Chapter 7 of 20
Manufactured-home financing
The landscape of loan types, and which ones your situation actually opens.
1 min read
Financing a manufactured home is not harder than financing a house, but it is different, and the difference is driven by one question: is the home real property or personal property? That single fact determines which products are available to you.
If the home is on land you own, on a permanent foundation, and converted to real property, you are largely in ordinary mortgage territory. Several government-backed and conventional programmes lend on manufactured homes that meet their conditions, typically involving foundation requirements, minimum size, and the home not having been moved since installation.
If the home sits on a leased lot, you are almost certainly looking at a chattel loan secured by the home alone. These close faster and with less cash, but carry shorter terms and higher rates than mortgages, which raises the monthly payment for a given price.
There are other routes worth knowing exist: dealer-arranged financing, which is convenient but should always be compared against an independent quote; personal loans for very inexpensive homes, which are expensive but sometimes the only option; and seller financing, which occasionally appears in private sales and needs careful legal review.
Shop the loan as seriously as you shop the home. Compare the annual percentage rate rather than the headline rate, compare terms, and get more than one quote. The spread between lenders on manufactured-home lending is wider than on conventional mortgages.
Key points
- Real property or personal property determines which loans you can even apply for.
- Owned land plus permanent foundation opens mortgage products.
- Leased land generally means a chattel loan: faster, less cash, shorter term, higher rate.
- Compare APRs across multiple lenders, the spread is wide in this market.
Watch out
Dealer-arranged financing is convenient and is not always competitive. Get at least one independent quote before accepting it, and compare the APR rather than the monthly payment, which can be made to look attractive by lengthening the term.