Refinancing or purchasing a manufactured home requires choosing the right type of financing. Two primary loan options are available: chattel loans and mortgage loans. Each comes with distinct requirements, benefits, and limitations. This guide breaks down the key differences to help you determine which loan type best fits your goals, property setup, and financial profile.
What Are Chattel Loans?
A chattel loan is a personal property loan used to finance a manufactured home that is not permanently affixed to land. These loans are often used when a borrower is placing a home in a leased land community, such as a mobile home park.
Key Features of Chattel Loans:
- The home is classified as personal property, not real estate
- No land ownership required
- Typical loan terms range from 10 to 20 years
- Higher interest rates than traditional mortgages
- Lower credit and income thresholds
Chattel loans are commonly used when flexibility, and accessibility are more important than long-term equity growth. Learn more about available options at ManufacturedHome.Loan’s loan programs.
When Do Chattel Loans Make Sense?
Chattel loans may be the right choice if:
- You lease land or live in a mobile home park
- You have lower credit scores
- You prefer shorter loan terms and plan to refinance later
These loans offer more flexibility, especially for buyers who don’t yet own land or need to act quickly.
What Are Mortgage Loans for Manufactured Homes?
A mortgage loan for a manufactured or modular home treats the home as real property. This means the home must be affixed to a permanent foundation and the borrower must own the land it sits on. These loans are similar to traditional site-built home mortgages.
Key Features of Mortgage Loans:
- Longer repayment terms (typically up to 30 years)
- Lower interest rates compared to chattel loans
- Access to FHA, VA, USDA, or conventional mortgage programs
- Higher qualification standards for credit, income, and documentation
- Allows equity growth in both land and home
- Potential for lower monthly payments over time
Visit eLEND’s mortgage options for manufactured homes to explore lending programs backed by federal and private institutions.
Mortgage Loan Advantages
A mortgage loan may be more suitable if:
- You own land and plan to permanently install the home
- You’re seeking long-term equity and stability
- You qualify for government-backed loans (e.g., FHA, VA, USDA)
- You want to lower your interest rate and monthly payments
These loans offer long-term financial advantages and may be a better investment when the manufactured home will serve as a permanent residence.
Chattel Loan vs. Mortgage Loan — Side by Side
| Feature | Chattel Loan | Mortgage Loan |
| Property Type | Personal property | Real property |
| Land Ownership | Not required | Required |
| Loan Term | 10–20 years | Up to 30 years |
| Interest Rate | Higher | Lower |
| Credit Requirements | Flexible | Stricter |
| Equity Potential | No land equity | Equity in land and home |
| Loan Programs | Limited | FHA, VA, USDA, Conventional |
What Is an FHA Chattel Loan?
An FHA chattel loan (often called a Title 1 Loan) blends the benefits of government-backed loans with the flexibility of personal property financing. While the home remains personal property (not real estate), the loan follows FHA underwriting standards—helping more borrowers qualify with competitive rates.
To qualify for an FHA chattel loan:
- Meet FHA credit, income, and debt ratio guidelines
- Work with approved lenders specializing in manufactured home loans
- Place the home on leased land or a non-permanent foundation
Neither eLEND or ManufacturedHome.loan offer this program at present, but a quick google search could assist you in finding a participating lender.
Can You Refinance a Chattel Loan Into a Mortgage Loan?
Yes—if you later purchase land and permanently affix your home to it, you may refinance a chattel loan into a mortgage. This process can unlock lower interest rates, longer terms, and long-term equity benefits.
Refinance eligibility depends on:
- Land ownership
- Permanent foundation installation
- Meeting credit, income, and appraisal requirements
- Applying through FHA, VA, USDA, or conventional mortgage programs
Learn more about refinance options at eLEND or ManufacturedHome.Loan’s refinance page.
How to Choose the Right Loan Type
Before deciding, ask yourself:
- Do I own the land where my home is or will be located?
- Is short-term affordability or long-term equity more important?
- Do I qualify for government-backed mortgage programs?
- Will I live in a mobile home park or place the home on private land?
Choose a chattel loan if:
You lease land, need faster loan approval, or prefer a shorter loan term.
Choose a mortgage loan if:
You own land, want to build equity, and can meet stricter credit and documentation requirements.
When Should You Refinance?
If you initially financed with a chattel loan and your financial situation has improved—or you’ve purchased land—consider refinancing into a mortgage to:
- Lower your interest rate
- Extend your loan term
- Build equity in both the home and land
Explore refinancing options at ManufacturedHome.Loan or eLEND.
Frequently Asked Questions
What is a chattel loan for a manufactured home?
A chattel loan is used to finance a manufactured home as personal property, often when the home is located on leased land.
Can you refinance a chattel loan into a mortgage?
Yes. If you purchase land and install the home on a permanent foundation, you may refinance into a traditional mortgage loan.
Are FHA loans available for manufactured homes?
Yes. FHA loans are available for manufactured homes that meet HUD requirements and are permanently affixed to land.
What are the benefits of mortgage loans for modular homes?
Lower interest rates, longer terms, equity building, and access to government programs.
When should you choose a chattel loan?
If you’re placing the home in a mobile home park, leasing land, or seeking a faster, more flexible approval process.
Your Financing Path Forward
Chattel loans and mortgage loans each play an important role in manufactured home financing.
- Chattel loans offer speed, flexibility, and low barriers for buyers leasing land.
- Mortgage loans deliver stability, lower rates, and the opportunity to build equity over time.
Evaluate your land ownership, credit profile, and long-term goals to select the right financing path. Whether you’re buying or refinancing, both eLEND and ManufacturedHome.Loan offer resources and loan programs tailored to your needs.
Lender NMLS: 2826
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