Manufactured Loan Tips

Manufactured Home Loan Tips — What Buyers and Agents Need to Know

Financing a manufactured home can be more complicated than financing a traditional site-built home. The key is identifying potential property issues early and working with a lender that understands manufactured-home guidelines.

What to know

1. Down Payment Requirements Vary by Loan Program

Manufactured homes used as a primary residence may qualify for Conventional, FHA, VA or USDA financing.

Conventional financing may allow approximately 95% financing, or about 5% down. Certain qualifying manufactured homes may be eligible for up to 97% financing through specialized programs such as MH Advantage®.

FHA financing may allow up to 96.5% financing, requiring as little as 3.5% down.

Eligible VA borrowers may qualify for 100% financing with no down payment, although individual lenders may have additional requirements.

USDA financing may also provide 100% financing for eligible borrowers and properties.

Qualifying multi-width manufactured homes used as second homes may be eligible for Conventional financing, generally with at least 10% or more down.

Traditional Conventional, FHA, VA and USDA manufactured-home programs generally aren't available for investment properties. Some Non-QM programs may be available, but they typically come with larger down payments, higher rates or additional restrictions.

2. Additions and Structural Modifications Can Create Financing Problems

Room additions, attached garages, decks, porches and other modifications can affect loan eligibility, particularly when the work wasn't properly permitted, engineered or inspected.

Depending on the loan program, structural modifications may require inspection and approval from a licensed professional engineer or appropriate government authority.

If the property has additions or modifications, investigate them before getting too far into the transaction. Waiting until the appraisal or underwriting stage can cause unnecessary delays.

3. Foundation Requirements Vary by Loan Type

Foundation certification requirements aren't the same for every loan program.

Conventional financing doesn't always require a foundation certification on an existing manufactured home unless the appraiser identifies a concern.

FHA requires a foundation certification, although a previous acceptable FHA certification may sometimes be used when there have been no subsequent alterations or observable foundation damage.

VA may require certification when the appraiser identifies foundation concerns.

USDA generally requires a foundation certification.

Individual lenders can impose additional requirements, so the specific lender's guidelines should always be verified.

4. Foundation Skirting Can Become an Appraisal Issue

Skirting may look like a minor cosmetic detail, but it can become an appraisal or underwriting condition.

Non-load-bearing skirting generally needs to be permanently attached to an appropriate backing and provide adequate ventilation underneath the manufactured home.

It's worth checking the skirting before the appraisal rather than discovering a problem afterward.

5. HUD Certification Labels and the Data Plate Are Important

Manufactured homes normally have a HUD Certification Label, sometimes called a HUD tag or HUD seal, attached to the exterior of each manufactured section.

A multi-section home should generally have a label for each section. Appraisers typically identify and photograph these labels as part of the appraisal.

The HUD Data Plate is different. It's normally located somewhere inside the home and contains important manufacturing and certification information.

Missing or unreadable HUD information can complicate financing. In certain circumstances, verification may be available through the Institute for Building Technology and Safety (IBTS).

Buyers and agents should check for HUD labels and the Data Plate early in the transaction.

6. The Home's Manufacturing Date Matters

For most traditional manufactured-home financing, the home generally needs to have been manufactured on or after June 15, 1976, when federal Manufactured Home Construction and Safety Standards became effective.

USDA has additional age and construction requirements that must be satisfied.

The home's manufacturing date can normally be found on the Data Plate.

7. Minimum Size Requirements Apply

Minimum size requirements vary by loan program.

For Conventional financing, a manufactured home generally needs at least 400 square feet of living area and must be at least 12 feet wide.

FHA and USDA manufactured homes generally need at least 400 square feet.

VA generally requires at least 400 square feet for a single-wide and 700 square feet for a double-wide.

Single-wide homes may qualify under certain programs, but lender restrictions can make financing them more difficult.

8. A Home That Has Previously Been Moved Can Be Difficult to Finance

This is an important issue to identify before ordering an appraisal.

Under most traditional manufactured-home loan programs, the home generally needs to have been transported directly from the factory or dealer lot --as new- to its current permanent location.

If the home was installed somewhere else and later moved to its present site, financing options may become very limited.  Documentation must evidence the home was never installed at a previous location.

VA guidelines may offer somewhat more flexibility in certain situations, but additional inspections and lender requirements may apply.

9. The Appraisal Will Require Manufactured-Home Comparable Sales

Manufactured-home appraisals can be challenging in areas where there aren't many recent manufactured-home sales.

Conventional and FHA financing generally require manufactured-home comparable sales. VA and USDA requirements can differ, and individual lenders may impose their own appraisal requirements.

If an appraiser can't locate enough acceptable comparable sales, completing the appraisal and financing the property can become more difficult.

10. Multiple Homes or an ADU Can Complicate Financing

Properties containing multiple dwellings can create additional underwriting issues when either the primary residence or an Accessory Dwelling Unit (ADU) is a manufactured home.

These properties aren't necessarily ineligible, but lender requirements can vary considerably.

If a property includes a manufactured home plus another dwelling, ADU or second manufactured home, have the property configuration reviewed before assuming it will qualify.

11. Check the Property for Potential Problems Early

Many manufactured-home loan problems can be avoided by reviewing the property before the appraisal and underwriting process begins.

Try to determine whether the home is legally classified as real property, when it was manufactured, whether the HUD labels and Data Plate are present, whether it has ever been moved, and whether there are additions or structural modifications.

Also check the foundation, skirting, home size, availability of manufactured-home comparable sales and whether the property contains additional dwellings or an ADU.

Finding an issue doesn't automatically mean the property can't be financed. It means the appropriate loan program, lender and documentation need to be identified before the issue becomes a last-minute problem.

12. Manufactured-Home Lending Experience Matters

Manufactured-home financing can go smoothly when the property meets the applicable guidelines and potential problems are identified early.

The difficulty often comes when property-specific issues aren't discovered until the buyer is already well into escrow.

The best approach is to review the property early, identify the applicable loan guidelines and address potential issues before they threaten the closing.

If you're buying or refinancing a manufactured home in California and aren't sure whether the property will qualify, I’m happy to take a look.

No sales pressure—just straightforward answers about the property, your financing options and what it may take to get the loan closed.

Manufactured-home lending guidelines can change, and individual lenders may impose requirements beyond basic agency guidelines. Always verify current requirements for the specific property, borrower and loan program.