November 30, 2020
FHA home loan options include FHA mortgages for mobile homes. You can buy a mobile home, manufactured home, or modular home using an FHA mortgage and there are many common questions about this type of FHA mortgage option.
What Does the FHA Define As A Manufactured Home?
The FHA official site describes a mobile home (also known as a manufactured home) as a property built “to the Manufactured Home Construction and Safety Standards (HUD Code) and displays a red certification label on the exterior of each transportable section”.
The FHA official site also states that manufactured homes are built “in the controlled environment of a manufacturing plant” and are transported in one or more sections on a permanent chassis. FHA loan rules state that any mobile home must be affixed to a HUD-approved permanent foundation as a condition of loan approval.
Manufactured Home Versus Modular Homes?
Is there a difference, for the purpose of FHA loan approval, between a mobile home and a modular home? According to the FHA, manufactured homes are “constructed according to a code administered by the U.S. Department of Housing and Urban Development” This so-called HUD Code, requires any manufactured home purchased with an FHA mortgage, “to be constructed on a permanent chassis”.
However, modular homes differ in some ways but in general, they are built under the jurisdiction of the same state, local or regional building codes as “site-built” homes. In any case, the modular home can be approved for an FHA mortgage if it meets FHA and lender requirements.
FHA Home Loan Options For Mobile, Modular, and Manufactured Homes
The HUD official site advises consumers that there are two basic options for mobile/manufactured homes.
“HUD’s FHA program insures two types of mortgages. Title II insures mortgages on qualifying manufactured homes sold with land and meeting other requirements. FHA’s Title I program can provide information to consumers interested in obtaining HUD-insured loans.”
The HUD official site also mentions an option for those interested in purchasing or building a mobile home park.
“You may contact the Office of Multifamily Housing” to get information about a program called Section 207, “which is an FHA mortgage insurance program for HUD-approved lenders, promotes the creation of manufactured home communities by increasing the availability of affordable financing and mortgages”.
Mobile Home Installation Problems
Some FHA borrowers want to know who to contact in the event there are problems during the delivery and installation of the mobile home / manufactured home. FHA/HUD are not the points of contact for such issues–you will need to contact the retailer and/or the installation contractor to resolve issues in this area.
Not all FHA lenders are willing to issue mobile home loans; you will need to shop around for the right lender who can work with you and offer the right kind of mortgage loan for your needs.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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