Financing For First-Time Mobile Home Buyers

Financing For First Time Mobile Home Buyers

Buying or building a new home is an exciting and life-changing experience. However, it also comes with its share of challenges.

A first-time homebuyer is often faced with the daunting task of financing their new mobile home. On top of that, they are overwhelmed with credit score myths. Fortunately, several options are available to help make this process easier and more affordable. These include getting loans from banks or lenders, credit unions, community organizations, or insurance companies.

This article will give you a better understanding of what mobile homes are, along with some tips on financing if you’re a first-time buyer. 

Mobile vs. Modular vs. Manufactured Homes

If you are a prospective homeowner, you are sure to encounter terms like mobile, modular, and manufactured homes. Although these three are closely related, they have key differences that could set them apart. Therefore, knowing the differences, as well as the advantages and disadvantages of each type, is essential.

Mobile Homes

Mobile homes are manufactured in factories and then transported on wheels to a property. They usually have an aluminum exterior and come in many different styles, colors, and sizes.

Some mobile home parks provide residents with community amenities such as pools, clubhouses, and picnic areas, while others require purchasing and maintaining these amenities.

Manufactured Homes

On June 15, 1976, the US Department of Housing and Urban Development (HUD) recognized the term “manufactured home” and defined it as a “mobile or prefabricated structure, built on a permanent chassis and designed to be transported from site to site as needed.”

Manufactured homes are factory-built houses, either single or multi-sectioned, that meet HUD’s construction and safety standards for mobile homes. These homes are built on steel frames, and the exterior walls, ceilings, floors, roof trusses, and doors come in panels that can be bolted together. 

Modular Homes

A modular home is another type of home that has been pre-made from a factory and just set up on the property. However, unlike mobile and manufactured homes, modular types are often similar to traditional homes. They can even be built in more than one way, depending on the preference of the owner.

As a note, modular homes must be under a contract within the same state as a site-built home.

Mobile Home Buying Tips for First-Time Buyers 

If you’re not sure what type of mobile home to buy, take some time and do your research. You will want to consider the following factors:

  • Where are you going to be living?
  • What is the climate like in that area?
  • How much space does one person need?
  • What type of amenities do you want?

In addition, the best way to find a mobile home is by shopping around. You will be able to see the floor plan, ask tons of questions, and get some perspective from another person’s eyes before making your decision. 

Does First-Time Homebuyer Credit Apply to Mobile Homes?

The good news is that the IRS considers a mobile home the same as a traditional home for the buyer’s tax credit. So, as a first-time homebuyer, you can qualify to get credit when buying a mobile home.

In the same way, you are no longer considered a “first-time” homebuyer if you have previously owned a mobile home and are now looking into buying a traditionally built one.

First-Time Homebuyer Programs

There are different types of loans that you can get, based on your qualifications. For example, some may get you a longer contract, some may get you lower interest rates, and some may get you lower down payments.

Here are the types of loans you can avail of for your first mobile home:

FHA Loan

An FHA Loan is a type of loan insured by the Federal Housing Administration. This is perfect for buyers with lower credit and those who can only afford a lower downpayment.

An FHA loan allows you to buy a mobile home with a credit score as low as 580 for a downpayment of 3.5%.

Veterans Loan

A Veterans loan is a type of loan backed by the U.S. Department of Veterans Affairs. Zero down payment is available for people from the military, veterans, and their spouses.

“Good Neighbor Next Door”

“Good Neighbor Next Door” is a HUD program that provides aid for law enforcement officers, firefighters, emergency medical technicians, and teachers looking to buy their own homes.

If qualified, beneficiaries can get up to a 50% discount from the listing price of an eligible property.

Fannie Mae or Freddie Mac-backed Loans

You can avail of these loans with a downpayment that can go as low as 3%. However, this is only available for customers with a strong credit history, and a credit score of 650 or above.


A USDA Loan is a loan backed by the U.S. Department of Agriculture. It is “100% guaranteed” in the sense that you can get approved without owning a farm or anything in the agriculture sector. For those reasons, only USDA-eligible areas can qualify for the program.

Alongside familiar options like FHA Loans, Veterans Loans, and others, first-time homebuyers might also explore alternatives such as money lender loans, which cater to diverse financial needs and might offer more flexible terms. Such loans, available through various financial institutions, can be a viable solution, especially for those who may not qualify for conventional bank loans. Understanding the nuances of these loans, including their terms and eligibility criteria, is crucial in making an informed decision.

First-Time Home Buyer Assistance Programs by State

Tuscaloosa Housing Authority Homeownership Program (Alabama)

New homebuyers can take advantage of affordable housing options with this program. The down payment for every applicant is $1000, which must be paid on their first mortgage. 

Moderate Income Purchase Assistance Program (California)

The program provides loans to cover down payment, acquisition, and closing costs for first-time homebuyers with average incomes. As a down payment, applicants must contribute at least 1% of the home’s price.

Duval County Home Sweet Home Program (Florida)

A first-time homebuyer may qualify for this 30-year deferred, no-interest second mortgage program. However, the applicant must complete an approved homebuyer education course, have a FICO score of 640 or higher, and qualify economically for the program. 

County of Kaua’i Home Buyer Loan Program (Hawaii)

First-time homebuyers on the island of Kauai can apply for low-interest loans through this program. However, applicants’ household income must fall below 80% of the KMHI to be considered eligible.

How to Find the Right Manufactured Home Lender

Identify your preferred form of financing (mortgage, lease, or loan) and start your search by finding lenders who specialize in that area and meet any other criteria you may have, like geographic location or membership in specific organizations like NAR or MBA, etc. 

In addition to the type of financing, you may want to consider the following:

  • How long have they been in business?
  • Do they specialize in one or more types of loans or products that will best suit your situation?
  • What are their rates compared with other lenders? How much do additional services cost (e.g., appraisal, inspection)?
  • What is the minimum credit score requirement?
  • Do they offer finance to people with low or no credit scores or bad credit histories?
  • How quickly can I get approved for a loan? How long does it take from start to finish if everything goes smoothly (e.g., how long will it take to close)?
  • What forms of payment do they accept, and how can I pay them?

Final Words

Financing for your first mobile home should not feel like rocket science. There are many advantages of owning your own mobile house, and as long as you do the necessary research before buying one, it can be a fantastic experience. With enough market research and expert guidance, you can find a perfect lender fit for your qualifications and needs in no time.


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