getting a loan for a modular home: what to expect

Financing a modular home can feel familiar if you’ve bought a site-built house, but a few steps are unique. Lenders usually treat modulars as real property once they’re set on a permanent foundation and titled with the land, so conventional, FHA, or VA options may apply.

How lenders view modular homes

Modular homes are built to local building codes and assembled on-site, which differs from manufactured homes. Because of this, banks often use a construction-to-permanent loan that funds the build in draws and then converts to a standard mortgage after final inspection.

A quick example

Say you have a 680 credit score and 10% down. Your lender may ask for the builder contract, plans, specs, and an appraisal based on plans. During construction you pay interest-only on amounts disbursed; once the home is complete and the certificate of occupancy is issued, the loan rolls into a fixed-rate term.

What affects approval and rate

• Credit score and DTI
• Down payment and reserves
• Owned land or land purchase
• Licensed builder
• Comparable sales for appraisal

Practical tips

1. Get preapproved early and share plans.
2. Ask about single-close construction-to-perm.
3. Clarify draws, inspections, and locks.