Under the Title I program, lenders with approval from the Federal Housing Administration can offer loans to eligible borrowers to finance the purchase of new manufactured homes. These lenders also offer refinancing of manufactured homes. The FHA will insure the lender against monetary loss if the borrower of the loan defaults.
The lender offers credit after taking into account the credit history and the ability of the applicant to repay the loan in installments. The lender offers the loan from their own funds—the FHA does not lend any money. Instead, the FHA only insures the loan to encourage mortgagees to lend.
This means that Title I manufactured home loans are not Federal grants or loans. The interest rate of the loan, which the lender and the borrower negoitiate, must be constant throughout the term of the loan. Finally, the term of these loans is 20 years.
Purpose of Loans
Home buyers may use Title I loans to purchase or refinance a new manufactured home, a lot to place a manufactured home, or both. However, the manufactured home must serve as the main residence of the borrower.
Manufactured Homes on Leased Lot
If you plan to apply for a Title I loan, you need not own or buy the land on which your manufactured home will reside. Instead, you may lease a lot. This may indeed be a site lot within a mobile home park or a manufactured home community.
If you lease a lot or land, the US Department of Housing and Urban Development requires the lessor to offer you an initial lease term of at least 3 years. Moreover, the lease should provide that in the event the lease is to be terminated, the mobile home owner receive written notice at least six months in advance. These terms are present to protect the homeowner in case the lessor closes the park or sells the land.
Maximum Loan Amount
- Manufactured Home Only – $69,678
- Manufactured Home Lot – $23,226
- Manufactured Home & Lot – $92,904
Maximum Loan Term
- Twenty Years, for loans on a manufactured home or on the combination of a single section manufactured home and lot
- Fifteen Years, for loans on a manufactured home lot
- Twenty-Five Years, for loans on a multi-section manufactured home and lot