The manufactured home loan process is more complex than financing a traditional site-built home.
Not all lenders offer loans for manufactured homes and many who do are not proficient with this loan type. This lack of expertise often results in a less than stellar experience for a manufactured home buyer and the agents involved. These tips should help distinguish the facts from all the noise with the end result a more satisfying home purchase experience. Below are some of the potential issues I have come across in my 30+ years of lending financing hundreds of manufactured homes-- both brand new and resale. In many cases there are solutions to these issues and in some cases it's better to walk away from certain properties. Always remember---if it's very difficult to finance when you buy, imagine how difficult it may be to eventually sell with a buyer facing similar issues and perhaps a less experienced loan officer!
What's the difference between a manufactured home, mobile home and a modular home? Click here for details.
Missing labels (HUD tags) and/or the data plate can be an issue -- click here for more details
A foundation certification by a licensed engineer may be required--more details click here
Manufactured home must have been built on or after June 15, 1976 and were originally built with Hud Tags and a data plate. Some lenders will add additional age rules and only do manufactured homes 15 or 20 years old.
The manufactured home can't be a 2-4 unit property.
Subordinate financing is NOT permitted. (no seller carryback or piggyback loan)
Loan to value on conventional primary residence purchase can't exceed 95% with the exception for a special Fannie Mae program called MH Advantage where the home is built to special construction standards. MH Advantage homes are homes built to Federal Building Code that need to include features like low profile foundation, higher pitch roofs ( 4/12 ) garage or carport, dormers, porch, and drywall throughout the home. When a home is built to the MH Advantage standards, a sticker will be applied to the home that identifies the home as a MH Advantage home.
FHA maximum LTV is the standard 96.5%.
VA will allow zero down--however some VA lenders have underwriting overlays (special more restrictive rules) and they may require a downpayment on a manufactured home.
USDA guaranteed loan program -as of May 2025, USDA will allow existing manufactured homes to be eligible nationwide, expanding the previous limited state pilot program. However, there is currently a 20 year age limit from the date of the new loan closing for a manufactured home to be eligible. Keep in mind some lenders will have overlays and not allow manufactured on USDA, or they may require either a downpayment or have stricter property condition rules.
Second or vacation homes are allowed on conventional with a minimum of 10% down payment for Fannie Mae and 15% for Freddie Mac. FYI--the interest rate and PMI on this scenario will be higher than a normal owner occupied purchase.
Manufactured investment property is not eligible for standard conventional or government loan financing.
Homes in mobile home parks are not eligible for "typical" loan programs. I do have a speciality lender for this type of property as well as manufactured homes located on private property that are not on a permanent foundation. Contact me for details.
Manufactured homes in approved condo projects may be eligible under certain conditions. Not many lenders will do this property type however.
Manufactured homes in PUDs (planned unit developments) with a number of single wide manufactured homes can be a problem.
Foundation skirting required-- Non-load bearing skirting must be permanently attached to concrete, masonry or wood backing. Skirting must allow ventilation to the space. FHA requires perimeter enclosures to be constructed of concrete, masonry or treated wood. Vinyl skirting alone is not acceptable.
Any structural modifications to an existing manufactured home must be approved by a licensed professional engineer or the local building department (need permits). Click for more details.
Land typically must be owned by the buyer/borrower. Leasehold interest or manufactured condo projects pose a problem and many lenders will not touch these scenarios. Any manufactured condo project must be approved by Fannie or FHA.
Second moves of the manufactured home --are almost always a deal killer. Homes installed at one location and then relocated and installed at a second location are ineligible for all loan programs except for VA. VA will require additional plumbing, electrical and roof inspections if a second move. FYI --- Only a handful of VA lenders will allow a second move like this and many will have stricter overall rules than a typical VA loan.
Flood insurance required on the property. On FHA if the manufactured home requires flood insurance it can be a deal killer. Flood map amendments or elevation certificates are required--expensive and not always successful.
Repair escrows - lender required property repairs to be completed after closing are not typically allowed on manufactured conventional loans. Repair escrows may be allowed on FHA, VA and USDA depending on the lender. Repair escrows for foundation installation or retrofits are typically not allowed.
Appraiser must have a minimum of 2 manufactured sold comps in the appraisal report on a multi wide home. For single wide homes--when a lender allows this property type--at least one sold comp must be a single wide home. If an appraiser can't include manufactured sold comps then nearly every lender will not lend on the property.
Tow hitch and running gear must be removed from the property.
Second dwelling on the property
A second additional vacant manufactured home located on a property being used strictly for storage with an inoperable kitchen typically may remain if it does not pose a health or safety risk. Financing problems may occur when this additional manufactured is hooked up to utilities or septic/sewer.
ADUs (accessory dwelling unit) can pose problems. Fannie Mae does not allow ADUs when the main home is a manufactured. Freddie will allow an ADU when the main home is a manufactured however the ADU cannot be a manufactured home. Many lenders will not accept this scenario.
FHA allows ADUs --sometimes even a second manufactured, however this is a problematic transaction and both manufactured homes must comply with FHA rules. Many lenders will not touch this scenario.
If you're considering a manufactured home, don't hesitate to reach out to us for personalized assistance. Our team at Lend4less Home Loans is here to guide you through the loan process and help you find the perfect financing solution for your new home. Contact us at 209-602-4900 or Dennis@lend4less.com for more information.