Fee Simple & Leased Land Lending

There are 2 types of manufactured homes that can be financed: Homes that are considered Fee Simple and homes that are on Leased Land. Let’s take a look at each.

Fee Simple Manufactured Homes

Fee simple manufactured homes are homes that are installed on land that you own. Typically a block foundation wall is build around the botton of the home. This type of foundation allows the title from DMV (like a car title at DMV) to be “retired”.  Once this is done, the home and the land become “real estate” and are inseparable. With the manufactured home now considered “real estate”, traditional financing, such as a Conventional, FHA or VA loan, can be used to make the purchase.

Leased Land Manufactured Home

Homes that are installed on a lot that you “lease” (often called Lot Rent)  are titled through DMV just like a car or a boat.. However, these manufactured homes cannot have a retired title and are subject to a different kind of financing … called Chattel Financing.

“Chattel” is simply a legal term for personal property. For example, cars and boats are considered personal property.

Financing Options For Fee Simple Homes

As mentioned above, fee simple manufactured homes that are titled as real estate can secure traditional financing, such as a Conventional, FHA or VA loan. These loans offer fixed interest rates with terms up to 30 years.

Down payment requirements can be as low $0 with a VA loan, 3.5% with FHA and 3-5% with Conventional.  Credit scores as low as 600 are allowed depending on the loan product.

Financing Options For Leased Land Homes

Manufactured homes on leased land are financed with Chattel Loans. Down payments can be as low as 5% if the home is your primary home. Terms will go up to 20 years for single wides and double wides.  Homes built prior to 1976 are not eligible for financing. Typically, chattel interest rates will be higher than real estate interest rates on fee simple homes.

For more details, or to ask any questions, feel free to reach out to us at 302-222-2064 and ask for Larry Knopf!