Will FHA Loans Cover Manufactured Homes?


Looking for a new home but don’t have enough money to make a 20% down payment?

Then an FHA loan might be helpful for you. It provides a great opportunity for people who want to get their dream home without paying cash.

But how do FHA loan coverage works? This article will talk about the coverages of an FHA loan, as well as their rates, and the requirements needed to qualify for this type of loan.

What is an FHA Loan?

An FHA loan is a type of loan that is backed by the Federal Housing Administration.

An FHA loan is a great deal for people that have an average credit score (580 and higher) and can pay 3.5% of down payment.

Borrowers can choose between 15 and 30 years of fixed-rate terms to pay. Although this loan is insured by the FHA, it does not lend, plan, or build houses.

FHA Loan Rates

The Federal Housing Administration allows borrowers who may not have high incomes or excellent credit scores to become homeowners.

However, borrowers must get an FHA mortgage insurance before they become homeowners. With the FHA mortgage insurance, lenders are protected from losses if borrowers can’t continue paying their loans.

Borrowers who avail of the mortgage insurance are required to pay two mortgage insurance premiums:

  • Upfront mortgage insurance premium: This mortgage insurance premium requires borrowers to pay 1.75 percent of the total loan amount. They can pay the premium upfront or roll it into their loan, which will be added to their total amount.
  • Annual mortgage insurance premium: The annual mortgage insurance premium rates vary from 0.45 percent to 1.05 percent, depending on the loan amount and term (15 years or 30 years payment term), along with the initial loan-to-value ratio (LTV).

Quick facts about FHA Mortgage Insurance Premiums

Once you’ve purchased FHA mortgage insurance premiums, you won’t be allowed to cancel your policy. You can, however, refinance it with a non-FHA loan or you may sell your house.

If you want to buy your dream home but don’t know how FHA loans work, we recommend Sprint Funding.

It’s a company that offers different types of loans such as conventional loans, VA loans, FHA loans, and Jumbo loans.

They support homebuyers like you with their simplified approach, to make your next loan experience a positive one.

FHA Loan Requirements

How to Qualify for an FHA Loan

To qualify for an FHA loan, individuals who want to get their house through FHA loan programs must follow and meet the following lending guidelines:

  • FICO score of 580 or higher with a 3.5 percent down payment or FICO score of 500 to 579 with a 10 percent down payment.
  • Can submit a verified income statement through federal tax returns, pay stubs, and bank statements.
  • Verified employment history for the past two years.
  • Your chosen house must be inspected by a licensed FHA inspector.
  • You need to have a front-end debt ratio — your monthly mortgage payments — that should not exceed more than 31 percent of your gross monthly income (GMI).
  • For your back-end debt ratio — your mortgage, plus all monthly debt payments — you should have 43 percent or lower of your gross monthly income (GMI).

FHA vs. Conventional Loans

Compared to FHA loans that are insured by the government, conventional loans are backed by private lenders and its insurance fees are usually shouldered by the borrower.

Read more about the differences between an FHA loan and a conventional loan.

Do FHA Loans Cover Manufactured Homes?

Aside from the conventional houses that you can get through loan financing, the Federal Housing Administration permits any homebuyers to loan manufactured homes.

Here are some facts that may help you secure your first house through FHA loan financing.

  • Lower or Unestablished Credit Most of the homebuyers that have credit flaws don’t feel confident when it comes to getting a house through loan financing. FHA loan programs allow borrowers with lower or credit reports that aren’t yet established.
  • FHA Down Payment Requirements What makes FHA loan programs great for homebuyers is that they offer a low down payment, which is as low as 3.5 percent of the total amount of the loan. Down payment requirements may vary depending on the house you will get, the status of your credit report, and many more. This is why it’s important to ask all the information you need when you talk to your lenders.
  • Mortgage Insurance All homebuyers that apply through FHA loans are required to have two mortgages insurance. It’s a procedure that protects private lenders if the homebuyers can’t continue paying their monthly mortgage payments.
  • FHA Home Inspection Before you get your home through FHA loan programs, you need to follow their FHA loan requirements. One of those requirements is to have an FHA home inspection that should be completed by a licensed FHA inspector.
FHA Loan

FHA Rates, Coverage—Learn More from Sprint Funding

Whether you’re looking to learn more about FHA loans or a mortgage loan, Sprint Funding is ready to assist you.

We cover just about any loan–construction, conventional, and foreign national loans.

Give us a call to know more.