Purchase Manufactured Home with FHA Loan

It seems there's nothing the government won't do to encourage home ownership or home improvement. The FHA Title I loan program offers two loans, one for home improvements and another for purchase of a manufactured home, for those who might not otherwise qualify for a conventional loan.

Under the Title I program, approved lenders (banks, savings and loans, thrift and loans, credit unions, etc.) make loans to eligible borrowers to finance property improvements or purchase of a manufactured home, and HUD insures the lender against loss if the borrower defaults. Credit is granted based on the applicant's credit history and ability to repay the loan in regular monthly payments.

These are not low interest rate loans, the rate is based on the prevailing interest rate in your area at the time loan is made. The maximum home improvement loan for a single family home is $25,000. The maximum home purchase loan for a manufactured home is $48,600 for a manufactured home only, $16,200 for a developed lot on which to place a manufactured home, and 64,800 for a manufactured home and lot in combination.

The maximum term for a property improvement loan on a single family home is 20 years. The home purchase loan term may not exceed 20 years for a manufactured home only. Manufactured home lot loans are limited to 15 years. A loan on a single-module home and lot is limited to 20 years, while a loan on a multi-module home and lot can extend to 25 years.

A loan on a new manufactured home requires a minimum cash down payment of five percent of the first $5,000 of the purchase price and 10 percent of the balance. The same down payment is required on all combination loans, whether the home is new or existing. The minimum down payment on an existing manufactured home loan or a manufactured home lot loan is 10 percent of the purchased price.

Manufactured homes are usually purchased through dealers that sell the homes. The names of lenders in your area that specialize in financing manufactured homes can be obtained from local manufactured home dealers. These dealers are listed in the yellow pages of your telephone directory. Property owners can apply for a Title I property improvement loan at a HUD-approved lender. For information on how to find a HUD-approved lender in your area, see www.hud.gov