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It’s no secret that a super-hot housing market and inflation have made it hard to afford daily life in many places across America. It’s also delaying the dream of homeownership for many people.

If, however, you are free to move, you might consider putting down roots where houses are more affordable and where homeownership is potentially easier to achieve. To help you consider your options, here is a list of 10 cities where the cost per square foot of housing is lowest.

The average price in the U.S. per square foot at the time of this survey was $169, and the median home price was $397,000. Take a look at these budget-friendly options, and see if you might want to make one of them your home base.

1. Memphis, Tennessee

Average Home Listing Price: $242,500

Average Price Per Square Foot: $92

Memphis ranked as the most affordable place to live based on the cost per square foot of homes in a recent study using data from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, and Realtor.com. Known as the birthplace of the blues, rock ‘n’ roll, and soul (not to mention where Elvis Presley lived at Graceland), Memphis is a city that is great for low-cost housing as well as music.

2. Cleveland, Ohio

Average Home Price: $183,750

Average Price Per Square Foot: $103

With the average home in Cleveland costing less than half of the national average, this Ohio city is clearly a bargain for aspiring homeowners. In addition to its parks, river frontage, and setting next to a Great Lake, it has a burgeoning foodie scene and world-class art museums.

3. Pittsburgh, Pennsylvania

Average Home Price: $210,000

Average Price Per Square Foot: $134

In the past, Pittsburgh lost some of its younger residents to metro areas with a stronger job market, but today’s affordable housing market and job growth are attracting younger residents again. There are multiple universities in the area, such as the prestigious Carnegie Mellon University, that also attract a vibrant and youthful population.

Recommended: Cost of Living by State Comparison (2023)

4. Indianapolis, Indiana

Average Home Price: $276,250

Average Price Per Square Foot: $134

Indianapolis has a lively downtown area that is quite walkable and full of fun things to do, yet it also offers big-city amenities. Those looking for a more suburban feel can enjoy outer neighborhoods that still feature plenty of shopping and entertainment venues without all the hustle and bustle of being in downtown Indianapolis.

5. Buffalo, New York

Average Home Price: $217,450

Average Price Per Square Foot: $139

Buffalo is currently experiencing a sort of renaissance thanks to a rapidly developing waterfront and being home to one of the nation’s most advanced medical corridors.

Local government support has led to an increasing number of local businesses, which means there are likely some pretty good job opportunities to be found for career builders in Buffalo.

💡 Quick Tip: Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow home mortgage loans with as little as 3% down for qualifying first-time homebuyers.

6. Birmingham, AL

Average Home Price: $272,450

Average Price Per Square Foot: $144

Birmingham has plenty to recommend it, from great sports teams to root for to its craft brewery scene. Affordability is a major factor. Housing costs are less than the national median in this area. What’s more, residents tend to spend less on food, healthcare, and other typical expenses than those who are located in other areas of the country.

7. Oklahoma City, Oklahoma

Average Home Price: $282,124

Average Price Per Square Foot: $149

Oklahoma City has affordable homes, healthcare, transportation, and other basic living expenses. In addition, it has a vibrant arts scene and plenty of parks with all kinds of activities available.

Recommended: Local Housing Market Trends

8. Detroit, Michigan

Average Home Price: $217,450

Average Price Per Square Foot: $152

Detroit is a city in the midst of a turn-around. On the one hand, there are many fixer-upper and abandoned houses waiting to be rehabbed, but, on the other, the cost of living has been rising. If you want to jump into the affordable housing market and make Detroit your home, you’ll be rewarded with music festivals and the gigantic Belle Isle Park.

9. St. Louis, Missouri

Average Home Price: $245,000

Average Price Per Square Foot: $152

This historic metro area houses almost 3 million people (known as St. Louisans) and is known for being a tight-knit community that is very family-friendly. Hometown loyalty is strong in St. Louis and many residents choose to come back after heading off to college or paying to move somewhere else for a while.

💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.

10. Louisville, Kentucky

Average Home Price: $252,500

Average Price Per Square Foot: $152

Families will love spending their weekends in Louisville, thanks to having easy access to the Louisville Zoo, Kentucky Science Center, and the Louisville Slugger Museum. Day by day this city is becoming more diverse! Residents are moving in from around the world and the city is supportive of the LGBTQ community.

Financing a Home

Even the most affordable homes can cost a pretty penny, which is where applying for a mortgage comes in.

Consumers may compare mortgage loan rates and terms from commercial banks, mortgage companies, and certain financial institutions. Typically, certain requirements relating to credit scores and income level help determine if a consumer will receive a mortgage and what their rates and terms are.

When preparing to get a mortgage, it can be helpful to consider multiple lenders, comparing loan terms to get an idea of what might work for an applicant’s financial situation.

Asking lenders for a preapproval or prequalification letter can help mortgage applicants better understand what type of mortgage terms they may be offered.

The Takeaway

It’s possible to find an affordable place to live, where homes cost as little as possible per square foot, and your daily budget may therefore be easier to wrangle. If you are willing to relocate and perhaps move to an up-and-coming town, you may find that your dreams of homeownership can come true sooner rather than later.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOHL0623036

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Mortgage fraud involves lying or omitting information to fund or insure a mortgage loan. It results in billions of dollars in annual losses nationwide. In the second quarter of 2023, 0.75% of all mortgage applications were estimated to contain fraud, which is about 1 in 134 applications, according to CoreLogic. Rates of fraud were higher for two- to four-family properties than for single-family homes. The top states for mortgage application fraud in 2023 were New York and Florida.

What Is Mortgage Fraud?

The FBI, which investigates mortgage fraud, defines it as “a material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.” A borrower might apply for a loan saying they had received a gift of money to help purchase a home when in reality, the borrower simply used money borrowed from a family member to temporarily inflate their assets during the loan application process.

Sometimes those working in the mortgage industry are the fraudsters: In one recent case, employees of a New Jersey mortgage business misled lenders about the intended use of properties to fraudulently secure lower mortgage interest rates. They often submitted loan applications saying that borrowers would reside in a property when in fact the property was being used as a rental or investment property.

How Does Mortgage Fraud Happen?

Mortgage fraud happens when someone involved in the process of obtaining a loan for a property purchase makes false statements about their financial situation or the planned use of the property. It may involve falsifying documents, lying about the source of income, or even creating an entirely false identity.

Types of Mortgage Fraud

The FBI investigates two distinct areas of mortgage fraud: fraud for profit and mortgage fraud schemes used for housing.

Fraud for Profit

The FBI says that those who commit this type of mortgage fraud are often industry insiders. Current investigations and reporting indicate that a high percentage of mortgage fraud involves collusion by bank officers, appraisers, mortgage brokers, attorneys, loan originators, and other professionals in the industry. The FBI points out that fraud for profit is not about getting a home, but manipulating the mortgage process to steal cash and equity from lenders and homeowners.

Fraud for Housing

It’s not only industry insiders who can look to milk the system with mortgage scams. With fraud for housing, the perpetrators are borrowers who take illegal actions in order to acquire or maintain ownership of a house. They could do this by lying about income or presenting false information about assets on their loan application to get a good mortgage rate, for example. One area where fraud is on the increase in recent years is occupancy misrepresentation, in which an investor claims that an investment property is their primary residence in order to get a more favorable mortgage rate.


💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

What Are the Penalties for Mortgage Fraud?

Mortgage fraud schemes abound, and mortgage fraud is serious. In fact, it’s typically a felony. It’s usually the FBI who investigates mortgage fraud, and conviction for federal mortgage fraud can result in a federal prison sentence of 30 years; state convictions can last a few years. If the crime is a misdemeanor and the amount involved is less than $1,000, there can be a one-year sentence.

A conviction on a single count of federal mortgage fraud can result in a fine of up to $1 million. State fines can range from a few thousand dollars for a misdemeanor to $100,000 or more for a felony. Those found guilty can expect to pay restitution to compensate the victims and to be on probation following jail time.

9 Main Types of Mortgage Fraud

Mortgage fraud comes in many flavors so let’s get a closer look at exactly what is mortgage fraud. Scammers are big on creativity, particularly when it comes to scams targeting seniors. The FBI has a list of common mortgage fraud schemes and scams to watch out for. Here are a few of theirs and others to keep in mind.

1. Property Flipping

There’s nothing innately evil about flipping properties. In fact, adding investment properties to your portfolio can be a way to build wealth if you’re good at it. But then there’s the sinister side of flipping. It goes something like this: A property is purchased below the market price and immediately sold for profit, typically with the help of a shady appraiser who puffs up the value of the property. This is illegal.

2. Equity Skimming

The FBI explains how this works: An investor may use a “straw buyer” (a knowing accomplice), false income documents, and false credit reports to obtain a mortgage loan in the straw buyer’s name. After closing, the straw buyer signs the property over to the investor in a quit-claim deed, which relinquishes all rights to the property and provides no guarantee to title. The investor does not make any mortgage payments and rents out the property until foreclosure takes place several months later.

3. Asset Rental

It’s one thing to borrow something blue on your wedding day, and quite another to borrow or rent the assets of your best friend or loved one to make yourself look better in the eyes of a lender. You “borrow” the asset, maybe a hefty chunk of cash, and after the mortgage closes, you give it back to your partner in crime. Sounds harmless, but it’s a common and serious mortgage scam.

4. Inflated Appraisals

Appraisers have the keys to the kingdom. They state the fair market value of a home. Crooked appraisers can do a couple of things that are illegal: They can undervalue the property so that a buyer gets a “deal,” or more often, they overstate the value of the property. The goal is to help a buyer or seller, or a homeowner planning to refinance or tap home equity.

5. False Identity/Identity Theft

Identity theft is an epidemic. According to the Federal Trade Commission, in 2022, it received over 1.1 million reports of identity theft.

Scammers use financial information like Social Security numbers, stolen pay stubs, even fake employment verification forms to get a fraudulent mortgage on a property they do not own. If you’ve been a victim, report identity theft as soon as possible.

6. Foreclosure Scams

Talk about kicking somebody when they’re down. Predators seek out those who are in foreclosure or at risk of defaulting on their loan and tell them that they can save their home by transferring the deed or putting the property in the name of an investor. It can sound rational when you’re desperate.

The perpetrator cashes in when they sell the property to an investor or straw borrower, creating equity using a fraudulent appraisal and stealing the seller proceeds or fees paid by the homeowners. The homeowners are typically told that they can pay rent for at least a year and repurchase the property when their credit has improved.

But that’s not how the story goes. The crooks don’t make the mortgage payments, and the property will likely wind up going into foreclosure.

7. Air Loan

This may as well be in a movie, because nothing is real with this — it’s probably the most bizarre of the mortgage fraud schemes. The FBI describes an air loan as a nonexistent property loan where there is usually no collateral. Brokers invent borrowers and properties, establish accounts for payments, and maintain custodial accounts for escrow. They may establish an office with a bank of phones used as the fake employer, appraiser, credit agency, and so on, to deceive creditors who attempt to verify information on loan applications.

8. Inaccurate Income

A lie can be what you leave out as much as what you say. Given the nature of how self-employed people file taxes, some do not report their full income on their taxes. When it comes to a “stated income” loan, a borrower claims a certain amount of income, and an underwriter makes a decision based on that figure to give them a loan or not.

If the borrower tells a little white lie about their income, it’s not little at all. It’s mortgage fraud. One way lenders try to ensure the information a borrower provides is accurate is to request a letter of explanation about anything that might be concerning in a borrower’s application. This is also why a lender asks for bank statements for a mortgage application, and may ask for extra documentation if you are self-employed.

9. Repaying Gift Money

You can receive part of a down payment for a home, but the gift is not to be repaid. In fact, when you plan to use gift funds, you’ll need to provide a gift letter that proves the money is not a loan to be repaid. You may also be asked to provide documentation to prove the transfer of the gift into your bank account. This may include asking the donor for a copy of their check or bank account statement.

If that gift is to be repaid, it is mortgage fraud. It can also put your loan qualification at risk, as all loans need to be factored into your debt-to-income ratio.


💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.

Why Is Mortgage Fraud Committed?

Borrowers who know they are not really mortgage-ready — perhaps because of a poor credit history, a low credit score, or a nothing-to-brag-about salary that would likely get them the thumbs down from a lender — may be driven to try to enhance their chances of getting a loan, even by illegal means.

As for industry professionals, be it appraisers, real estate agents, mortgage brokers, or anyone who has a role in the home buying and selling process, they could be motivated by the almighty dollar. If they can look the other way to get the transaction done, or manipulate facts so they get their piece of the action, they may do so. (Home improvement scams are widespread too, so exercise caution when commissioning work on your home as well.)

Avoiding and Preventing Mortgage Fraud

When it comes to buying or selling a house, there are a lot of moving parts and many cooks in the kitchen. It’s a good idea to, above all, be truthful about everything, and if anyone along the way seems to be pushing you in any other direction, you could pay dearly for taking that bad advice.

You can play the game straight, but what about all the others involved in the process? It’s smart to get referrals for companies and real estate and mortgage pros that you’ll be working with, and to check state and local licenses. Visit a home loan help center to familiarize yourself with the ins and outs of getting a mortgage before you start your home search.

Once you’ve found a home you love and begin the buying process, do your homework to ensure your property evaluation, or appraisal, is on target. It might be helpful to look at other homes that are similar to see what they have sold for, and recent tax assessments of nearby homes.

Guard your John Hancock as well. Be careful what you sign, and never sign a blank document or one containing blank lines.

Once you’re a homeowner, never sign over the house deed “temporarily.” This could be a set-up. Someone may be asking you to sign over your house deed as part of a scheme to avoid foreclosure. Know that chances are you’ll lose your house permanently.

Can You Accidentally Commit Mortgage Fraud?

Even if you didn’t set out to perpetrate a mortgage scam, you could commit fraud unwittingly by signing fraudulent documents presented by a clever thief, by guessing at your assets and writing numbers into your application without checking them, or by borrowing money for a down payment without disclosing the loan.

Victims of Mortgage Fraud

What do you do if you’re the victim of mortgage fraud? Your local police department may take a report. Your state attorney general’s office may be another good resource. The FBI, however, is the agency that handles most mortgage fraud investigations. You can go to tips.fbi.gov to report a crime. Other federal agencies also investigate mortgage fraud, but the FBI is likely the best first option.

The Takeaway

Mortgage fraud isn’t rare, and both industry insiders and borrowers can be involved. It’s smart to approach the process of getting a home loan with care. Do your homework to find a loan provider you trust and read everything before you sign.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What is considered mortgage fraud?

Intentionally providing false information or omitting information during the mortgage loan application process is considered mortgage fraud.

What are common mortgage fraud tactics?

Mortgage fraud takes many different shapes but common tactics include borrowers falsely inflating assets or income; those involved in the mortgage lending process inventing fake borrowers; or appraisers artificially inflating property values.

What is the typical sentence for mortgage fraud?

The average sentence for mortgage fraud is 14 months, but prison time can extend to 30 years. Fines (of up to $1 million) and the payment of restitution — repaying the money that resulted from the fraud — are also usually part of the sentence.

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Photo credit: iStock/fizkes

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q224-1945609-V1

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The U.S. mortgage market is massive, so it’s no surprise that it’s actually composed of a primary and a secondary market.

The primary market serves the homebuying public. The secondary serves investors, but plays a big role in a borrower’s ability to get a mortgage and how much that home loan costs.

Primary vs. Secondary Mortgage Market

The primary mortgage market links borrowers to home mortgage lenders. The secondary mortgage market allows investors to invest in existing mortgage loans in hopes of earning a return.

What Is the Primary Mortgage Market?

Any time a homebuyer takes out a mortgage loan from a reputable lender, that is the primary mortgage market in action. Homebuyers and mortgage refinancers can work with a mortgage broker or direct lender to find the right home loan.

Direct lenders include banks, credit unions, and online mortgage companies. They originate loans with their own money or borrowed funding. Many of them originate mortgages only to sell them to investors, though the lenders may retain the servicing rights.

What Is the Secondary Mortgage Market?

With the secondary mortgage market, investors such as pension funds, banks, and insurance companies buy mortgage-backed securities and try to earn a profit on them.

Why would lenders sell some of their home loans? Because they’re able to replenish their supply of mortgage funding and remove the risk they took on by making the loans.

The mortgages that Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corp.), the country’s biggest residential mortgage buyers, purchase are conforming loans. That means they conform to certain lending guidelines and loan limits. In 2025 the conforming loan limit for a single-family home was $806,500 in most housing markets. In 2026 it is $832,750.

Then there’s Ginnie Mae (the Government National Mortgage Association), which buys government-backed FHA, VA, and USDA loans and bundles them into securities to be sold on the bond market.

Recommended: Try This Mortgage Calculator

Example of Both Markets in Action

Betty Borrower decides she wants to buy a home and needs help financing the purchase. She shops for a mortgage with an attractive interest rate and low costs. She finds a good fit, applies for the loan, and is approved.

She moves in; her loan moves on. Betty gets a letter from her lender saying that her mortgage has been sold to another financial entity.

The mortgage buyer, which may be an investor or mortgage loan aggregator like Fannie Mae or Freddie Mac, can repackage home loans as mortgage-backed securities or hold them and collect the interest from borrowers.

Any investor who engages with the secondary mortgage market is buying Betty’s mortgage debt and many others’ and counts on the borrowers to pay the debt, with the investor pocketing a percentage of the profit.

Recommended: Guide to Buying, Selling, and Updating a Home

Why Are There Two Mortgage Markets?

They work hand in hand. Congress created the secondary mortgage market in the 1930s to give lenders a larger, steadier stream of mortgage funding to stabilize the country’s residential mortgage markets and expand opportunities for homeownership.

Pros and Cons of the Primary Mortgage Market

The primary mortgage market has its upsides and downsides.

Advantages of the Primary Mortgage Market

Mortgage loans are plentiful: Homebuyers can choose from an array of different types of mortgage loans from banks, credit unions, savings and loans, mortgage brokers, and online financial institutions.

Borrowers have options: The most popular choice is a fixed-term loan of 30 years, but some borrowers may opt for an adjustable-rate mortgage (ARM), in which the introductory rate is fixed for a specified period of time. The 5/1 ARM has a five-year fixed rate.

Rates are reasonable: The demand for conforming loans helps rein in interest rates for borrowers who meet the lending criteria, which include down payment and credit requirements in addition to conforming loan limits. (Nonconforming loans — loans that Fannie Mae and Freddie Mac cannot buy — include government-backed loans and jumbo loans. The rates may be even lower than conforming loan rates.)

Down Payment Can Be Low: For first-time homebuyers, a 3% down payment for a conventional loan may suffice.

Disadvantages of the Primary Mortgage Loan Market

Borrowers have to be vetted credit-wise: Mortgage lenders will review a potential borrower’s credit score in order to determine their eligibility for a loan. Applicants with a bad credit score may find it challenging to secure a mortgage other than an FHA loan.

Missed mortgage payments can have negative effects: Borrowers who miss payments may face a plummeting credit score or even foreclosure (but mortgage forbearance is an option).

Pros and Cons of the Secondary Mortgage Market

Here are two ways to view the secondary loan market.

Advantages of the Secondary Mortgage Market

Replenishes lender funding: The secondary market keeps money flowing through the mortgage system in good economic times and bad.

Fuels lower mortgage costs: The secondary market can lead to lower costs for borrowers.

May be good for investors: Most mortgage-backed securities are issued or guaranteed by a government agency such as Ginnie Mae or by government-sponsored enterprises like Fannie Mae and Freddie Mac. The securities carry the guarantee of the issuing organization to pay interest and principal payments on their mortgage-backed securities.

Disadvantages of the Secondary Mortgage Loan Market

Not for the average investor: Common buyers of mortgage-backed securities include deep-pocketed financial organizations like insurance companies, banks, and pension funds. Because of the complexity of mortgage-backed securities and the difficulty that can accompany assessing the creditworthiness of an issuer, individual investors should use caution.

Investors won’t see the properties attached to the mortgages: Secondary mortgage loan buyers usually won’t physically see and assess the properties attached to the mortgages they’re buying.

The Takeaway

The primary mortgage market and secondary mortgage market have a symbiotic relationship. Most mortgage seekers will only be interested in the primary market: getting a home loan that suits their needs.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What is the secondary market for mortgages?

When homebuyers take out a mortgage, lenders can bundle similar types of loans and sell shares in this bundle to investors, including banks, pension funds, and mutual funds. Investors are willing to buy these shares because as long as the mortgages are paid off, the investors receive a steady stream of income over the life of the mortgages in the bundle.

What is a second mortgage?

A second mortgage is a loan that uses your home as collateral that you take out while you are still paying off the primary mortgage on your home. Home equity loans are often second mortgages.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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The average length of a mortgage is 30 years, but that’s not the amount of time that most borrowers will keep the loan. The typical U.S. homeowner has a tenure of about 12 years, and many refinance their home loans.

So most folks will sign up for a 30-year mortgage but keep it for a far shorter time. Why 30 years? It tends to keep monthly payments affordable.

Let’s review mortgage terms to help you decide what’s best for your situation.

What Is a Mortgage Loan Term?

The term is the number of years over which a borrower agrees to repay the total amount borrowed on a mortgage. When choosing a mortgage term, a homebuyer or refinancer picks a term of, for example, 30, 20, 15, or 10 years, divided into monthly payments. A 30-year loan is divided into 360 monthly payments, and a 15-year loan is divided into 180 monthly payments.

Choosing a loan term is one of the most important considerations you’ll make during your home purchase or refinance. It will help determine the monthly payments and how much interest you’ll pay over the life of the loan.

Understanding how mortgage amortization works is a key part of this. A loan with a shorter term will result in a much lower overall interest cost but higher monthly payment.

An online mortgage payment calculator can help you find your desired monthly payment number.

30-Year Mortgage Term

A 30-year mortgage term is the most common mortgage term. The popularity of 30-year mortgages could be an indication of home affordability as buyers look to qualify for a mortgage.

With average 30-year monthly payments hitting $2,188 nationwide at the end of 2024, it’s no wonder borrowers usually choose the 30-year term over others. Aspiring homeowners, even with first-time homebuyer programs, have faced sky-high home prices in a tight housing market whose future temperature remains uncertain.

20-Year Mortgage Term

The 20-year mortgage is far less common than a 30-year mortgage, and even less common than a 15-year mortgage, but could be considered the sweet spot between the two, offering substantial savings on interest costs compared with the 30-year loan.

After all, a mortgage loan that you’re not paying interest on for 10 years is bound to cost less. As a bonus, shorter-term mortgages tend to have lower interest rates.

Recommended: Mortgage Lender vs. Servicer

15-Year Mortgage Term

A 15-year mortgage is the second most common mortgage term. Like 20-year mortgages, 15-year mortgages offer substantial savings on interest costs. The catch is you have a much higher monthly mortgage payment.

10-Year Mortgage Term

The 10-year mortgage term is found in both fixed- and adjustable-rate mortgages.

A fixed-rate 10-year mortgage is an accelerated mortgage that allows borrowers to build equity fast. Someone choosing traditional refinancing or cash-out refinancing might opt to pair a lower rate with a faster loan payoff.

A 10/1 adjustable-rate mortgage (ARM) is actually a 30-year loan most of the time, but the introductory period, when the rate may be lower than fixed-rate loans, is what holds appeal. A 10/1 has a fixed rate for 10 years, after which the rate will adjust every year.

More and more, you’ll see ARMs whose rates will adjust every six months (so a 10-year ARM will be offered as a 10/6), thanks to a new benchmark index.

The teaser rate for a 10/1 ARM is higher than that of other ARMs.

5-Year Mortgage Term? Not Exactly, but …

A 5/1 ARM is actually a 30-year loan most of the time, but the intro rate is the star attraction. A 5/1 ARM features a low rate for five years, after which the rate will adjust every year according to an index.

You’ll also see 5/6 ARMs, whose rate adjustments are based on the Secured Overnight Financing Rate, or SOFR, which replaced the London Interbank Offered Rate, or LIBOR. A 5/6 ARM rate can go up or down by one percentage point every six months. A 5/1 ARM rate can rise or fall by up to two percentage points each year.

For borrowers who are not planning to keep their home for long or for those hoping to refinance before the initial rate adjustment, a five-year ARM may make sense.

Recommended: Home Loan Help Center

The Takeaway

The average length of a mortgage is 30 years, which keeps monthly payments affordable. The savings on a loan with a shorter term are substantial, but many homebuyers and refinancers can’t abide the higher payments that come with a faster loan payoff.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What is the most common mortgage term?

The most common mortgage term is 30 years, according to Home Mortgage Disclosure Act data.

What is the longest mortgage term?

It may be possible to obtain a 40-year mortgage. Any mortgage with a term longer than 30 years is not considered a “qualified mortgage,” which means few lenders will offer it. Forty-year loan modifications are more often used for borrowers in distress.

Forty-year loan modification options for borrowers in distress are more common.

Are there 40-year mortgages?

Forty-year mortgages do exist, but they’re not considered qualified mortgages, which is a requirement for a mortgage to be sold on the secondary mortgage market to investors. This is ultimately what makes a mortgage affordable. You can only get a 40-year mortgage from a portfolio lender, which is a lender that keeps the loan on its books.

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Photo credit: iStock/Elena Katkova

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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Many manufactured homes take just a week to build. (Yes, a week!) Manufactured homes can be built so quickly because they’re made in a factory — a controlled environment. All of the materials and tradespeople are on hand, and the standard sizes of manufactured homes make for quick and easy builds.

The time it takes for the manufactured home to be placed on land is much longer, however. In this article, you’ll read about the basics of new manufactured homes, as well as the timeline for building and delivering a manufactured home. And we’ll share the factors that affect the building timeline so you can be on the lookout for possible slowdowns.

What Is a Manufactured Home?

A manufactured home is built in a factory according to standards set by the U.S. Department of Housing and Urban Development (HUD). The home, which usually has one, two, or three sections, is transported to a dealer, plot of land, or manufactured home community.

Manufactured homes average a lower cost and shorter construction timeline than traditional homes, but homebuyers should be aware that manufactured homes may depreciate. Then again, depending on the local housing market and the home’s setting, a manufactured home might gain value.

How much does a new manufactured home cost? The average price nationwide was $127,800 in late 2024, with a single-wide averaging $86,600 and a double-wide $156,300, according to the Manufactured Housing Survey conducted by the Census Bureau and sponsored by HUD.

That helps to show why manufactured housing is gaining in popularity. In 2024, manufactured homes accounted for 8.6% of new-home starts. It’s the second most popular home type, after detached, single-family homes.

Recommended: What Is a Modular Home?

Timeline for Building a Manufactured Home

How long does it take to get a manufactured home? From placing an order to moving in, it could take two to four months. That compares with 10 months for a traditional contractor-built home.

The site can be prepared, if needed, while the manufactured home is being built. If you need to develop raw land (i.e., put in your own utility connections, clear the land, or install a driveway), the process could take much longer.

Process of Building a Manufactured Home

Several factors help determine how long it takes to get a manufactured home, start to finish. Keep in mind that sales centers for manufactured homes may be able to offer help or coordinate the process.

Design, Model, and Floor Plan Selection: 1-3 Weeks

You’ll most likely start your manufactured housing journey by choosing your home model, floor plan, design, finishes, exterior elements, and other details of the home. This process can take a week or more.

It’s a good idea to start here, because you may have to wait until the factory is available to build your home. If you choose a model that has already been built, you can save some time.

Financing: 4-8 Weeks

Before construction can begin on your manufactured home, you’ll need to get approved for a loan for the home and, if applicable, the land. You’ll submit your personal information, your income and employment, specs on your chosen manufactured home, who you’re purchasing the home from, and information about where you’re going to place the home.

Most of the time, financing options depend on whether the home is real property or personal property.

Some manufactured homes qualify for conventional mortgage. An option is a government-backed home loan. In most cases, the home must be permanently attached to a foundation and on land that you own or will own: That makes it real property. Going through the mortgage prequalification process can help you determine how much home you can afford.

An exception is an FHA Title I loan, for the purchase of a new or used manufactured home on land you do or do not own. There are loan limits.

It’s also possible to finance a manufactured home with a large personal loan. It’s worth noting that a personal loan may have a higher interest rate than a home mortgage loan.

And a chattel mortgage may be used to finance a home that will not be permanently affixed to the land.

Recommended: Credit Score Needed for Personal Loans

Site Selection: 1-4 Weeks

When it comes to placing your manufactured home, you’ll typically be faced with two options: Lease or buy land. It could take time to find the proper setting.

Lease the land: With leased land, you’ll pay a fee — usually between $100 and $1,000 per month — to place your manufactured home on a lot. Lots are typically close together and include utility connections and some community maintenance. Some may feature community amenities like a swimming pool or park.

Purchase land: Many lenders offer financing for a manufactured home with the land. A lot in a community may already have a paved pad and utility hookups. If you need to install your own utilities, you may need to find a contractor to coordinate the exterior elements. Your manufactured home sales center may also be able to help with some of these details. A land loan on its own could take around a month to secure.

Permitting: 1 Week to Several Months

Setting a manufactured home on land requires a permit. Requirements can be found from your county or city. The permitting process can take a few days or a few months, depending on your locale, but be sure to submit all required documents and plans so you don’t face additional delays.

Site Preparation: 1-4 Weeks

Site preparation for raw land can include tree and rock removal, land grading, a driveway, well or water connection, sewer connection or septic system, and other utilities.

Minimal site prep can be completed in less than a week, while more extensive site prep can take up to a month.

Construction: 1 Week

The factory environment makes for quick construction: a few days to a week. Materials, tools, and craftspeople are located in the same factory to increase efficiency. Standard sizes and finishes also account for the short construction timeline.

The manufacturer tests the mechanical systems, such as electrical or plumbing, as your home nears completion.

Transport and Installation: 1-4 Weeks

After construction is complete, you may be wondering how long it takes to set up a manufactured home. While transporting your manufactured home will likely only take a few days at most, you may have to spend more time on the installation of the home.

Once the home has been transported to your site, it is attached to ground anchors and utilities are connected. Then, if you desire, additional exterior elements such as a porch or a garage can be added. Customizations like this will take several weeks to complete.

Factors That Affect the Building Timeline

Type of Manufactured Home

The size and type of your home will affect the building timeline. A triple-wide manufactured home, for example, will take longer to build and will also require more site development. A larger septic system, for example, would be required for a larger manufactured home.

Features of the Home

Some custom features like French doors will take additional time to build into your home. But manufacturers say these features usually add only a little time to the process.

Backlog

Although the actual construction of your home may only take a week, you may need to wait for months for the manufacturer to begin construction due to a backlog.

The Takeaway

Financing, permitting, and finding and developing land all take much more time than the construction of a manufactured home. It could take four months from the time you order a manufactured home to stepping into your new home. Getting your financing plan in place can help keep things moving along smoothly to move-in day.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How do you speed up the process of building your manufactured home?

If you want to build a manufactured home faster, you can shop builders to check on their availability and get your finances in order. Know which loans apply to the home’s setting, leased or owned land, and consider getting preapproved. You can also select a manufactured home that is already built rather than design your own custom home.

Are manufactured homes cheaper?

Manufactured homes are usually cheaper than traditional homes. The average sales price for a new double-wide manufactured home (not including land) was $156,300 in late 2024, compared with the median sales price for a new single-family home, $402,600, around the same time, according to the U.S. Census Bureau and HUD.

Do manufactured homes take a shorter time to build?

Manufactured homes take much less time to build than other forms of housing. Because the homes are built in a controlled environment, manufacturers can avoid weather delays and supply shortages and can schedule trades (like plumbing) more efficiently. Everything is in one spot, and the standard dimensions of manufactured homes make construction efficient.

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Photo credit: iStock/uptonpark

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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