Financing For A Mobile Home

Owning your own home is the American dream; but the recent real estate boom put home ownership out of reach for many people. However, you can still make that dream come true by buying a mobile home.

Mobile homes are housing units that are constructed in factories, rather than on a parcel of land. They're then transported by truck to the site that they'll occupy.

Sometimes, mobile homes are referred to as "manufactured homes," but the terms aren't interchangeable. "Manufactured home" is a term used to describe a unit built according to the Department of Housing and Urban Development's (HUD) construction code. These homes are transported in one or more sections on a permanent chassis. Although they're placed in a permanent location, they can still move.

Financing under HUD's Title I Program

Under Title I, approved lenders make loans to eligible borrowers to finance the purchase of a mobile or manufactured home and/or lot. The Federal Housing Administration guarantees the loan against borrower default. Mobile home loans are made based upon the applicant's credit history and ability to repay.

These are not low interest rate loans. The rate is fixed and usually based on the market rate in the area at the time the loan is made. Title I loans may be used to purchase a new home or a refinance home loan. The unit must be the borrower's principal residence.

Veteran's Administration Guaranteed Loans

Eligible veterans can receive up to 40 percent of their financing or up to the maximum amount of $20,000 for manufactured homes. The Veteran's Administration (VA) guarantees the loan if the borrower defaults.

The VA home loans program considers a home "manufactured" if it's:

• Built on a permanent frame
• At least ten feet wide with 400 square feet of floor space
• At least 20 feet wide with 700 square feet of floor space

Non-government loan options

Some online lenders finance mobile/manufactured homes. You can also try the retailer from whom you buy your home. Since their objective is to sell units, they'll frequently offer you a competitive rate.

By carefully weighing all your loan options, you can find the home that's right for you. By making it a mobile one, you may wind up upwardly mobile.