The 5 best mobile home loans of 2021

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What is a mobile home loan?

A mobile home loan is a loan for manufactured homes that can be placed on land. Styles can vary from modest trailers to dwellings that look like houses permanently attached to the land they sit on.

Mobile home loans differ from a traditional home loan in that most lenders and counties do not view them as real estate, but rather as personal property. In fact, in many counties a mobile home is taxed by the Department of Motor Vehicles rather than the property tax assessor. In most cases, if you want to buy a mobile home and place it on land you lease, your loan will be more like a personal loan, with higher interest rates and shorter terms than a traditional home loan.

There are exceptions, however, and we’ve included them in this list. Some real estate lenders have loans for mobile homes if they are attached to the owner’s land. Others, and they are less numerous, will lend on a mobile home even if it is on land that you rent.

What does it take to get approved for a mobile home loan?

The lenders we looked at have loans ranging from $ 75,000 to $ 2 million for jumbo loan programs. The debt-to-income ratio (DTI) ceiling for most lenders is in the 40s. The lender will use your DTI and income to determine how much you can borrow.

If you qualify for one of the government-backed loan programs, such as the FHA, VA, or USDA, you can purchase a mobile home with a down payment of 3.5%, and in some cases less.

If you own the land or plan to buy the land with the mobile home, you will have more lender options than if you want to buy a mobile home that is in leased land in a mobile home park.

Do you have to own your land when buying a mobile home?

When you buy a mobile home, you don’t have to own the land, but it will open up more loan options for you.

Mobile homes are sometimes located in a mobile home park where the owner of the park holds title to the land and you lease it. In these cases, the landlord rents a piece of land but owns the mobile home itself. Many lenders will require you to sign a minimum three-year lease for the land before lending the mobile home.

Alternatively, mobile home owners can place mobile homes on land they own or buy in conjunction with the mobile home. When you own the land and the house, your loan rates and terms will be better, and you will have more loan options.

What credit score do I need to buy a mobile home?

The lenders we have reviewed and selected as the best may work with low credit scores between 500 and 600. A credit score below 500 may not qualify at all.

Of course, higher credit scores will always get you better rates and terms. Credit scores in the 700s and 800s will get the lowest interest rates.

If your credit score is low, look for a strong lender in the USDA, FHA, and VA programs. Conventional loans won’t forgive scores below 700 as much. You can get your loan approved, but it will carry higher rates and a term of 20 years or less.

How we choose the best mobile home loan providers

We looked at 12 mobile home lenders to select the top five. We analyzed the history and reputation of the business, whether they have financed both new and used mobile homes, and their minimum and maximum loan value limits.

The credentials of the borrower were also important. We compared companies to see who allowed borrowers to have lower credit scores, higher debt-to-income ratios, and if they had low down payment programs.

Finally, we analyzed the requirements of lenders to know if you are renting or owning the land on which your mobile home would sit. If you own the land, you will have more loan options, but that’s not a compromise.

In most cases, interest rates start a few points higher than conventional loans because mobile homes tend to depreciate. So we looked at the lenders’ interest rate ranges to make sure they were lower than the higher rates you will pay for an unsecured personal loan. , which is also an option for the purchase of a mobile home.

The financing of the only mobile home, with good credit and stable income, can be taken out in as little as two weeks. Buying the house and land and using a low down payment government program can extend the subscription period up to 60 days.