How to Buy a Used Manufactured Home

A manufactured home is built in a factory to federal construction and safety standards set by the Department of Housing and Urban Development (HUD). Unlike modular homes, which adhere to state and local building codes, manufactured homes can be placed on various foundations and often retain a permanent steel chassis. Opting for a used manufactured home offers an accessible and often more affordable path to homeownership.

Key Considerations Before Searching

Understanding land ownership is crucial, as it impacts the financial structure and long-term value of a manufactured home. A home can be on leased land, typically within a manufactured home park, or on land the homeowner owns. On leased land, the homeowner pays monthly lot rent, which can range from $200 to $1,200 nationwide, averaging $400 to $500. In this scenario, the home is personal property, similar to a vehicle, and may not appreciate like real estate.

If the manufactured home is permanently affixed to owned land, it can be converted to real property, similar to a site-built home. This conversion involves removing the home’s vehicle title and recording it as real estate with the county. This classification means the property is subject to real estate taxes, rather than personal property taxes, and may offer greater appreciation. Understanding the age and condition of a used manufactured home is also crucial, as homes built before June 15, 1976, may not meet current HUD standards and can be more difficult to finance. Older homes may require more extensive repairs or upgrades, influencing financing and insurance availability.

Zoning regulations dictate where manufactured homes can be placed on private land and what foundation requirements must be met. These regulations ensure compliance with local building and safety standards. When budgeting, consider the purchase price and ongoing costs such as lot rent (if applicable), utilities, insurance, and property taxes. If the home needs to be relocated, transport costs can range from $1,000 to over $25,000, plus setup fees typically adding $3,000 to $4,000.

Locating and Assessing Potential Homes

The search for a used manufactured home can begin through specialized dealerships, real estate agents, online marketplaces, classified ads, or direct inquiries at manufactured home parks. When reviewing listings, look for clear photographs, detailed descriptions, the home’s age, location, and whether land is included. Pay attention to the home’s Vehicle Identification Number (VIN) or HUD tag number for compliance and financing.

Once a potential home is identified, a thorough on-site assessment is essential. During a visit, examine the exterior for signs of wear or damage to the siding, roofing, and windows. Inspect foundation elements, such as skirting and tie-downs, for stability and integrity. Inside, check walls, floors, and ceilings for water damage, soft spots, or structural concerns.

Evaluate major utility systems, including plumbing, electrical, and HVAC, for functionality and safety. Request any available maintenance records or previous inspection reports. Hiring a qualified inspector with manufactured home experience is highly recommended, especially for older models, to identify hidden issues. A professional inspection typically costs between $150 and $650, averaging around $400, and is a worthwhile investment to ensure the home is safe.

Securing Financing

Financing a used manufactured home differs from traditional site-built homes, particularly if the land is not part of the purchase. A common option for homes not on owned land is a chattel loan, a personal property loan secured by the home. Chattel loans typically require a FICO credit score around 575 and may require a down payment as low as 5%. While accessible for homes on leased land, they often have shorter repayment terms, typically 20 to 23 years, and potentially higher interest rates, sometimes 0.5% to 5% above traditional mortgages.

Government-backed options like Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans have specific requirements. FHA loans, including Title I (home-only) or Title II (home and land), generally require the home to be built after June 15, 1976, and display a HUD Certification Label. For FHA Title II loans, the home must be permanently affixed to a foundation on owned land and meet minimum size requirements, often 400 square feet. VA loans for eligible veterans require the home to be on owned land, permanently affixed, classified as real property, and often a double-wide or larger (minimum 700 square feet). While VA loans may offer no down payment, some lenders may still require a minimum of 5%.

Conventional loans are available if the manufactured home is permanently affixed to land owned by the buyer and meets specific criteria, such as being built after June 15, 1976, and having a minimum size of 400 to 600 square feet. These loans typically require a minimum credit score of 620 and a down payment that can be as low as 5%, though 20% or more may be needed to avoid Private Mortgage Insurance (PMI). Lenders assess the borrower’s creditworthiness, including their credit score and debt-to-income ratio, to determine eligibility. Obtaining pre-approval for a loan before actively searching can provide a clear understanding of purchasing power and streamline the buying process.

The Purchase and Titling Process

After identifying a suitable home and understanding financing options, formulate an offer and navigate negotiations. The offer should clearly state the proposed purchase price, any inclusions like appliances or detached structures, and important contingencies, such as a satisfactory professional inspection and securing financing approval. A clear, written purchase agreement is essential, outlining all terms, conditions, and timelines, protecting both buyer and seller.

Upon acceptance of an offer, a due diligence period typically commences. During this time, the buyer can arrange for an appraisal and a final professional inspection. A title search is also conducted to ensure no undisclosed liens or ownership disputes. The process for transferring ownership, or titling, depends on whether the manufactured home is being purchased as personal property or as real property.

If the home is considered personal property, often on leased land, the title transfer process is similar to that of a vehicle and is typically handled through the state’s Department of Motor Vehicles (DMV) or an equivalent state agency. This involves transferring the existing title into the buyer’s name.

If the manufactured home is permanently affixed to land owned by the buyer and classified as real property, the ownership transfer involves a deed recorded with the county, much like a traditional home sale. The closing marks the final stage, where all documents are signed, funds are transferred, and the buyer receives the keys and official title or deed. Following the purchase, necessary post-acquisition steps include arranging for insurance coverage and coordinating utility hook-ups. If the home is being moved, organizing its transport and setup at the new location, including permits and utility reconnections, becomes a key consideration.