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Financing Manufactured (Mobile) Homes

Under the Title I program, FHA approved lenders make loans from their own funds to eligible borrowers to finance the purchase or refinance of a manufactured home and/or lot. FHA insures the lender against loss if the borrower defaults. Credit is granted based upon the applicant s credit history and ability to repay the loan in regular monthly installments.

FHA does not lend money; FHA insures loans in order to encourage mortgagees to lend. Title I manufactured home loans are not Federal Government loans or grants. The interest rate, which is negotiated between the borrower and the lender, is required to be fixed for the entire term of the loan, which is generally 20 years.

Purpose of the Loan

A Title I loan may be used for the purchase or refinancing of a manufactured home, a developed lot on which to place a manufactured home, or a manufactured home and lot in combination. The home must be used as the principal residence of the borrower.

Manufactured Homes Placed on a Leased Lot

For Title I insured loans, borrowers are not required to purchase or own the land on which their manufactured home is placed. Instead borrowers may lease a lot, such as a site lot within a manufactured home community or mobile home park. When the land/lot is leased, HUD requires the lessor to provide the manufactured homeowner with an initial lease term of 3 years. In addition, the lease must provide that the homeowner will receive advance written notice of at least 180 days, in the event the lease is to be terminated. These lease terms are designed to protect homeowners in case the lessors sell the land or close the park.

Maximum Loan Amount

• Manufactured home only - $69,678
• Manufactured home lot - $23,226
• Manufactured home lot - $92,904

Maximum Loan Term

• 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

Locating a Dealer

Manufactured homes are usually purchased through dealers or retailers that sell the homes. The names of lenders in your area which specialize in financing manufactured homes can be obtained from local retailers. These retailers are listed in the yellow pages of your telephone directory. They have the required application forms.

Manufactured homes must comply with the Model Manufactured Home Installation Standards, and all applicable state and local requirements governing the installation and construction of the manufactured home foundation system.

Consumer Protection

HUD provides two types of consumer protection. The borrower must sign a HUD Placement Certificate agreeing that the home has been installed and set-up to their satisfaction by the retailer before the lender can give the loan proceeds to the retailer. After moving in, the borrower can call HUD at (800) 927-2891 to get assistance about the problems with construction of the home.

Eligible Borrowers Must

• Have sufficient funds to make the minimum required downpayment.
• Be able to demonstrate that they have adequate income to make the payments on the loan and meet their other expenses.
• Intend to occupy the manufactured home as their principal residence.
• Have a suitable site on which to place the manufactured home. The home may be placed on a rental site in manufactured home park, provided the park and lease agreement meet FHA guidelines. The home may be situated on an individual homesite owned or leased by the borrower.

An Eligible Manufactured Home Must

• Meet the Model Manufactured Home Installation Standards.
• Carry a one-year manufacturer s warranty if the unit is new.
• Be installed on a homesite that meets established local standards for site suitability and has adequate water supply and sewage disposal facilities available.

The proceeds of a Title I manufactured home loan may not be used to finance furniture (for example, beds, chairs, sofas, lamps, rugs, etc.). However, built-in appliances and equipment and wall-to-wall carpeting are eligible for financing.

Want Advice on Buying a Home?

HUD encourages those who are considering a home purchase to talk with a HUD-approved housing counseling agency for guidance. These agencies offer free assistance to consumers in meeting their specific housing goals. A housing counselor can assess your financial situation, determine available options, and is familiar with various HUD programs and other local community resources.

HUD-approved counseling agencies are located throughout the country. You can find a counseling agency near you by calling (800) 569-4287 (toll-free). Or, search for HUD-approved housing counseling agency near you by visiting the following website: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

Equal Opportunity in Housing

The Fair Housing Act prohibits discrimination in housing and related transactions, including mortgages and home improvement loans. Lenders may not deny funds or offer less favorable terms and conditions in lending on the basis of the borrower s race, color, religion, sex, national origin, familial status (i.e. the presence or number of children in a household) or disability. In addition, lending decisions may not be based on the race, color, sex, religion, national origin, familial status or disabilities of persons associated with the borrower or with the area surrounding the property.

If you believe you have been the victim of discrimination in mortgage lending on one of the prohibited bases, you may file a fair housing complaint by contacting a local fair housing advocacy group, the Office of Human Rights for your state or local government, or by calling the national Fair Housing Hotline at (800) 669-9777 or TTY: (800) 927-9275.