11 Best Manufactured Home Loans for Bad Credit Financing

11 Best Manufactured Home Loans for Bad Credit Financing
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Brittney Mayer
By: Brittney Mayer
Updated: May 11, 2018
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As with many things in finance, the very first step to finding a mortgage for the manufactured home of your dreams is to make sure you get the semantics right. In this case, you’ll want to make sure you know exactly what you need to fund. Homes built in a factory — as opposed to homes built on-site — come in three basic styles: mobile homes, manufactured homes, and modular homes.

Factory-built homes constructed before June 15, 1976 (i.e., before the US Department of Housing and Urban Development (HUD) set safety standards) are considered mobile homes. Factory-built residences built after HUD regulations were in place are called manufactured homes (regardless of their mobility), and modular homes are those built in a factory but assembled on-site. All three types can typically be financed, though the ease of obtaining that financing will likely vary both by home type and the type of loan.

Conventional | FHA | Refinance | Government

Best “Conventional” Loans for Mobile Homes

Conventional mortgage loans are those for which the lender alone is responsible, without insurance or backing from any external agency. In an FHA–backed loan, for example, if the borrower defaults on the loan, the FHA or VA will reimburse the lender for the bulk of the mortgage amount. In a conventional loan, the lender has to settle for what it can get from the resale of the property — and eat the rest.

And herein lies the rub with conventional mortgages for manufactured homes. On the whole, manufactured homes don’t appreciate as well as traditional site-built homes, making them a higher risk to the lender. Since conventional mortgages are already the most difficult to obtain, definitely compare multiple options, such as with the online lending networks below, if it’s the route you wish to take for a manufactured home.

  • Options for: home purchase, refinance, home equity, and reverse mortgage
  • Lenders compete for your business
  • Receive up to 5 offers in minutes, and pick the best offer for you
  • Founded in 1996, LendingTree has facilitated 55 million+ loan requests and $250 billion+ in closed loan transactions
  • Click here for official site, terms, and details.
★★★★★

4.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 1996 7 Minutes 9.0/10
  • Options for: home purchase, refinance, cash-out, and debt consolidation
  • The nation's largest online lender
  • Allows applicants to buy a home with a minimal down payment (as little as 3.5% down)
  • In some cases, down payment can be a gift from a relative or nonprofit organization
  • Get pre-approved for free – before you shop for your new home – and get more bargaining power
  • Avoid paying Private Mortgage Insurance with PMI Advantage program
  • Click here for application, terms, and details.
★★★★★

4.7

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 2000 6 Minutes 9.0/10
  • Easy to OwnSM programs give options for those with lower income, limited credit history, and low down payment needs.
  • Provides the potential for minimal out-of-pocket expenses with seller contributions.
  • Offers loans that don't require monthly mortgage insurance.
  • Requires less cash upfront for your down payment and closing costs.
  • Click here for application, terms, and details.
★★★★★

4.5

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies 1852 6 Minutes 8.0/10

Probably the best way to qualify for a conventional mortgage loan, particularly one for a manufactured home, is to provide a very healthy down payment. Typically, conventional mortgages require a 20% down payment already (though they can sometimes be obtained with lower down payments if your credit is good), so you’ll likely need at least that much to obtain the loan. Bigger, however, is most definitely better in this case.

Best “FHA” Loans for Mobile Homes

Perhaps the easiest route to take to find financing to buy a manufactured home is through an FHA loan, or one backed by the Federal Housing Administration (FHA). These loans are not issued by the FHA, but are insured (i.e., refunded) by the FHA in the event that the borrower defaults on the loan, reducing the risk for the lender.

Because of the lower risk, FHA loans generally have much lower credit score, income, and down payment requirements than conventional loans, even for manufactured homes. That said, the exact requirements will still vary by lender, and some lenders may have much higher credit or down payment requirements than others, so be sure to compare quotes from a number of lenders. You can use an online lending network, like our picks below, to simplify the process.

  • Options for: home purchase, refinance, home equity, and reverse mortgage
  • Lenders compete for your business
  • Receive up to 5 offers in minutes, and pick the best offer for you
  • Founded in 1996, LendingTree has facilitated 55 million+ loan requests and $250 billion+ in closed loan transactions
  • Click here for official site, terms, and details.
★★★★★

4.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 1996 7 Minutes 9.0/10
  • Options for: home purchase, refinance, cash-out, and debt consolidation
  • The nation's largest online lender
  • Allows applicants to buy a home with a minimal down payment (as little as 3.5% down)
  • In some cases, down payment can be a gift from a relative or nonprofit organization
  • Get pre-approved for free – before you shop for your new home – and get more bargaining power
  • Avoid paying Private Mortgage Insurance with PMI Advantage program
  • Click here for application, terms, and details.
★★★★★

4.7

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 2000 6 Minutes 9.0/10
  • Easy to OwnSM programs give options for those with lower income, limited credit history, and low down payment needs.
  • Provides the potential for minimal out-of-pocket expenses with seller contributions.
  • Offers loans that don't require monthly mortgage insurance.
  • Requires less cash upfront for your down payment and closing costs.
  • Click here for application, terms, and details.
★★★★★

4.5

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies 1852 6 Minutes 8.0/10

To qualify for an FHA loan, a manufactured home must meet Federal Manufactured Construction and Safety Standards — and be labeled as such — and must have been manufactured after June 15, 1976 (so no mobile homes will qualify). Additionally, manufactured homes must be considered to be real estate, which means it will need to be affixed to a permanent site, and the mortgage must cover the unit and the site.

Best “Refinance” Loans for Mobile Homes

Although you can technically refinance your mortgage regardless of how long you’ve had it, most lenders will want you to have at least a few months of mortgage payments under your belt before they’ll approve a refinance loan. Even then, refinancing a mortgage for a manufactured home will carry many of the same problems that obtaining the original loan did; namely, the higher risk to the lender from a manufactured home than a site-built one.

On the plus side, you can use an easier-to-get FHA-backed loan to refinance a manufactured home, though, of course, individual requirements will be up to the lender. As with mortgages for a new purchase, you can comparison shop refinance loans to obtain multiple quotes and find the best deal. Online lending networks, like our expert-rated options below, can often provide several quotes from a single application.

  • Options for: home purchase, refinance, home equity, and reverse mortgage
  • Lenders compete for your business
  • Receive up to 5 offers in minutes, and pick the best offer for you
  • Founded in 1996, LendingTree has facilitated 55 million+ loan requests and $250 billion+ in closed loan transactions
  • Click here for official site, terms, and details.
★★★★★

4.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 1996 7 Minutes 9.0/10
  • Options for: refinance only
  • Get 4 free refinance quotes in 30 seconds
  • Network of lenders compete for your loan
  • Trusted by 2 million+ home loan borrowers to date
  • Interest rates are near all-time lows
  • Click here for application, terms, and details.
 
★★★★★

4.7

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies 2004 4 minutes 8.5/10
  • Options for: home purchase, refinance, cash-out, and debt consolidation
  • The nation's largest online lender
  • Allows applicants to buy a home with a minimal down payment (as little as 3.5% down)
  • In some cases, down payment can be a gift from a relative or nonprofit organization
  • Get pre-approved for free – before you shop for your new home – and get more bargaining power
  • Avoid paying Private Mortgage Insurance with PMI Advantage program
  • Click here for application, terms, and details.
★★★★★

4.7

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 2000 6 Minutes 9.0/10

In general, there are two main types of refinancing: a simple refinance and a cash-out refinance. A simple refinance will involve paying off your original mortgage with a new loan, ideally one with a much lower interest rate. In this scenario, the second loan is smaller (because you’ve made several payments already). In a cash-out refinance, the loan size stays the same, and that equity is given to you as cash to use as you like.

Best “Government-Backed” Loans for Mobile Homes

Although FHA loans are the most common form of government-backed mortgage loans, other government departments also back home loans for those in need of a little help. In particular, the US Department of Agriculture (USDA) and Department of Veterans Affairs (VA) both have housing assistance programs. Unlike FHA loans, however, USDA- and VA-backed loans have very specific eligibility requirements.

While borrowers must only meet basic income requirements to qualify for a USDA-backed home loan, the property you wish to finance will need to meet more stringent qualifications. Specifically, USDA loans are only available to finance primary residences located in an eligible rural area.

  • Offers 100% Financing, Low rates and Affordable Payments.
  • Helps lenders work with low and moderate income families living in rural areas to make home ownership a reality.
  • Loans can be used for repairs and rehabilitation; physical disability equipment; connection fees, assessments or installment costs for utilities; and essential household equipment.
  • Loans can include closing costs and reasonable/customary expenses associated with the purchase
  • Click here for application, terms, and details.
★★★★

4.0

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies 1897 9 Minutes 9.0/10

To finance a manufactured home with a USDA-backed loan, the home must be new (i.e., be purchased within 12 months of its manufacture), and cannot be moved from any location other than the dealer’s lot. The home’s permanent foundation must meet Federal Manufactured Home Construction and Safety Standards (FMHCSS), and the home itself must be at least 400 square feet in size.

To qualify for loans partially guaranteed by the VA, you’ll need to be an active or retired member of the US military, or an eligible family member, and you’ll also need to meet specific requirements based on when and how you served. VA home loans have no specified minimum credit score, though individual lender requirements may vary.

  • For military veterans, service members, their spouses, and other eligible beneficiaries only
  • No down payment and no monthly mortgage insurance
  • The basic entitlement available to each eligible veteran is $36,000
  • Lenders generally loan up to 4 times a veteran's available entitlement without a down payment
  • Click here for application, terms, and details.
★★★★

3.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 1944 9 Minutes 7.5/10

You can purchase modular or manufactured homes with a VA-backed mortgage. Manufactured home VA loans are simplest to obtain when used to purchase manufactured homes that will be permanently affixed to a lot and that are considered to be real estate. You can use a VA loan to purchase a new manufactured home as well as the property on which to place it, and you can also use VA loans to refinance an existing manufactured home mortgage.

Get Into an Affordable Home with the Right Loan

As with so many other areas of our everyday life, finance and real estate both have grown to hold a massive wealth of options for nearly everything. And just like knowing the right name of the real estate product you wish to purchase can help you avoid mistakes down the road, so, too, can knowing the exact type of financial product you need to purchase it.

Unfortunately, there’s no one right mortgage loan for every person. The type of loan you need — and can qualify for — will vary based on your individual financial situation, your personal background, and even the area you wish to purchase a home. One important note here, however, is that no matter what, you want a mortgage loan. Avoid other types of loans as financing for a manufactured home

For example, you may be tempted (or even poorly recommended) to look into personal loans to purchase a manufactured home. Short story: don’t. The average personal loan, particularly those aimed at poor-credit consumers, is going to have at least a 10% interest rate — though it’s likely to be closer to 15% — and could be as high as 30% if your credit score is particularly low.