Buying a mobile home or manufactured home can be an affordable way to achieve homeownership. While not identical to traditional site-built homes, mobile homes offer many of the same amenities and benefits. This article will walk you through the process of buying a mobile home, including financing options, finding a home, and considerations for where to place it.
What is a Mobile Home or Manufactured Home?
A mobile home, also called a manufactured home, is a prefabricated house that is built in a factory and then transported to a site where it will be installed. Mobile homes built after June 15, 1976 are required to follow strict federal standards from the Department of Housing and Urban Development (HUD) and are officially called “manufactured homes”.
Mobile homes built before 1976 are not held to the same standards and are usually referred to as “mobile homes.” However, the terms are often used interchangeably in casual conversation. The main differences between a mobile home and a traditional stick-built house are:
- Mobile homes are built in a factory in sections, then transported and joined together on-site. Stick-built homes are constructed entirely on location.
- Mobile homes are considered personal property, while stick-built homes are real property.
- Mobile homes tend to depreciate in value over time, while stick-built homes generally appreciate.
Pros and Cons of Buying a Mobile Home
There are several key advantages and disadvantages to weigh when considering a mobile home purchase:
- Cost – Mobile homes are significantly less expensive than site-built homes, both upfront and over time.
- Customization – You can often customize the floor plan, fixtures, and finishes.
- Efficiency – Factory construction is not affected by weather and has faster timelines.
- Flexibility – Mobile homes can potentially be moved to a new location in the future.
- Financing – Loans may have higher interest rates and stricter requirements.
- Depreciation – Mobile homes tend to go down in value over time.
- Location – You may have to rent a lot in a mobile home park with additional fees.
- Resale – Mobile homes can be more difficult to resell, especially in parks.
- Perception – There is sometimes a stigma associated with mobile homes.
How to Finance a Mobile Home Purchase
Financing a mobile home is different than financing a traditional house. Here are some common options:
- Chattel loans – Also called personal property loans, these tend to have higher interest rates and shorter repayment terms than mortgages. The mobile home itself serves as collateral.
- FHA loans – You may qualify for a loan insured by the Federal Housing Administration. These can be used to purchase both the home and land.
- VA loans – Veterans Affairs loans can also be used to buy a mobile home and land in some cases.
- Land-home financing – Some lenders offer combined loans to purchase both the mobile home and land together. This can help secure better terms.
- Seller financing – You may be able to finance directly through the seller if they own the home outright. Be sure to get a written purchase agreement.
Shop around and compare interest rates and fees to find the best financing option for your situation. Government-backed loans like FHA and VA programs often offer the lowest rates.
How to Find a Mobile Home to Purchase
There are a few different avenues to find a mobile home for sale:
- New models – Most mobile home retailers have model homes on display that you can tour. You can also customize the floor plan and finishes.
- Resale homes – There are resale mobile homes available through retailers, classified ads, and real estate sites. These provide a more affordable option.
- Mobile home parks – Many parks have homes available right within the community. This provides convenience but less customization.
- Private sellers – You may find a good deal buying directly from an individual owner. Be sure to inspect the home thoroughly first.
Consider the pros and cons of buying new versus used. New models offer warranties and customization but are more expensive. Used homes are more affordable but may need repairs and upgrades.
Where to Locate Your Mobile Home
One important decision is where to place your mobile home. You have a few options:
- Mobile home park – This is the most convenient option, but you’ll pay monthly lot rent to the park owner. Ensure you like the location and park rules.
- Private land – Buying your own land to place the home allows you to build equity. But it’s a larger upfront investment.
- Leased land – You may be able to lease land from a private owner. This avoids buying land but provides more freedom than a park.
- Family land – Placing the home on land owned by family is an affordable option. Make sure to formalize the arrangement.
Consider costs, zoning laws, utilities access, community amenities, resale value, and more when deciding on a location.
Steps to Purchase a Mobile Home
Here is an overview of the typical process:
- Get pre-approved – Having financing lined up will make your offer more attractive to sellers.
- Find options – Search retailer listings, classifieds, and real estate sites for available homes. Consider new versus used.
- Inspect the home – Thoroughly examine any used mobile home yourself or hire a home inspector.
- Make an offer – Submit an offer with the purchase price, desired closing date, and any contingencies.
- Secure financing – Finalize loan details with your lender if not already completed.
- Complete purchase agreement – Review and sign the final purchase contract. Include home specifications and a closing timeline.
- Close on the home – Finalize the transaction by signing paperwork and exchanging money/keys on the closing date.
- Transport and set up – The home will be delivered and installed on your site. Oversee this process closely.
With the right research and preparation, buying a mobile home can be an affordable path to achieving your homeownership dreams. Reach out to discuss financing options that fit your budget and goals.