Chattel vs real-property loans: which one fits you?

Financing a manufactured home comes down to one question: is the home titled as real property, like a house, or as personal property, like a vehicle? The answer determines which loans you can use, your rate, and your term. Both paths are legitimate; they just fit different situations.

Real-property loans

When a manufactured home sits on a permanent foundation on land you own, and the title is converted to real property, it can be financed with the same kinds of loans as a site-built house: conventional, FHA, and VA. These come with the longest terms and generally the lowest rates, because the land and home together secure the loan. This is the path most owned-land buyers want, and the one that helps a home hold value like real estate.

Chattel loans

A chattel loan finances the home as personal property, separate from the land. It is common when the home will sit on leased land (such as a community, or family land you do not own) or when you simply want a faster, lighter process. Chattel loans typically close quickly with lower closing costs, but they carry shorter terms and higher rates than a real-property mortgage.

Which one fits you

• You own your land and want the lowest long-term cost: a real-property loan (conventional, FHA, or VA) is usually the goal.
• Your home will sit on leased land or land you do not own: chattel is often the only option, and a perfectly good one.
• You want to close quickly with lower upfront costs: chattel can be faster and lighter.
• You are buying land and home together: ask about packages that finance both.