How can I get a loan to buy a manufactured home? Part 1: HUD FHA Insured Loans and First-time Homebuyer Programs
If you are purchasing a manufactured home from a lot or using a real estate agent, they can help you arrange financing. If you are buying a trailer, with or without land or land to put a manufactured home on directly from the owner, you have to find a way to finance it.
There are a lot of reasons to consider a HUD FHA Insured Loan. There are often first-time homebuyer programs and other programs to make it easier to buy your own home.
HUD’s special homebuying programs
- Good Neighbor Next Door (formerly known as Teacher/Officer/Firefighter Next Door)
- Homeownership for public housing residents
- Indian Home Loan Guarantee Program (Section 184)
Who is HUD?
HUD, the Department of Housing and Urban Development is the Federal agency that works with housing. FHA, Federal Housing Administration is part of HUD. FHA provides mortgage insurance on home loans. Mortgage insurance protects the lender from default mortgages. FHA does not lend money. FHA insures the loans that are made by a lending institute (bank or mortgage company). If you qualify, sometimes these loans have lower interest and a lower down-payment.
There are two ways HUD’s FHA program can help you get a loan to buy a manufactured home. For Title I insured loans, you don’t have to buy land. The manufactured home can be in a manufactured home community or mobile home park. Title II loans can only be used to purchase the home and the land it sits on jointly. The manufactured home cannot be in a manufactured home community or mobile home park.
Title I
Title I insures mortgage loans made by private lending institutions to finance the purchase of a new or used manufactured home that will be your principal place of residence. You must meet credit requirements (have decent credit).
A Title I loan may be used for the purchase or refinancing of a manufactured home, a developed lot on which to place a manufactured home, or a manufactured home and lot in combination. The home must be used as the principal residence of the borrower.
The buyer must agree to make the required downpayment and meet credit guidelines. The interest rate is negotiated between the borrower and the lender. The borrower pays an upfront insurance premium, along with an annual premium based on the declining balance of the loan. The maximum loan term is 20 years and 32 days for a single unit manufactured housing loan.
As of 2023, this is the most HUD Title 1 will insure a lender to give you to purchase a manufactured home, a lot to put it on, or both.
Maximum Loan Amount
- Manufactured home only – $69,678
- Manufactured home lot – $23,226
- Manufactured home & lot – $92,904
Maximum Loan Term
- 20 years, plus 32 days for a loan on a manufactured home or on a single-section manufactured home and lot
- 15 years, plus 32 days for a manufactured home lot loan
- 25 years, plus 32 days for a loan on a multi-section manufactured home and lot
Title II
Title II insures a mortgage for a manufactured home (with a HUD tag) sale that includes land.
Title II insures mortgages on qualifying manufactured homes sold with land and meeting other requirements.
