Can You Get an FHA Loan on a Manufactured Home?

With the cost of buying a home increasing, some homebuyers turn to manufactured homes as a more affordable alternative. However, getting a mortgage to cover this type of home can be a bit tricky. Lenders tend to view manufactured and mobile homes with a different level of risk than traditional properties.

What is a Manufactured Home?

Manufactured homes are a type of prefabricated housing that’s constructed in factories and then transported to a lot for a permanent residence. Fewer banks are willing to lend mortgages to cover manufactured housing, but there are some options available.

One such option is an FHA loan, a type of loan that has helped countless people get onto the housing market.

Can you get an FHA Loan on a Manufactured Home?

Suppose you are struggling to meet conventional mortgage standards or can’t find a lender who will approve a loan on a manufactured home, then good news! You can get an FHA loan to cover this type of home purchase. An FHA loan can be used to cover the cost of the home itself, a lot to build it on, or both. FHA loans are designed to approve homebuyers with a slightly higher risk profile in terms of credit score, or in this case, a non-traditional house purchase. However, there are guidelines on what will and will not be approved.

What are the FHA Manufactured Home Guidelines?

While FHA loans are easier to obtain than conventional mortgages, there are still several requirements you need to meet to get approved. You will need to consider both the general FHA loan requirements and the guidelines specifically laid out for manufactured homes.

Standard FHA requirements

FHA manufactured home loans still need to abide by the standard FHA requirements. This means you will need a minimum credit score of 580, a down payment of at least 3.5%, and a Mortgage Insurance Premium (MIP). Other requirements state that the home you’re purchasing must be your primary residence, your debt-to-income ratio cannot exceed 43%, and you must have at least a two-year work history showing a steady income.

FHA manufactured home requirements

For manufactured homes specifically, the following guidelines apply:

• The home must have been built after June 15th, 1976
• The home must sit on less than 5 acres of land
• Minimum credit score requirement is 640
• Max DTI is 45%
• The loan amount must be more than $100K
• It must adhere to the Manufactured Home Installation Standards
• There must have a red HUD certification label attached to every section of the home, remaining visible even after siding or painting is complete.
• The home must be a single-family dwelling
• It cannot be less than 400-square feet
• It must be built on a permanent foundation
• The home must have a water supply and sewer system that are FHA approved
• New homes must have a one-year warranty from the manufacturer

FHA Loan limits

The loan itself cannot exceed 30 years, and there are specific loan limits that restrict the amount you can borrow. The amount you can borrow will depend on buying the land, the home, or both together.

• The loan limit for the land-only is a maximum of $23,226
• The loan limit for the home only is a maximum of 69,678
• The loan limit for both the land and the home is a maximum of $92,904

FHA Manufactured Home Foundation Requirements

There are also strict guidelines on the type of foundation you place the manufactured home on. The foundation must be able to easily support the structure and must also be permanently connected to the home’s structure. You will need to secure a foundation inspection from an engineer before an FHA loan will be approved. If the inspection is approved, you’ll be given a PFGMH Certification.

Get started

While the guidelines may be stricter for manufactured homes, FHA loans are often your best chance of getting approved for financing. Before you consider applying for an FHA loan, it’s worth weighing up all the guidelines beforehand. With OVM Financial, we can help you arrange an FHA-approved loan and get the funding you need to finally purchase your home. Get in touch today to see how we can help.