Manufactured Home Financing Options: FHA and VA Loans

Buying a manufactured home can be challenging and there are very strict requirements for home loan financing options.

Our article will address manufactured home loans. Before proceeding, it’s important to understand there is a difference between a mobile home and manufactured home.

If the home you’re interested in is not secured to a permanent foundation, it would be considered a MOBILE home and is therefore not eligible for the manufactured home financing options mentioned below.

Manufactured Home Loans

For most Americans, the FHA mortgage offers the most affordable and likely option to finance a manufactured home. However, if you qualify for a VA loan and served in our country’s military, then the VA also offers an excellent manufactured home loan as well.

FHA Manufactured Home Loan

The FHA manufactured home loan offers a wide variety of benefits but also has some very guidelines to qualify.

FHA Manufactured Home Financing Benefits

• Low Down Payment – the FHA loan requires as little as 3.5% of the purchase price for a down payment. Borrowers can put more down if they choose and higher down payment amounts can result in cancellable mortgage insurance as well as cheaper mortgage insurance premiums.
• Low Interest Rates – interest rates on FHA manufactured home loans are some of the lowest out there. It is important to note that interest rates on manufactured home loans run higher than rates on traditional financing options for single family homes. Overall though, there are no lower rates you’ll find when searching for financing options for a manufactured home.
• Seller paid closing costs- FHA manufactured home loans allow for sellers to contribute up to 6% of the purchase price to help cover your closing costs. It’s important to negotiate this upfront and finding a top real estate agent to help is important.

FHA Manufactured Home Guidelines

Not only are there borrower requirements to qualify for an FHA loan, but on manufactured homes there are several guidelines the home itself must meet to be considered an FHA approved home.

• The manufactured home must be built after June 15, 1976
• Living square footage must be greater than 400 square feet
• The HUD labels must be affixed to each section and be viewable by the appraiser
• The manufactured home MUST be permanently tied down or strapped to the foundation and meet the HUD permanent foundation guidelines.
• The lot must be owned by the buyer or included with the purchase of the manufactured home (it cannot be leased).
• Must be a primary residence
• Borrower must have stable and verifiable income, and have debt-to-income ratios below FHA guidelines (57% in most instances)

Important Note: while FHA guidelines allow homes down to 400 square feet, very few lenders in the nation offer FHA financing or any traditional financing options on single-wide manufactured homes. There are lenders who spealize in those options specifically and often will require a 10% down payment.

VA Manufactured Home Loan

The VA manufactured home loan is exclusively for qualifying Veterans. There are several VA home loan benefits but below we highlight a few of the most common ones.

VA Manufactured Home Financing Benefits

• NO Down Payment – assuming you have all your entitlement intact, the VA doesn’t require a down payment on manufactured homes.
• Low Interest Rates – since FHA and VA manufactured homes are secured by the government, they both offer similar interest rates.
• Seller paid closing costs- VA manufactured home loans allow for sellers to cover ALL of your closing costs if negotiated properly upfront.

VA Manufactured Home Guidelines

Like FHA, the VA manufactured home loans have property requirements. Since they’re both government-backed loan programs, the guidelines are nearly identical.

• The manufactured home must be built after June 15, 1976
• Living square footage must be greater than 400 square feet
• The HUD labels must be affixed to each section and be viewable by the appraiser
• The manufactured home MUST be permanently tied down or strapped to the foundation and meet the HUD permanent foundation guidelines.
• Must be a primary residence and the lot must be owned by the buyer or included with the purchase of the home.
• Borrower must have stable and verifiable income and must be able to meet the VA residual income qualifications.

About United Fidelity Funding

At United Fidelity Funding, we offer an unusual blend of experienced FHA and VA manufactured home loan professionals along with ultra-competitive rates and low overall closing costs. We are a multi-state lender lending in some of the larger states throughout the country.

With an average of 7 years in the industry and 400 funded loans, our licensed loan officers are highly experienced with manufactured home mortgage options and would love to help you with buying a house.