Chattel loan or mortgage? How manufactured home financing works
October 30, 2026
How you finance a manufactured home depends mostly on one question: do you own the land under it?
Chattel loans (personal property)
A chattel loan is secured by the home alone, treated as personal property, without land. If you rent your lot in a land-lease community, a chattel loan is typically the main option because there is no land for the lender to take as collateral. Compared with a traditional mortgage, chattel loans generally have higher interest rates, shorter terms and sometimes larger down payments, though they can close faster. Rates and terms vary by lender and credit profile, so get several quotes.
Mortgages (real property)
If the home is permanently attached to land you own, and meets the lender's foundation and title requirements, it can often be financed like a house with a conventional, FHA, VA or USDA mortgage. Mortgages usually carry lower rates and longer terms than chattel loans.
FHA Title I and Title II
The FHA insures two programs that apply to manufactured homes:
- Title I helps finance the home itself, the lot, or both, and is used for homes that are not on owned land. For a home on a leased lot, the lot lease generally has to meet minimum requirements, such as a multi-year term and long notice before it can be ended. Check with the lender.
- Title II treats the home and owned land as one mortgage, with the home on a permanent foundation.
FHA loan limits and rules change from year to year, so check HUD's current manufactured home loan information or ask an FHA-approved lender rather than relying on older numbers.
What to compare between offers
- Interest rate and APR
- Loan term
- Down payment
- Closing costs and fees
- Whether the lender requires the home to be a certain age or built to the HUD Code
- Prepayment penalties
- Whether you can later refinance into a mortgage if you buy land and place the home on a permanent foundation
Tips
- Get at least two or three quotes, including from lenders that specialize in manufactured homes.
- Ask each lender what happens if the park raises lot rent or you decide to move the home.
- Improve your credit score and save a bigger down payment if you can. Larger down payments often earn better rates.
This is general information, not financial advice. Rates and program rules change, so confirm current terms with lenders.