Rules to Know for FHA Manufactured Home Loans
Borrowers should know that they are not required to also purchase land to put the mobile home on, although this is common. If you do not own land, you will be required as a condition of loan approval to have a leased lot to place the mobile home upon. Again, permanent foundation requirements will apply regardless of whether you own or lease the land your new home will be placed upon.
Mobile homes are popular with some FHA borrowers for a very important reason--the price point is lower than some typical suburban homes. One source--Investopedia--reports that the average price of a new mobile home / manufactured home as reported in October 2020 at an average of somewhere around $85,000.
Single-wide mobile homes are closer to $60K in some housing markets; double-wide mobile homes can run as high as $110,000 (again, according to Investopedia). Lower prices mean lower down payments, and that’s an appeal for those who need to save money on up-front costs for their mortgages.
Mobile home loans guaranteed by the FHA loan program have some unique requirements. One of them? The manufactured-by rule; HUD 4000.1 states that mobile homes manufactured before June 15, 1976 cannot be approved for an FHA mortgage.
Then there’s a size restriction--your new home cannot be too small. HUD 4000.1 says your manufactured home must have a floor space of 400 feet or more to be approved for an FHA mortgage.
And what about FHA loan limits for mobile homes? This issue is a bit more complicated as there are FHA loans for land-only purchases for borrowers to place a mobile home on, there are also home-and-lot purchase options, and home-only options.
In 2021, FHA mobile home loan limits in typical areas for a combination mobile home and land purchase is $92,904.
The FHA loan limit for the mobile home alone in typical cost areas is $69,678. There is also an FHA loan limit for land-only purchases (intended to purchase and develop the lot for a mobile home rather than simply purchasing undeveloped land) which is $23,226.
The FHA maximum loan terms range from 15-20 years depending on certain variables according to FHA.gov:
- 20 years for a loan on a manufactured home (or on a single-section manufactured home and lot)
- 15 years for a manufactured home lot loan
- 25 years for a loan on a multi-section manufactured home and lot
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