Does FHA Allow Single-Wide Manufactured Homes?

The Federal Housing Administration (FHA) supports homeownership by insuring mortgages provided by FHA-approved lenders. This government backing reduces risk for lenders, making home loans more accessible to a broader range of buyers. Many prospective homeowners inquire whether FHA financing extends to manufactured homes, including single-wide units. The FHA does allow loans for manufactured homes, including single-wides, provided these properties meet specific and comprehensive criteria. These requirements ensure the home’s safety, structural integrity, and long-term viability as real property.

FHA Manufactured Home Eligibility

To qualify for FHA financing, manufactured homes must adhere to specific eligibility requirements established by the Department of Housing and Urban Development (HUD). A primary condition is that the home must have been built on or after June 15, 1976, which is the effective date of the Manufactured Home Construction and Safety Standards, often referred to as the HUD Code. This federal regulation ensures the home meets standards for design, construction, durability, and safety, including fire safety and energy efficiency. Evidence of this compliance is typically found on a HUD certification label, which must be affixed to each section of the home.

The manufactured home must be classified as real property, meaning it is permanently affixed to a foundation and taxed as real estate. This classification distinguishes it from personal property. The home must also have a minimum floor space of 400 square feet and be designed as a one-family dwelling. The FHA requires that the home has not been moved from its original site, except for initial transport from the manufacturer or dealer to its permanent foundation. The home must also serve as the borrower’s primary residence.

Property and Site Requirements

Specific requirements pertain to the physical installation of a manufactured home and the land it occupies for FHA loan eligibility. The home must be placed on a permanent foundation that complies with HUD standards, as outlined in the Permanent Foundations Guide for Manufactured Housing (HUD-7584). This foundation must be constructed of durable materials such as concrete, mortared masonry, or treated wood, and designed to withstand various forces like wind and settling. Essential components include reinforced concrete footings below the frost line, solid piers, and a permanently supported perimeter wall or skirting that encloses the foundation to prevent vermin and water entry.

The home’s towing hitch, wheels, and axles must be removed to ensure its permanent status. Adequate tie-downs anchored to the footings are also required to resist horizontal and uplift forces. The borrower must own the land on which the manufactured home is permanently affixed, as leased land is not acceptable for FHA manufactured home loans under the Title II program. The property must have permanent connections to all utilities, including water, sewer, and electricity. The overall condition of the home is also assessed, requiring it to be safe, structurally sound, and free from defects or hazards.

Preparing for an FHA Loan

Prospective borrowers should begin by understanding the financial qualifications for an FHA manufactured home loan. While FHA guidelines are more flexible than conventional loans, lenders may have their own overlays. A minimum credit score of 500 may be accepted with a 10% down payment, but a score of 580 or higher is required for the lowest 3.5% down payment.

The debt-to-income (DTI) ratio is another important financial metric, which compares monthly debt payments to gross monthly income. FHA guidelines allow for a maximum housing expense-to-income ratio of 31% and a total DTI ratio of 43%. With compensating factors such as a strong credit history or significant cash reserves, some lenders may approve DTI ratios up to 50% or even 57%. Borrowers will need to gather documents, including proof of income like recent pay stubs and tax returns, bank statements to verify assets, and government-issued identification. The manufactured home must also have its HUD certification labels and data plate available for verification during the loan process.

The FHA Loan Process

After preparing all necessary documentation and understanding the financial requirements, the FHA loan process for a manufactured home begins with submitting a complete application to an FHA-approved lender. Once the application is submitted, the lender initiates the underwriting phase, which involves a comprehensive review of the borrower’s financial qualifications and the property’s eligibility. This includes verifying income, assets, and credit history to ensure they meet FHA and lender standards.

The FHA appraisal specifically evaluates the manufactured home to confirm it meets FHA property and structural requirements. This appraisal includes an inspection to ensure the home is permanently affixed to the land and connected to utilities. For manufactured homes, a certified engineer or architect must provide a foundation certification, attesting that the permanent foundation complies with HUD’s Permanent Foundations Guide for Manufactured Housing. Borrowers should also consider FHA mortgage insurance premiums (MIP). Upon successful underwriting and appraisal, the loan moves to closing, where all final documents are signed, funds are disbursed, and title to the property is transferred to the borrower.