June 14, 2021
Did you know that you do not have to own the lot your new mobile home will be placed on in order to be approved for an FHA home loan? FHA mortgage loans for mobile and manufactured homes permit you to purchase a mobile home, modular home, or manufactured home that will act as your primary residence and that will be attached permanently to an approved foundation.
There is more than one type of mobile home loan you can get from a participating FHA lender who offers them. You can apply for an FHA mortgage to buy the mobile home alone, or you can apply to purchase land in conjunction with the mobile home purchase.
Your lender may even allow you to apply for a home loan to purchase the land you want to put your mobile home on without having to apply for a purchase loan for the mobile home itself–a good option for those who have a mobile home already or plan to pay cash for one.
FHA loan rules say that your mobile home loan typically (but not always) involves a retailer who sells you the home. When you purchase from a dealer or private seller, the mobile home must be compliant with Model Manufactured Home Installation standards as well as be fixed to an approved permanent foundation.
When you buy a mobile home using an FHA mortgage, there are some protections for the borrower–you must sign something called a “HUD Placement Certificate” agreeing that the home has” been installed and set-up” to your satisfaction prior to your lender releasing the loan funds to the seller.
You cannot be charged a penalty for early payoff of the loan, and your home must carry a manufacturer’s warranty if it is new, according to the HUD official site.
Who qualifies for an FHA mobile home loan? HUD.gov says that the usual FHA loan financial standards apply:
- The applicant must have “sufficient funds to make the minimum required downpayment”.
- The borrower must have “adequate income to make the payments on the loan” as well as meeting other financial obligations;
- The borrower must use the home as the primary residence;
- The borrower must “have a suitable site on which to place the manufactured home. The home may be placed on a rental site in a manufactured home park, provided the park and lease agreement meet FHA guidelines.” The home may also be “situated on an individual homesite owned or leased by the borrower”.
- The mobile home may not remain unattached to a permanent foundation.
Not all FHA lenders offer FHA mobile home loans or manufactured home loans. Ask your participating lender if that financial institution offers mobile home loans. You may need to shop around for a lender who can work with your individual circumstances.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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