When it comes to affordable housing options, both manufactured homes and modular homes offer practical solutions for buyers looking to own their own space without breaking the bank. But when financing comes into play, many buyers find themselves asking: Are manufactured home loans easier or harder to get than modular home loans?
The answer depends on how these two types of housing are classified and what lenders are willing to finance. Let’s break it down.
Manufactured Homes vs. Modular Homes: The Key Difference
Before diving into loans, it’s important to understand the difference between manufactured housing and modular housing:
- Manufactured Homes are built entirely in a factory and delivered to a site, often placed on a permanent or non-permanent foundation. They are built to the HUD Code (a federal building standard). Whether the home is permanently affixed to land or not plays a big role in what loan options are available.
- Modular Homes, on the other hand, are also factory-built but must follow the same state and local building codes as traditional stick-built houses. Once assembled on-site, they are treated much like a traditional home in the eyes of lenders.
This classification difference directly impacts the types of loans available.
Manufactured Home Loans: More Specialized Options
Because manufactured homes may or may not be permanently affixed to land, manufactured home loans can be trickier to secure than modular home loans. If the home is not on a permanent foundation or the borrower doesn’t own the land, the property may not qualify as real estate. In those cases, buyers often need:
- Chattel loans (personal property loans for the home itself).
- FHA Title I loans designed specifically for manufactured housing.
While these options make manufactured homes more accessible, they typically come with higher interest rates and shorter terms compared to conventional mortgages. However, if the home is permanently affixed to land and classified as real property, buyers may qualify for FHA, VA, USDA, or even conventional loans, much like with a modular home.
Modular Home Loans: Treated Like Traditional Mortgages
Since modular homes are built to local building codes and permanently installed on a foundation, they almost always qualify as real estate. This means buyers can access traditional mortgage products, including:
- Conventional mortgages
- FHA loans
- VA loans
- USDA loans
Because lenders view modular homes as similar to stick-built houses, financing is typically more straightforward and comes with competitive interest rates and longer loan terms.
Which Is Easier?
In general, modular home loans are easier to secure because lenders treat modular homes like traditional site-built homes. The process is familiar, the collateral is considered stable, and loan products are widely available.
Manufactured home loans, however, depend heavily on classification. If the home is considered real estate (permanently affixed and the land is owned), financing options open up. If not, buyers are often limited to chattel or specialized government-backed programs, which can be harder to qualify for and may cost more over time.
The Bottom Line
Both manufactured and modular homes are excellent paths to affordable homeownership, but the financing process isn’t identical. Manufactured home loans may require specialized programs and vary depending on how the home is classified, while modular home loans are typically more straightforward and resemble traditional mortgages.
If you’re considering purchasing one of these housing options, understanding the financing differences can help you prepare for what to expect.
At ManufacturedHomeloans.com, we’re here to make the financing process easier by connecting you with lenders and resources tailored to manufactured housing. Whether you’re exploring manufactured home loans or comparing them to modular home loans, our goal is to help you make confident, informed decisions.
