Should You Buy a Manufactured Home?

What Is a Manufactured Home?

The term "manufactured home" is used to describe factory-built housing made after 1976 that meets construction and safety standards set by the U.S. Department of Housing and Urban Development (HUD). To qualify, manufactured homes must be built on a wheeled chassis that gets removed when the home is moved to its permanent site.

You can place a manufactured home on your own land or on land leased within a manufactured home community. But you may run into some restrictions with financing, depending on the location.

Modern manufactured homes are generally well-built and energy efficient, and often hard to distinguish from traditionally built homes. During the build stage, you can usually choose from a variety of floor plans and add porches, garages and decks. Customization options also include features like wood-burning fireplaces, spa bathrooms and high-end kitchens.

Manufactured homes are different from mobile homes, which are factory-built homes built prior to 1976, but terms are sometimes used interchangeably. Modular homes are another type of factory-built home, but they are made in sections and assembled on-site rather than delivered fully built on wheels.

Types of Manufactured Home Loans

If you want to finance a manufactured home, you can choose from several types of manufactured home loans. Eligibility varies, however, depending on where you plan to put the manufactured home.

To use a mortgage to finance a manufactured home, it generally needs to be classified as real property. This usually means the manufactured home needs to be on your land and set on a permanent foundation—not on leased land. But there are some exceptions.

Manufactured homes set on leased land, such as a mobile home park, are generally considered personal property. Mortgage options are often limited when the land is leased, but you may be able to use a chattel loan or personal loan for financing.

Here's a closer look at the different types of manufactured home loans that may be available for financing, including mortgages through Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy most U.S. mortgages.

Fannie Mae Standard MH

A Fannie Mae Standard MH mortgage can be used to finance qualifying multi-width manufactured homes. Single-width manufactured homes may also be eligible with some limitations. Financing requires at least 5% down, and the mortgage may also come with a lower interest rate for the first years.

Fannie Mae MH Advantage

A Fannie Mae MH Advantage mortgage can be used to buy eligible manufactured homes built to meet the same standards as site-built homes. Loans terms are up to 30 years, and financing requires 3% down. Like the Fannie Mae Standard MH mortgage, this loan also may come with a lower starting interest rate.

Freddie Mac Standard Manufactured Home Mortgage

Eligible manufactured home buyers may qualify to purchase a manufactured home with a Freddie Mac standard manufactured home mortgage. The down payment may be as low as 5% of the purchase price for qualified buyers.

Freddie Mac CHOICEHome Mortgage

A CHOICEHome mortgage offers financing for manufactured homes that meet or exceed national safety codes. The down payment may be as low as 3% of the purchase price for qualified buyers.

Government-Backed Loans

Some manufactured homes classified as real property may qualify for manufactured home loans backed by the Veterans Administration, U.S. Department of Agriculture and Fair Housing Administration (FHA).

For example, the FHA Title I Manufactured Home Loan Program can help you finance a manufactured home, just the land it sits on or both. FHA Title I loans can also be used to finance manufactured homes on leased land, but limitations may apply.

Chattel Loan

A chattel loan (or chattel mortgage) is a type of loan used to finance movable equipment, including manufactured homes, tractors and bulldozers. The equipment serves as collateral until you pay off the loan. Compared to mortgages, chattel loans typically have higher interest rates and limited consumer protections. The Consumer Financial Protection Bureau (CFPB) estimates that at least 42% of manufactured homes are financed by chattel loans.

Personal Loans

Personal loans can also be used to finance a manufactured home. Like chattel loans, personal loans usually have higher interest rates than mortgages. Personal loans may not have high enough loan limits to cover the full cost of buying a manufactured home, so you may still need to fund some of the purchase out of pocket.

Learn more: Can You Buy a House With a Personal Loan?

How Much Do Manufactured Homes Cost?

The average cost of a manufactured home is around $200,000, including the land, according to Freddie Mac. Compared to new site-built homes, which cost around $500,000, buying a manufactured home is usually much more affordable. At the end of 2025, the median cost of a home averaged around $400,000, making manufactured homes cheaper than traditional real estate too.

Due to strict HUD building codes, manufactured homes also tend to be more energy efficient than older homes or other newly built construction. You may pay less for utilities, like heat and cooling, which can help you save even more money in the long run.

Do Manufactured Homes Depreciate?

The long-term value of a manufactured home generally depends on where it's permanently placed. Manufactured homes placed on land that you own generally appreciate in value like a site-built home since the value of the property follows the housing market.

But manufactured homes placed on leased land generally depreciate at a similar rate to a vehicle. There's no value to gain on the land, since the placement location is leased, and the structure usually loses value over time due to wear and tear.

Pros and Cons of Manufactured Homes

Buying a manufactured home comes with both advantages and disadvantages. Here's a closer look at some of the top pros and cons to consider.

Are Manufactured Homes Worth It?

Buying a manufactured home may be worth it for some buyers. They're generally more affordable than site-built homes, cost less to maintain and may appreciate in value if placed on land you own. Plus, they include many of the same features as traditional homes.

However, getting a mortgage to finance a manufactured home can sometimes be challenging. And if you choose to place the manufactured home on leased land, you still have to pay rent and could potentially lose access to the land down the line.

How to Buy a Manufactured Home

The process to buy a manufactured home varies a bit depending on the manufacturer and whether you plan to put the home on your own property or leased land. Follow these general steps as a guide for buying a new manufactured home.

1. Find a placement location. Choose between land you own (or plan to purchase) or lease land, like a manufactured home park. For land you own, be sure you understand what's needed for permits, zoning, inspections and other site-related requirements. If you lease the location, pay close attention to the manufactured home park's rules.
2. Order your manufactured home. You can usually buy a newly manufactured home through a dealer. Compare a few options to find the home that best meets your needs and budget. (You can find existing manufactured homes on the market, but they may require a lease for the land or be expensive to relocate.)
3. Check your credit. To get the best rates for financing, start by getting your credit report and FICO^® Score^Θ for free from Experian to see where your credit stands. Address any issues you find and take steps to improve your credit, if necessary.
4. Secure financing. Research your financing options carefully. Some manufactured homes are considered real property and eligible for mortgages, while others may only be financed with a chattel loan. Shop around and compare your loan options before making a decision.

Frequently Asked Questions

Is a Manufactured Home Right for You?

A manufactured home can be an affordable way to own your own home, but it's important to know the risks before buying. Owning or buying the land where you'll place the manufactured home usually opens up more financing options. But you still need to prepare the property and make sure zoning laws allow placement. If you plan to put the manufactured home in a leased community, keep in mind that financing is often more limited and you have to pay an ongoing lease.