Today’s mobile and manufacturer homes are a far cry from the trailer parks of yesteryear. While you can buy a mobile home that just screams out “Poor White Trash!” there are plenty of other options available. One of the keys to getting the right kind of mobile or manufactured home is being able to get a mobile home loan.

Still, a mobile home loan isn’t exactly the same as a traditional mortgage. The risk to the lender, of course, is that you’ll have the home towed away, leaving the bank with a worthless IOU and no collateral if you default. There are some special requirements you need to follow to get a mobile home loan. Essentially, you can either put the mobile home on a permanent foundation or you can get a personal property loan, as opposed to a mortgage.

Traditional Home Loan

If your mobile or manufactured home has a permanent foundation, you can get a regular home loan. The mortgage can include the home as well as the land or lot that the home is in. The loan should cover the cost of your new mobile or manufactured home, as well as the cost of any necessary work to make sure the lot is ready.

Many lenders, including local banks, credit union and mortgage brokers, will offer to provide a home loan for a mobile home. All of the traditional fees associated with a mortgage will apply here, including loan application fees, origination fees, document preparation fees and appraisal fees.

Mobile homes manufactured after 1976 usually can qualify for a home loan if they’re on a permanent foundation. The axles and wheels have to be removed, and it has to meet specific requirements, including a third-party inspection to qualify.

Personal Property Loan

This is the kind of home loan you’ll get if your mobile home is still truly mobile. It is designed for purchase of a home on a rented lot, like you’d find in a trailer park. In many cases, a personal property loan will be offered by the mobile home retailer.

A personal property loan will have different terms than a traditional mortgage. You’ll need to put 10 percent down usually, and the interest rate will usually be about two to three percent higher than with a mortgage. In many cases, you have to go for a shorter term than the traditional 30-year home loan, as well.  However, you can qualify for this type of loan with a higher debt ratio, and you can also borrow to cover lot improvements.

Photo via Smabs Sputzer