Home Buying Guide

Factory-Built Home Financing and Insurance


A rumor we would like to dispel about factory-built home financing is that it is harder to obtain than if you were buying a site-built structure. In actuality, the process of applying for a loan and obtaining insurance is very similar for each. Many financial institutions – from large, national lenders to regional and local banks and credit unions – have a variety of lending programs that are specifically designed for buyers of factory-built housing. 21st Mortgage Corporation, Triad Financial Services, and C.U. Factory Built Lending are just a few of the MHIA member organizations that specialize in providing financing for factory built and modular housing. Down payment requirements and loan terms differ from lender to lender, though in the world of factory-built housing, down payments between 5 and 10 percent, term lengths between 15 to 30 years, and affordable insurance rates are the norm.

It is important to note the two main ways to finance a factory-built home. If you have purchased a parcel of land along with your manufactured home, you can qualify for a conventional mortgage. However, if your home is located on leased land, your home will be titled as personal property and financed through a personal property (chattel) loan. 

Interest rates for factory-built homes vary based on the age and size of the home, the location of the home, the loan amount, the down payment, and the borrower’s credit. The interest rate on chattel loans may be higher than for a conventional mortgage, but loan payments for manufactured homes on leased land are typically less than for a site-built home or rent for a comparable apartment.



Other factors that are present when seeking financing and obtaining insurance for a factory-built house include:

  •     Your credit history
  •     Your income history
  •     Your employment status
  •     Your debt-to-income (DTI) ratio
  •     The size of your down payment
  •     The cost of the home


Before you apply for loans, gather all your financial records. The more prepared you are and the more your financial situation is in order, the smoother the process is for obtaining financing and insurance for your home. The best way to determine your budget is to get pre-approved by a lender. This lets you know what you can afford based on your current financial situation. It also gives you the opportunity to shop around and learn more about the various loans you may be eligible for. In addition, most banks have a mortgaging checklist that will help you through the necessary steps for financing your manufactured home. Another tool you can use for estimating the range of your total cost is an online mortgage calculator. A mortgage calculator can generate your estimated monthly mortgage payment after factoring in a variety of relevant variables, such as your loan amount, interest rate, and desired loan term length.

MHIA-affiliated lenders are your best source of information regarding financing a factory-built home. All offer competitive rates on both land-home packages and leased land arrangements. Feel free to reach out to any of our members directly by clicking here to return to our website.

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