Manufactured homes offer an affordable path to homeownership, especially as housing prices continue to climb across the country. But when it comes to buying one, financing can look different compared to traditional site-built homes. If you’re considering purchasing a manufactured home, understanding the ins and outs of financing options is key to making a smart, informed decision.
What is a Manufactured Home?
A manufactured home is built in a factory and transported to a site, where it’s placed on a foundation. These homes must meet the standards of the U.S. Department of Housing and Urban Development (HUD), which ensures safety and quality. Unlike modular homes, manufactured homes are often placed in communities or on leased land, and this distinction can influence financing availability and terms.
Why Financing is Different for Manufactured Homes
Traditional mortgages are often harder to obtain for manufactured homes due to how they’re classified. If the home isn’t permanently affixed to land owned by the buyer, it may be considered personal property rather than real estate. This classification affects which lenders and loan programs are available. However, there are still many viable financing options available today.
Top 7 Financing Options for Manufactured Homes in 2025
1. FHA Loans (Title I and Title II)
FHA-backed loans are among the most accessible financing methods for manufactured homes.
- Title I loans are for homes placed on leased land or in manufactured home communities. They finance the home only, not the land.
- Title II loans are for homes placed on land owned by the borrower. The home must be permanently affixed to qualify.
Pros: Low down payments, flexible credit requirements
Cons: Strict HUD compliance, upfront and annual mortgage insurance premiums
2. VA Loans
If you’re a qualified veteran, VA loans are a powerful option.
- The home must be affixed to land you own or will purchase.
- VA loans for manufactured homes can be used to buy a home, a lot, or both.
Pros: No down payment, no PMI, competitive rates
Cons: Must meet specific VA and HUD standards
3. USDA Loans
The USDA offers loans for manufactured homes in eligible rural areas.
- These loans are available to low-to-moderate-income buyers.
- The home must be new, permanently affixed, and located in a rural area.
Pros: No down payment, low interest rates
Cons: Strict location and income eligibility requirements
4. Conventional Loans (Fannie Mae and Freddie Mac)
Both Fannie Mae and Freddie Mac offer programs created specifically for manufactured homes.
- Fannie Mae’s MH Advantage and HomeReady loans are designed for homes that meet specific standards, including permanent foundations and energy efficiency.
- Freddie Mac’s CHOICEHome offers similar financing for homes with features comparable to site-built homes.
Pros: Competitive interest rates, low down payment options
Cons: High eligibility standards, more documentation required
5. Chattel Loans
Chattel loans are personal property loans, often used when the manufactured home is not on owned land.
- These loans are similar to auto loans, typically with shorter terms and higher interest rates.
- Commonly used for homes in leased land communities.
Pros: Faster processing, easier to qualify for
Cons: Higher interest rates, shorter repayment terms, no land equity
6. Personal Loans
For buyers with strong credit and smaller financing needs, personal loans can offer a flexible solution.
- These loans don’t require the home to meet HUD standards.
- It is ideal for used manufactured homes or homes on leased land.
Pros: No property restrictions, fast approval
Cons: High interest rates, shorter loan terms
7. Seller Financing
Sometimes, the seller of a manufactured home will offer financing directly.
- This is more common in private sales or smaller communities.
- Terms and interest rates are negotiated between buyer and seller.
Pros: Flexible terms, potential for lower closing costs
Cons: Less regulation, potentially higher interest
Top 7 Things to Consider Before Financing a Manufactured Home
Before you start shopping around for loans, it’s important to assess your individual situation and understand what you could be getting into. Here are some of the top things you should consider before making the decision to finance a manufactured home:
1. Land Ownership
Do you own the land, plan to purchase it, or will the home be placed in a community?
- Owning the land improves your financing options and loan terms.
- Leased land limits you from getting chattel loans or FHA Title I.
Pro Tip: Consider the long-term costs of renting land vs. buying.
2. New vs. Used Manufactured Home
Financing a new manufactured home is easier than a used one.
- New homes are more likely to meet lender and HUD standards.
- Used homes may not qualify for traditional loans and may require personal or chattel financing.
Pro Tip: Always get a professional inspection, especially for used homes.
3. Home Classification
Is the home considered real property or personal property?
- If the home is permanently affixed to land you own, it may qualify as real property—which opens up more favorable financing.
- If not, it’s likely considered personal property, limiting your loan options.
Pro Tip: Converting personal property to real property can increase value and financing options.
4. Credit Score & Financial Health
Just like with traditional home loans, your credit score, debt-to-income ratio, and income stability matter.
- Most lenders require a credit score of 620 or higher for favorable terms.
- FHA and VA loans offer more flexibility for lower scores.
Pro Tip: Improve your credit score before applying for better interest rates.
5. Loan Term & Interest Rates
Manufactured home loans often come with different terms than conventional home loans.
- Chattel loans, for instance, often have terms of 15–20 years instead of the usual 30.
- Interest rates can also be higher, depending on the loan type and your credit profile.
Pro Tip: Shop around and compare APRs, not just interest rates.
6. Home Location & Zoning
Some cities and counties have zoning restrictions on manufactured homes.
- Always check local laws to ensure the home can be placed on your desired property.
- Some lenders may also restrict financing based on location.
Pro Tip: Confirm zoning laws and get all permits before moving forward.
7. Resale Value and Depreciation
Unlike traditional homes, manufactured homes can depreciate in value—especially if not on owned land.
- Homes affixed to owned land tend to hold value better.
- Market demand in your area will also affect resale value.
Pro Tip: Treat your manufactured home as a long-term investment and maintain it well.
Final Thoughts
Financing a manufactured home may seem more complicated than a traditional mortgage, but it’s entirely manageable with the right knowledge and preparation. Whether you’re a first-time buyer or downsizing for retirement, manufactured homes offer affordable, flexible living—especially when paired with smart financing.
Do your homework prior to applying: find out what type of loan you are eligible for, how the home is zoned, and how the land situation affects the conditions of your loan. And compare prices! Interest rates, terms, and approvals can vary considerably between lenders.
With the right plan, you can secure low-cost financing and take the plunge into manufactured homeownership with confidence.
