FHA Loan Articles
FHA Rules for Manufactured Homes
Manufactured homes are often sold and transported in sections to be assembled on-site. Some buyers may wonder if the assembly counts as "construction", and would such "construction" reclassify the manufactured home in the eyes of the FHA?
The FHA defines a manufactured home differently than new or existing construction properties--what does the FHA consider different than with those new construction or existing construction suburban homes?
According to FHA rules, a manufactured home differs from a new construction project because of the nature of its assembly. New construction property is built "on-site". FHA defines a manufactured home as "a structure that is transportable in one or more sections. In traveling mode, the home is eight feet or more in width and forty feet or more in length."
These homes are regulated under the rules known as Federal Manufactured Construction and Safety Standards and must be labeled accordingly. To be eligible for FHA mortgage insurance, the manufactured home must be built after June 15, 1976 and there must be a certification label to prove it. Manufactured home floor space can not be smaller than 400 square feet and must be classified as real estate.
The only manufactured homes that may be classified as real estate or "real property" are those which have a permanent foundation built to FHA standards. They must be considered a "permanent dwelling" or the home is considered personal property for tax purposes and is ineligible for an 30-year FHA mortgage. According to FHA requirements, "the mortgage must cover both the manufactured unit and its site and shall have a term of not more than 30 years from the date amortization begins."