stable housing payments.

Stable employment and income are important for FHA loan qualification. Lenders verify employment for the most recent two years to assess income consistency. While continuous employment with the same employer is not strictly required, changes within the same line of work showing income advancement are viewed favorably. Borrowers must occupy the manufactured home as their primary residence, not as an investment property or second home.

FHA loans require two types of Mortgage Insurance Premiums (MIPs): an upfront premium and an annual premium. The upfront MIP is a one-time payment of 1.75% of the loan amount, which can be paid at closing or financed into the loan. The annual MIP is a recurring charge, about 0.55% of the loan amount for most borrowers, divided into monthly installments. This annual MIP may be required for the entire loan term if the down payment is less than 10%, or for at least 11 years if the down payment is 10% or more.

The Loan Application and Closing Process

Securing a 30-year FHA loan for a manufactured home begins with finding an FHA-approved lender experienced in manufactured home financing. Not all FHA-approved lenders handle these loans, so seek out those with expertise. The Department of Housing and Urban Development (HUD) website provides resources to search for FHA-approved lenders.

Once a suitable lender is identified, the initial step involves pre-approval, where the lender assesses a borrower’s financial standing. Following pre-approval, the application process requires submitting financial documents. These include recent pay stubs (past 30 days), W-2 statements or 1099s (last two years), and bank statements (most recent two months) to verify income and assets.

The lender’s underwriting department reviews all submitted documentation to assess the loan’s risk. An FHA-approved appraiser conducts an appraisal to ensure the home meets FHA minimum property standards. This includes verifying the home’s structural integrity and confirming the permanent foundation through a professional engineering certification.

If the application is approved, the process moves toward closing. This final stage involves signing legal documents, including the mortgage note and deed. Borrowers pay closing costs, ranging from 3% to 6% of the home’s purchase price, covering fees like origination, appraisal, title insurance, and prepaid items such as property taxes and homeowner’s insurance. Upon closing, loan funds are disbursed, and the deed is recorded, transferring ownership to the borrower.