FHA Guidelines for Mobile Homes
FHA (Federal Housing Administration) rules for manufactured homes also apply to modular and mobile homes. FHA does not classify on-site assembly as new construction. FHA regulates these homes under the rules and label of the Federal Manufactured Construction and Safety Standards. For mobile homes to be eligible for FHA mortgage insurance on loans, they must meet or exceed these standards.
Federal Manufactured Construction and Safety Standards
To meet these standards and be eligible for FHA mortgage financing, homes must have been built after June 15, 1976. They must have a certification label or other documentation to prove their manufacture date. Mobile homes must include at least 400 square feet of living space. The home must also be classified as real estate. To be considered real estate, the home must be attached to a permanent foundation and built to FHA standards.
Real Estate Classification
Earning the real estate classification involves the home sitting on a permanent foundation and considered a "permanent dwelling." This classification is more easily achieved if the mobile home sits on land that you own. Many states, such as Florida, consider even modular or manufactured homes on permanent foundations as personal property if they sit on leased or rented land. Mobile homes taxed as personal property, instead of real estate, are ineligible for FHA mortgage financing.
It's important to be aware of the permanent foundation guidelines, since they are vital to FHA financing eligibility. You can find the detailed guidelines by reading The Permanent Foundations Guide for Manufactured Housing. The basic rule is a bit more straightforward: "All foundation systems, new and existing, must meet the FHA guidelines in effect at the time of the certification." The FHA requires a licensed professional engineer to provide the necessary certification of compliance for home foundations.
FHA Title 1 Program
The Title 1 program allows FHA-approved lenders to make loans for the purchase or refinance of a manufactured home. Title 1 will also insure a loan to finance an improved lot upon which a mobile home will sit. FHA Title 1 has lending limits, which can affect your financing decisions. A manufactured home has a maximum loan of only $69, 678, while a developed lot for a mobile home is limited to $23,226. A mobile home and lot together allow FHA financing up to $92,904. Loan terms are limited to 15 years for lots, 20 years for a mobile home and lot, and 25 years for a multi-section manufactured home with a lot.