Can You Get an FHA Loan for a Manufactured or Mobile Home?

Can you get a mortgage? The answer’s yes. Not only can you get a home loan, you can buy a mobile home using an FHA loan, a government-backed loan with highly favorable terms.

Can You Get an FHA Loan for a Manufactured or Mobile Home?

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$1,000-50,000 Loan Amount

8.49-35.99% APR

3–7 years Terms

560 Minimum Credit Score

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Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49%-35.99%. All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's bank partners. Information on Upgrade's bank partners can be found at https://www.upgrade.com/bank-partners/.

Mobile home vs. manufactured home: What’s the difference?

You’ll often see these words used interchangeably in ads and listings, along with the terms “trailer” or “modular home.” In reality, there are few substantive differences in design between all of these. It comes down to when the home was constructed. 

The first mobile homes (as we understand the term today) were made in the 1920s. They were intended for camping and could be pulled––i.e., trailered––behind a car or truck. After World War II, trailers rose as an option for cheap, quick housing as veterans returned to civilian life.

These early homes had low to no construction standards and were often lost to fires, floods, and other hazards. For this reason, safety experts recommend avoiding mobile homes built before 1976.

Why that specific year? That was when HUD Manufactured Home Construction and Safety Standards were established. This 1976 law sets formal minimum standards for fire safety, energy efficiency, plumbing, and design. With this law, these homes were formally referred to as “manufactured homes” to distinguish them from stick-built or site-built homes. The term applies to all housing manufactured in a facility, then moved to its final site. 

What is an FHA manufactured home loan?

Important

You do not apply directly to the FHA for a loan. Instead, you reach out to an FHA-approved lender.

FHA loans are those backed by the Federal Housing Administration. Because they are government-backed loans, lenders can offer them to people whose credit history might otherwise block them from borrowing.

You do not apply directly to the FHA for a loan. Instead, you reach out to an FHA-approved lender––more on that below. Manufactured home dealers may also be able to connect you with financing through their lending partners. 

These loans are typically more affordable than conventional loans and have a lower barrier to entry. Down payments can be as low as 3.5% for borrowers who meet credit score minimums. US News found the average cost of a new manufactured home in the U.S. is $148,100. Buyers using an FHA loan for that purchase would need to come up with a down payment under $6,000.

The down payment does not have to come from your own savings. You can use gifted funds as long as the donor provides a letter with their contact information, the gift amount, and a statement that they do not expect repayment. 

FHA manufactured home loan options

FHA loans fall under two programs: Title I and Title II. These loans have different limits and purposes. Which is right for you depends on whether you are living on land you own and why you need to borrow. 

Title I FHA loans for mobile or manufactured homes

A Title I loan can be used to buy a new or used manufactured home, even on land you do not own. Think of a trailer park or mobile home community where residents own their homes, but rent the lots beneath them. 

You can use a Title I loan to finance the site for a manufactured home. This can include vacant, standalone lots, and lot purchases in resident-owned mobile home communities.

These loans can also be used to finance improvements or repairs to a manufactured home if it is on a lot you already own. They can be used to refinance a manufactured home, the lot it sits on, or both. 

Title II FHA loans

To qualify for a Title II loan, the house must be permanently attached to land you own. So, if you see a piece of undeveloped land you’d like to make your home, you can purchase a mobile home and transport it there, all paid for with an FHA loan. 

You can use a Title II loan to finance the purchase of a new manufactured home, as well as the cost of transporting and installing it. 

These loans can also be used to refinance an existing loan used to buy a manufactured home. To qualify, your home must have been installed at the site for at least one year. 

Benefits and drawbacks of FHA manufactured home loans

The top benefit of an FHA loan is accessibility. People who might otherwise be unable to own a home can find a path through an FHA loan. Owning your own home can mean lower monthly housing costs, increased wealth, and greater stability. 

However, potential borrowers still need to be sure the loan they are looking at will meet their specific needs. 

One of the potential drawbacks of an FHA loan is the loan limit. Title I loans have stringent upper limits. Someone buying a house and land is limited to $92,904 as of 2024. Buying only the mobile home means a $69,678 limit. If you are only buying the land, you have a loan limit under $24,000. In many parts of the country, this is not enough to purchase even a used manufactured home in liveable condition. 

The limits for Title II loans are based on national median home prices, which gives borrowers some leeway. As of 2024, the FHA limit is $498,257 for a single-family home.

Properties purchased with FHA loans must be inspected to be sure they meet health and safety standards. They also require a separate appraisal. Some sellers balk at these requirements because they consider them an extra hurdle. 

How to apply for the loan

Before you apply, make sure you meet the qualifications for the loan. There is a minimum down payment of 3.5%. This down payment option is available as long as you have a credit score of at least 580.

Lower credit scores are not a barrier, however. The FHA will accept borrowers with scores as low as 500 as long as they are able to make a 10% down payment. 

Lenders will also look at your debt-to-income (DTI) ratio. This is the portion of your gross monthly income that goes toward debt. Debt can include credit card payments, installments on a car loan, and student loans. You must have a DTI ratio under 43% to qualify for an FHA loan. This percentage must include your new FHA mortgage.  

Don’t know your credit score? You can often get it for free from nonprofit HUD-certified housing counselors. Your credit card company may also include your score in your monthly statement. The score is determined by factors you can find on your credit reports. Credit reports from all three reporting agencies can be accessed once a week at no charge from AnnualCreditReport.com.

HUD maintains a list of lenders you can access by entering your location and the type of loan you are looking for. You’ll need to provide your Social Security number, proof of citizenship or residency, and bank statements going back at least 30 days. 

Tip

Before you apply, make sure you meet the qualifications for the loan.

Alternatives to FHA loans

If you or the property you are working with don’t meet FHA loan requirements, that doesn’t mean you are locked out of funding. There are a number of home improvement loans and personal loans that can give you the money you need to cover your manufactured home and any improvements it needs. 

At Acorn Finance, we work with lenders who can get you the money you need. There’s no fee to apply. And, you can prequalify for a loan without any risk to your credit.

Homes come in many sizes, from cozy refurbished Airstreams to 5-bedroom manufactured log cabins, to massive traditional homes. Your loan options are just as varied. Answer a few quick questions at our loan portal today to learn more.