Manufactured homes (also called mobile homes) are an alternative form of housing and often a less expensive path to homeownership. Nearly 20 million Americans call them home, and buyers can choose from plenty of mobile homes for sale.
“Manufactured homes are a great option for buyers who cannot afford a traditional home because manufactured ones give homeowners the opportunity to buy a home with a lower purchase price and a smaller down payment,” says Walter Johnson, founder and CEO of Sonos Capital and a real estate expert specializing in manufactured homes.
While the image of a trailer park in mainstream culture has not always been positive, manufactured homes are now a more popular option. “There is definitely a trend where younger people are buying homes within manufactured housing communities,” continues Johson. “The reason being it is easier to get into from a price perspective. Additionally, the younger generation is typically more minimalistic and actively trying to reduce the carbon footprint they have on the world, which is great.”
Mobile Homes vs. Manufactured Homes
The terms “mobile home” and “manufactured home” are typically used interchangeably, though the difference between the two largely comes down to when the home was constructed.
The Department of Housing and Urban Development indicates that a “factory-built home prior to June 15, 1976, is called a mobile home, and one built after the date is called a manufactured home.” Manufactured homes are also held to construction and safety standards (HUD Code), which is indicated by a red certification tag on the home’s exterior.
Modern Manufactured Homes
It’s common for a new luxury manufactured home to start at $120,000, excluding the cost of purchasing or renting land. Buyers can have them custom-built. There are also luxury manufactured home communities with high-end amenities like swimming pools and clubhouses.
A 2023 Lending Tree study cited that in some parts of the United States, manufactured home prices are “rising faster than single-family homes” due in part to the popularity of the new luxury market. These dwellings can boast chef’s kitchens, spa-like bathrooms, and high-end appliances.
Single-Wide vs. Double-Wide
There are traditionally two sizes for a manufactured home: single-wide and double-wide. The latter is much bigger, but the former is often less expensive due to the smaller footprint.
- Single-wide: Typically 500 to 1,300 square feet, with 12 to 18 feet (width) and 40 to 80 feet (long).
- Double-wide: 1,000 to 2,300 square feet, with 20 to 36 feet (width) and 32-90 feet (long)
Double-wide homes need more property (which may mean a higher lot rent), but the resale power is better on average than the resale value of single-wide ones.
How Much Does a Manufactured Home Cost?
According to data from the U.S. Census Bureau, the average cost of a newly built manufactured home is $121,900.
New single-wide homes cost, on average, $75,300, and double-wide homes $154,700. Of course, if you purchase a used home, you may pay considerably less depending on a few factors, like geographic location, park fees and the home’s size and amenities.
How to Buy a Mobile Home
Your financing options with a manufactured home are slightly more restrictive than they are with other types of homes. Additionally, some mortgage options, such as VA loans, are offered with terms shorter than the standard of 30 years.
Financing Your Mobile Home
Financing a mobile home can be more challenging than it is with a townhouse or single-family home. Seamus Nally, CEO of TurboTenant, says that
“many traditional lenders avoid mobile homes altogether.”
The terms of some government-backed loans can also differ. For example, Nally says “you can use a VA loan to purchase a mobile home, but there are quite a few restrictions and they don’t operate in quite the same way.”
Loan Options for a Manufactured Home
- FHA loans: You can use an FHA loan if you and the manufactured home meet FHA’s requirements.
- USDA loans: Manufactured homes in qualifying rural areas may be eligible for a USDA loan.
- VA loans: VA loan terms for a manufactured home are shorter than the standard 30-year mortgage. You must meet the eligibility requirements as a service member, veteran or surviving spouse.
- Chattel loans: A chattel loan can be taken out on any moveable type of home, including manufactured homes. Chattel loans usually have higher interest rates, and your home becomes the collateral for the loan. This type of mortgage offers less protection than an FHA, USDA or VA loan.
- Personal loans: You could consider taking out a fixed, unsecured personal loan to purchase a used manufactured home.
Down Payment Requirements
If you secure an FHA home loan, the down payment amount will depend on your credit score.
- FHA loan: 3.5% down payment with a credit score of 580 or higher; 10% down payment with a credit score of 500.
- USDA and VA Loans: No down payment requirement; credit score requirement will vary by lender, but 620 is typical.
Pre-Purchase Inspection
A pre-purchase inspection from a certified home inspector will help you decide whether the home is a smart buy. Like a traditional home inspection, the inspection will culminate in a report covering the home’s structure, foundation, windows, wiring and specific systems, like well and septic, HVACs, plumbing and electrical.
Land and Lot Considerations
Renting land for your manufactured home requires less money upfront, but it comes with risks compared with buying land. If someone buys the manufactured home park where you lease, you may be subject to rent increases.
If you purchase the land, you must budget for a larger down payment and be responsible for set-up costs, property taxes, maintenance, and possibly homeowners association fees.
Budgeting for Additional Costs
If you purchase a manufactured home that isn’t on an existing lot, you must either rent or purchase the land it sits on. You may need to budget for other hidden costs, including setup costs, property taxes, homeowners insurance and homeowners association fees.
Land
You may be able to purchase an existing manufactured home with the land that it sits on. However, if you are buying a newly manufactured home, you’ll need to budget for the cost of the home and the land. You can finance a manufactured home and the land together in either scenario.
Set-Up Costs
If you’re setting up a manufactured home in a new location, you must have a HUD-certified installation. Costs will vary depending on your situation, but you’ll typically need to budget for the following:
- Preparing the home site, including clearing the site, grading the land and ensuring that the soil is prepared for the foundation.
- Choosing and constructing the foundation. Manufactured homes can sit on a variety of foundations. A slab is the most popular choice and the most permanent foundation. There are other foundation options, including block and footing or pier and beam.
- Connection to utilities, including water, electric and possibly septic.
- Installation and connection of HVAC, as well as electrical and plumbing systems.
Property Taxes
You’ll be responsible for property taxes if you own the land that your manufactured home sits on. If you’ve financed your manufactured home, these taxes can be paid out of your escrow account, like a traditional home. In some areas, you may be required to pay personal property tax on your home.
In Virginia, for example, certain counties tax single-wide manufactured homes as personal property, while double-wides are taxed as real estate. The type of foundation used – and ownership of both the home and the land – can also have an effect on how your home is taxed.
Researching a Manufactured Home Community
Before you move to a manufactured home park or community, learn about the rules, speak to the owner or manager, read resident reviews and visit any listed amenities.
Understanding Community Fees
You’ll most likely pay homeowners association or community fees for living in a manufactured home community. These may include garbage and recycling, grounds maintenance and snow removal. There may be fees associated with any recreational amenities.
Maintaining Your Manufactured Home
Like any home, annual upkeep is important. Pay attention to any cracks in your foundation, check for holes around the perimeter of your home, and seal up any cracks caused by weather-related events. If needed, consider recoating your roof, cleaning your gutters and resealing windows and vents.
The Bottom Line on Manufactured Homes
Manufactured homes can be an affordable entryway to homeownership if you feel priced out of other types of homes. A knowledgeable real estate agent with experience with manufactured home listings and transactions can help you navigate the buying process.
Consider the pros and cons of renting a lot in a manufactured home park or community versus buying your own land, and educate yourself on the trade-offs of purchasing a manufactured home versus a traditional one.
Manufactured Homes FAQs
The downsides of mobile home ownership include potential lot rent increases if you don’t own the land, as well as fewer mortgage options. Manufactured homes may not be as secure against weather and natural disasters.
A well-designed and maintained mobile home could last 30 to 50 years. The home’s location, the quality of its foundation, and vulnerability to natural disasters can all impact its lifespan.
When buying a mobile home, you’ll want to ask questions that could impact your budget. Ask your lender about interest rates and the financing options that you can qualify for. If the home is in a mobile home community, inquire about any fees, including homeowners association dues, as well as amenities and services that may be included.
Maya Dollarhide is a freelance journalist with over a decade of experience covering personal finance, with a special focus on homeownership. She's a regular contributor to Investopedia, Bankrate and Time. Maya received her master's degree from the Graduate School of Journalism at Columbia University.
