Manufactured Home Loans: Getting Out of Chattel Rates
Whether your manufactured home is titled as real property decides whether you pay mortgage rates or personal property rates.
Manufactured homes make up a meaningful share of affordable housing, and their owners routinely pay far more for financing than they need to. The reason is almost always a titling issue rather than a credit issue.
Two lending worlds
If the home is permanently affixed to land you own and titled as real property, it is financed like any other house: conventional, FHA, VA, or USDA, at ordinary mortgage rates over 30 years.
If it is still titled as personal property, especially in a leased community, you are in the chattel market. Terms run 15 to 20 years at rates that are frequently double what a mortgage would cost.
Title elimination
Most states provide a process to eliminate the vehicle title and convert a manufactured home to real property. The mechanism, the paperwork and the timeline vary by state, and whether it has been done is what decides which financing applies.
For an owner paying 11% on a chattel loan, this single step is usually worth several hundred dollars a month.
Age and condition requirements
Homes built after June 15, 1976 carry HUD certification labels and are financeable on most programs. Units that have been moved more than once, or that lack the HUD tags, require a portfolio lender. An engineer's foundation certification is standard on nearly every program.
Before you buy one
Confirm the land is included and owned, ask whether the title has already been eliminated, and verify the HUD tags exist. Those three answers determine your financing options and, by extension, what the home actually costs you every month.
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