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When it comes to purchasing a “mobile home” or manufactured home, prospective buyers often seek loan options that cater to the unique nature of these properties. For those considering a manufactured home, FHA loans may be a viable option to secure financing.
In this article, we will explore the ins and outs of FHA loans for manufactured homes, including guidelines, requirements and the types of loans available for financing.
Can You Buy a Manufactured Home With an FHA Loan?
Yes, it is possible to buy a manufactured home with an FHA loan.
The Federal Housing Administration (FHA) insures loans for certain types of manufactured homes. To be eligible for an FHA loan on a manufactured home, the property must meet certain FHA guidelines.
FHA Manufactured Home Guidelines 2024
To qualify for an FHA loan, a manufactured home must meet FHA minimum property requirements along with additional guidelines set by the Department of Housing and Urban Development (HUD).
To satisfy some of the basic guidelines, the home must:
- Be at least 400 square feet in size
- Serve as the homeowner’s primary residence
- Display the HUD seal on the exterior of the home
- Have access to water and sewer facilities
- Have access to all-weather roads
Along with these base guidelines, manufactured homes must meet certain requirements relating to the property’s age, skirting, tie-downs and foundation.
Manufactured homes must have been constructed after June 15, 1976 to be eligible for FHA financing. On this date, the HUD established its standards to regulate the construction of mobile homes.
While the terms “mobile home” and “manufactured home” are often used interchangeably, there are some technical differences between the two. While the term “mobile home” generally refers to any transportable housing structure, “manufactured home” describes a mobile home that was constructed after June 15, 1976 in compliance with HUD standards and regulations.
Even if an older mobile home that was constructed before HUD regulations is renovated to ensure its current compliance, the property is not eligible for an FHA loan.
Skirting and Tie-Down Requirements
Skirting, if used, must be weather-resistant and take precautions to prevent water damage and decay. Wood skirting near the ground must be treated to resist decay and termite infestations.
Additionally, the home must be securely tied down with steel strapping to withstand various weather conditions. The strapping must be protected against deterioration and corrosion.
To qualify for FHA financing, a manufactured home must be permanently affixed to the land, having been built and remaining on a permanent chassis (metal frame).
Manufactured homes in flood hazard areas face additional requirements to ensure the structure’s safety. The structure must be capable of withstanding reasonable flooding and winds and feature constructional elements designed to prevent floatation, collapse or lateral movement of the home.
For a more in-depth look at the foundation requirements and all other guidelines for an FHA-financed manufactured home, visit the comprehensive Model Manufactured Home Installation Standards or discuss a specific property’s eligibility with your chosen lender.
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How to Get an FHA Loan for a Manufactured Home
To qualify for an FHA loan for a manufactured home, you must meet the financial requirements for all FHA loans.
- Down payment: FHA loans require a minimum down payment of 3.5% of the total loan amount.
- Debt-to-income ratio: Your debt-to-income ratio (DTI) must be less than 43%.
- Mortgage insurance: FHA loans require an upfront and monthly mortgage insurance premium to protect lenders in case of default.
What is the Minimum FICO Score for an FHA Manufactured Home?
The minimum FICO credit score required for an FHA loan on a manufactured home follows FHA’s standard credit score requirements. The required score will vary based on the size of your down payment:
|Minimum Credit Score
|10% or greater
|Less than 10%*
*Note: Keep in mind that all FHA loans require a down payment of at least 3.5%
Types of FHA Loans for Manufactured Homes
When it comes to financing manufactured homes, there are two FHA loan programs to consider:
FHA Title 1 Manufactured Home Loans
The first relevant type FHA loan is a Title I FHA manufactured home loan.
Title I loans are most commonly used to purchase a new or existing manufactured home. However, these loans can also be used to purchase land for a manufactured home to occupy or fund repairs, renovations or improvements to a manufactured home that you currently own. Title I loans can also be used to refinance an existing loan used for a manufactured home, land for a manufactured home or both.
With this flexibility comes certain limitations to Title I manufactured home loans. For example, if you opt to use a Title I FHA loan to fund repairs to your current manufactured home, you must own the land the property sits on. For all other uses, however, you do not have to own the land as long as your initial lease term is at least 3 years.
Title I FHA loans are subject to loan limits depending on their intended use:
- Purchasing a manufactured home: $69,678
- Purchasing land for a manufactured home: $23,226
- Purchasing land AND a manufactured home: $92,904
FHA Title 2 Manufactured Home Loans
Another option to consider is a Title II FHA manufactured home loan.
FHA Title II loans are more widely offered by lenders compared to Title I loans but can only be used to finance a new manufactured home, including transportation costs and installation expenses.
Unlike Title I loans, you must own the land that the manufactured home occupies to qualify for a Title II FHA loan. Title II loans follow the standard FHA loan limit, which is capped at $498,257 as of 2024.
Researching and understanding Title I and Title II FHA loans will help you choose the one that aligns with your specific needs and financial situation. Both FHA loan programs offer a potential method of purchasing a manufactured home as long as the property and borrower meet the specified guidelines and requirements.