How to Refinance Mobile Home Loans | Rates & Loans 2024

How a mobile home refinance works

If you’re looking to reduce your monthly mortgage payments, learning how to refinance mobile home loans could be a beneficial step.

If you own a mobile home or manufactured home, you probably already know that mortgage requirements are different for these kinds of properties. Likewise, mobile home refinancing rules aren’t straightforward either.

When preparing to refinance mobile home loans, options depend on when the property was built, how big it is, and whether it’s fixed to its foundation. If you can refinance your mobile home or manufactured home, you might stand to save big on your monthly payments. Here’s how.

In this article (Skip to…)

• Requirements
• Mobile refi process
• Loan options
• Personal property loans
• Pros and cons
• FAQ

A note on terminology: Today’s “mobile homes” are really manufactured homes. This is true for any mobile or manufactured home built after June 15, 1976.

The terms “mobile home” and “manufactured home” are often used interchangeably when referring to today’s manufactured home financing. We use both terms in this article.

Can you refinance a mobile home?

Yes, you can refinance a mobile or manufactured home, but the process is different from refinancing a traditional home.

Mobile homes are generally considered personal property unless they’re affixed to a permanent foundation and you own the land it’s on. This distinction plays a big role in both your eligibility for refinancing and the types of loans available to you.

To successfully refinance mobile home loans, it’s important to compare offers from multiple lenders.

Requirements to refinance mobile home loans

Mobile home refinancing can be complex, but understanding the requirements will help simplify the process. The first step is to determine whether your home needs to meet certain guidelines to qualify for financing.

To refinance mobile home loans, the property must be:

• On land that you own (and that is not located in a mobile home park)
• Affixed to a permanent foundation that conforms to HUD standards
• Titled as real property (real estate)
• Built after June 15, 1976
• Without axles, wheels, or a towing hitch
• A minimum of 12 feet wide and 400 square feet in size

Your mobile home must also comply with building standards set by the U.S. Department of Housing and Urban Development (HUD). Look for a HUD tag (metal plate certification label) outside and a data plate (paper label) inside.

To refinance mobile home mortgages or manufactured home loans, you’ll need this HUD label, which should be found on the outside of the dwelling.

To get approved for a mobile home refinance, borrowers must also meet certain financial criteria.

• The required minimum credit score typically ranges from 580 to 620 for most loan types.
• Additionally, a qualifying debt-to-income ratio (DTI) is necessary. Although the acceptable DTI can vary, aiming for a ratio lower than 43% is generally a good benchmark.

How to refinance mobile home loans

Mobile home refinancing requires some extra steps. Here’s what to expect:

1. Find out what kind of mobile home you have

Today’s “mobile homes” are often called “manufactured homes” or “modular homes.” In fact, the terms are often used interchangeably in the industry. But there are some key differences, and they can affect financing and refinancing options for your mobile home.

Raymond Brousseau, partner with River City Mortgage, explains:

• Mobile home: A mobile home is a residence that has or used to have axles and wheels. It’s titled as a motor vehicle. “True” mobile homes were built prior to June 15, 1976.
• Manufactured home: A manufactured home is constructed entirely in a factory. It’s brought to the home site in one or more pieces. These come in both single-wide and double-wide varieties.
• Modular home: A modular home is mostly constructed in a factory, but it’s brought to the home site in multiple pieces to finish construction. Once built, you can’t move a modular home. These also come in both single-wide and double-wide homes.

2. Determine if your home is real property

If you have it, look at the title to determine if your mobile home is classified as real property. Alternatively, contact your county assessor’s office. This is frequently possible online.

As a rule of thumb, you cannot refinance mobile home loans when the property is technically “mobile.” But if it’s fixed to a foundation and considered real property, it can likely be financed or refinanced.

If your home is fixed to its foundation and considered real property, it can likely be financed or refinanced with a mortgage loan. — Raymond Brousseau, River City Mortgage

Technically, any manufactured home built prior to June 15, 1976, is considered a bona fide mobile home. Those built after that date are considered manufactured homes.

Because they’re titled as real property, you can refinance mobile home loans when the dwellings are permanently affixed to a foundation. But mobile homes not permanently affixed to a foundation are usually titled and financed as “personal property” and cannot be refinanced with a mortgage loan.

3. Convert personal property to real property

Before you can refinance mobile home loans, dwellings must be converted to real property when they’re currently titled as personal property.

Mobile or manufactured homes that don’t meet the requirements listed above are considered personal property. So you might need to make some changes to the home before you can be eligible for a mortgage refinance.

Converting your mobile home title into real property requires:

• Certificate of title
• Certificate of origin
• Affidavit of affixture (demonstrates the home is permanently attached to land you own)

Additionally, according to Brousseau, “you’ll require a foundation certification from a qualified structural engineer. Plus, the home needs sufficient homeowners insurance coverage to qualify for a mortgage loan.”

This process is easier today in some states, including Virginia, Maryland, Tennessee, Nebraska, Illinois, Missouri, Alaska, Iowa, and North Dakota.

4. Check with a mortgage lender

If you do qualify for a refinance, it’s important to consider the different types of refinancing options, such as a cash-out refinance or a streamline refinance, to determine which one is best for your financial situation.

Before you decide, you should also look at the terms of a new loan. This includes the interest rate, the monthly payment, and any fees that come with the refinance. You should also think about how long you plan to live in your home and if the savings from refinancing will be worth the costs.

5. Compare mobile home refinance rates and terms

To refinance mobile home loans, request quotes from multiple lenders and compare interest rates, fees, and terms to find the best offer. Be sure to specify that you’re refinancing a manufactured home, as this can affect the rates you’re quoted.

After choosing a lender, maintain regular communication with your loan officer and have all necessary documents about your manufactured home readily available, especially for the appraiser. If the goal of your refinance is to transition your manufactured home to real property, be sure to lock in your mortgage rate for a duration that accounts for the time needed to affix your home to its permanent foundation.

Current mobile home refinance rates

Mobile home refinance interest rates are typically slightly higher than rates for traditional home loans. Many factors influence the rates you may qualify for, including:

• Your credit score and DTI ratio. In general, a credit score above 700 and a DTI below 43% will help you get the lowest rates.
• Your home's age, type, and whether it's classified as real or personal property. Newer manufactured homes classified as real property tend to get better rates.
• Your loan type and lender. Rates vary between conventional, FHA, VA, and USDA loans and from lender to lender, so be sure to compare options.

As with any refinance, comparison shopping is key to finding the best deal on your mobile home refinance loan. Check with at least 3–5 lenders to ensure you’re getting the lowest possible rate for your situation.

Mobile home refinance loans

You can refinance mobile home loans with a variety of options if the properties are eligible. To qualify, the home must be permanently affixed to owned land and meet property requirements.

Mortgage lenders may have varying credit score minimums, debt-to-income ratios, and maximum loan-to-value percentages based on their risk assessment criteria and specialization.

“Manufactured homes typically have slightly higher rates regardless of other qualifying factors,” — Jon Meyer, loan expert and licensed MLO.

Here’s a little more information about each mobile home refinance loan program and how to qualify.

Conventional loans

Conventional loans are best for borrowers with a credit score of 620 or higher and at least 5% equity in their manufactured home. Both fixed-rate mortgages and adjustable-rate mortgages are available. Cash-out refinancing may be an option for owners of multi-width manufactured homes (single-width homes are not eligible), according to Fannie Mae guidelines.

FHA loans

For both first-time home buyers and existing manufactured homeowners, the Federal Housing Administration’s (FHA) loan program offers flexible credit requirements and low down payment options. FHA refinance loans require a minimum credit score of 580 and allow loan terms of 20–25 years for mobile and manufactured homes.

Refinance options include:

• FHA Streamline Refinance offers a simplified, faster, and more affordable refinancing process for existing FHA loan holders.
• FHA Title 1 loans are available for mobile home improvements only, with borrowing limits of $25,090 for homes classified as real property and $7,500 for manufactured homes on leased land.

VA loans

Veterans and active duty military personnel can take advantage of low interest rates on VA loans thanks to their backing by the U.S. Department of Veterans Affairs. A credit score of 620 or higher is typically required, and the maximum loan term is 25 years.

VA Streamline Refinance, also known as Interest Rate Reduction Refinance Loan (IRRRL), is available for existing VA loan holders, providing a quicker and easier refinancing process.

USDA loans

The U.S. Department of Agriculture developed USDA loans to encourage homeownership in designated rural areas. To qualify, the mobile home must be less than one year old, and borrowers must meet income limitations.

USDA Streamline Refinance is available for existing USDA loan holders, offering a simplified refinancing process with reduced paperwork and credit requirements.

Which is best for a mobile home refinance: Mortgage or personal property loan?

If your manufactured home is titled as real property, you may have a mortgage loan. However, if it’s titled as personal property, you likely have a personal property loan, also known as a chattel loan, which often comes with higher interest rates than mortgage loans.

The Consumer Financial Protection Bureau reported that most purchase loans for mobile homes were higher-priced than mortgage loans, with many being chattel loans. If you rent the site your mobile home is on, a personal property loan may be your only financing option.

To refinance mobile home loans at today’s lower interest rates, you’ll need to convert your personal property loan and title to a mortgage loan. This requires owning the land and setting the home permanently on a foundation.

Pros and cons of mobile home refinancing

Deciding to refinance mobile home loans can improve your finances, but it also comes with challenges and costs to consider carefully. Before deciding to refinance mobile home loans, understand the advantages and disadvantages.

Pros

• Lower monthly payments: Securing a lower interest rate or stretching out your loan term can lower your monthly payments, keeping more cash in your pocket.
• Access to quick cash: A cash-out refinance allows you to use your home equity to pay for urgent expenses, such as medical bills or student loan debt.
• Potentially better interest rates: If you got your original loan when interest rates were high, refinancing now could save you money over the life of the loan.

Cons

• Closing costs:Refinancing involves closing costs, and if you’re changing your title status, there are additional fees to consider.
• Legal fees: Depending on your situation, you might need a real estate lawyer or a title company, which adds to your costs.
• Property tax implications: Changing your mobile home’s status from personal to real property may increase your property taxes.
• Foundation costs: Some refinancing terms require placing your mobile home on a permanent foundation, which can be a significant expense.

A mobile home refinance can either improve your financial situation or result in new debt if you’re not careful. Take your time, look at your current mortgage and financial situation, and weigh your long-term goals. When in doubt about whether to refinance mobile home loans, consult a mortgage professional to understand your options.

FAQ: How to refinance mobile home loans

Today’s mobile home refinance rates

When considering whether to refinance mobile home loans, crunch the numbers and determine how much longer you’ll stay in your home. Provided you qualify for a lower interest rate, there’s a good chance you could save by refinancing your mobile or manufactured home—even when the upfront costs are considered.

Not sure whether you’d qualify? You can contact a mortgage lender to check your mobile home refinance eligibility.

Loan officers are able to look at your unique situation to tell you whether you’re eligible to refinance and how much you might save.