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If you’re looking to purchase a home at a lower cost, you might consider buying a mobile or manufactured home. These are a type of home that’s constructed off-site before being transported to the final property.
In 2020, the average cost of a manufactured home ranged from $54,300 up to $120,300, according to Homes Direct — much less than the prices typically associated with purchasing a traditional house. There are also several financing options available to help you pay for your manufactured home.
Here’s what you should know about mobile home financing:
- Types of financing for mobile homes
- Pros of using a personal loan to purchase a mobile home
- Cons of using a personal loan to purchase a mobile home
- How to get approved for a mobile home personal loan
- Can you finance a mobile home and land together?
- What credit score do I need for mobile home financing?
- How many years can you finance a mobile home with a personal loan?
Types of financing for mobile homes
Before you purchase a mobile home, it’s important to compare as many financing options as possible. This way, you can pick the type of loan best suited to your needs.
Here are several mobile financing options to consider:
|Must own land?||Loan amount||Repayment term||Min. credit score|
|Personal loan||No||$600 to $100,000|
(with Credible partner lenders)
|1 to 7 years|
(depending on lender)
|Varies depending on lender|
|FHA Title 1 loan||No, but must have leased the land for at least 3 years if land isn’t owned||15 to 25 years|
(depending on home and lot type)
|Fannie Mae Manufactured Housing loan||No, but home must be principal residence||Up to 97% of LTV ratio||Up to 30 years||620|
|Freddie Mac mortgage||Yes||Up to 95% of LTV ratio||15 to 30 years||660|
|VA loan/strong>||Yes||Depends on VA entitlement |
(full entitlement has no loan limit)
|Up to 25 years||None
(some lenders might have higher credit restrictions because due to greater risk with manufactured homes)
|USDA loan||Yes||Up to 100% financing||15 to 30 years||640|
|Chattel mortgage||No||$14,000 minimum||15 to 23 years||575|
Best for: Smaller loan amounts
Personal loans can be used for almost any personal expense — including the purchase of a manufactured home — and are available from online lenders as well as traditional banks and credit unions.
These loans typically range from $600 to $100,000 or more, and they come with repayment terms of one to seven years, depending on the lender.
You’ll generally need good to excellent credit to qualify for a personal loan — a good credit score is usually considered to be 700 or higher. There are also several lenders that offer personal loans for bad credit, but these loans tend to come with higher interest rates compared to good credit loans.
Here are Credible’s partner lenders that offer personal loans for mobile home financing:
|Lender||Fixed rates||Loan amounts||Loan terms (years)|
|7.99% - 29.99% APR||$10,000 to $50,000||2, 3, 4, 5|
|9.95% - 35.99% APR||$2,000 to $35,000**||2, 3, 4, 5*|
|7.99% - 15.19% APR||$10,000 to $50,000||3, 4, 5, 6|
|8.99% - 35.99% APR||$5,000 to $35,000||2, 3, 4, 5|
|6.99% - 24.99% APR||$2,500 to $35,000||3, 4, 5, 6, 7|
|8.3% - 35.89% APR||$1,000 to $40,000||3, 5|
|7.99% - 35.99% APR||$2,000 to $36,500||2, 3, 4, 5, 6|
|5.99% - 23.99% APR||$5,000 to $100,000||2, 3, 4, 5, 6, 7
(up to 12 years for home improvement loans)
|18.0% - 35.99% APR||$1,500 to $20,000||2, 3, 4, 5|
|7.74% - 17.99% APR||$600 to $50,000 |
(depending on loan term)
|1, 2, 3, 4, 5|
|6.99% - 35.99% APR||$2,000 to $50,000||2, 3, 4, 5|
|7.99% - 23.43% APR10||$5,000 to $100,000||2, 3, 4, 5, 6, 7|
|11.69% - 35.93% APR7||$1,000 to $50,000||3 to 5 years 8|
|8.49% - 35.97% APR||$1,000 to $50,000||2, 3, 5, 6|
|5.4% - 35.99% APR4||$1,000 to $50,0005||3 to 5 years4|
FHA Title 1 loan
Best for: Buyers who want to finance both a manufactured home and lot
Title 1 loans are available to borrowers who want to refinance or purchase a manufactured home or lot — or both. These loans are offered by lenders approved by the Federal Housing Administration (FHA) and are insured by the FHA.
With an FHA Title 1 loan, you might be able to borrow up to $92,904 if you plan to finance both a manufactured home and a lot together. Loan maximums will be lower if you want to finance just a home or lot separately. Repayment terms for Title 1 loans range from 15 to 25 years, depending on the size of the home and type of lot.
Learn More: How Do Personal Loans Work?
Fannie Mae Manufactured Housing loan
Best for: Borrowers who want to finance a permanent residence
Fannie Mae backs two types of loans for manufactured housing: Standard Manufactured Housing (MH) for homes and MH Advantage. MH Standard applies to properties that don’t meet specific requirements while MH Advantage refers to properties that do.
With an MH loan, you can finance up to 97% of your loan-to-value (LTV) ratio — found by dividing the amount you borrow by the appraised value of the property. You could have up to 30 years to repay an MH loan.
Check Out: How to Get a $100,000 Personal Loan Fast
Best for: Borrowers who want to pay for land and various fees alongside their mobile home (such as delivery, set up, and installation)
Freddie Mac also backs mortgages that can be used to purchase or refinance a manufactured home. These loans can cover up to 97% of a manufactured home’s LTV ratio and come with terms ranging from 15 to 30 years.
Unlike an FHA-insured loan, a mortgage from Freddie Mac can be used to purchase or refinance a primary or secondary residence.
Keep in mind that loan maximums and terms could differ if you use the loan to fund a secondary residence. Freddie Mac also allows borrowers to cover the purchase of land, the home, set up, and delivery all in one loan.
Best for: Veterans or their spouses
To qualify for a loan insured by the Department of Veterans Affairs (VA), you or your spouse must be an active or retired member of the U.S. military. Keep in mind that while VA loans for traditional homes come with no down payment, VA loans for manufactured homes require a 5% down payment.
Additionally, because manufactured home mortgages present a greater risk to lenders, you might be subject to stricter credit requirements.
Best for: Low-income borrowers who live in rural areas
The U.S. Department of Agriculture (USDA) offers a few mortgage programs to help low-income borrowers in rural areas purchase homes — including manufactured homes. These loans require no down payment and could be a good choice for borrowers with poor credit.
To be eligible for a USDA loan, the manufactured home must be new and installed on a permanent foundation.
Best for: Borrowers who don’t own land
Unlike traditional mortgages, chattel mortgages can be used to finance a manufactured home if it’s not attached to a foundation. With this type of mortgage, the manufactured home itself is used as collateral to secure the loan.
These loans can also be used to purchase heavy equipment like tractors or farm equipment.
Keep in mind that chattel mortgages come with lower closing costs and fees than traditional mortgages, they also have higher interest rates as they’re considered a greater risk by lenders.
Check Out: Best Personal Loans for Fair Credit
Pros of using a personal loan to purchase a mobile home
If you’re thinking about getting a personal loan to finance your mobile home purchase, here are a few benefits to consider:
- No collateral required: Most personal loans are unsecured, which means you don’t have to worry about collateral.
- Don’t have to own the land: Unlike traditional mortgages for manufactured homes, personal loans don’t require you to own the land the home will sit on or have the home installed on a permanent foundation.
- Variety of lender options: Because manufactured home mortgages are considered to be higher risk, many lenders don’t offer them. But with a personal loan, you’ll have multiple lenders to choose from.
Cons of using a personal loan to purchase a mobile home
And here are some potential drawbacks to keep in mind:
- Smaller loan amounts: Personal loan amounts typically range from $600 to $100,000 — less than you might get with a mortgage.
- Shorter repayment terms: You’ll generally have one to seven years to repay a personal loan, depending on the lender. This means your monthly payments might be higher compared to a longer mortgage term.
- Higher interest rates: Because personal loans aren’t unsecured, they tend to have higher interest rates compared to secured loans like mortgages.
Learn More: How Personal Loans Impact Your Credit Score
How to get approved for a mobile home personal loan
While the eligibility criteria for a personal loan can vary by lender, here are a few common requirements you’ll likely come across:
- Good credit: You’ll typically need good to excellent credit to qualify for a personal loan — especially if you need a large loan amount to finance a manufactured home.
- Verifiable income: Personal loan lenders want to see that you can afford to repay the loan. Some lenders have a minimum income requirement while others don’t — but in either case, you’ll likely need to show proof of income.
- Low debt-to-income ratio: Your debt-to-income (DTI) ratio is the amount you owe in monthly debt payments compared to your income. You’ll generally need a DTI ratio no higher than 40% to qualify for a personal loan — though some lenders might require lower ratios than this.
Can you finance a mobile home and land together?
This depends on the type of financing you choose. For example, an FHA-insured mortgage can be used to finance both a mobile home and lot while other mortgages require you to already own the land.
With a personal loan, you might not be able to borrow enough to fully cover the cost of both the manufactured home and the land.
Find out: How Much is Mobile Home Insurance?
Check Out: Average Personal Loan Interest Rates
What credit score do I need for mobile home financing?
This depends on the kind of loan you choose. Here are the minimum credit score requirements you can generally expect:
- Personal loan: 580 or higher (with Credible partner lenders)
- FHA loan: 580
- Fannie Mae loan: 620
- Freddie Mac loan: 660
- VA loan: None
- USDA loan: 640
- Chattel mortgage: 575
Learn More: 4 Long-Term Loans for All Credit Types
How many years can you finance a mobile home with a personal loan?
Repayment terms vary depending on how you choose to finance your manufactured home. With a mortgage, you could have terms ranging from 15 to 30 years. Personal loans, on the other hand, come with shorter terms — typically one to seven years, depending on the lender.
If you decide to take out a personal loan to finance your manufactured home, remember to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 5.40%-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 10%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.