What Types of Mortgage Options Are Available For Mobile Homes?

What Types of Mortgage Options Are Available For Mobile Homes?

As the real estate market continues to fluctuate with housing costs changing and interest rates increasing, it is becoming more and more challenging for some to afford home ownership. Many people who are struggling with affording their own home are considering other options, including purchasing mobile homes. If you are interested in alternative housing options in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage is here to help. Continue reading to learn more about financing options when purchasing a mobile home.

Mobile Homes: Essential Information


Mobile homes are typically more affordable for a home buyer and can offer a bit more flexibility than owning a traditional home. When discussing mobile homes, you may have heard them referred to as mobile, modular, or manufactured homes. Although these names are often used interchangeably, it is important to note that they do have some differences.

  • Mobile homes – These are homes that can be moved and that were created in a factory before June 15, 1976.
  • Manufactured homes – These homes are also built in a factory, however, they are not intended to be moved after being set up. Any home created in a factory after June 15, 1976, (when the U.S. Department of Housing and Urban Development, (HUD), introduced home code standards), is considered a manufactured home.
  • Modular homes – These are homes that were also manufactured at a different location, and then assembled on the intended building site. They’re often larger than mobile or manufactured homes, and are more similar to traditional housing with a foundation, a basement, etc.

Financing Options When Buying a Mobile Home

There are a few types of financing options available when purchasing a mobile home, however the financing process may be different than getting a traditional home loan. Some common mobile financing options include:

  • Conventional loans – There are certain loan options from Fannie Mae and Freddie Mac that can back a loan on manufactured housing. It is important to note that manufactured homes may not always be eligible for conventional loans if the homeowner does not own the property that the house is on.
  • FHA loans – These are insured by the Federal Housing Administration and can help finance a mobile home with two options: a Title I or Title II loan.
  • VA loans – This financing option is available to military service members and veterans, and is backed by the U.S. Department of Veterans Affairs. Lenders can offer up to 100 percent financing on a mobile home, and a down payment is not required.
  • Chattel loans – a personal property loan that can be used to buy a mobile home. In this case, the movable property, or “chattel”, secures the loan, and a lender can hold interest on it.

If you are interested in exploring home ownership with a mobile home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today for a consultation.


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