Can you get an FHA loan for a mobile home?
FHA loans allow financing for manufactured homes, which are commonly mistaken for mobile homes, but specific requirements must be met. FHA loans help make manufactured homeownership more accessible by offering lower down payment requirements and competitive interest rates.
The Federal Housing Administration (FHA) offers financing options for manufactured homes, provided they comply with HUD regulations, are permanently affixed to a foundation, and meet certain size and age requirements.
Manufactured vs. Mobile Homes
Because they both describe factory-built housing, it’s easy to assume that mobile homes and manufactured homes are the same thing. However, when it comes to FHA financing, the differences between the two are critical since they affect FHA loan eligibility, financing options, and long-term property value.
Mobile homes refer to factory-built homes constructed before June 15, 1976. Back then, no uniform safety or construction standards were in place, which led to inconsistencies in quality. These homes were often built with cheaper materials, had weaker structures, and lacked proper energy efficiency, making them ineligible for FHA loans.
Manufactured homes, on the other hand, are factory-built homes constructed after June 15, 1976, and must comply with HUD’s Manufactured Home Construction and Safety Standards. These federal regulations ensure that all manufactured homes meet strict guidelines for durability, fire safety, insulation, and overall structural integrity.
This shift in regulation wasn’t just about better materials but was more so about making factory-built homes safer, more sustainable, and more like traditional site-built houses. To qualify for an FHA loan, your manufactured home must meet HUD standards and be built after June 15, 1976. Homes built before this date are considered mobile homes and are ineligible for FHA financing. In such cases, alternative loan options may be necessary.
FHA Manufactured Home Guidelines
When securing an FHA loan for a manufactured home, meeting the FHA’s guidelines is essential to getting approved for purchase. These rules ensure your home is safe and durable, as well as a sound financial investment.
Property & Residency Requirements
To qualify for FHA financing, manufactured homes must be a minimum of 400 square feet. Additionally, the home must be designed for permanent residency and undergo an FHA appraisal to verify it has adequate plumbing, heating, and electrical systems.
The home must also be permanently affixed to a foundation that meets FHA and HUD standards. A home resting on temporary blocks, piers, or wheels does not qualify. The foundation must be designed to withstand natural forces such as wind, water, and settling.
For example, if your manufactured home still sits on its wheels or cinder blocks, it won’t pass FHA requirements because these temporary foundations do not provide the stability required to withstand natural forces such as strong winds or shifting soil.
Without a permanent foundation, a home is considered movable, making it ineligible for FHA financing. Installing an approved foundation system ensures the home is securely anchored and classified as real property, making it a safer and more viable long-term housing option.
HUD Certification Label or Data Plate
Every FHA-eligible manufactured home must have a HUD tag or data plate to prove that the home was built according to federal construction and safety standards. A HUD tag or certification label is a metal plate, typically found on the outside of the home. It is usually red and silver.
An alternative to the HUD label is the certification label, an 8 ½” by 11” piece of paper typically found on the interior of the home.
Without either of these identifiers, the manufactured home is not eligible for FHA financing.
Let’s say you find a manufactured home but can’t locate the HUD tag. We recommend you ask the seller for documentation. The label is a small metal plate affixed to the home's exterior, often near the rear or under the kitchen sink.
If it is missing, you may need to contact the home’s manufacturer or HUD to obtain a letter of verification. Without this certification, there is no way to confirm that the home meets federal safety and construction standards, disqualifying it from FHA loan approval.
Lot Ownership Options
FHA loans provide flexibility when it comes to lot ownership. You can finance just the home if it’s located in a manufactured home community, or you can finance both the home and the land it sits on if you plan to own the property.*
If you’re placing your home in a leased-lot community, you only need financing for the home. In this case, an FHA Title I loan may be the best option, allowing you to finance the home itself while paying monthly rent for the lot.
This setup is common in retirement communities and manufactured home parks, where land ownership is separate from homeownership. However, if you decide later to move the home to a private lot, refinancing options may be limited, so it’s important to consider long-term plans before choosing this route.
Not all FHA lenders will finance home and land purchases. Paddio does not currently offer Title I FHA financing.
Property Classification
Another key factor to consider is how the home is titled. Older mobile homes were often classified as personal property, similar to vehicles. This meant they could be easily moved and didn’t hold the same long-term investment value as traditional homes.
However, manufactured homes that meet FHA requirements and are permanently affixed to land can be classified as real estate, making them eligible for FHA-backed financing. This can significantly impact the type of loan you qualify for and your home's long-term equity.
A small trailer or recreational vehicle would not qualify, even if placed on a permanent foundation. FHA loans require manufactured homes to be at least 400 square feet and designed for year-round residency.
RVs and tiny homes often lack the necessary features, such as HUD certification and permanent utility connections, making them ineligible. If you're looking for a smaller home, consider checking with lenders about other financing options, such as conventional loans or personal property loans tailored to alternative housing types.
Meeting these FHA manufactured home guidelines is crucial to securing financing for your new home. If you’re unsure whether a home qualifies, reach out to a Paddio loan expert for questions!
Two Types of FHA Loans for Manufactured Homes
When exploring an FHA loan for a mobile home, you have two primary options: FHA Title I loans and FHA Title II loans. FHA Title I loans are designed to finance only the manufactured home itself, making them ideal if you plan to place the home in a manufactured home community or on leased land.
Unlike traditional mortgages, a Title I loan does not require the home to be permanently affixed to the land. For instance, if you're purchasing a manufactured home in a retirement community where you’ll lease the lot, an FHA Title I loan allows you to finance just the home while paying rent for the land separately.
Paddio does not currently offer FHA Title I loans.
On the other hand, FHA Title II loans cover both the manufactured home and the land it sits on. To qualify, the home must be permanently affixed to the land and classified as real estate rather than personal property. If you're purchasing a manufactured home along with the lot, a Title II loan is the better option since it treats the home as a long-term real estate investment.
Title I loans typically have smaller loan amounts and shorter repayment terms, while Title II loans often come with lower interest rates and longer repayment periods. Both loan types may have stricter lender requirements, such as higher credit score minimums and down payments, compared to traditional FHA home loans.
How to Get a Manufactured Home with an FHA Loan
Are you ready to pursue an FHA loan for a manufactured home and land? Follow these steps:
Check FHA Eligibility: Verify that the home meets FHA guidelines, including size, foundation, and HUD certification requirements. Ensuring compliance upfront can save time and prevent loan approval issues later.
Paddio is an FHA lender with a 4.75/5 star satisfaction review. Get started today!Find an FHA-Approved Lender: Not all lenders offer FHA loans for manufactured homes. Research multiple lenders, compare rates, and ensure they have experience financing manufactured homes.
Apply for Preapproval: This step helps determine how much you can borrow and what loan terms you qualify for. Preapproval also gives you an advantage because it shows sellers you are serious about buying.
Complete the Loan Application: Work with your lender to submit the required documentation, including proof of income, credit history, and details about the home and property. Your lender will also arrange an appraisal to confirm the home meets FHA standards.
Close the Loan: Once approved, finalize the paperwork, sign loan documents, and secure your financing. At this point, you’re officially on your way to homeownership!
Purchasing a manufactured home with an FHA loan can be an excellent way to achieve affordable homeownership. Whether you're financing just the home or both the home and land, understanding the FHA manufactured home guidelines and working with the right lender will help you confidently navigate the process.
Ready to take the next step? Contact a Paddio loan expert to explore your loan options!
