Guide to Manufactured Homes:

Editorial Staff

Understanding Financing and Insurance

Guide to Manufactured Homes: Understanding Financing and Insurance

Contrary to common belief, obtaining financing for a manufactured home is not more challenging than securing a loan for a traditional site-built structure. In fact, the process of applying for a loan and obtaining insurance for a manufactured home closely resembles that of a conventional home purchase.

Understanding the Basics

Numerous financial institutions, ranging from national lenders to local credit unions, offer specialized lending programs tailored to factory-built housing buyers. Companies such as 21st Mortgage Corporation, Triad Financial Services, and C.U. Factory Built Lending, among others associated with the FMHA, specialize in financing for manufactured and modular homes. While specific down payment requirements and loan terms vary among lenders, it's typical within the manufactured housing sector to encounter down payments ranging from 5 to 10 percent, loan terms spanning 15 to 30 years, and reasonable insurance rates.

An essential consideration in financing a manufactured home is that if it will be situated on leased land, you may not qualify for a traditional mortgage. In such cases, the home is typically titled as personal property and financed through a chattel loan. Qualifying for a conventional mortgage is usually feasible only if the factory-built home is placed on a permanent foundation on land you own.

Several factors influence the financing and insurance processes, including:

• Credit history
• Income history
• Employment status
• Debt-to-income (DTI) ratio
• Size of the down payment
• Home cost

 

Today's buyers of factory-built homes enjoy a diverse range of financing options. Retailers are well-versed in home financing and can offer a list of lending institutions—both national and local—that can assist in securing financing. Alternatively, buyers can independently explore financing options.

Various financing options are available, including personal property financing (home only), conventional loans, VA loans, and FHA loans with terms extending up to 30 years when the home is considered real property. If you opt to purchase land along with the home, bundling the financing for both is an option. Lenders actively participate in financing factory-built homes, as studies indicate that these homes appreciate in value similar to conventional homes. Additionally, obtaining insurance for your home is straightforward, with numerous reputable insurance companies offering coverage.

FMHA-affiliated lenders serve as valuable resources for information regarding financing manufactured homes, offering competitive rates for both land-home packages and leased land arrangements.