FHA Manufactured Homes and Mobile Homes
For home loan purposes, mobile homes and manufactured homes are basically the same thing. In the case of mobile homes there may be less labor involved for getting the home affixed to a permanent foundation than for a manufactured home that may come in sections and require some assembly (depending on circumstances) upon delivery.
The appeal of a mobile home or manufactured home is, for some borrowers, that these loans are smaller than the type of mortgage you would need to buy a condo unit or townhouse. Smaller loans, and lower monthly payments are just two of the incentives for some to investigate their options for an FHA mobile home loan.
FHA Mobile Home Loans: Provided for “Real Property”
When you purchase a mobile home or modular home with an FHA mortgage, the home must be classifiable as real property. A suburban home loan allows you to buy or build with the understanding that the home is mounted to an acceptable permanent foundation. A mobile home loan allows you to buy a home that is not (at first) fixed to a foundation.
Under the conditions of your FHA home loan, there must be a plan to install on a permanent foundation at a condition of loan approval. This cannot be done “some time in the future”, there must be a plan.
Your mobile home loan requires the property securing the loan to be be taxable as real estate regardless of whether or not it is actually taxed in your state. Your mobile home loan cannot be approved for non-real estate purchases such as an RV.
Mobile homes that will not or can not be permanently affixed to a permanent foundation (which must meet FHA standards) cannot be approved for an FHA home loan.
FHA Mobile Home Loans for Lot and Home
Some borrowers want to buy both a mobile home and land to have the mobile home placed upon (again, using a permanent foundation).
FHA mortgages can be approved to cover the cost of both the mobile home and land to place it on. Remember, the rules mentioned above regarding permanent foundations apply when you buy the lot and the home together.
If there is no specific plan to affix the home to a permanent foundation, you will be required to have one as a condition of loan approval. If you are not sure about how much time you have to get your home affixed to the foundation, ask your lender what standards apply for your transaction as well as how long it typically takes to have the installation performed.
You are not required to purchase land to put your mobile home on, but you will be required to show proof of a leased lot.
Learn About the Path to Homeownership
Take the guesswork out of buying and owning a home. Once you know where you want to go, we'll get you there in 9 steps.
Step 1: How Much Can You Afford?
Step 2: Know Your Homebuyer Rights
Step 3: Basic Mortgage Terminology
Step 4: Shopping for a Mortgage
Step 5: Shopping for Your Home
Step 6: Making an Offer to the Seller
Step 7: Getting a Home Inspection
Step 8: Homeowner's Insurance
Step 9: What to Expect at Closing
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