The 5 Best Mobile Home Loans of 2020

Find the right loan for your mobile home needs

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According to the U.S. Census Bureau, the average price of a new mobile home (officially called “manufactured houses or homes”) is $85,600. The average price for a single-wide is $52,900 and for a double-wide is $109,800. Used mobile homes can range from almost nothing, where the seller wants to just walk away from the monthly lot rent.

Unlike a traditionally built home that is permanently fixed to the ground and the land comes with the purchase, mobile homes can be moved. This creates a common situation where a mobile home park owner holds title to the land where you’ve parked your home, and you continue to pay a lot rental fee every month separate from the debt you owe on the home itself. Most mobile homes are considered personal property rather than real property because the owners don’t own the land upon which the home sits. Therefore, about 85% of the time, mobile homes are financed with either a chattel loan or a personal loan.

We reviewed more than 20 mobile home providers to help you find the best loan for your needs. In deciding on the top five, we considered the type of loan, credit requirements, and rates.

The 5 Best Mobile Home Loans of 2020

Manufactured Nationwide: Best Overall

ManufacturedNationwide

 ManufacturedNationwide

We chose Manufactured Nationwide as our best overall mobile home lender because it lends in all 50 states and works with government-backed loan programs that include manufactured homes as well as the more difficult construction and renovation programs. It provides various loan programs with competitive fixed rates and low- and no-money-down programs.

Pros
  • Buyers with less-than-perfect credit are eligible

  • Higher debt-to-income ratios are acceptable

  • 30-year and 15-year loan terms

  • Open seven days a week

  • Can do one-time close construction loans for manufactured homes and land

Cons
  • Low credit scores can translate into higher rates

  • Government-backed programs have distinct purchasing limits that vary based on where you live

  • Your mobile home must be on a fixed foundation on land that you own to qualify

  • Does not finance properties in a mobile home park or on leased land

A division of Magnolia Bank, the Manufactured Nationwide team has more than 100 years of combined manufactured home lending experience. The company is our best overall mobile home lender because it lends in all 50 states and is an expert in low-down-payment, government-backed loan programs.

Manufactured Nationwide offers single-, double-, and triple-wide manufactured, mobile, and modular home loans for new and used homes. Its government-backed loan programs, such as the VA, FHA, USDA, and FNMA, provide competitive fixed-rate mortgages to this segment of the housing market.

It has programs that lend as low as $50,000 for renovations and up to $2 million on purchases. Credit scores for the VA loan must be at least 620, while the FHA program allows credit scores even lower. Manufactured Nationwide's down payment requirements range from zero down for their VA and USDA programs to little money down for the FHA program.

Manufactured Nationwide's loan programs allow borrowers to have a debt-to-income ratio of up to 43% and a typical interest rate of 4.0%. The loan duration is 15 or 30 years.

Depending on how many issues come up, a loan can stay in the underwriting stage anywhere from two to six weeks, and the entire loan process takes 30 to 60 days from application to closing.

ManufacturedHome.Loan: Best for Good Credit

ManufacturedHome.Loan

 ManufacturedHome.Loan

ManufacturedHome.Loan (MHL) is our best lending option for borrowers with good credit because it offers competitive mortgage rates and a strong online platform for highly qualified borrowers.

Pros
  • Strong mortgage offers for applicants that meet credit/income standards

  • First-time homebuyer programs

  • Can finance homes in a mobile home park

  • Can finance mobile homes as vacation homes

Cons
  • Rates aren’t published

  • Customer service rings to one person

  • Most efficient way to get pre-qualified is through an online form

Founded in Irvine, California, ManufacturedHome.Loan is a licensed nationwide mortgage broker. Therefore, as a broker with hundreds of financial institutions and private equity lenders to choose from, the company can shop for the lowest rates and best terms for you. As a result, MHL is our best for borrowers with good credit because it can save you time and shop on your behalf for the most competitive rates and terms in the nation.

MHL can finance new or used mobile homes for purchase or refinance. While most mobile home lenders will only lend to you for your primary residence, and even then, only if you also own the land, and with good credit above 700, MHL can expand your options. You could finance a vacation home or buy a mobile home in a park where you lease the land.

While MHL is best for borrowers with good credit scores above 700 because they can provide more options and flexibility, it also uses government-backed programs that support credit scores in the 600s, such as VA and FHA.

Loan values can be as low as $75,000 and as high as $2 million for a jumbo loan program, and the down payment varies depending on the type of loan as well as income and credit score requirements. If you qualify for MHL's VA or FHA loans, your down payment could be as low as zero to 3.5%, respectively.

Pre-qualification can take as little as 24 hours. Once you have selected a home, underwriting can range from two weeks for a conventional loan to six weeks for one of the government programs.

21st Mortgage Corporation: Best for Bad Credit

21st Mortgage Corporation

21st Mortgage Corporation

Because it can qualify all credit scores in most states, we chose 21st Mortgage Corporation as our best mobile home lender for those with bad credit scores.

Pros
  • Available in most areas

  • One of the few lenders to finance used mobile (or manufactured) homes, which depreciate much faster than traditional homes

  • No prepayment penalties

  • “Innovative loan programs” allow buyers to make down payments using cash, trade, or land equity

  • No minimum credit scores required in most states

  • Closing costs and fees can be financed—and “zero money down” loan products are available for primary residences

Cons
  • Does not lend in AK, MA, HI RI

  • No pre-approval for loans

  • If you are buying the home for someone else, the property purchase requires a minimum 20% down payment

  • Property not on a paved road may require a larger down payment or lower loan-to-value ratio

  • Properties with a shared well may not be financed unless the well is located on property that is pledged as collateral

21st Mortgage Corporation was founded in 1995 in Knoxville, Tennessee, and now has over 800 employees. The company became a subsidiary of Clayton Homes after an acquisition in 2003. It lends in 46 states plus Washington, D.C. It’s the best for borrowers with bad credit because it does not have a credit score minimum and can finance homes placed in mobile home parks.

21st Mortgage Corporation offers innovative fixed-rate loan products for manufactured homes. It can also finance manufactured homes in a park or community on leased land, for both permanent and non-permanent home foundations.

Financing options are available for both new and pre-owned mobile homes with a minimum loan amount of $21,980 for person-to-person lending and $13,737 for property that is purchased through a retailer.

The company requires the borrower’s debt-to-income ratio to be under 43% to qualify for a loan without having a co-signer or additional documentation.

21st Mortgage’s interest rates are relatively high—between 6% and 12%, almost double the national average—because its average borrower has lower income levels and credit scores.

Interestingly, there are no minimum credit scores with 21st Mortgage. Down payment requirements range from zero to 35% on all property purchases. If your score is under 570, that will require a 35% down payment, but it can be a combination of cash, trade-in, or land equity.

Mortgage loans can be applied for and completed online and the whole process can be completed in about four to six weeks for home-only loans and six to eight weeks for loans involving land.

eLEND: Best for Low Down Payment

eLEND

eLEND

eLEND not only has 100% financing through its USDA and VA loan programs, but it also offers a Down Payment Assistance (DPA) program equal to 2% or 3.5% of the purchase price to a wide range of borrowers.

Pros
  • Low down payment requirement, up to 100% financing available

  • Low mortgage rates

  • Mortgage insurance included

  • Online portal is convenient

Cons
  • Geographic restrictions may apply to some programs.

  • Mixed customer service reviews

eLEND is our best mobile home lender for low down payments because of its use of the government-backed loan programs that often carry zero to 3.5% down payments and its DPA program that further supplements the down payment burden for its borrowers.

eLEND is a division of American Financial Resources, Inc. Company with a lot of experience in the industry. It works to provide affordable home financing options to first-time buyers and existing homeowners. The company utilizes the latest technology and delivers educational resources to customers in an effort to simplify the mortgage process.

The company offers USDA, FHA, VA, conventional fixed, and adjustable-rate loans. If you qualify for one of the government-backed programs, your down payment can range from zero to 3.5%. If you qualify for its DPA program, you can lower your down payment expense even more. The DPA allows you to use gifted funds toward your down payment. Furthermore, if you are a community service professional, such as a police officer, firefighter, EMT, or teacher, or you work in the medical field or the military, and you are a first-time homebuyer, you can qualify for the DPA.

The applicant does not need a high credit score, but many lenders in eLEND’s platform want to see at least average The current interest rate for a zero-down, 30-year, fixed-rate mortgage using the USDA or VA programs is very low.

If you plan to buy a mobile home in a mobile home park where you’ll be leasing the land, the company's lenders will ensure that the lease contains provisions for continued use of the land for low- and moderate-income housing.

The underwriting process typically takes 35 to 40 days to close.

Vanderbilt Mortgage and Finance: Best for Manufacturer’s Financing

Vanderbilt Mortgage and Finance, Inc.

Vanderbilt Mortgage and Finance, Inc.

Vanderbilt Mortgage and Finance, Inc. maintains a partnership with Clayton Homes, one of the top manufactured home builders giving it the market share to provide great rates in manufacturer's financing.

Pros
  • Conventional and bi-weekly options.

  • 40 years of experience

  • Simple online application process

Cons
  • Difficult to contact

  • Limited information available online

Vanderbilt Mortgage and Finance, Inc., is a Berkshire Hathaway Company and one of the partner financing companies of Clayton Homes. This lender’s partnership integration with Clayton Homes earned it our top choice for borrowers who want manufacturer’s financing.

Vanderbilt is a national housing lender that provides a number of home loan programs. It primarily focuses on the manufactured housing sector, offering loans for new and used modular homes. It has serviced over 200,000 loans in its more than 40 years of service. It also provides traditional home loans.

The company offers fixed and adjustable rate mortgages in a very wide range amounts. In most states, as big as the government will allow.

The typical underwriting process takes four to six weeks for home and land financing. If you are financing just the home, It generally takes only two weeks.

What Is a Mobile Home Loan?

A mobile home loan is a loan for factory-built homes that can be placed on a piece of land. Styles may vary from modest trailers to dwellings that look like houses attached permanently to the land upon which they sit.

Mobile home loans differ from a traditional property loan because most lenders and counties do not consider them real property, but rather personal property. In fact, in many counties, a mobile home is taxed by the department of motor vehicles rather than the property tax assessor. In most cases, if you want to buy a mobile home and place it on land that you lease, your loan will more closely resemble a personal loan, with higher interest rates and shorter terms than a traditional home mortgage.

There are exceptions, however, and we’ve included them in this list. Some home lenders do have loans for mobile homes if they are attached to the homeowner’s land. Others, and there are fewer of them, will lend on a mobile home even if it sits on land you lease.

What Is Required to Get Approved for a Mobile Home Loan?

The lenders we’ve reviewed have loan amount ranges from $75,000 to $2 million for jumbo loan programs. The debt-to-income (DTI) ratio ceiling for most lenders is in the low 40s. The lender will use your DTI and income to determine how much you can borrow.

If you qualify for one of the government-backed loan programs, such as the FHA, VA, or USDA, you can buy a mobile home with a 3.5% down payment, and in some cases less.

If you own the land or plan to buy the land together with the mobile home, you’ll have more lender options than if you want to buy a mobile home that sits in a rented lot in a mobile home park.

Do You Have to Own Your Land When Buying a Mobile Home?

When you purchase a mobile home, it is not necessary to own the land, but it will open up more loan options for you.

Mobile homes are sometimes located in a mobile home park where the park owner holds title to the land and you lease it. In these cases, the homeowner leases a plot of land but owns the mobile home itself. Many lenders will require you to sign a three-year lease minimum for the land before they will lend on the mobile home.

Alternatively, owners of mobile homes can place mobile homes on land they own or land they are buying in conjunction with the mobile home. When you own the land and the home, your loan rates and terms will be better, and you’ll have more lending options.

What Credit Score Do I Need to Buy a Mobile Home?

The lenders we’ve reviewed and selected as the best can work with low credit scores in the 500 and 600 range. A credit score lower than 500 may not qualify at all.

Of course, higher credit scores will always get you better rates and terms. Credit scores in the 700s and 800s will get the lowest interest rates.

If you have a credit score on the lower end, look for a lender that is strong in the USDA, FHA, and VA programs. Conventional loans will not be so forgiving of scores below 700. You may get your loan approved, but it will carry higher rates and a term of 20 years or less.

How We Chose the Best Mobile Home Loan Providers

We reviewed 12 mobile home lenders to select the best five. We analyzed company history and reputation, whether they financed both newly constructed and used mobile homes, and their minimum and maximum loan value limits.

Borrower credentials mattered, too. We compared firms to see who allowed borrowers to have lower credit scores, higher debt-to-income ratios, and whether they had low-down-payment programs.

Finally, we analyzed lender requirements for whether you leased or owned the land upon which your mobile home would sit. If you own the land, you’ll have more loan options, but it’s not a deal-breaker.

In most cases, interest rates start a few points higher than conventional loans because mobile homes tend to depreciate, so we looked at interest rate ranges for the lenders to make sure these were lower than the higher rates you’ll pay for an unsecured personal loan, which is also an option for buying a mobile home.

Financing just the mobile home, with good credit and stable income, can be underwritten in as little as two weeks. To buy the home and the land, and using a low-down-payment government program, can extend the underwriting period to as long as 60 days.

Article Sources

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  1. US Census Bureau. “MHS Latest Data.” Accessed November 13, 2020.