How to Buy a Mobile Home: The Full Process

Buying a mobile home offers a distinct path to homeownership, different from acquiring a traditional house. This process involves specific considerations, including home classifications, financing options, and installation requirements. Understanding these differences helps buyers make informed decisions. This guide explores the journey of purchasing a mobile home.

Understanding Mobile Home Types and Locations

A clear distinction exists between “mobile homes” and “manufactured homes.” A “mobile home” refers to a factory-built house constructed before June 15, 1976. A “manufactured home” is built after this date and adheres to the Manufactured Home Construction and Safety Standards, often known as the HUD Code. These post-1976 homes display a red certification label on each transportable section, indicating compliance with federal regulations for structural integrity, fire safety, and energy efficiency.

Where the home is situated is a key aspect of ownership. One common scenario involves placing the home on land the buyer owns, classifying it as real property, similar to a traditional house. This means the home is permanently affixed to a foundation and taxed as real estate. The other common scenario involves leasing a lot within a manufactured home park, where the home remains personal property and the land is rented.

The choice of location affects financial implications and tax treatment. A manufactured home on owned land is subject to real property taxes. If the home is in a leased lot, owners pay monthly lot rent, averaging $200 to $800 nationwide, though this can reach up to $1,000 in certain regions. Lot rent often includes maintenance services and may cover some utilities like water, trash pickup, and sewer. Zoning laws also dictate where manufactured homes can be placed, with regulations varying by local jurisdiction.

Securing Financing

Financing a manufactured home differs from a traditional mortgage due to its classification as personal or real property. For homes on leased land, a common option is a chattel loan. These personal property loans, similar to vehicle loans, have shorter terms, often 15 to 20 years, with higher interest rates and down payment requirements ranging from 5% to 20%.

The Federal Housing Administration (FHA) offers government-backed financing for manufactured homes through its Title I and Title II loan programs. FHA Title I loans can finance a new or used manufactured home, even if the buyer does not own the land, and can also cover lot purchase or home improvements. For these loans, the home must be a primary residence, connected to utilities, and meet FHA guidelines, including being built after June 15, 1976, and displaying a HUD certification label. FHA Title II loans are used when purchasing both the manufactured home and the land it sits on, requiring the home to be permanently affixed to the land. FHA loans feature lower down payments, potentially as low as 3.5% for borrowers with a credit score of 580 or higher.

For eligible veterans and active-duty service members, VA loans offer another financing avenue. These loans do not require a down payment or private mortgage insurance. To qualify for a VA loan, the manufactured home must be classified as real property, permanently affixed to a foundation, and meet specific VA and HUD requirements. Most lenders require the borrower to own the land for VA financing, and the home usually needs to be a double-wide or larger.

Conventional mortgages are available if the manufactured home is permanently affixed to owned land and meets specific criteria. This often involves removing axles, wheels, and the towing hitch, and placing the home on a permanent foundation. Lenders like Fannie Mae and Freddie Mac have programs, such as MH Advantage, that facilitate conventional financing for manufactured homes meeting certain quality and installation standards. Other financing options include personal loans, which may have higher interest rates and shorter repayment periods, and seller financing, offering flexibility in terms.

Finding and Evaluating a Mobile Home

The search for a manufactured home can begin through new home dealers, real estate agents specializing in manufactured housing, and online listing platforms. Direct sales within manufactured home parks or from private sellers are also options. During an initial walkthrough, buyers should look for obvious signs of wear, such as structural issues, water damage, or general deterioration.

A professional inspection is recommended once a promising home is identified. Manufactured home inspections require specialized expertise due to unique construction methods. A comprehensive inspection covers the home’s foundation and anchoring system, ensuring proper tie-downs and skirting. Inspectors also examine structural integrity, including walls, roof, and undercarriage, for damage or deterioration.

The inspection assesses critical systems such as plumbing, electrical, and HVAC, checking for functionality and safety compliance. Issues like exposed wiring, outdated electrical panels, or signs of leaks are noted. The average cost for a professional manufactured home inspection ranges from $200 to $500, varying by location and scope.

Due diligence on the home’s location is important. If the home is in a manufactured home park, review the park’s rules, lot lease agreements, and community fees. Understand potential increases in lot rent, which rise between 3% and 6% annually, for budgeting. For homes on private land, verify local zoning laws to ensure manufactured homes are permitted and confirm access to utilities like water, sewer, and electricity. A purchase offer should outline the proposed price and terms, including contingencies for a satisfactory inspection and financing approval.

Completing the Purchase and Setup

The closing process for a manufactured home finalizes the financial and legal aspects. This includes securing final loan approval and signing documents like the bill of sale, loan agreements, and title transfer paperwork. Buyers should anticipate closing costs, which may include sales tax, title transfer fees, and loan origination fees, ranging from 1% to 3% of the loan amount.

After purchase, transferring the home’s title into the new owner’s name is required. This process is similar to titling a vehicle and is handled through a state’s Department of Motor Vehicles or housing authority. Depending on classification as personal or real property, annual registration may be required, with fees based on the home’s length. If permanently affixed to owned land and declared real property, it receives a one-time real property decal and is subject to property taxes instead of annual registration fees.

Securing specialized mobile home insurance is an immediate post-purchase action. This insurance protects against damage from perils like fire, theft, and natural disasters, and is usually a lender requirement. Policies for manufactured homes are distinct from traditional stick-built homes, reflecting their unique construction.

If the home needs to be moved, hiring licensed transporters and installers ensures safe relocation. Transport costs range from $2,000 to over $10,000 depending on distance and home size. Setup fees, including leveling and securing, can range from $2,000 to $8,000. Once on site, the home requires utility connection to water, sewer, and electrical services, with costs from $6,500 to $30,000. Proper skirting around the base and adequate tie-downs are completed during installation to protect the home and meet safety standards.