Home prices have spiked over the last couple of years. Many hopeful buyers find themselves priced out of the traditional housing market. This has ushered in a movement of consumers looking for alternatives to a traditional stick-built home.

While some buyers have simply resigned themselves to being long-term renters, others have decided to take a second look at more affordable options such as manufactured homes.

What To Think About When Considering a Mobile Home

Mobile homes were once looked down upon as sub-standard residential units that were typically found in low-income mobile home parks. However, a lot has changed over the years, and manufactured homes are now a great alternative.

Manufactured Homes Are Not Modular Homes

Mobile homes and manufactured homes are essentially the same things. Some real estate professionals and builders will call those homes built before July 15, 1976 "mobile homes," and those built after that date "manufactured homes." While these homes differ in the safety standards in place at the time of their construction, they are structurally the same.

Modular homes are not the same as manufactured homes. While modular homes are pre-fabricated like mobile homes, they are held to the same building codes that a traditional home must adhere to. This also leads to differences in the structure, such as the ability to include a second story in a modular home.

Mobile Home Advantages

An estimated 17 million people are currently living in mobile homes in the United States alone. There are a lot of good reasons for that:

  • Cost: On average, mobile homes cost 20% less than traditional homes.

  • Location Choice: You can place your home on your own land or rent a space in a mobile home neighborhood.

  • Customization: These homes may be limited on floor plans, but they can be loaded with special features.

  • Home Warranty: New manufactured homes typically come with a one-year warranty on the structure and separate warranties for all appliances, fixtures, windows and doors.

  • Energy Efficiency: Major mobile home manufacturers usually include energy-saving appliances, doors and windows.

Mobile Home Disadvantages

You would be hard-pressed to find any style of home that doesn't have disadvantages, and manufactured homes are no different. Here are a few that are worth noting:

  • Mobile homes may depreciate rather than appreciate in value.

  • Re-selling a manufactured home can be more challenging than a traditional home.

  • If you rent your lot, the owner can evict you.

  • Though mobile homes have come a long way, they are still not as safe as wood-built structures in a high-wind scenario.

  • Manufactured homes can be difficult to find financing for.

Individual home buyers have to assess the pros and cons of a mobile home purchase and decide if it's the right choice for them.


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How To Finance Your Manufactured Home

One of the challenges of purchasing a mobile home is that it can be difficult to secure financing. Traditional lenders often refuse to finance manufactured homes for two main reasons:

  • As these homes are moveable, lenders see them as personal property rather than real property.

  • Unlike site-built homes, mobile homes do not gain in value over time; in fact, they consistently depreciate.

The good news for hopeful homeowners seeking to purchase a manufactured home is that financing is available. The Federal Housing Administration has a manufactured home loan, although there are specific requirements.

Qualifying for an FHA Manufactured Home Loan

To get an FHA loan for the purchase of a manufactured home, both the borrower and the home will need to qualify.

Buyer Requirements

If you are applying for an FHA manufactured home loan, you will need to fill these requirements:

  • Minimum credit score of 640

  • Sufficient debt-to-income ratio

  • Ability to pay a minimum downpayment of 3.5%

  • Established work history

The lender you are working with may have established additional guidelines that you will need to meet in order to secure a loan.

Structure Requirements

There are several requirements that the mobile home will need to meet to qualify for an FHA loan.

Safety Standards

Your home must meet the Manufactured Home Construction and Safety Standards established on June 15, 1976. If your home was constructed before this date, it may not meet these standards.

Foundation Requirements

You will need to have the foundation inspected to assure that it is in compliance with HUD requirements. These include:

  • Anchors and straps to withstand wind

  • Removal of axles and wheels

  • Crawl space vapor barrier

  • Piers at exit points larger than 48 inches

  • Stabilizers to limit movement of the structure

Documents and Identification

Just as a traditional home has a deed and lot identification, a mobile home has essential documents and identifying markers that you will need to produce when applying for an FHA loan.

  • The data plate is a document that outlines the specific geographic location for which a mobile home was built. It could be posted in a closet or cabinet or on the home's electrical panel.

  • Certification labels are tags attached to the outside of the home. Larger homes that were not constructed in one piece will have multiple tags, one for each section of the home.

If you are purchasing a new manufactured home, locating these items will be a simple process. If you are purchasing a used home or looking to refinance an existing home, it could be more challenging.

If these items cannot be located, by you or the seller of the home, you may need to have the Institute for Building Technology and Safety research and certify this information before a loan can be processed.


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Choosing Whether To Buy a Manufactured Home

Whether a manufactured home is right for you and your family is a personal decision. There are many benefits, beginning with a purchase price that is significantly lower than a traditional home. You will also be able to choose the right location for your home and enjoy amenities and special features that you might not otherwise be able to afford.

However, there are drawbacks as well, such as the extra steps you will need to take to secure an FHA manufactured home loan. You can only make the correct decision for your situation by carefully assessing your financials, lifestyle, future plans and preferences.