When you’re budgeting for a new manufactured home, it’s easy to focus on the price tag and forget about the extra costs that come with the purchase. One expense that often catches buyers by surprise is sales tax. Depending on your state and the purchase price of the home, sales tax can add up to thousands of dollars. That leads many buyers to wonder: Can I finance the sales tax on a manufactured home?
The short answer is sometimes, yes. Whether or not you can roll sales tax into your manufactured home loan depends on several factors, including the lender, loan type, and how the home is classified. Let’s break it down so you can plan your purchase without any unpleasant surprises.
How Sales Tax Applies to Manufactured Homes
Sales tax on manufactured homes varies from state to state. Some states charge the standard sales tax rate, others have a reduced rate for manufactured housing, and a few exempt certain types of sales altogether.
In most cases, if you’re purchasing a brand-new manufactured home from a dealer, you’ll need to pay sales tax at the time of purchase. If you’re buying a used home, the tax rules can be different, sometimes sales tax doesn’t apply. That’s why it’s important to check your state’s guidelines before you finalize your budget.
Financing Sales Tax: When It’s Possible
In many manufactured home loans, lenders allow you to include the sales tax in your total loan amount. This means the sales tax gets rolled into your monthly mortgage payments, instead of being paid upfront.
This option is most common when:
- You’re using a chattel loan (home-only loan) or a land-home package loan.
- The home is classified as real property rather than personal property.
- The total financed amount, including sales tax, doesn’t exceed the lender’s maximum loan-to-value (LTV) ratio.
If your lender allows it, financing sales tax can help you avoid having to pay thousands of dollars out of pocket at closing. However, it’s important to remember that you’ll be paying interest on that amount over the life of the loan, which means the total cost of the tax will be higher in the long run.
When You Might Have to Pay Sales Tax Upfront
Not all lenders allow the sales tax to be rolled into a manufactured home loan. In some cases, you’ll need to pay the tax in full before the sale is finalized. This is more common when:
- You’re buying a used home from a private seller.
- You’re working with a lender that has strict loan amount limits.
- Your state requires sales tax to be paid directly to the Department of Motor Vehicles (DMV) or another agency before issuing the home’s title.
In these situations, you’ll need to plan ahead and set aside the funds to cover the tax at closing.
Tips for Managing Sales Tax Costs on Manufactured Homes
- Ask your lender early whether they allow sales tax to be financed.
- Research your state’s rules for manufactured housing sales tax rates and exemptions.
- Compare loan types: chattel loans, FHA loans, VA loans, and USDA loans each have different rules.
- Factor it into your budget from the beginning so you’re not caught off guard.
The Bottom Line
Yes, in many cases you can finance the sales tax on a manufactured home, but it depends on your loan type, lender, and state regulations. If you’re planning to buy, talk to your lender upfront and get a clear picture of whether the sales tax can be included in your manufactured home loan. This way, you can make informed decisions, avoid surprise costs, and keep your path to homeownership smooth.
At ManufacturedHomeLoans.com, we’re here to help you navigate every step of the financing process, from understanding loan options to breaking down costs like sales tax. Whether you’re brand new to manufactured housing or a seasoned buyer, we’ll connect you with the resources you need to make confident, well-informed choices.
Ready to explore your financing options? Visit us today to learn more about manufactured home loans and find the right path to your dream home.
