Dollars and Sense: The Ins and Outs of Financing Your Manufactured Dream Home

Manufactured homes aren't just places to live; they are gateways to modern, sustainable, and affordable living. The variety of financing options available today reflects the industry's commitment to making these homes accessible to a broader audience. Explore the diverse world of manufactured home financing with our concise guide to the most preferred loan types tailored to your specific needs. Please note that terms, interest rates, conditions, and availability are subject to change, with the possibility of new programs in the future.

Home Only Purchase Loans: Ideal for new manufactured homes not permanently attached to real estate, home-only loans (chattel) are commonly used in land-lease communities or manufactured home parks. These loans offer efficiency, simplicity, and a quicker processing time, requiring a minimum down payment of 5 to 20 percent. Interest rates typically range 2 to 5 percent higher than mortgage loans, with maturity terms spanning 15 to 20 years.

Land/Home Purchase Loans: Combining the purchase of property with a new manufactured or modular home provides significant financing advantages. Involving real property allows for better mortgage arrangements through conventional loans, potentially saving thousands compared to chattel loans. While requiring more documentation, the benefits often outweigh the additional effort for the buyer.

Land-in-lieu Financing: Hybrid loans that finance the home as a chattel loan combined with a real estate loan secured by the property where the home is sited. This option is commonly used when refinancing owned land with equity to be used in lieu of the manufactured home down payment or for an outright purchase.

Construction Loans: Available from traditional manufactured home lenders, construction loans follow a process similar to those for site-built homes. It acts as a temporary bridge to a permanent loan, often combined with an FHA or conventional loan. Payments are made to contractors, including the seller, based on an agreed-upon completion schedule. Streamlining the process, some lenders offer a one-time construction loan with the first draw scheduled upon the manufactured home's delivery.

FHA Loans: Suitable for retailers well-versed in the program's nuances and adept at navigating governmental regulations. It's recommended to prioritize conventional loans before exploring FHA options due to their complexity.

 

Please note that terms, interest rates, conditions, and availability are subject to change, with the possibility of new programs in the future.