What to Know When Buying a Mobile Home

Buying a home is a significant financial commitment, and purchasing a mobile home involves unique considerations compared to traditional houses. This guide provides an overview of classifications, ownership models, financing, and due diligence to help prospective buyers make informed decisions.

Mobile Home Classifications and Terminology

Factory-built homes are categorized by construction standards and production date. A “mobile home” refers to a dwelling built before June 15, 1976, when the U.S. Department of Housing and Urban Development (HUD) established federal building standards. Homes built after this date, adhering to the HUD Code, are termed “manufactured homes.” Modular homes are another factory-built category, complying with local and state building codes like site-built homes, and are typically assembled on a permanent foundation.

Manufactured homes are classified by their width and number of sections. A “single-wide” home consists of one long section, typically 13-16 feet wide and up to 90 feet long, offering 800-1,200 square feet. “Double-wide” homes join two sections on-site, providing a wider footprint, usually 20-36 feet wide and up to 90 feet long, with 1,000-2,300 square feet. “Triple-wide” homes combine three or more sections, offering expansive living spaces, often exceeding 2,000 or 3,000 square feet. Classification influences ownership aspects, including financing and placement restrictions.

Land Ownership and Mobile Home Parks

Mobile home ownership differs based on land ownership. One scenario involves placing the home on land the buyer owns, such as private property. When both the home and land are owned, the property may be taxed as real estate, similar to a traditional house. This model provides more freedom for property use and modifications, and the property might appreciate.

Another option is leasing a lot within a mobile home park. Here, the buyer owns the home but pays “lot rent” for land use. Lot rent varies significantly, typically $200-$1,200 monthly, with a national average around $400-$500. Higher costs occur in desirable locations or communities with extensive amenities. This fee often covers water, sewer, trash removal, and common area maintenance.

Mobile home parks have specific rules and regulations set by management. These rules cover pet policies, age restrictions, and standards for home maintenance and exterior modifications. Lease agreements, which can be month-to-month or longer-term, outline tenancy terms, including rent increases and community fees. Understanding these rules and the lease agreement is essential before purchasing in a park setting.

Financing and Other Costs

Mobile home financing differs from traditional mortgages. Conventional mortgages generally do not apply unless the home is permanently affixed to owned land and converted to real property. For many purchases, especially when land is leased, a “chattel loan” is common. These loans treat the home as personal property, similar to an automobile, with shorter repayment terms, often 10-25 years. Chattel loan interest rates are generally higher than traditional mortgages, sometimes 5.99%-12.99%, and can be 0.5%-5% higher than conventional rates.

Government-backed loan programs are available for manufactured homes meeting specific criteria. The Federal Housing Administration (FHA) offers Title I loans for manufactured homes, with limits for the home only or a home and lot combination. FHA Title II loans typically require the home to be placed on borrower-owned land and permanently affixed, classifying it as real property. VA loans are available for manufactured homes built after June 15, 1976, if securely attached to a permanent foundation on borrower-owned land and meeting minimum square footage.

Beyond the purchase price and financing, several other costs are associated with mobile home ownership. If the home is located in a park, lot rent and potential community fees are ongoing expenses. Mobile home insurance is specialized, typically costing $700-$2,000 annually, varying by location, age, and condition.

Property taxes for mobile homes depend on their classification; if not permanently affixed to owned land, they may be subject to personal property taxes, often an annual registration fee. If the home is new or needs relocation, transportation and setup costs can range from $3,500 to $18,000, influenced by distance, home size, and the need for permits, site preparation, and utility hookups. Buyers should also account for utility connection fees and standard closing costs associated with the loan.

Pre-Purchase Due Diligence

Thorough due diligence is important before finalizing a mobile home purchase. A professional inspection assesses the home’s structural integrity, foundation, tie-downs, plumbing, electrical systems, HVAC, roof, and skirting. Inspections typically cost $300-$600. The inspection helps identify issues requiring repairs or further negotiation.

Verifying the home’s title and ownership is important. Unlike traditional homes with deeds, mobile homes might have a vehicle title, depending on classification and if permanently affixed to land. Ensure the title is clear of liens or outstanding financial claims.

If in a park, a comprehensive review of park rules and the lease agreement is essential. These documents outline restrictions on modifications, pet policies, guest rules, and clauses regarding resale or future rent increases. Understanding these terms before signing ensures alignment with the buyer’s lifestyle and plans.

If placing the home on private land, check local zoning laws and regulations, and obtain necessary permits for placement and utility connections. A personal walk-through is advisable to assess its general condition, appliance age, and any visible repair needs.