Can I Buy a Manufactured Home with FHA Financing?

A young couple and their baby standing in front of their home.

With so many different types of loans out there, choosing the right one for your needs can be a complex part of the home buying process. Learn what an FHA loan is, if you may qualify for one and if it could be the right option for you and your family.

As you look at financing options when you’re getting ready to purchase your dream home, you will see there are various loan programs to choose from. To get started, you can ask lenders for quotes and compare the total costs to see which loan program will be the best fit for your specific situation.

Many home buyers will consider FHA loan programs. Manufactured homes that are purchased with or without land may qualify for FHA loan programs, depending on the lender. The best way to find out if your home purchase will qualify for an FHA loan is to speak with different lenders about your available options. To learn if this might be the right option for you, let’s first talk about what an FHA loan is.

What is the FHA?

The FHA in FHA loan stands for the Federal Housing Administration. The FHA provides mortgage insurance on loans made by approved lenders throughout the United States. It insures mortgages on residential properties, which includes manufactured homes.

A young family sitting around a Monopoly game while the dad teaches his young son to play.

An FHA loan is funded by an approved lender and meets the FHA’s requirements to be insured. The lender is covered by the FHA if the loan defaults, which means the lender is less at risk. Loans also must meet certain requirements established by the FHA to qualify for insurance. Some of the requirements or considerations for FHA programs relate to the following:

  • Credit scores
  • Down payments
  • Mortgage insurance premiums
  • Home inspections
  • Loan terms

Here are a few key ways the FHA process is different from a traditional loan when you’re purchasing a manufactured home, which could help make an FHA loan a good option for you.

Lower or Unestablished Credit

Some home buyers, especially first-time home buyers, may be concerned about credit flaws standing in the way of their home purchase. FHA loan programs consider borrowers with less than perfect credit scores. And for those who may not have well-established credit yet, FHA loan programs consider borrowers with little credit history, too.

Lower Down Payment Requirements

FHA loan programs often offer lower down payment requirements than some other types of loans, potentially as low as 3.5%. Along with the lower requirement, the down payment can also be gifted in certain cases. However, the exact down payment requirements may vary by loan, so make sure you check with your chosen lender.

Mortgage Insurance Premiums

The caveat to lower credit and down payment requirements is that FHA loans require mortgage insurance with a monthly premium on top of the monthly payment on the loan, as well as an upfront mortgage insurance premium, depending upon the loan program.

With an FHA loan, mortgage insurance may be required for the life of the loan. It’s important to understand all the options and requirements for different lenders and loan types when you’re shopping for a home loan.

A young mom sitting on her bed and playing with her smiling baby.

FHA Home Inspection

All FHA loans must have a home inspection before the closing, completed by a licensed FHA inspector who will verify that the home meets HUD code standards. One of the benefits of purchasing a new Clayton Built® home is that all of our manufactured homes are built to these national construction and safety standards. The FHA home inspection will also look at the setup of the home at the home site to make sure it meets the HUD FHA foundation requirement.

FHA is an option for manufactured home purchases with many lenders. However, there are many different financing programs available to fit various needs and budgets. So, take your time and find the loan program that works the best for you.

Are you ready to find your dream home?
Start shopping now or find a home center in your area to learn more about Clayton Built® home options.

By entering your email address, you agree to receive marketing emails from Clayton. Unsubscribe anytime.

Get prepared with budgeting tips, information on mortgage types and more.