How Do You Get a Mortgage for a Manufactured Home?

Traditional mortgages and chattel mortgages, both of which are available from conventional lending sources such as banks, are used for manufactured homes, according to Investopedia. In the event that the manufactured home isn't permanently attached to the land on which it's built, it's categorized as personal property rather than real estate. Under these circumstances, a borrower often has no choice but to seek out a chattel loan.

Manufactured homes that are categorized as real estate qualify for traditional mortgages and the terms and protections that come with them, notes Investopedia. With a traditional mortgage, the borrower can qualify for either an FHA-insured loan or a loan backed by Fannie Mae. A traditional home loan is covered by specialized consumer protection laws and is more likely to have lower interest rates as long as the borrower has a good credit score.

Manufactured homes bought with chattel loans can have liens placed on them by the lender until the borrower repays the loan, according to Investopedia. Compared to traditional loans, chattel loans are more expensive, especially for borrowers without good credit. However, chattel loans have less expensive closing costs, shorter closing times and lower interest payments due to the shorter loan terms.