Understanding Chattel (Mobile Home) Loans: The Key to Affordable Homeownership
Are you looking to purchase a manufactured home but don’t plan on buying the land it sits on? If you’re eyeing a beautiful home in a leased-land community or mobile home park, a Chattel Loan might be the perfect financial solution for you.
In this post, we’ll break down what a chattel loan is, why it’s different from a traditional mortgage, and how you can qualify.
What is a Chattel (Mobile Home) Loan?
A Chattel Loan is a specialized type of financing used to purchase “personal property” rather than “real estate.” In the world of housing, this typically refers to manufactured homes where the borrower owns the home but rents or leases the lot (space) in a park or community.
Unlike a traditional mortgage that bundles the home and the land together, a chattel loan focuses solely on the home itself.
Why Choose a Chattel Loan?
Chattel loans offer several unique advantages, especially for those looking for a faster, more accessible path to homeownership:
- No PMI Required: Even with a low down payment, borrowers can avoid the monthly cost of Private Mortgage Insurance.
- Low Down Payments: You can get started with as little as 5% down.
- Streamlined Process: These loans don’t involve the complex TRID requirements (like Loan Estimates or Closing Disclosures) found in traditional mortgages, often leading to a faster closing.
- Stability: Enjoy the peace of mind that comes with fixed rates and fixed terms, with no penalties for paying your loan off early.
- Ideal for In-Park Living: Specifically designed for homes in leased-space communities.
Do I Qualify? (Eligibility Requirements)
To secure a chattel loan through Doos Mortgage, there are a few key requirements to keep in mind:
Property Standards
- Age of Home: Must be a Post-HUD (June 15, 1976) or newer manufactured home.
- Primary Residence: The home must be your main living space (no vacation homes or rentals).
- Location: The home must be in a rental/leased space park (Condo or Co-op parks are not eligible).
Credit & Financials
- Credit Score: A minimum FICO of 650 is typically required for the 5% down payment program (for homes 2001 or newer).
- History: You need at least 24 months of credit history and at least one installment loan (like a car payment) that lasted 12 months.
- Clean Slate: No current delinquencies are allowed on open credit lines.
How to Apply for a Chattel Loan
The process is straightforward and designed to get you into your new home quickly:
- Initial Consultation: We discuss your financial goals and provide a pre-approval estimate.
- Document Gathering: You’ll need standard items like your ID, Social Security card, proof of income (W-2s/Paystubs), and bank statements.
- Home Details: Provide the specifics of the home, including the manufacturer, year, and VIN/Serial number.
- Submission: We compare offers from multiple lenders to find you the best possible rate and terms.
Ready to Get Started?
If you’re ready to take the next step toward owning your manufactured home, we are here to help.