Mobile Home Loans: How to Finance Your Mobile or Manufactured Home

Nearly 18 million Americans live in what they consider a mobile home or trailer, according to the U.S. Census Bureau. That accounts for about 5% of the entire population.

The perks of these living arrangements are obvious: they’re low-cost, they’re flexible in location, and they don’t require the same level of upkeep and maintenance as a single-family home.

But financing a mobile home comes with its own challenges—and it’s not the same as getting a traditional mortgage. Are you looking to finance a mobile or manufactured home? This guide will break down your options.

In this guide:

• Mobile, manufactured, and modular: What’s the difference?
• Pros & cons of mobile home financing
• Types of manufactured and mobile home financing

Mobile, manufactured, and modular: What’s the difference?

The term “mobile home” is all-encompassing for many people, but really, there are three types of homes this phrase may be referring to: an actual mobile home, a manufactured home, or a modular home. Knowing what category your home falls into will determine your options for financing.

Manufactured homes

Manufactured homes are properties built in a factory and then moved to your desired home site (either by you or your manufacturer). They’re also installed on a permanent foundation.

For financing purposes, manufactured homes need to be built after June 15, 1976, to qualify for manufactured home financing, as this is when the Department of Housing and Urban Development set safety standards for their production.

Because manufactured housing is permanently affixed, many lenders consider them “real property” and have mortgage programs designated for their financing. There are FHA, VA, USDA, and GSE options for manufactured home loans.

Mobile homes

Mobile homes can be one of two things: a manufactured home built before the above-mentioned 1976 date or an actual mobile home (on wheels) that you can travel in.

In most cases, these homes are considered “personal property” and are not eligible for traditional financing. You’ll likely need what’s called a “chattel loan” or personal loan to finance the purchase of a mobile home. This is what we refer to as “mobile home financing” or “mobile home loans” in this guide.

There are a few other financing options, too, which you’ll see noted below.

If your mobile home is on a fixed foundation but is on rented land, such as a lot in a mobile home park, you may also have trouble getting a traditional mortgage and may need a personal or chattel loan instead.

Modular homes

Modular homes are similar to manufactured ones in that they’re both built off-site in a factory. The only difference? The pieces are actually assembled on-site, at your desired location.

These homes are required to meet local building codes and are affixed to a permanent foundation, so they’re usually eligible for traditional mortgage financing as well.

If you need to finance the purchase of both your home and the land you’re placing it on, there are FHA loan programs to help.

>> Read more: Best FHA Lenders: Get Help Buying Your First Home

Pros & cons of mobile home financing

If you’re unable to get a traditional mortgage loan and need to use more creative financing to purchase your mobile home, here are the pros and cons you’ll face along the way:

Keep in mind that unlike most real properties, mobile homes depreciate in value (every year, actually). If you want to improve your wealth over time, it might be smarter to buy a low-cost, used single-family home instead.

Just make sure to get a thorough home inspection to ensure it’s safe and habitable (this is important for FHA financing, too).

Types of manufactured and mobile home financing

There are several types of mobile home loans you can choose from. Study up on your options below to see which is best for your individual situation.

Chattel loans

Chattel loans can be used to finance both mobile and manufactured homes but are only available for the physical properties—not the land or lot they’re placed on.

Technically a type of personal property loan, they’re similar to traditional mortgages in that they’re secured—meaning your home can be seized if you fall behind on payments.

The main difference is your property doesn’t have to be affixed to a permanent foundation. You can also use chattel loans whether you own the real estate or you lease it.

There’s a chance you can get a chattel loan from your bank or a local credit union—especially if you’ve already done business there in the past. But if you’re looking for a convenient online option, LightStream can be a great choice for creditworthy borrowers.

LightStream

LightStream doesn’t have a chattel loan, per se, but it does have a tiny home loan, which is essentially the same idea. The main difference is that LightStream’s loan is unsecured. The program offers discounts for auto-payments, funding as soon as the same day, and a number of other perks—including a fully online or mobile application process.

• Credit score category: Excellent, good
• Soft credit pull to check rates: Not available
• Deposit time: As soon as the same day
• Origination fee: 0%
• Late fee: None
• Discounts: 0.50% interest rate reduction for enrolling in autopay
• Repayment terms: 24 – 144 months^**

Personal loans

You can also use personal loans to finance a mobile home purchase. Because these are usually unsecured (there’s no collateral to safeguard the lender), they typically come with higher interest rates than other options.

If you want to lower your rates, you might consider a secured personal loan—just know that if you fail to make your payments, you could lose your home. 

Upgrade

If you have bad or fair credit, Upgrade is a good option to finance your mobile home purchase. They do an initial soft pull on your credit so you can check rates without hurting your credit score. The loan application process is simple and you can receive funding as soon as the next day.

• Credit score category: Fair, bad
• Soft credit pull to check rates: Yes
• Deposit time: As soon as the next day
• Origination fee: 2.9% – 8%
• Late fee: $10
• Repayment terms: 36 or 60 months

Seller/manufacturer financing

Most places that sell or manufacture mobile homes offer in-house financing, which you can use to make your purchase. Depending on the lender and loan terms, these may or may not offer competitive rates.

If you do decide to go this route, make sure to get a quote for at least one chattel or personal loan, too, so you can properly compare rates and evaluate your options. As long as you’re only getting prequalified for each loan, it won’t affect your credit score.

RV loans

Generally, when people mention mobile homes, they’re referring to manufactured properties built off-site and permanently placed on another. In some cases, though, you may need to finance a home on wheels instead—a recreational vehicle not intended for permanent or long-term placement.

If this is the type of home you’re looking to purchase, an RV loan may be the right choice. See below for information or check out our guide to RV loans for other options. 

LightStream

In addition to the tiny home loan, LightStream also offers a mobile home loan. If you have excellent or good credit, this is a great option.

• Credit score category: Excellent, good
• Soft credit pull to check rates: Not available
• Deposit time: As soon as the same day
• Origination fee: 0%
• Late fee: None
• Discounts: 0.50% interest rate reduction for enrolling in autopay
• Repayment terms: 24 – 144 months^**

Buying a manufactured or mobile home? You have options

Whether you’re buying a manufactured, mobile, or modular home, there are financing options to help you do it. Just do your research, get prequalified for several loans, and compare rates before choosing who to go with. Shopping around can save you thousands in the long run.

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^*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

^**Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.