How to Get a Mortgage for a Factory-Built Home

Before comparing interest rates or down payments, you need to understand one classification: whether your home will be treated as real property or personal property. Every manufactured home financing program in the country is structured around this distinction. Getting it wrong means applying to programs you don't qualify for and wasting weeks in the process.

When a manufactured home is permanently affixed to a foundation on land you own, many states allow you to title it as real estate, exactly like a site-built home, though conversion procedures and requirements vary by state. That classification opens the door to FHA, VA, USDA, and conventional mortgage programs with 15- to 30-year terms and competitive rates. When the home sits on leased land or is not permanently affixed, it stays titled as personal property, which pushes you into a different and more limited category of financing.

The good news is that converting a home from personal property to real property is possible in many states. It typically requires surrendering the personal property title, permanently affixing the home to a foundation on owned land, and filing an affidavit of affixture or equivalent document with your county recorder. Once that conversion is recorded, refinancing into a standard manufactured home mortgage becomes an option, often at a noticeably lower rate.

These programs treat the home as real estate when it's permanently affixed to owned land and titled accordingly. They offer the best terms available in the factory-built home financing market, and they're worth pursuing first if your situation qualifies.

FHA Title II is designed for manufactured homes permanently affixed to a foundation on owned land. The down payment is 3.5% with a 580 or higher credit score, or 10% for scores between 500 and 579. Terms run up to 30 years, making this one of the most accessible entry points for buyers who don't have a large down payment saved.

The loan includes both an upfront mortgage insurance premium and an annual MIP, which adds to the overall cost. To qualify, the home must have been built on or after June 15, 1976, the date the HUD Manufactured Home Construction and Safety Standards took effect, measure at least 400 square feet, and sit on a permanent foundation that meets FHA standards. The home must also carry its HUD certification labels and data plate.

VA loans are available to eligible veterans and active-duty service members financing a manufactured home as real property. The down payment is 0%, and the main program-specific cost is the VA funding fee, which can be waived for certain borrowers. The home must be HUD-code, built after June 15, 1976, permanently affixed, and titled as real estate. Many lenders add their own overlays on top of VA minimums, so confirming a lender's specific requirements before applying is worth the call.

USDA loans cover manufactured homes in eligible rural areas with 0% down, but they include an upfront guarantee fee and an annual fee in addition to standard closing costs. Both income limits and geographic eligibility rules apply, so buyers need to verify that their lot's location qualifies before pursuing this route.

Standard conventional loans are available for manufactured homes on owned land titled as real estate, with a typical minimum of 5% down and a 95% LTV cap. PMI applies above 80% LTV but cancels once you reach that equity threshold, unlike FHA's MIP, which has different removal rules.

Fannie Mae's MH Advantage program goes further, allowing 3% down (97% LTV) for manufactured homes that meet specific design standards. To qualify, a home must be multi-section with a roof pitch of 4/12 or greater and eaves of at least 6 inches. Exterior siding must be an approved material such as fiber cement or engineered wood, and drywall is required throughout. The floor must be set no more than 30 inches from grade, and the home must meet ENERGY STAR, the 2009 IECC, or an overall U-value of 0.076 or less. Site features, including a driveway, sidewalk, and covered porch or attached garage, are also required. Qualifying homes carry an MH Advantage sticker applied by the manufacturer, and lenders verify eligibility through appraisal photos during underwriting.

When you don't own the land, or when the home won't be permanently affixed, real-property mortgage programs are off the table. Two programs cover that scenario. Understanding their terms helps set realistic expectations before you shop for a manufactured home loan.

FHA Title I can finance the home only, the lot only, or a home-and-lot combination, and it works even when the land is leased. This makes it a useful tool for buyers in manufactured home communities where land ownership isn't part of the transaction. Down payment is 5% for borrowers with a credit score above 500, and 10% for scores at or below 500, with maximum LTVs of 95% and 90% respectively.

Loan terms are shorter than Title II, maxing out at 20 years for a home-and-lot combination and 15 years for lot-only financing. Loan limits are also lower: in 2026, Title I caps out at $237,096 for a multi-section home plus lot, compared to county-based limits under Title II that can reach $1,249,125 in high-cost areas. Rates are typically higher than real-property mortgage rates, reflecting the added risk to the lender.

Chattel loans are offered by private lenders and finance the home as personal property without requiring land ownership. They are the most common financing method for homes in land-lease communities, and for many buyers in that situation, they're the only realistic path to ownership.

Terms typically run 10 to 25 years, and interest rates tend to run 2% to 4% higher than conventional mortgage rates, though spreads vary by lender and market conditions. Down payments range from 5% to 20% depending on the lender and the borrower's credit profile. The main tradeoff is cost over time: a higher rate on a shorter term means significantly more interest paid compared to a 30-year mortgage, even if the monthly payment looks manageable up front. The upside is speed and fewer site requirements, chattel loans close faster and don't require the same foundation documentation that mortgage programs demand.

This distinction matters more for financing than most buyers expect. Modular homes and HUD-code manufactured homes are both factory-built, but lenders treat them through entirely different lenses, and the practical impact on your loan options is significant.

Modular homes are built in sections in a factory, then assembled on-site, but they're subject to the same local and state building codes as stick-built homes rather than HUD Code. Because they are titled as real estate from the start and treated identically to site-built homes under most state laws, modular homes qualify for virtually any conventional, FHA, VA, or USDA product without the additional manufactured-home overlays. There are no HUD Code date restrictions, no certification label requirements, and broader lender participation across the board.

HUD-code manufactured homes are the homes that require the specific loan programs covered in this article. Lenders verify the HUD date, foundation type, and land title status before approving any manufactured home loan. Homes built before June 15, 1976 are generally not eligible for FHA, VA, USDA, or most conventional programs, as mainstream mortgage products require compliance with the HUD code that took effect on that date. For buyers building a new HUD-code home on owned land, construction-to-permanent loans are an option worth exploring. These loans cover the construction and installation phase, then convert to a permanent mortgage once the home is set and affixed, combining two closings into one and crediting any existing land equity toward the down payment requirement.

Beyond the loan type, lenders run through a checklist for both the borrower and the property. Knowing what they look for lets you prepare documentation and address potential issues before they slow down your application.

On the borrower side, credit score minimums vary by program. FHA products allow as low as 500 with a larger down payment, while conventional MH Advantage and standard conventional loans typically require 620 or higher in practice. Debt-to-income ratios, employment history, and income documentation follow the same standards as any mortgage application. For VA loans, you'll also need a Certificate of Eligibility confirming your service status.

On the property side, lenders verify a specific list of conditions before approval:

Not every lender finances factory-built homes, and the ones that do often specialize in a narrow set of programs. Identifying your loan type first, then finding lenders who participate in that program, is a faster path than calling lenders at random and hoping they work with manufactured homes.

Fannie Mae-approved lenders are the best starting point for conventional or MH Advantage financing. Ask each lender directly whether they originate manufactured home loans and which specific programs they participate in. Title I is less widely originated by standard mortgage lenders and is often handled by specialized lenders, so that distinction matters if leased land is part of your situation. State housing finance agencies run affordable housing programs in many states that include manufactured homes, with lists of participating local lenders published on their websites. Credit unions sometimes make portfolio loans on manufactured homes, especially for members buying on owned land, and calling locally is often worth a few minutes of your time.

The loan type you qualify for also determines the home type you can buy. FHA Title II, VA, and conventional programs require homes that meet specific HUD Code or MH Advantage standards, which means you need a builder who produces those exact products. Getting clear on your financing before you shop for a builder saves you from falling in love with a model that won't pass your lender's property checklist.

On Prefably, the directory separates builders by home type, including modular, manufactured, HUD-code, and ADU specialists, organized by state. Once you know whether your loan requires a modular build or a HUD-code manufactured home, you can go straight to the builders whose products actually qualify. Browse builder profiles, read the ratings, and contact them directly without filling out lead forms or fielding sales calls from companies you didn't choose.

The factory home mortgage process is more straightforward than it looks once you understand the real property versus personal property divide. Buyers who own the land and plan to permanently affix their home can access FHA Title II, VA, USDA, or conventional programs with competitive rates and long terms. Buyers financing a home in a land-lease community have FHA Title I and chattel loans available, with the tradeoff of higher rates and shorter terms. Modular homes qualify like site-built homes and open the widest set of conventional options, while HUD-code manufactured homes need the specific programs covered here.

Start by confirming your land ownership status and whether you plan to permanently affix the home. That single answer narrows your loan options immediately. Then match your situation to the right program, find a participating lender who actively originates that product, and confirm the home you want meets the lender's property requirements before you sign anything with a builder. Confirming land ownership and foundation status is the first step to qualifying for a factory home mortgage.

When you're ready to find builders who produce the right type of home for your loan, Prefably is a practical place to start. Browse by state, filter by home type, and reach out to builders directly at prefably.com, no middlemen, no resold inquiries, just direct access to the builders who can deliver what your financing requires.