Questions Before Buying a Manufactured Home

NEW YORK — With stylish features and floor plans, many of today's manufactured homes break the old "mobile home" stereotype — without breaking the bank.

On average, new manufactured homes cost about a third of the price of site-built homes, reports the Manufactured Housing Institute, a trade group. Factory construction lowers material and labor costs, and a federal building code makes inspections more efficient.

Lesli Gooch, CEO of the MHI, says manufactured homes are an attractive choice for many buyers, from entry-level buyers to retirees.

"It's affordable, but it's also turnkey," she says.

However, obstacles remain. In some cities, zoning restrictions limit or ban where manufactured homes can be placed. And it's harder to find a mortgage for amounts below $150,000, so buyers have fewer lender choices for traditional financing.

On Jan. 6, the Consumer Financial Protection Bureau sued Vanderbilt Mortgage & Finance, alleging that the company trapped some borrowers in manufactured home mortgages they couldn't afford. Vanderbilt Mortgage is a unit of Clayton Homes, the nation's largest manufactured home builder.

In a statement, Vanderbilt Mortgage said their lending practices exceed legal requirements, and this lawsuit will deprive creditworthy borrowers of owning a home. "The CFPB's lawsuit is unfounded and untrue, and is the latest example of politically motivated, regulatory overreach," Vanderbilt said in the statement.

If you're shopping for a manufactured home this year, ask these questions to shop smart and stay informed.

How much can I afford?

Manufactured homes are one of the lowest-priced home types on the market. In December 2024, the median listing price for a manufactured home was $159,500, compared to $420,000 for an existing single-family home, reports Realtor.com.

When it's time to set your budget, no one knows your cash flow better than you do. It's your responsibility — not a lender's — to determine a monthly payment that works for you. Start with an online calculator to estimate how much house you can afford. For free or low-cost advice, find a housing counselor sponsored by the U.S. Department of Housing and Urban Development (HUD).

Pro tip: The onsite lender at the manufactured home dealer isn't your only option to finance your home. It's OK to shop around, and when you talk to a loan officer, you shouldn't feel rushed or pressured to buy. Alys Cohen, senior attorney with the National Consumer Law Center, says to trust your gut.

"If you feel like you're being talked into a mortgage you can't afford, then you're being talked into a mortgage you can't afford," she says.

Which type of loan is best for me?

Compare at least three lenders to understand your options and get the best interest rate. Want to delegate? Have a mortgage broker shop around on your behalf. (Brokers charge a fee but can often negotiate a lower interest rate than you can find on your own.)

To finance a manufactured home, the two most common options are traditional mortgages (like conventional loans or FHA loans) and personal property loans. A traditional mortgage has stricter qualifications: Usually, the home must be titled as "real property," which means you need to own the land underneath and attach the home to a permanent foundation. But average interest rates are lower with a mortgage, and you'll have more options if you struggle to make payments.

Personal property loans, sometimes called chattel loans, aren't secured by the land. Since most manufactured homes come titled as "personal property," chattel loans can be more convenient to get. But with higher interest rates, the cost of borrowing is generally more expensive. FHA Title I loans, backed by the Federal Housing Administration, are a type of personal property loan to finance a manufactured home, lot or both.

With a traditional mortgage, a lender must send you a copy of your closing disclosure at least three days before your closing date. If numbers on the final paperwork look different than what you agreed to, that's a red flag, says Cohen.

"It should be worrisome if they say, 'Oh well, we'll just fix that later,' or, 'We didn't really mean that,' or, 'We can just get you a new loan later to fix that problem — just sign here today,'" she says.

Will I own or lease the land underneath?

You may have heard that all manufactured homes lose value over time, like a car. But today, that's not always the case. When you keep up with maintenance and repairs, a manufactured home can grow in value similar to a site-built home. In 2024, the national median price per square foot for a manufactured home climbed 1.2%, while the median price per square foot of a single-family home climbed 2.5%, reports Realtor.com.

However, a manufactured home can lose value when you don't (or can't afford to) keep up with maintenance — especially if you don't own the land underneath. While land ownership is a strong predictor of appreciation, there's less upfront cost to buy a unit in a land-lease community, says Dave Anderson, executive director of the National Manufactured Home Owners Association.

"Leasing land instead of buying it can hugely increase the affordability," he says.

Affordable housing can be hard to find in rural areas or small towns, so a land lease might be the best option. For low-income families, owning a home on a leased lot can offer more stability than renting an apartment.

If that's the best fit for your financial situation, do your research to make sure the community is well-managed. Are the roads and public utilities in good shape? Is there a history of tenant complaints or lawsuits? Your state attorney general's office should have a consumer guide on your rights as a tenant of a manufactured home park, Anderson notes.

Am I ready for the responsibility of homeownership?

The cost of homeownership doesn't end with the mortgage. Leave some wiggle room in your budget for ongoing expenses like taxes, insurance and maintenance.

One plus, Gooch notes: With their excellent energy efficiency, manufactured homes tend to have a shorter to-do list when you move in.

"People today don't have time to go buy the fixer upper that's old and drafty and really expensive," she says. "And in the end, they don't have the money to fix it up."

If you do your research and stick to your budget, a manufactured home can be a smart way to get well-crafted construction at a lower cost.

"It's not Grandma's trailer, right?" Gooch says. "These are quality, resilient homes."

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