Thinking of purchasing a mobile home, but not sure about financing? Take a look at the popular FHA Mobile Home Loan program. With low money down options and easier qualification requirements, it’s a great choice for borrowers looking to save money!
What is an FHA Mobile Home Loan?
The Federal Housing Administration (FHA) offers special home financing products for a variety of housing types, including mobile and manufactured homes.
Why are FHA Mobile Home Loans so popular?
These loans typically require less money down (usually only 3.5% of the purchase price) and the seller is allowed to contribute up to 6% toward closing costs, further reducing upfront expenses. In addition, qualifying for this type of loan is usually easier than qualifying for a conventional fixed rate loan, since the credit requirements for FHAs are often a little more lenient.
How does it work?
FHA loans are backed by the Federal Housing Administration, meaning if you should stop paying your mortgage payment, your lender is protected from financial loss. Without this insurance, many lenders would be reluctant to help people finance mobile and manufactured homes, as they are sometimes considered more of a risky investment.
Do I have to own the land to qualify for an FHA Mobile Home Loan?
The FHA offers two types of mobile home loans: one for people who own the land the home sits upon and another for homes that are (or will be) situated on a rented lot.
How can I qualify?
According to the U.S. Department of Housing and Urban Development, eligible borrowers must (subject to change – speak with a licensed mortgage professional for the most up-to-date criteria)…
a.) Have sufficient funds to make the necessary down payment
b.) Show that they have adequate income to make the monthly payments and handle other financial expenses.
c.)Intend to use the mobile home as their primary residence.
d.)Have a suitable site on which the home will be placed.
Are there property restrictions?
According to the U.S. Department of Housing and Urban Development, an eligible mobile or manufactured home must…
a.) Meet the Model Manufactured Home Installation Standards
b.) Carry a one-year manufacturer’s warranty. (If the unit is new)
c.) Be installed on a home site that meets established local standards for site suitability, including adequate water supply and sewage disposal facilities.
To learn more about FHA mobile home financing solutions, talk to your lender today. He or she can give you more in-depth information on FHA-backed mobile home loans and keep you up-to-date on current rates. Please note that FHA guidelines change periodically. Visit Hud’s web site for the latest information.