The real estate boom has likely reached its peak, leaving ownership of a traditional single-family home a distant dream far beyond the price range of many potential home-buyers. Mobile Homes, which can typically be bought at 20%-40% of the price of single-family home, have become an increasingly popular (and for many, the only) option for home ownership. The following are some of the factors to take into consideration to help you decide if buying and financing a mobile home is going to make the most sense, and to help you get the best loan terms possible.



A mobile home is defined as any home that was built/manufactured at a remote facility, and then transported to an offsite location with a tractor-trailer. One major characteristic of a mobile home is that the land underneath the home is not owned by the mobile home resident (it is usually situated in a mobile home park or on leased land). Because the land is not owned by the resident, it cannot legally be attached to the title of the land (the deed to the land will not mention the resident), and so the home is treated as “personal property", as opposed to “real property". In cases where the land and the mobile home are sold together and the home is permanently attached, it is then considered real property and given financing treatment similar to a single family home. The remainder of this article deals specifically with non-attached mobile homes.

No matter who you go through for financing, the following tips/guidelines are almost universal in the mobile home lending industry:

•Your interest rate will likely range from an 8.75% to a 10.75%.

•Homes built after 1976 qualify for the best rates and programs (i.e. Post HUD homes).

•Obtaining a loan on a home built before 1970 can be extremely difficult; expect a high rate and a large (at least 30%) down payment requirement.

•Rates on singlewide homes are usually 0.5% to 1% higher than on multi-wide homes.

•The longest loan term is usually 20 years (Blue Coast does offer a 30 Year Fixed).

•Many loan programs require a minimum credit score (Fico score) of 660.

•If you cannot verify that you earn at least twice as much as your total monthly debt (including the proposed new home payment) with paystubs, tax returns, or pension/social security/disability award letters, most lenders will require you to put at least 30% down, and charge a higher rate.

•There are no zero down mobile home loans, the minimum down payment is 5%.

•The best rates come at 20% down or more.

Mobile home loans are more difficult to qualify for than single family home loans. If you are considering buying a mobile home, the first thing to do is to make sure your financing is in order by getting pre-approved. Mobile home lenders are surprisingly rare. If you walk in to your local bank or credit union, it is extremely unlikely that they will have programs for mobile homes, because mobile home loans are difficult to sell on the secondary market (the vast majority of all mortgage loans end up being sold to insurance companies or foreign investors on Wall Street, even if your original lender continues sending you the monthly bill on the new note holder’s behalf). Most banks are not willing to tie up their capital for long-term un-sellable mobile home loans. You should contact a mobile home lender such as Blue Coast Home Loans for a pre-approval and a quote. A legitimate lender will not charge you any out-of-pocket fees for a loan pre-approval, and a pre-approval is usually necessary to tell you with certainty what your interest rate will be. Along with the rate, a mobile home loan specialist can let you know what your monthly payments will be at different loan amounts, which can be useful to help you determine how much of a home you can afford.

If you are considering buying new or used from a dealer, they will almost definitely have a lending partner in place, and try to push you into their financing terms. Using the dealer’s lender can sometimes be more convenient, but the drawback is that the financing terms you get through the dealer’s lender are usually worse in rate and/or fees than you would obtain from an outside lender (it is important to keep in mind that both the rate and fee combination that is important, neither matters by itself). The dealer’s lenders often feel they have a captive audience, and since the competition is scarce to begin with, they often feel no need to offer competitive loan terms. Many times even a “normally competitive" lender is unable to offer the best financing terms when using a dealer referral, because in order to have the privilege of being the “dealer’s lender", they must offer a kickback to the dealer (pay the dealer $2000 for every referral), and they must pass this cost on to you either in the form of increased fees or a higher interest rate. If you don’t have the time/inclination to find a good 3rd party mobile home lender (as I mentioned, they can be difficult to locate), and you don’t mind paying a slightly higher rate and/or fees, going through the dealer’s lender is probably the most convenient route.

Because a mobile home purchase is a huge investment, it is important to carefully consider all of the factors. A 1977 multi-wide home that costs $100,000 may have lower monthly payments than a 1975 single wide that sells for $80,000, because the more expensive home will carry a much lower interest rate. The age of the home, size of the home, and your down payment all play a large role in determining your financing terms

Record home prices are encouraging potential home-buyers to consider all the options, and many are now realizing the current quality, convenience and, of course, affordability of manufactured homes is on par with many traditional single-family homes, and are available at a fraction of the cost. In short, after considering all the factors and armed with the necessary knowledge to make a sound decision, you might find that a manufactured home is the right fit for you.