Manufactured homes account for a significant slice of the housing stock, but financing one is not the same as financing a site-built house. The structure of your loan depends on whether the home is classified as personal property or real property, and that classification hinges on three factors: land ownership, foundation type, and how the title is recorded.
Chattel Loans: Personal Property Financing
A chattel loan finances the manufactured home as personal property, similar to financing a car or RV. You secure the loan with the home itself, not with a deed of trust or mortgage lien on real estate. Chattel financing typically applies when you do not own the land beneath the home—common in land-lease communities or mobile-home parks—or when the home sits on a temporary foundation and retains its vehicle title rather than being converted to real property.
Chattel loans generally carry higher interest rates than conventional mortgages, often in the 7–9% range for well-qualified borrowers, and shorter terms, usually 15 or 20 years. These figures are illustrative; rates and products are subject to change and this is not a commitment to lend. Down payment requirements are often steeper, and the loan is documented with a security agreement and a UCC-1 financing statement filed with the state, not a recorded deed.
Real-Property Mortgages: Converting to Land and Home
When you own the land and the manufactured home is affixed to a permanent foundation, most states allow you to retire the vehicle title and record the home as real property on a deed. Once that conversion happens, the home and land together become eligible for a standard mortgage—FHA, VA, conventional, or USDA—under the same terms as a site-built house.
Real-property treatment opens access to longer terms, often 30 years, and lower interest rates that track conventional mortgage markets. FHA's Title II program and Fannie Mae's MH Advantage both explicitly cover manufactured homes on owned land with permanent foundations, provided the home meets HUD certification requirements and local code. The key documentation difference: the lender records a deed of trust or mortgage against the combined real property, and the home's title is surrendered to the state.
Foundation and Certification Requirements
A permanent foundation means a concrete slab, crawlspace, or full basement engineered to local frost lines and load codes, with the home's frame anchored to that foundation. The axles, wheels, and hitch must be removed. Most lenders also require a professional engineer's certification that the foundation meets HUD's Permanent Foundations Guide.
All manufactured homes financed under either structure must carry a HUD certification label—the red tag affixed at the factory—showing the unit was built to federal construction standards after June 15, 1976. Older mobile homes without HUD labels typically do not qualify for agency-backed financing.
The Alliance Take
If you own land and plan to stay long-term, converting the home to real property and financing it as such will save thousands in interest over the loan's life. If you lease the land or the home will remain mobile, understand that chattel terms reflect the lender's higher risk. Either way, verify the home's HUD label and local zoning before you commit. If you are ready to explore manufactured-home financing options, start an application and we will walk through the documentation that fits your scenario.