The Federal Housing Administration, under the umbrella of the United States Department of Housing and Urban Development, insures loans for all types of properties, including mobile homes. However, the FHA now exclusively uses the term manufactured home to refer to these dwellings, so information on mobile homes falls under that listing. It sets specific requirements the borrower and the property must meet to qualify for an FHA loan.
The FHA defines a manufactured home as one built in a climate-controlled manufacturing factory and transported to the site on a permanent chassis. It must be built to HUD code and display a red certification sticker on each transportable section.
A borrower can obtain an FHA loan to purchase a manufactured home, the land or lot for a manufactured home, or a combination of a lot and home. The loan also can go toward refinancing an existing manufactured home. The home must be the principal residence of the borrower.
The borrower must own or lease the lot or land the home sits on, or rent a lot from a manufactured home park.
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A manufactured home FHA loan sets amount and term maximums based on the type of loan:
- Manufactured home only: $69,678 and 20 years
- Manufactured home lot: $23,226 and 15 years
- Manufactured home and lot: $92,904 and 25 years
Borrowers who live in high cost areas may be eligible for a loan maximum increase of up to 85 percent.
HUD mandates that a manufactured home have a permanent foundation. To meet the HUD foundation standards, a manufactured home's foundation must:
- Be site-built and made of concrete, mortared masonry, treated wood or other durable material
- Have attachment points that anchor the home to the soil or rock underneath
- Be vertically and laterally stable to prevent overturning because of wind or earthquakes
- Have a large enough footprint to prevent soil settlement around it, with the footing placed below maximum frost-penetration depth
The borrower must adhere to additional requirements to secure an FHA manufactured home loan including:
- Purchase a manufactured home that complies with the Model Manufactured Home Installation Standards and follows all state and local laws
- Sign a HUD Placement Certification, which attests that the manufacturer installed and set up the home to the buyers satisfaction
- Get a one-year manufacturer's warranty if purchasing a new home
- Install the home on a site that has adequate water supply and sewage disposal facilities that meet local standards