Manufactured home loans are more and more becoming the choice for people who want to own their own home, but are replace apartments now unhappy with the “apartment feel” of a separate apt/dorms or their high price. But the financing can be challenging to get for a manufactured home. In this complete guide, we’re going to take you through all of the details of what a manufactured home loans is, how it works, and what you need to know so you can make the most educated decision. And as we go, we’ll explain how this loan ties into larger homebuying objectives like those ulterior motives you have with VA Construction Loans and other smart housing decisions here in Texas.
What Is a Manufactured Home Loan?
A mobile home loan is a type of loan that is specifically made in order to help out those who want to purchase a mobile home We’ve already defined this type of loan, being offered for factory made homes that are less than 400 square feet in dimension, and having been built after 1976 to HUD standards. These houses are built in a factory, and then reeled to a site forever.
Unlike site-built homes, manufactured homes could be more affordable given that construction is simplified. But getting financing for one can entail different rules, interest rates and requirements, depending on the lender and the type of loan.
Types of Manufactured Home Loans
There are a variety of loans available that can be used to purchase a manufactured homes:
- FHA Loans: Government backed-mortgages with low down payments and more relaxed credit standards. They’re perfect for first-time homebuyers.
- VA Loans: Cal Swinford, branch manager with Caliber Home Loans in Dublin, says some veterans or active-duty service members can qualify for a VA loan to purchase a manufactured home if they meet certain criteria.
- Chattel Loans: When the home is not permanently affixed to the land, chattel loans are the most appropriate type of financing for mobile or leased-lot homes.
- Conventional Loans: They can be used to finance manufactured homes that adhere to Fannie Mae or Freddie Mac guidelines and which are on land owned by the homebuyer.
Key Requirements for a Manufactured Home Loan
In order to be eligible for most manufactured home loans: owners must generally meet the following criteria:
- The house must be HUD approved and be constructed after June 15, 1976.
- If it is financed as real property, it must be permanently attached to a foundation.
- The borrower must own or must be purchasing the land on which the home is built.
- Credit score and income requirements will be different by loan type.
If you’re looking for a new home and would like to build on a lot, look into getting your financing set up with a VA Construction Loan, a loan that’s perfect for veterans looking to build (including building a modular or manufactured home) a home on their land with terms that work well for veterans.
Why Choose a Manufactured Home?
There are a lot of advantages to buying a manufactured home, particularly in high-demand housing markets such as Texas:
- Affordability: Manufactured homes are far less expensive per square foot than site-built homes.
- Energy Efficiency: Model is constructed with energy-saving capabilities.
- Fast Construction: Factory construction means no weather holdups.
You should research where to buy land in Texas when looking to build. Land prices vary greatly statewide, so the best financing option for you will depend on your unique situation.
Modular vs. Manufactured: Know the Difference
Although the terms are sometimes used interchangeably, manufactured and modular homes are not the same. Modular homes are assembled in sections and then placed on a lot, fitting into standard lenders’ criteria. If you’re an inquiring mind, you might research how to build a Modular Home on more traditional financing.
Finding the Right Lender and Builder
That means you have to get the lender and the builder to work well together. For more options, also search for a lender that specializes in manufactured home loans with low rates and flexible terms. At the same time, make sure your builder is a proven deliverer of high-quality building.
If you’re searching for the best Texas home builders, focus on those who specialize in factory-built housing and understand the unique requirements for permanent foundations and HUD compliance.
And remember to ask them if they sell Triple Wide Manufactured Homes that have larger rooms for families that want more space without spending more money.
Working With Quality and Compliance
Quality counts, and you are making a purchase that will last for years down the line. Find a homebuilding company that has a record of satisfied customers and can stand behind their work with certifications and warranties (AND great reviews) as the Hotels Do.
If you’re right at home on your own land, and that land is titled as the real stuff, you might be able to get a Loan to Build a House on My Land program. These loans can cover the cost of placing the home on the lot, installing utilities and making sure the land meets lending requirements.
Interest Rates and the Rate Drop Advantage
Interest rates on manufactured home loans are can be higher and are dependent on the borrower’s financial qualifications. In most cases, chattel loans have an interest rate that is 2 percent higher than that of a mortgage for a house on real property. But refinancing options can save you money in the long run.
One such option is Rate Drop Advantage, a refinancing benefit that lets you take advantage of a lower rate if rates have dropped and you can save on interest over the life of your loan.
Final Thoughts
A Texas manufactured home loan can be one of the best options for low and moderate income families to be able to live in the home of their dreams in the land of their dreams. Whether you are a first-time buyer or a military veteran considering purchasing a home using your benefits, you have options and considerations around best fits that apply specifically to your scenario.
Whether you have chosen a VA Construction Loan, want to know where to buy land in Texas, or decided to build a modular home, you can feel confident that you have covered the bases on options for investing in your future. With a little help knocking down walls, reliable contractors, and a good plan, building your dream home with a little elbow grease is not as far-fetched as it seems.