How to Buy a Mobile Home with Bad Credit

You’ve found just the perfect mobile home and total bliss awaits. But your credit isn’t so great, so you figure it’s time to brush up on loans types and credit scores.

As you begin, pause to remember that bad credit is just a phase, it’s not who you are or what you will become. Keep a smile on your face as you go through the extra work necessary to get a loan with less than perfect credit. The payoff is worth it.

Mobile Homes that Qualify for Real Estate Mortgage Loans

Perhaps just as important as credit scores are the types of loans available to you as a mobile home buyer. Here’s how to tell if your dream mobile home may qualify for a real estate loan (mortgage).

  • If the mobile home is a manufactured home built after July 1, 1976 and rests on a permanent foundation and the lot is part of the sale, it is real property and real estate financing may be available.
  • If the manufactured home is in a rural area, the lot comes with it, and you are a low-income buyer, the Department of Agriculture has a special lending program tailored just for you. It’s a fantastic program with 100-per cent financing available and it’s not limited to first time buyers. Even those with non-typical credit histories may be considered.

Buy a Mobile Home with Bad Credit

How to buy a mobile home with bad credit

Mobile Homes that May Not Qualify for Real Estate Loans

Since many mobile and manufactured homes will not qualify for real property loans unless they are permanently installed, other means of financing will need to be considered. Homes that don’t qualify for real property loans

  • Mobile homes that don’t rest on a permanent foundation.
  • Homes situated in a park or lease community.

Sometimes it’s a bit harder to get a real estate loan on a single-wide, but persevere–you will find one. There is still chattel loans, personal loans, owner financing, or rent-to-own options.

Loans Other than Real Estate Loans

  • Chattel loan: A fancy word for a loan secured by both the personal property (mobile home) and the creditworthiness of the buyer. Chattel loans are usually for mobile homes on non-permanent foundations. Expect to put 5 – 10% down depending on your credit rating. Chattel loans made by dealers or manufacturers are usually for 20 year terms.
  • Personal loans: Expect to put 20% down, more with poor credit. Loan terms are 15 years or less.
  • Owner financing: With persistence and a bit of luck you may find a mobile home owner who is not only willing but even eager to extend credit to you.
  • Personal or secured loan from a friend or relative.

Rent to Own Contracts

These are available for both real estate and chattel loans. After a period of time specified by the landlord/owner, and at a price agreed to by the landlord/owner and renter, the renter may opt to purchase the mobile home. The renter will then need to secure a loan. If you decide to go this route, be sure to search for and carefully read one or more rent to own agreements.

Make sure to research what your state’s maximum interest rate for rent-to-0wn and owner-financing contracts. Here in WV it is 8%.

How to Buy a Mobile Home with Bad Credit

Credit Scores

What is your credit score, and what does it mean? And what’s this FICO stuff all about? Your credit score is an assessment of how likely you are to repay a loan in a timely fashion. Most people seeking a loan will find their credit (FICO) score is between 350 and 800, although the possible range is 0 to 850.  Here’s how lenders view credit scores:

  • 720 – 850: Prime. Borrower qualifies for a very good interest rate.
  • 675 – 719: Still a good prospect but at a higher interest rate.
  • 620 – 674: Sub-prime. Any loan will be at a substantially higher interest rate.

So you’ve got a low score, maybe a really low score, is all hope lost? Of course not.

  • You can search for a lender who specializes in making loans to folks with bad credit.
  • You can also take steps to improve your credit. It’s easier than you think.

Improving your Credit (FICO) Score

There’s a right way and a wrong way to improve your credit score. You’ll want help fixing your credit even if it’s just in the form of information. If some outfit promises things like:

  • We can completely and instantly erase your bad credit!
  • We can help you establish a new credit identity!
  • We can reduce the amount you owe by 50% or more!

Run away as fast as you can! 

The plain truth is that your credit can be improved, but not instantly, and not without some work on your part. If you want to take a do-it-yourself approach to improving your credit then your first stop should be the Federal Trade Commission’s Credit Repair Help Site here. If you want help,  locate an NFCC approved credit counseling service to guide you through the process.

Now go find your new mobile home and enjoy affordable living!

More resources on buying a mobile home that may be helpful to you:

Caveat Emptor, Let the Buyer Beware

Buying a Mobile Home: They Can and DO Appreciate!

5 Tips for Buying & Moving Into a Mobile Home

Buying A Used Mobile Home

Avoiding Issues During a Manufactured Home Purchase

Buying a Manufactured Home: Warranties and How to Handle Issues After the Sell

15 Tips for Buying and Financing A Manufactured Home

Thank you for reading Mobile and Manufactured Home Living!

 

 

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24 Comments
  1. Barbara A Martinez says

    I had very bad credit when I bought my mobile home in 2005. From a inheritance I put $8K down on a 2003 single wide repo priced at $32,900. I had an interest rate of 12.25%, very high. My credit score has gone up immensely since I’ve never been late or missed a payment, but it’s irritating that my mortgage co would not refinance to a lower rate. I bought from a repo outlet and they found the financing for me. I had no experience or advice when I did this, I wish your site would have been around back then. I’ve learned a lot from it, so if I do this again, I’ll be better prepared.

    1. Crystal Adkins says

      Hi Barbara,

      I have heard so many stories of finance companies promising people that they can refinance their manufactured homes at a lower interest rate in a couple of years. It’s a blatant lie and every one of those salespeople should be fined or fired. It’s stuff like this that makes us despise the industry so much. I’m terribly sorry you were done like that – if you can, pay as much on that loan every month as you can. Every little bit helps and will save you a bit of interest at least.
      Thanks for reading Mobile Home Living!Best of luck!

  2. Dallas says

    I am looking to purchase a used mobile home for 12,000 or less but I will need to finance it. I have poor credit and am currently do not have an account with any financial institution. How would I go about getting a loan based on these details. I am able to put %20 down and completely pay it off in less than a year. I take 2000 – 2500 a month. Please let me know my options thank you.

    1. Crystal Adkins says

      Hi Dallas,

      We don’t sell or finance mobile homes, we just write about them. However, I can give you some tips cause I was in a similar situation (though I am not a professional of any kind). My first tip is to go to Capital One Bank Services website and get a secured credit card. You will have to give them a deposit of $200-400 and that will be your credit limit. Use the card and pay it off every month. This will help you establish a credit record.

      To get financing for a used manufactured home you will either need to go through a dealership and pay higher interest rates or you may be able to get a private loan or chattel loan through a private bank. It would likely need to have collateral of some sort (land usually). These places don’t really like used homes but if you own the land it will sit on you will have an easier time.

      Best of luck! Let me know how it goes.

  3. Karrie says

    I have found a mobile I’m really interested in buying..but my credit is in need of improvement. .I’m working with a law group in repairing it..Im buying a car I purchased in June. .how do I go about buying this mobile home..before it sells..it’s a steal at 25000 the buyer priced it for a quick sale due to them wanting to build a house on the lake lot.

    1. Crystal Adkins says

      Hi Karrie,

      You are doing all the right things. Working with credit experts is a great way to get your credit up. I’ve been trying to raise my score as well but it is a very slow process. I’ve read that you need a long term relationship with your bank (preferably a local bank or credit union), the longer you’ve done business with them the easier it is to get approved for loans (in addition to the credit score, down payment, etc.). Google manufactured home financing in your town and you should be able to find a good starting place.

      Best of luck!

  4. Patricia Woods says

    Here’s the deal. I have land but my credit is bad and I can’t as much get a personal loan and i have tried manufactured home lots and am turned down left and right. I have about 20000 to put as down payment. Coulee u help guide me in the direction I need to be please. I’m desperate at this point.

    1. Crystal Adkins says

      Hi Patricia,

      I would think with that kind of down payment and the ability to use land as collateral you would be able to find some kind of financing (even if it was high interest). I would go to a consumer credit counselor and have them help you. They can help you raise your credit score and may be able to help find you a financing company.

      Best of luck!

  5. love spell says

    Hello,I log on to your new stuff named “How to Buy a Mobile Home with Bad Credit” like every week.Your writing style is awesome, keep doing what you’re doing! And you can look our website about love spell.

    1. Crystal Adkins says

      Wow! Thanks!

  6. Mike says

    Hi. My credit score is horrible and I want to get a repo mobile home with no credit check or a huge down payment. But I’m willing to pay monthly. I need this ASAP, please help

    1. David Allendorf says

      I’m interested in buying a modular home I don’t know who to go to with my credit away stands I like to get one soon if you can help I appreciate it

      1. Crystal Adkins says

        Hi David,

        A modular home is completely different from a manufactured home and I am not knowledgeable about them. Modular homes are built in sections in a factory and installed together on site. They must pass local regulations and codes. Manufactured homes are built completely in a factory on a chassis and only need to pass a national code. Modular homes receive the exact same financing as a site-built traditional home whereas manufactured homes are often relegated to high-interest loans, chattel loans, or even personal loan financing.

        That’s all I know about modular. Best of luck!

  7. Karin says

    I’m considering selling my house and downsizing to a manufactured/mobile home. I have an IRS lien on my house due to a messed up inheritance from my deceased husband along with bad tax advice. Otherwise my credit score would be in the 700’s if that lien wasn’t there. The only way out of this IRS “spider web” is to sell the house and satisfy the lien. Since my husband passed 3 years ago, I will not be able to afford a single-family home and I would not want to go back to apartment living. As of now a mobile home is all I can afford with my income. After the house is sold and the lien is paid, I will have very little equity left and may be able to make little or no down payment.

  8. Blanca says

    Hi..I look for a mobile home..but my credit.is 630 score..and 21 financial for 9.7% /21 years and 10% dawn…your recomend buy the mobile is new and its 1700 sq. What you recomend for me?

    1. Crystal Adkins says

      Hi Blanca,

      I always recommend that buyers try to go through a private bank or credit union and get approved for a mortgage or even a personal loan first. If that doesn’t work and you’re comfortable with paying higher interest rates and losing the ability to refinance then a manufactured home dealer would be the next possibility. The larger dealers like Clayton have their own in-house finance companies and can get people financed that likely can’t get approved through banks. Make sure to read every word in the contracts before you agree to anything and do not sign anything until a 3rd party has reviewed it – not even a permission slip to pull credit.

      best of luck to you! Thank you so much for contacting me!

  9. Stephanie Rumph says

    Hi, my family and I are in need of a new mobile home,,ASAP.The mh we’re currently living in is very old. We have our own land and money to pay down, even trade this one in, but both of us have credit issues right now. Is there any way u can be a help to us we would greatly appreciate it.

    1. Crystal Adkins says

      Hi Stephanie

      I’m just a blogger that writes about mobile homes but you should be able to contact a local manufactured home dealer and they should be able to help you. Just type in your town and state and buy manufactured home into a Google Search bar.

      Best of luck!

  10. Daniel Miltz says

    Hi Cindy…I got rejected into a mobile home park for a low credit score. I can pay cash for the home. Any way of getting into a park with low scores.

    1. Crystal Adkins says

      Hi Daniel,

      You’ll probably want to go through a private owner. You’ll get the best deal usually since you can pay cash. The only catch is whenever you buy a home on a rented lot you typically need to be approved through the rental company and they often use credit scores. We didn’t have great credit and was fortunate enough to find a home on a half an acre of land in WV through a private seller. I found it in a weekly trader newspaper but I’ve seen lots of them on Craigslist. They look a bit scammy (or almost too good to be true) because they will say something like $1000 down and owner financed but if you spend a couple hundred on a lawyer to ensure it’s legitimate it can be a great way to home ownership, at least it was for us.

      Best of luck!

  11. Kaitlyn says

    Hi i’m living ina modular home right now with my husband and we would like to purchase it. Are you able to help finance?

    1. Crystal Adkins says

      Hi Kaitlyn,

      Unfortunately, I’m not associated with any finance companies or banks. Perhaps a local Google search in your area will help?

      Best of luck to you!

  12. Cindy says

    Want to buy a singlewide., temp. locate at rent park, just to get out of apartments& buy before inter. goes up. Then later want to buy land,move mh onto it. Is this a stupid idea? Was told once moving singles less than 10mi. was cheap.

    1. Crystal Adkins says

      Hi Cindy!

      I think you have a great idea but there’s a few things to keep in mind. First, parks are very strict about moving homes out of lots because they lose money so make sure you have an iron-clad contract stating there are no penalties for moving the home into and out of the park within a certain time frame. You’ll also want to make sure the utility companies won’t penalize you (paying to have water lines installed to your home in the park, for instance, may cost a lot so you’ll need to factor those costs in).

      Another factor to consider is transporting the home. It’s not usually the distance that costs the most, it’s the breakdown and setup of the home. Here in WV, you’d probably be charged a minimum of $3500 to move a single wide under 50 miles. You’ll be paying to have the home moved twice in a short amount of time and that could pose additional stress on the home, especially if the transporters aren’t careful.

      Honestly, if you can find a piece of land for the home first, I think that would be a lot less stress and hassle for you but I understand wanting to get out of an apartment quickly. You may move into the park and love it and want to stay or you may have terrible neighbors, there’s just too many variables at play but I’m sure you’ll make a decision that is best for you. If there’s anything I can help you with please don’t hesitate!

      Good luck!

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