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Mobile Home Financing Options

December 28, 2020 · 6 minute read

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Mobile Home Financing Options

A mobile home, also referred to as a manufactured home, is a style of home built in a factory. This factory-made home is then placed on a trailer chassis. This set-up allows the mobile home owner to move the home if need be.

In many cases, the owner rents or leases the land their mobile home sits on (such as in a mobile home park), but they own the actual home. Mobile home owners can also choose to place their homes on land that they own.

There are varying styles of mobile homes, cost ranges, and home loan options worth considering for those interesting in financing a mobile home.

What is the Average Cost of a Mobile Home?

While costs vary greatly depending on the location of the mobile home, if the homeowner owns or rents the land where the mobile home is situated, and the type of mobile home, there are some average costs that can give an idea of what the expenses of buying a mobile home will look like.

According to the Census Bureau’s Manufactured Housing Survey, as of February 2020, the average sale price nationwide for new mobile homes were $55,600 for a single-wide trailer and $107,500 for a double-wide trailer.

However, mobile home prices can vary greatly by region. For example, mobile home prices are typically lower in the South, but higher in the West.

In the Northeast, home buyers can find the lowest average price for a new single-wide mobile home for about $54,000. Those who desire a double-wide mobile home can find a lower average price in the Midwest for $98,200.

It’s important to remember when buying a mobile home that the costs don’t stop at the purchase of the home. If the mobile home owner lives in a development or mobile home park, they typically pay monthly fees or rent the land their home is situated on.

If someone chooses to set up their mobile home on private acreage, they may need to finance additional needs such as installing a foundation, decking, and landscaping costs. These types of costs can vary greatly depending on the location of the land and what type of labor and materials they need.

Differences Between a Mobile Home, Modular Home, and Manufactured Home

There are many types of mobile homes that can suit a variety of housing needs, budgets, and lifestyles. These are a few of the more popular options that fall under the overarching mobile home category.

Mobile home. A mobile home is prefabricated and built offsite. Once it’s built, the mobile home transfers as a single unit to the property it will reside on.

Manufactured home. A manufactured home is the same as a mobile home, but this term is commonly used interchangeably.

Modular home. Although manufacturers make modular homes in factories or offsite facilities, they build them in a similar manner to homes built on site. Once transported to the home site, finishing touches are added. Modular homes must meet the same local building codes as homes built on site and they typically qualify for the same financing programs that homes built on site do.

Different Types of Mobile Homes

There are generally three main sizes of mobile homes, and size is a big determining factor in the price of a mobile home. Larger mobile homes typically have more layout features that can add to the cost.

Single-wide mobile homes. This size mobile home generally ranges from around 600 to 1,300 square feet and measures 18 feet or less in width and 90 feet or less in length. Typically, a single-wide mobile home has one or two bedrooms and one or two bathrooms.

Double-wide mobile homes. On average, double wide mobile homes range from around 2,000 to 2,500 square feet and are about 20 feet wide and under 90 feet long. Generally, this style of mobile home has two or three bedrooms and bathrooms. Extra layout features like separate dining rooms may be available that aren’t usually found in a single-wide mobile home.

Triple-wide and multi-wide mobile homes. This is generally the largest mobile home format and can be as large as 4,500 square feet and 50 feet in length. The width of this style varies based on the specific layout of the home and features of the structure, and it’s much more possible to customize a mobile home of this size. Home buyers can find triple-wide mobile homes with at least three bedrooms and two bathrooms (or possibly more).

Financing a Mobile Home

Those looking for mobile-home financing may have a few options available to them, but financing a mobile home can be more difficult than with a traditionally built home. However, if a mobile home meets certain requirements, it may be possible to qualify for a traditional home loan.

•   The mobile home must sit on a foundation and have its wheels removed so it is stationary.
•   The borrower needs to own the land under the mobile home.
•   Generally, the mobile home must be at least 400 square feet in size.

These requirements qualify the mobile home as “real property,” which makes it eligible for a mortgage.

Fannie Mae. If the title includes both the mobile home and the land it resides on, and qualifies as real property, then a manufactured home loan under the Fannie Mae MH Advantage® program may be possible. The program offers up to 30-year term fixed-rate mortgages, as well as 7/1 and 10/1 adjustable-rate loans. The down payment can be as low as 3% for some borrowers. Investment properties and single-wide mobile homes are ineligible for this type of loan.

Freddie Mac. Similar to the Fannie Mae program, borrowers may qualify for a manufactured home loan under the Freddie Mac program if the home meets certain qualifications and qualifies as real property. Fixed-rate mortgages and 7/1 and 10/1 ARMs are available to qualified borrowers. Primary residences and second homes may qualify, but, similar to Fannie Mae, investment properties do not qualify. Down payments can start as small as 5%.

FHA. Under the Title I program , certain lenders that are FHA approved can provide loans to eligible borrowers to help finance purchasing or refinancing a mobile home, the lot a mobile home will reside on, or both. Through this program, the FHA insures the lender against any losses that may occur if the borrower defaults on their loan payments. The FHA does not lend money, they simply insure the loans to encourage lenders to offer home loans for mobile homes. The borrower still has to meet certain credit history requirements and needs to show an ability to repay their loan in regular monthly installments. The borrower and the lender negotiate the interest rate, but the lender must offer a fixed interest rate for the entire term of the loan, which typically lasts 20 years.

The maximum loan amounts are:

•   Manufactured home only: $69,678.
•   Manufactured home lot: $23,226.
•   Manufactured home and lot: $92,904.

The maximum loan terms are:

•   Manufactured home or a single-section manufactured home and lot: 20 years.
•   Manufactured home lot loan: 15 years.
•   Multi-section manufactured home and lot: 25 years.

US Department of Veterans Affairs (VA). Certain VA lenders offer mobile home financing for the purchase or refinance of a mobile home, as well as the lot. Using the loan to improve the lot, refinance a mobile home in order to buy a lot, or simply refinance an existing VA mobile home loan are possible. The mobile home must be considered a real property and have a permanent foundation. It is possible to put no money down, without needing mortgage insurance, if the borrower meets the lender’s credit and income requirements. Potential home loan terms can range from 15 to 25 years.

US Department of Agriculture. The Single Family Housing Guaranteed Loan Program is specifically for housing, including manufactured homes, in rural areas. The USDA works with lenders to guarantee home loans to low- and moderate-income borrowers to make home ownership more attainable. Applicants must meet income and other eligibility requirements. The property must be considered real property, be in a designated rural area, and be less than one year old, among other requirements, to be eligible for the program. Qualified program applicants may be able to receive financing with no down payment.

The Takeaway

There are a lot of things to consider when looking for a home loan for a mobile home, but SoFi wants to make the process easier. SoFi home loans are quick and easy to apply for, and most importantly, are flexible.

With 10-, 15-, 20-, and 30-year fixed rates, aspiring home buyers have options. To make the process less confusing, applicants can work with a mortgage loan officer who can walk through each step so that the applicant feels confident in the home-buying process. Because we all deserve to find a place to call home.

Learn more about how SoFi’s home loans can help finance a mobile home today.



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