Mobile homes and manufactured homes have become a popular solution to the housing crisis in the US because of their affordability. According to the United States Census Bureau, the average price of a single-wide mobile home was only $87,300 in March 2022. 1
Nevertheless, even with prices that low, most people still need financing to buy a mobile home. Read on to learn about the different types of mobile home loans and what credit score you need to get them.
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Credit score requirements for different types of mobile home loans
Because mobile homes don’t fall snugly into any one property category, you have several options for financing your purchase, and each has its own requirements.
The best option depends on the type of home you’re buying and your personal circumstances.
FHA loans
FHA loans are insured by the federal government, and they’re known for being more accessible than other types of home loans. There are two types of FHA loans for manufactured housing (which mobile homes count as):
- Title I loans: These are loans that can be used to buy a new or used mobile home, refinance a mobile home loan, or buy land for a mobile home. You don’t need to own or purchase land to get an FHA Title I loan.
- Title II loans: These loans can only be used for real estate, so you need to purchase land in order to qualify (instead of just the mobile home itself, but not the land under it). Your mobile home also needs to be at least 400 sq. ft, built after June 15, 1976, and built on a permanent chassis.
Credit score needed: No set minimum. However, you need to make a down payment of at least 10% if you don’t have at least a credit score of 500. 2
FHA Mobile Home Loan Options
| Loan Type | Property Type | Maximum Loan Amount | Maximum Loan Term |
|---|---|---|---|
| FHA Title I | Mobile home only | $69,678 | 20 years + 32 days |
| Mobile home lot | $23,226 | 15 years + 32 days | |
| Single-section mobile home + lot | $92,904 | 20 years + 32 days | |
| Multi-section mobile home + lot | $92,904 | 25 years + 32 days | |
| FHA Title II | Mobile home + lot | Unspecified | 30 years |
Chattel loans
Unlike traditional mortgages, chattel loans aren’t specifically designed for buying a home. Instead, they’re a type of personal property loan that can be used to finance all sorts of purchases, including movable items.
Chattel loans are a popular option because unlike most other home loans, which require the manufactured home to be permanently installed on property that you own, chattel loans can be used to finance mobile homes regardless of where you plan on putting them (e.g., on property you’re just renting).
Credit score needed: Lenders set their own requirements for chattel loans, but usually require a credit score of at least 575–620. 5 According to the Consumer Financial Protection Bureau (CFPB), borrowers approved for a chattel loan for manufactured housing have an average credit score of 676. 6
VA loans
VA loans are a special type of financing offered by the United States Department of Veterans Affairs. They’re only available to past or former members of the US military.
VA home loans can be applied to manufactured housing (including mobile homes), as long as certain requirements are met. Specifically, like FHA Title II loans, VA home loans can only be used for mobile homes that are classified as real estate. 7
This means that the mobile home must be permanently located on land that you own.
VA Mobile Home Loan Options
| Property Type | Maximum Loan Term |
|---|---|
| Single-wide manufactured home | 20 years + 32 days |
| Single-wide manufactured home + lot | 20 years + 32 days |
| Double-wide manufactured home | 23 years + 32 days |
| Double-wide manufactured home + lot | 25 years + 32 days |
| Mobile home lot only | 15 years + 32 days |
| Used mobile home | Estimated life expectancy of the home |
Source: US Department of Veterans Affairs.
Credit score needed: No set minimum, but lenders often require a credit score of at least 580–620. 8 9
USDA loans
The United States Department of Agriculture (USDA) insures mortgages for homes purchased in rural areas, and USDA loans can be used on mobile homes that meet certain criteria under the Single Family Housing Guaranteed Loan Program (SFHGLP).
To qualify, your mobile or manufactured home must meet the following requirements: 10
- New unit (no more than 12 months old) that has never been installed anywhere else
- Floor area of at least 400 sq. ft
- Placed on a permanent foundation
- No attached tow hitch or running gear
Credit score needed: No set minimum, but your credit report needs at least two tradelines (i.e., two credit accounts) with 12 months of credit history. 11 However, lenders may set their own credit score requirements.
Fannie Mae mortgages
Fannie Mae is one of the largest mortgage buyers in the country. They offer two different programs to insure conventional mortgages for mobile and manufactured homes.
Fannie Mae Mortgages for Mobile Homes
| Standard MH | MH Advantage | |
|---|---|---|
| Eligible Properties | Single-width or multi-width manufactured homes | Single-width or multi-width manufactured homes |
| Interest Rate Type | Fixed rate or 7- or 10-year secured overnight financing rate (SOFR) | Fixed rate or variable rate |
| Down Payment | 5% | 3% for fixed-rate mortgages 5% for variable-rate mortgages |
Bear in mind that you don’t get these mortgages directly from Fannie Mae. Instead, you’ll need to apply through a conventional mortgage lender.
Credit score needed: 620 to qualify. 15
Freddie Mac mortgages
Similar to Fannie Mae, Freddie Mac is a mortgage buyer that insures conventional mortgages offered by financial institutions and other lenders.
Freddie Mac mortgages can only be used on mobile homes that meet these requirements:
- The mobile home is your primary residence
- It’s a new unit that has never been installed anywhere else
- The interest rate of the loan is fixed for the full term or fixed for 7 or 10 years and then adjusted every 6 months (aka 7/6-Month ARM or 10/6-Month ARM)
If you’re a low-income borrower, then you may be able to qualify for Freddie Mac’s Home Possible mortgage, which allows financing for mobile homes with a minimum down payment that can be as low as 3%. 16
Credit score needed: 620 for standard mortgages. 17 However, you can qualify for a Home Possible mortgage with no credit score at all if you make a down payment of at least 5%. 18
Tips for buying a mobile home with bad credit
Even though there are mobile home loans that you can get with bad credit, it can still make a huge difference to your loan terms (e.g., the interest rate and fees you get saddled with).
Here are tips that may help you get a better deal on a mobile home loan.
Understand what other requirements you need to meet
Your credit score and credit history aren’t the only factors that lenders will look at when deciding whether or not to give you a mobile home loan. They’ll also consider the following other factors:
- Income level
- Existing debts
- Savings
- Down payment size
- Type of mobile home you’re buying
- Employment status
- Debt-to-income ratio
These additional requirements aren’t necessarily a bad thing. For example, if you have a high income, it could be enough to persuade lenders to overlook a bad credit score.
It’s also worth noting that if you’ve had major problems with your credit in the past, it may take time before you’re eligible for certain home loans. The table below shows how different negative items in your credit history can disqualify you from different types of mortgages.
Negative Marks That Will Disqualify You from Getting a Home Loan
| FHA Loans | VA Loans | USDA Loans (Streamlined Processing) |
|---|---|---|
Save up a large down payment
The bigger the down payment you have for your mobile home, the less you’ll need to borrow and the less you’ll pay overall in interest on your loan.
In addition to making your loan easier to pay off, saving up a big down payment will also make lenders more willing to give you money. This is because it lowers the risk they’re taking on by extending you credit.
Shop around
Gathering quotes and comparing offers is a key part of getting any type of financing, but this is even more important for bigger loans like mobile home loans.
Once you’ve decided on the type of mobile home you want and what type of loan to apply for, visit different lenders in your area or get quotes online and compare the APRs and loan terms you’re offered.
In addition to your actual interest rate, be sure to take into account the loan repayment term and whether the interest rate is fixed or variable because these factors will also contribute to the overall cost of your mobile home loan.
Request rapid rescoring
If you’ve been taking steps to quickly boost your credit score so you can buy a mobile home, it may take a while for your credit reports and scores to update. You can speed up the process by asking lenders for rapid rescoring.
Typically, your credit reports only update when data-furnishing companies (like your creditors) provide new or updated information to the credit bureaus. This usually happens once every 30–45 days. 19
Some lenders offer rapid rescoring to speed up this process and get updated credit reports sooner—often within 2–3 days. 20 This is a good option if you want to fix your credit fast so you can buy your new mobile home as soon as possible.
Prep your credit in advance
The more time you give yourself to build and improve your credit score before you start applying for mobile home financing, the better your chances are of securing a loan with good terms.
If possible, take the following steps in the months leading up to your applications for mobile home financing:
- Dispute errors on your credit report: Before applying for financing, check your credit score and request your free credit reports at AnnualCreditReport.com. If you spot any errors in your credit file, submit a credit dispute with the relevant credit bureau (Experian, Equifax, or TransUnion).
- Pay off your debts: Paying off your debts, particularly on your credit cards, will lower your debt-to-credit ratio. This will raise your credit score and make lenders more willing to extend credit to you.
- Use credit-building tools: Take steps to build up good credit, such as taking out a credit-builder loan, signing up for Experian Boost, or signing up for a rent-reporting service to have your rent payments added to your credit report. (However, note that lenders cannot consider credit scores affected by Experian Boost for USDA loans.)
- Remove negative marks from your credit report: You’ll have a hard time buying a mobile home if your credit history is full of derogatory marks. To convince lenders to give you the money you need to buy a mobile or manufactured home, consider removing negative marks from your credit report on your own or hiring a credit repair company to help you clean up your credit history.
If you have poor credit, it may be worth taking a few months or even a year or two to rebuild your credit before you apply for financing for a mobile home. Doing so can save you money in the long term and make the loan application process go a lot smoother.
