How to Buy Land and a Manufactured Home

For many, a manufactured home offers an accessible path to homeownership, particularly when combined with land ownership. This process involves selecting a residence and acquiring suitable property for its placement. It merges real estate acquisition with the purchase of a factory-built home, creating a distinct pathway to homeownership. This guide clarifies the steps involved in this specific real estate endeavor.

Understanding the Components

A manufactured home is a factory-built dwelling constructed to the Manufactured Home Construction and Safety Standards, also known as the HUD Code, effective in 1976. This distinguishes them from older “mobile homes” built before this code and from “modular homes,” which are built to local or state building codes. These homes are transported in sections to a building site, where they are installed on a permanent foundation.

Acquiring land for a manufactured home requires considering several factors. Zoning regulations dictate whether a manufactured home is permitted, often specifying minimum lot sizes or appearance requirements. Utility access is important, encompassing connections to water (municipal or private well) and wastewater disposal (public sewer or septic tank). Soil quality is another important aspect, particularly for septic systems, often requiring a “perk test” to determine the ground’s ability to absorb wastewater. The topography of the land influences site preparation costs, with flatter, easily accessible plots generally being more economical to develop.

Financing Your Purchase

Financing the acquisition of land and a manufactured home involves distinct approaches, depending on whether purchases are separate or combined. For land-only purchases, options include raw land loans from banks or credit unions, which often require larger down payments and have shorter repayment terms than traditional mortgages. Owner financing, where the land seller directly provides the loan, can also be an alternative, offering more flexible terms.

If the manufactured home is not permanently affixed to land, it is considered personal property, or “chattel.” A chattel loan is typically used, resembling an auto loan with shorter terms and higher interest rates than real estate mortgages. This financing is common when the home is placed in a leased community or on land not owned by the homeowner.

Combining the land and home into a single financing package, treating the manufactured home as real estate, is a common method. This requires the home to be permanently affixed to a foundation on owned land. Conventional mortgages can be secured for manufactured homes that meet specific criteria for permanent foundations and titling. Government-backed options, such as Federal Housing Administration (FHA) Title II loans, offer competitive rates and lower down payments, typically around 3.5%, for manufactured homes on approved permanent foundations. Department of Veterans Affairs (VA) loans provide financing for qualified service members and veterans, often with no down payment required, for manufactured homes on owned land with a permanent foundation. These combined loans usually involve a single appraisal of the combined land and home value. Lenders assess creditworthiness, income, and debt-to-income ratios to determine eligibility.

The Acquisition Process

The acquisition process for buying land and a manufactured home involves distinct but coordinated steps. Identifying suitable land begins with researching local zoning laws and deed restrictions to ensure manufactured homes are permitted and to understand any requirements regarding size or appearance. Engaging a real estate agent experienced with land transactions can be beneficial for locating properties and navigating local regulations.

Once a potential land parcel is identified, due diligence is important before making an offer. This includes:
Ordering a land survey to confirm boundaries and easements.
Conducting environmental checks if there are concerns about contamination.
Performing a thorough title search to uncover any liens or ownership disputes.

An appraisal specific to the land helps determine its fair market value. The land closing process then follows standard real estate procedures, transferring ownership to the buyer.

Simultaneously, selecting and purchasing the manufactured home involves visiting dealerships to explore models, floor plans, and customization options. After choosing a home, a purchase agreement is signed, often requiring an initial deposit. This agreement typically outlines the home’s specifications, chosen upgrades, total price, and estimated delivery timelines. Coordinating the home order with the land acquisition is important to ensure the site will be ready for delivery and installation when the home is manufactured.

Site Preparation and Home Installation

After acquiring the land and purchasing the manufactured home, the next phase involves preparing the site and installing the home. Obtaining necessary permits is an important initial step, typically involving applications for:
Building permits
Electrical permits
Water and sewer or septic system permits from local authorities

Specific requirements and fees vary by jurisdiction.

Site work commences with clearing the land of obstructions, followed by grading for proper drainage and a level surface for the foundation. Excavation is then performed for the chosen foundation type and utility trenches. A permanent foundation is required for a manufactured home to be classified as real property. Common types include concrete slabs, pier and beam systems, or full crawl spaces.

Utility hookups are then established, connecting the home to necessary services. This involves:
Linking water lines from a municipal supply or well.
Connecting to a public sewer system or installing a septic tank and drain field.
Running electrical lines from the power grid.

Additional utilities like natural gas or propane, and communication lines for internet and telephone, are also installed. Finally, the manufactured home is transported to the site, maneuvered onto the prepared foundation, leveled, and securely anchored. After the home is set and utility connections are complete, local building officials conduct final inspections to ensure compliance with all codes and approved plans before granting occupancy.

Titling and Finalizing Ownership

Once the manufactured home is installed on its permanent foundation, the final phase involves legally combining the home with the land to establish it as real property. This process, known as “affixation,” is important for both financing and future resale. It typically involves filing specific documents with state or local authorities, such as the Department of Motor Vehicles or the state’s manufactured housing division, to surrender the home’s personal property title.

Upon successful completion of the affixation process, the home’s status is legally converted from personal property to real property. This change is then reflected on the property deed, integrating the manufactured home as part of the land it sits on. The property deed, along with the recorded affidavit of affixation, officially demonstrates unified ownership.

With the home now considered real property, it becomes subject to local property taxes, assessed based on the combined value of the land and the affixed manufactured home. Property tax rates and assessment methods vary by jurisdiction, and these taxes are typically paid annually or semi-annually. Homeowner’s insurance is also necessary for the combined property, providing coverage for perils such as fire, theft, and liability, similar to policies for site-built homes. This ensures the investment is protected and is often a requirement for mortgage lenders.