Home Equity Loans & HELOCs for Manufactured Homes
A manufactured home, aka mobile home, is housing constructed in a factory before delivery, often with a steel chassis underneath that connects utilities at the installation site (mobile home park or private land).
A manufactured home purchase is similar to any other house, but you may need a different financing source.
You may find that getting a home equity line of credit (HELOC) or home equity loan for a manufactured home is more challenging than for traditional homes. We’ve researched your options so you can make informed decisions on leveraging your home’s value.
In this guide:
- Why don’t lenders like loans or HELOCs on manufactured homes?
- Lenders that will consider manufactured homes
- FAQs
Why don’t lenders like to offer home equity loans or HELOCs on manufactured homes?
A handful of lenders will offer HELOCs or home equity loans, but they have specific requirements for a mobile home to qualify.
Finding a lender willing to offer home equity loans or HELOCs on manufactured homes is more complex than traditional homes because the lending process for manufactured homes is considered higher risk.
Reasons for this designation include the following:
- Manufactured homes often don’t sit on a permanent foundation. For your mobile home to qualify for most home equity products, it must sit on a foundation. If you rent the land your home is on, it isn’t considered “real property” or traditional real estate.
- Fast depreciation. Mobile homes, especially those not on permanent foundations, are regarded more like vehicles than real estate. A mobile home starts to depreciate as soon as you drive it off the lot, just like a car.
- Many are too small. Double-wide trailer owners have a much higher success rate securing a HELOC or home equity loan. Many banks and lenders have size requirements for home loans and equity products.
- Some are too old to earn equity. Lenders must comply with regulations stating that loans can’t be made for mobile homes built before 1976. So those with older homes won’t qualify for any type of lending.
HELOCs and home equity loans rely on a critical factor for approval: your home’s equity. Getting these financial products may be challenging if you own a manufactured home.
Lenders that will consider a home equity loan or line of credit on manufactured homes
If you meet the home equity loan and HELOC requirements, specific lenders may be willing to work with you. If you obtained a mortgage for your mobile home, consider checking with your original lender to see whether it offers HELOCs or home equity loans for manufactured homes.
We’ve researched three companies worth considering.
M&T CHOICEquity
Home equity line of credit
- Rates starting at 7.59%
- No application fees, closing costs, or annual fees
- Credit line up to $100,000 for mobile homes
M&T Bank offers the M&T CHOICEquity line of credit. The credit line for manufactured homes can range from $15,000 to $100,000, with a standard draw period of 10 years and a 20-year repayment period.
You’ll only pay interest on the amount of the credit line you use. Plus, M&T charges no fees, including closing costs, application fees, or annual fees.
M&T’s rates aren’t rock-bottom, but they align with industry standards. Plus, M&T allows borrowers to lock in up to three fixed-rate loans on the line of credit, so your rate won’t fluctuate, and your monthly payment is predictable.
Key features:
- Interest rates (APR): Starting at 7.59%
- Minimum credit score: Not listed
- Maximum LTV: 70.99%
- Draw period: 10 years
- Repayment period: 20 years
- Discounts: 0.25% – 0.40% off your interest rate with M&T checking accounts
- Fees: No application fee, annual fee, or closing costs required
BCU Credit Union
Home equity loan and HELOC
- Variable rates start at 7.00%
- Rate reduction of up to 0.50% APR when you qualify for BCU’s Rewards Rates
- Access 100% of your home’s value, if you qualify
Built for members of the Baxter Healthcare employees, BCU Credit Union has expanded to offer banking and loan products to certain members. To qualify, you must meet one of the following requirements:
- Be an employee of one of BCU’s major partners (Target, UnitedHealth, and GEICO are examples)
- Live in one of 6 local communities BCU serves: Lake, McHenry, DuPage, Kan, or Cook counties in Illinois, or Kenosha County in Wisconsin.
- Be a family member of a qualifying member
BCU offers home equity loans and lines of credit at competitive interest rates. It also offers unique ways you can get cash back or discounts such as:
- Opening a new BCU account
- Having a BCU account
- Transferring a home equity loan or HELOC to BCU
- Direct deposit to a BCU account of at least $500 per month
- Having at least $25,000 on deposit with BCU
- Having a BCU loan in good standing
Key features:
- Interest rates (APR): Starting at 7.00%
- Minimum credit score: Not listed
- Maximum LTV: Access up to 100% of your home’s value
- Draw period: Varies
- Repayment period: Varies
- Discounts: $250 cash back if you transfer a home equity loan or HELOC to BCU; Up to 0.50% APR reduction when you qualify for Rewards Rates
- Fees: $700 – $1,300 in closing costs
Credit Human
Home equity loan
- Available in Texas, Louisiana, and Colorado
- Loan amounts up to $350,000
- Manage your account through Credit Human’s mobile app
Credit Human offers home equity loans in amounts up to $350,000. Loan terms stretch up to 20 years and come with interest rates as low as 7.00%. You must have good credit (740 or above) and live in Texas, Louisiana, or Colorado to qualify.
Credit Human’s application process is straightforward, and you can complete every stop online. Plus, the company allows you to set up direct payments from your Credit Human checking or savings accounts to manage your accounts all in one place.
Key features:
- Interest rates (APR): As low as 7.00%
- Minimum credit score: 740
- Maximum LTV: Up to 80%
- Draw period: Not listed
- Repayment period: 20 years
- Discounts: N/A
- Fees: Not listed
FAQs
What factors affect approval for a home equity loan or HELOC on a manufactured home?
The home’s value is the most critical factor in approval for any type of home equity loan or HELOC. Lenders will appraise the home and determine how much equity you have in the home before approval. Other factors that can affect approval include:
- Credit score
- Income
- Debt-to-income ratio
- Other mortgage liens or loan obligations
For a manufactured home, you must have a permanent foundation and own the land your home is on.
Is borrowing money on a manufactured home more expensive than on more traditional homes?
Yes, borrowing money on a manufactured home is often more expensive than on more traditional homes. This is because it’s considered a higher-risk loan. These loans often have higher interest rates, larger down payments, and higher closing costs.
What alternatives do I have to a HELOC or home equity loan on my manufactured home?
If you’re looking at options other than a HELOC or home equity loan on your manufactured home, consider:
- Cash-out refinance: Refinance your mortgage and take equity out of your home. A cash-out refinance can be helpful if you have a low interest rate on your loan and want to use the equity in your home to fund other projects.
- Personal loan: A personal loan is an unsecured loan you can use for various purposes. Unlike a home equity loan or a HELOC, you don’t need to put up your home as collateral for the loan. Personal loan rates are often based on your creditworthiness, not your home equity, so you’ll need a good or excellent score to qualify for the best rates.
- 401(k) loan: If you have a 401(k) retirement plan, you may be able to borrow as much as 50%, up to $50,000, of the balance of your 401(k). You must pay it back within a predetermined time frame. If you leave your job before the loan is paid off, you may be required to pay the balance in full immediately.
- Peer-to-peer loan: Peer-to-peer lending is a process where individuals can borrow and lend money without a traditional bank or financial institution. These loans are often based on credit score, so research the requirements before applying.
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