Financing A Manufactured Home
Manufactured and modular homes offer a great opportunity to build a quality home at a more affordable price point than traditional site-built housing. For potential buyers concerned with obtaining financing for a factory-built home, we have good news—it has never been easier to get a loan for your manufactured or modular home. Liechty Homes CFO Nick Schauer, who worked closely with Liechty Homes in the banking industry before joining our team, says that when getting financing on a manufactured home, “You have the same options as any other home. It shouldn’t hinder you in any way.” Noting that the key is finding a lender who is comfortable working with financing on manufactured homes he adds that Liechty Homes can help point buyers toward loan officers that can help, he adds, “We have preferred lenders in each sales office that know the process.” Whether a customer is looking to add a home to already-owned property, finance both a home and land purchase, or get a loan on a manufactured home going on leased land such as in a manufactured housing community, there are options to fit your needs.
Buying a home with land:
If you’re buying a manufactured home and land to set it on, the process will be similar to getting a mortgage for a traditional site-built home. As Brad Slaughbaugh, Sales Associate at Liechty Homes Bismarck points out: “If you buy any house in Bismarck, you’re buying a home and land with one loan. Any bank will treat the purchase of a manufactured home connected to land the same way.” Brianna Tabor, Mortgage Loan Officer for First Community Federal Credit Union (FCCU) in Jamestown, North Dakota, explains how the financing process can play out in different ways, as sometimes buyers are looking to finance the purchase of both a home and land in one package, and sometimes looking for a home to put on property they already own. “We have had many purchase land first, then reach out to us when they are ready to move forward with a Liechty Home purchase,” she says.
Many Liechty Homes customers first obtain a construction loan for their home. Tabor explains that for FCCU customers in North and South Dakota or Minnesota, “We require the borrower put 20% down as we would treat it as a construction loan and need all plans and specs. Once the house is completely set and any additional planned improvements (i.e. garage) is complete, the borrower would then have to take their construction loan and refinance into a permanent mortgage.” Rich Hawes of First Western Bank has also served Liechty Homes customers through the process of obtaining new construction loans and permanent financing for their completed homes, and notes that First Western is able to work with approved homebuyers most anywhere in the United States.
Buying a home to put on leased land:
Individuals looking to place their home in a manufactured housing community will need to work with both the community management and their loan officer throughout the home buying process. Slaughbaugh notes that credit unions are a good option for home-only loans. “Our financial service officers do offer mobile home loans with 20% down,” Tabor notes, “and if they are setting the home on a lot they are renting in a manufactured housing community, the member will need to also qualify with the lot rent included.
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Liechty Homes can help!
Every customer has a unique goal for their home purchase. If you’re dealing with generational transfer of land, looking for workforce housing, or looking to place a home on a farmstead, our sales staff can point you to a lender who can help. “We will recommend certain banks because we like them,” Slaughbaugh says. “If you ask anyone on our sales team, they will be able to suggest a bank and a person they like working with.” Contact or visit your local sales center to learn more.
Frequently Asked Questions: Manufactured Home Mortgages
Q: What is the main factor that determines the type of financing I can get for a Liechty home?
A: The main factor is land ownership and the home's classification. If you are buying a home to be permanently affixed to land you own (Land-Home Package), it's considered real property and qualifies for traditional mortgages (Conventional, FHA, VA, USDA). If the home is going on leased land (like a park), it's classified as personal property and requires a shorter-term chattel loan or home-only loan.
Q: Does Liechty Homes offer construction loans or single-close financing for Land-Home Packages?
A: Yes, we specialize in coordinating single-close financing which is often structured as a construction loan that automatically converts to a permanent mortgage upon home completion. This streamlines the process by financing the land purchase, site improvements (foundation, utilities), and the home itself all in one loan. We connect customers in North Dakota, South Dakota, and Minnesota with local lenders who are experts in this financing method.
Q: If I already own my land, how can I use that equity for my manufactured or modular home loan?
A: If you already own your land, you can often use the land's equity as your down payment for the new home loan, potentially reducing or eliminating your out-of-pocket costs. For modular homes or manufactured homes being classified as real property, a lender will appraise the land's value and use that as collateral, making it much easier to secure favorable terms for your home purchase.
Q: What is a Chattel Loan, and when should I consider one over a traditional mortgage?
A: A Chattel Loan is a loan secured by the manufactured home itself, treating it as personal property rather than real estate. You should consider a Chattel Loan if you plan to place your home on leased land or in a manufactured housing community. While these loans typically have shorter terms and slightly higher interest rates than mortgages, they are the primary financing route for customers who are not purchasing the land.
Q: Will Liechty Homes connect me with a lender who understands factory-built home financing?
A: Absolutely. Financing for manufactured and modular homes requires specific lender expertise. Our sales teams across the Midwest have long-standing relationships with preferred local financial institutions in every city (Bismarck, Rapid City, Duluth, etc.) that know the ins and outs of both construction-to-permanent and home-only loans. We guide you to a lender who understands the process to ensure a fast, transparent closing.
