Manufactured housing is a low-cost alternative to site-built homes that many Americans are opting to purchase. These types of homes are built primarily off-site in multiple sections and are then assembled like building blocks on the site that the property will sit on.
In the past, manufactured or mobile homes may not have been an option many would consider, but they have come a long way over the past few years. Manufactured homes now come with all the amenities and construction quality that you would expect in any other type of home.
Can you get a Fannie Mae Loan on a Manufactured Home?
The good news is yes, you can get a Fannie Mae loan to purchase a manufactured home. Fannie Mae is committed to its mission of expanding affordable housing and one of the ways it does this is by investing in manufactured housing loans.
Fannie Mae manufactured home mortgages
Fannie Mae offers different types of mortgages for manufactured housing – MH Advantage and Standard MH.
MH Advantage is a type of mortgage for manufactured homes that have similar features to traditional single-family homes as they’re built to blend into neighborhoods. Fannie Mae offers traditional 30-year fixed-rate loans with more benefits than you’d typically get with regular manufactured home loans.
This type of loan benefits from a low down payment requirement of just 3%, lower interest rates, and even cancellable mortgage insurance. MH Advantage home loans can include site-built homes as well, unlike Standard MH loans.
Standard MH loans are for those homes that don’t qualify for MH Advantages and provide a way for people to finally own their homes, especially useful in high-cost or rural areas.
What are the Fannie Mae Manufactured Home Guidelines?
Fannie Mae, like all lenders, has a series of guidelines for manufactured home loans which you can find in full on their website.
According to Fannie Mae’s definition, a manufactured home is a property of at least 400 square feet and at least 12 feet wide, built on a permanent chassis and foundation, and is constructed to the HUD Code.
This means that for your manufactured home loan to be approved, it must meet these guidelines first. For example, if the home does not have a permanent foundation, you may struggle to get a mortgage from a traditional lender and may have to get a personal loan instead.
Why choose a Fannie Mae loan
While you may qualify for a government-backed loan to fund your manufactured home purchase, this isn’t an option for everyone. This is usually only available through the U.S. Department of Veterans Affairs (VA) and the U.S. Department of Agriculture (USDA) so only applies to those who can qualify for VA or USDA loans.
There are also other guidelines beyond your personal eligibility for these types of loans. For example with USDA loans, the site where the home is built must be considered rural and be less than a year old.
Fannie Mae’s manufactured home loans are more accessible to those who don’t qualify for government-backed loans. Another plus is that while other lenders offer manufactured home loans, Fannie Mae is one of only two lenders that offer the MH Advantage program loan option.
Can you get a conventional mortgage on a manufactured home?
The short answer is yes, some lenders like Fannie Mae do provide conventional mortgages on manufactured homes. It’s a popular option for buyers because it usually includes more favorable interest rates and loan terms.
For those with a high credit score and minimal debt, a conventional loan could make a lot of sense.
However, since manufactured homes are constructed differently than traditional homes, lenders are usually stricter with their requirements. This is because they tend to depreciate in value faster whereas traditional homes tend to increase in value over time.
Different lenders will have different criteria that you must meet in order to be eligible. In order to qualify for a conventional mortgage, the home must be classed as real estate and not be movable. In other words, it must have a solid foundation at the least.
Conventional loans on manufactured homes usually come with a maximum loan amount as well, which can range between $484,350 and $726,52, depending on where the property is located.
Fannie Mae’s conventional loans are a popular choice thanks to its MH Advantage program which comes with perks and lower requirements than you’d find with many other lenders.