How to Get a Mobile Home: Buying and Financing

Mobile homes offer an accessible and more affordable path to homeownership than traditional site-built residences. This guide clarifies the process of purchasing and financing a mobile home, covering home types, placement options, and financial tools.

Understanding Mobile Home Types and Placement

Mobile homes include manufactured homes and modular homes. Manufactured homes are built to the federal Manufactured Home Construction and Safety Standards, known as the HUD Code. This code ensures a uniform national standard for structural integrity, fire safety, and energy efficiency.

Modular homes are built to state and local building codes, similar to site-built homes. They are constructed in sections at an off-site factory and transported to the building site for assembly on a permanent foundation. This classification affects regulation, transport, financing, and titling.

Mobile homes can be placed in a mobile home park or on private land. Parks offer designated spaces, amenities, and community services. Residents pay monthly lot rent for land use and park facilities, but do not own the land.

Placing a mobile home on private land means local zoning and ordinances apply. Property owners must ensure the land is suitable and has access to utilities. Utilities include water (municipal or well) and waste disposal (septic or public sewer).

Financing a Mobile Home

Financing a mobile home depends on whether it is considered personal property or real estate. Chattel loans are common for manufactured homes not permanently affixed to land. These loans treat the home as personal property and are secured by the home itself.

Chattel loan terms range from 10 to 20 years, with interest rates higher than traditional mortgages, 6% to 12%. Lenders require a down payment, 5% to 10% of the purchase price. Eligibility depends on factors like credit scores, 640 or higher, and verifiable income.

Federal Housing Administration (FHA) loans are available for manufactured homes. FHA Title I loans can finance a manufactured home, or a home and lot. For a home only, the maximum loan is $69,678 with terms up to 20 years. For a home and lot, the maximum is $92,904 with terms up to 25 years. These loans require the home to meet safety standards.

FHA Title II loans apply when a manufactured home is permanently affixed to a foundation and considered real estate. These loans follow standard FHA mortgage guidelines, including HUD-compliant permanent foundation requirements. VA loans offer options for eligible veterans to finance a manufactured home, especially when purchased with land and affixed. These loans feature no down payment requirements.

Conventional mortgages are available only when the mobile home is permanently affixed to real estate. The home and land are financed together under a single mortgage. Lenders assess applicants based on credit scores (600 or higher), debt-to-income ratios (below 43%), and a stable employment history. Documentation includes income verification, bank statements, and employment records.

The Mobile Home Purchase Process

Purchasing a new manufactured home involves working directly with a dealer for customization and delivery. New homes come with warranties and the latest features. A pre-owned home can be acquired from a private seller or a used model dealership, at a lower cost, but may require more inspection and repairs.

Locating a suitable mobile home involves exploring options through established dealerships, online listings, and specialized real estate agents. Mobile home parks sometimes have homes for sale directly or can provide information on available units.

Once a home is identified, formulating an offer involves considering the asking price and contingencies. These include a satisfactory home inspection or financing. An earnest money deposit, 1% to 5% of the purchase price, accompanies the offer to demonstrate serious intent.

Professional inspections evaluate the home’s condition. Inspectors assess structural integrity, electrical systems, plumbing, and HVAC units. They also check for water damage, roof leaks, and the condition of the foundation or anchoring system, and provide a report of issues.

A purchase agreement or sales contract formalizes the transaction, outlining the agreed-upon price, financing terms, and contingencies. Buyers should review clauses regarding warranties, delivery schedules, and closing conditions. It specifies the timeline for each stage, including financing approval and final walk-throughs.

Ownership transfer depends on whether the home is classified as personal property or real estate. If personal property, title transfer is handled through a state’s Department of Motor Vehicles. When permanently affixed to land and considered real property, ownership is transferred via a deed recorded with the county recorder’s office. Closing occurs within 30 to 60 days, with all parties signing documents and funds disbursed.

Post-Purchase Setup and Titling

After purchase, arranging for the mobile home’s transportation to its designated site. Professional movers specializing in manufactured homes ensure safe transit. Transportation costs vary, ranging from $1,000 to over $5,000, depending on distance and move complexity.

Upon arrival, the mobile home requires installation and setup on its foundation. This involves placing the home on a stable foundation (e.g., concrete piers, blocks, or a permanent slab). Licensed installers ensure the home meets local building codes and manufacturer specifications, with setup costs ranging from $3,000 to $10,000 or more.

Connecting utilities. Connections include water, electricity, and either a public sewer system or a private septic system. Natural gas or propane may be required for heating and cooking. Obtaining permits and engaging licensed contractors for these connections is mandated by local regulations; costs vary based on infrastructure and local fees.

Adding skirting around the base of the home is a final step, providing aesthetic appeal and protecting the underside. Skirting helps insulate the home, deter pests, and conceal the foundation. Basic landscaping around the home enhances its appearance and assists with drainage.

Titling and registration of the mobile home occurs with state or local authorities. If personal property, it requires titling with the state’s Department of Motor Vehicles and is subject to annual registration fees. For homes permanently affixed to land and classified as real property, an affidavit of affixture or similar document is filed with the county recorder’s office, merging the home’s title with the land’s deed.