Three Questions When Buying and Financing a New Manufactured Home
(Sources: Excerpts from an editorial by Abby Badach Doyle via Black Belt News Network) — With stylish features and floor plans, many of today’s manufactured homes break the old “mobile home” stereotype – without breaking the bank.
On average, new manufactured homes cost about a third of the price of site-built homes, reports the Manufactured Housing Institute (MHI), a trade group. Factory construction lowers material and labor costs, and a federal building code makes inspections more efficient.
Leslie Gooch, CEO of MHI, says manufactured homes are an attractive choice for many buyers, from entry-level buyers to retirees. “It’s affordable, but it’s also turnkey,” she says.
If you are shopping for a manufactured home this year, ask these questions to shop smart and stay informed.
How much can I afford?
Manufactured homes are the one of the lowest-priced home types on the market. In December 2024, the median listing price for a manufactured home was $159,500, compared to $420,000 for an existing single family home, reports Realtor.com
Pro tip: The onsite lender at the manufactured home dealer isn’t your only option to finance your home. It’s OK to shop around, and when you talk to a loan officer, you shouldn’t feel rushed or pressured to buy. It’s ok to shop around, and when you talk to a loan officer you shouldn’t feel rushed or pressured to buy. Alys Cohen, senior attorney with the National Consumer Law Center, says to trust your gut.
“If you feel like you’re being talked into a mortgage you can’t afford, then you’re being talked into a mortgage you can’t afford,” she says.
Which type of loan is best for me?
To finance a manufactured home, the two most common options are traditional mortgages (like conventional loans or FHA loans) and personal property loans. A traditional mortgage has stricter qualifications: Usually, the home must be titled as “real property,” which means you need to own the land underneath and attach the home to a permanent foundation. But average interest rates are lower with a mortgage, and you’ll have more options if you struggle to make payments.
Personal property loans, sometimes called chattel loans, aren’t secured by the land. Since most manufactured homes come titled as “personal property,” chattel loans can be more convenient to get. But with higher interest rates, the cost of borrowing is generally more expensive. FHA Title 1 loans, backed by the Federal Housing Administration, are a type of personal property loan to finance a manufactured home, lot or both.
Am I ready for the responsibility of homeownership?
The cost of homeownership doesn’t end with the mortgage. Leave some wiggle room in your buffet for ongoing expenses like taxes, insurance and and maintenance,
One plus, Gooch notes: With their excellent energy efficiency, manufactured homes tend to have a shorter to-do-list when you move in.
If you do your research and stick to your budget, a manufactured home can be a smart way to get well-crafted construction at a lower cost.
“It’s not Grandma’s trailer, right?” Gooch says. “These are quality, resilient homes”
