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What to Understand About Banks That Finance Mobile Homes with Land

November 6, 2023

What to Understand About Banks That Finance Mobile Homes with Land

Owning a mobile home with land can be a dream come true for many individuals and families. It offers the freedom of homeownership and the flexibility to enjoy both the comfort of a traditional home and the mobility of a mobile home. 

Financing a mobile home with land is relatively common, especially in regions where mobile and manufactured homes are popular. Many individuals and families opt for this arrangement due to its affordability and the opportunity to enjoy homeownership while having both the mobile home and the land it sits on. While the specific terms and requirements may vary based on location and individual financial circumstances, banks and lenders often provide options to accommodate these purchases. As mobile homes with land offer a blend of flexibility and stability, they continue to be an appealing choice for those seeking housing solutions that suit their needs and budgets.

However, financing such a property can be more complex than purchasing a conventional house. In this comprehensive guide, we will explore what you need to understand about banks that finance mobile homes with land.

Mobile Homes vs. Manufactured Homes

Before delving into the specifics of financing mobile homes with land, it's crucial to understand the distinction between mobile homes and manufactured homes. While the terms are often used interchangeably, there are differences:

Mobile Homes: These homes were built before 1976 and may not meet modern building codes. They were originally designed for mobility and are often found in a mobile home park (learn about loans for mobile homes in parks).

Manufactured Homes: These homes are built after 1976 and adhere to federal construction and safety standards. They are typically more permanent structures and can be located on land you own as the primary residence.

For the purpose of this article, we will primarily focus on financing manufactured homes placed on land you own.

What To Consider When Financing Mobile Homes with Land

Property Type and Zoning Regulations

Before proceeding with financing, confirm that your mobile home is situated on real estate with the appropriate zoning for residential use. Zoning regulations can vary by location, and some areas may have restrictions on the placement of mobile or manufactured homes.

Foundation Type

Lenders often require manufactured homes to be placed on a permanent foundation to qualify for traditional mortgage financing. Permanent foundations provide stability and safety and are a key factor in securing a loan.

Land Ownership

You should own the land where the mobile home is located to be eligible for a traditional mortgage. If you are considering purchasing both the land and the mobile home, you may need separate loans for each component.


Your credit history plays a significant role in securing financing for a mobile home with land. Lenders will evaluate your credit score, payment history, and overall financial health to determine your eligibility and loan terms.

Related: Learn How To Secure Mobile Home Loans With Bad Credit

Down Payment

The amount you can provide as a down payment will impact your loan terms. A larger down payment can lead to better interest rates and more favorable loan terms. Typically, a down payment of at least 5% to 20% is required.

Interest Rates

Interest rates for mobile homes with land tend to be slightly higher than those for traditional mortgages. Your credit score, down payment, and the lender you choose can all influence the interest rate you receive.

Loan Types

Several loan options are available for financing mobile homes with land, including conventional mortgages, FHA loans, VA loans (for eligible veterans), and USDA loans (in rural areas). Each loan program has its own eligibility criteria and terms, so it's essential to explore which option best suits your situation.

Closing Costs

Be prepared for closing costs associated with your mobile home purchase. These costs can include loan origination fees, appraisal fees, title fees, and more. Factor these expenses into your budget.

Insurance Requirements

Lenders typically require insurance coverage for both the mobile home and the land. Mobile home insurance may differ from traditional homeowners' insurance, so ensure you have adequate coverage.

Loan Pre-Approval

Before house hunting, consider obtaining loan pre-approval. This process involves a lender reviewing your financial situation through a pre-approval loan application and providing a pre-approval letter, which can make your offers more appealing to sellers.

Manufactured Home Inspection

A thorough inspection of the manufactured home is crucial to identify any issues or needed repairs. Banks that finance mobile homes with land may also require an inspection as part of the loan process.

Property Appraisal

An appraisal will assess the value of both the land and the mobile home. This step is essential for determining the loan amount and ensuring it aligns with the property's value.

Loan Term

Consider the length of your loan term, as it can significantly impact your monthly payments and overall cost. Common loan terms for mobile homes with land are 15 years, 20 years, 25 years, or 30 years.

Loan Repayment Strategy

Develop a repayment strategy that aligns with your financial goals. Decide whether you want to make extra payments to pay off your loan faster or stick to the standard repayment schedule.

Ongoing Costs

Factor in ongoing costs, such as property taxes, utility bills, maintenance, and repairs, when budgeting for your mobile home with land. Being financially prepared for these expenses is essential for long-term homeownership.

Financing a mobile home with land requires careful consideration of various factors, including property type, land ownership, creditworthiness, and loan options. Understanding these aspects and conducting thorough research will help you navigate the process effectively.

Remember that working with a knowledgeable lender who specializes in mobile home and manufactured home financing can be invaluable. They can guide you through the complexities of securing a loan, ensuring that you make informed decisions and achieve your goal of owning a mobile home with land.

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