Does a Mobile Home Purchase Disqualify Me From FHA?
The Federal Housing Administration (FHA) insures many different types of mortgages, including loans used to purchase mobile homes. FHA partner lenders write the loans used to make the purchase, but mobile homes being financed must meet the strict FHA eligibility guidelines. Homebuyers who qualify for FHA loans are able to make smaller down payments than people using other types of loans to purchase mobile homes.
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Borrower Eligibility
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Anyone wishing to purchase a mobile home with an FHA-backed loan must have sufficient funds to make a down payment. Typically, down payments amount to at least 5 percent of the purchase price. Borrowers cannot borrow funds for the down payments but family members can "gift" the funds needed to secure the home. Borrowers must have sufficient income to make monthly loan payments. Generally, the FHA only approves loans if the new payment combined with existing debt will not cause borrowers' monthly debt payments to exceed 43 percent of their gross monthly incomes.
Site
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Anyone wishing to purchase a mobile home must own a plot of land on which contractors can permanently fix the home. You can also have the home placed on a rented plot, but the landlord must agree to have the home installed using FHA guidelines. Any site used for a home must comply with state laws in terms of access to sewage, water and roads. The FHA only insures loans used to buy primary residences and not mobile homes used as vacation homes or rental properties.
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Mobile Home
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The FHA only insures mortgages tied to mobile homes built after 1976 because homes built prior to that time do not meet current safety standards. Financed homes must have a floor area of at least 400 square feet and meet state standards for classification as real estate. The FHA insures loans written for mobile homes with terms not exceeding 20 years, although a homeowner can finance a home and land parcel for up to 25 years with an FHA-backed loan.
Loan Details
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You can use an FHA-backed loan to buy a mobile home costing up to $69,678 in most parts of the United States. The FHA also insures loans used to buy mobile home and lot parcels, as long as the loan amount does not exceed $92,904. The FHA establishes loan limits on an annual basis, and some counties with above-average housing prices are classified as high-cost areas. In high-cost areas, the FHA insures loans up to the higher of $92,904 or 85 percent of the purchase price.
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References
- U.S. Department of Housing and Urban Development: Financing Manufactured (Mobile) Homes
- U.S. Department of Housing and Urban Development: Manufactured Homes: Eligibility and General Requirements -- Title II
- U.S. Department of Housing and Urban Development: Let FHA Loans Help You
- U.S. Department of Housing and Urban Development: Manufactured Homes Foundation Compliance
