A Step-By-Step Guide to Buying a Manufactured Home with Land

How to Buy a Manufactured Home with Land Step-By-Step

Buying a manufactured home with land can be an affordable path to homeownership for many people. When you permanently install a prefab home on land you own, you can legally classify it as real property. This lets you finance both your home and your land with a single mortgage and start building equity right away.

In this step-by-step guide, we walk you through the entire process of buying a manufactured home and land together. From getting pre-approved for financing to officially taking ownership, read on to learn everything you need to know.

Step 1: Understand What Qualifies as Real Property

Before you begin looking for land or a manufactured home to buy, it’s important to understand the difference between real property and personal property. This distinction can affect how your home and your land are financed, titled, taxed, and more.

What is Real Property vs Personal Property?

Real property includes land and structures that are permanently attached to it. For a manufactured home to qualify as real property, it must be permanently affixed to land owned by the homeowner and meet the applicable requirements under local law, which varies state-to-state.

On the other hand, personal property is not legally considered part of the real estate. A manufactured home classified as personal property may be financed with a personal property loan, sometimes called a chattel loan.

What Criteria Must a Manufactured Home Meet to Become Real Property?

To qualify as real property, a manufactured home must be permanently attached to land that you own, rather than sitting on leased land. In most states, the wheels, axles, and towing hitch must be removed, and the home must be installed on a permanent foundation that meets state and local requirements.

Once the home is permanently installed on your land, you will then need to complete legal paperwork, such as retiring the original home title and recording it as part of the real estate.

Why Does Real-Property Classification Matter?

Classifying a manufactured home as real property can offer several advantages, particularly when you are purchasing the home and land together. Depending on your state and financing program, these benefits may include:

• More Financing Options: In order to qualify for conventional mortgage loans like FHA, VA, or Fannie Mae loans, a manufactured home must be classified as real property.
• One Loan: When a home qualifies as real property, you can finance the manufactured home and the land through a single mortgage rather than arranging separate financing.
• One Property Title: Once your manufactured home is legally classified as real property, the home and land are generally treated as a single property. You do not have to manage a separate title for the home in addition to your land ownership records.
• Property Taxes: In some states, real property is taxed through the standard local property tax system, which is predictable and often lower than the fees attached to personal property.
• Equity Growth: When a manufactured home is classified as real property, it is tied to the land beneath it, which means it appreciates and gains value similar to traditional site-built homes.

Real-property classification can provide important financial and ownership benefits that make buying a manufactured home with land more accessible. With this understanding in place, the next step is getting pre-approved for a land-home loan.

Step 2: Get Pre-Approved for a Land-Home Loan

Before moving forward with selecting a manufactured home or parcel of land, you will need to secure financing. This helps you establish a more realistic budget before starting your search, and also gives you a strong advantage when you’re ready to buy.

Not all manufactured home loans work the same way. Understanding your financing options will help you choose the loan that best fits your purchase.

Can You Get a Loan for Land and a Manufactured Home Together?

Yes. A land-home loan is a financing option that lets you finance both the land and a manufactured home under one mortgage. These types of loans can also be used to pay for the cost of any land preparation work, home installation, and other construction costs.

Land-home loans like FHA Title I loans, VA loans, USDA loans, and conventional loans can cover the financing for both your manufactured home and the property you want to build it on:

• FHA Title I Loan: A flexible program that lets you finance both your manufactured home and the land it sits on as one loan. It’s backed and insured by the Federal Housing Administration (FHA), with a maximum term of 25 years for a combination loan.
• VA Loans: Eligible veterans and active-duty service members can use VA financing to secure both the home and the land it sits on, sometimes with as little as 5% down.
• USDA Loans: If you’re looking to buy a home and land in a rural area, USDA loans can finance the home, the land, and site preparation costs like foundation installation, driveways, utility connections, and more, all under one loan.
• Conventional Loans: These loans are provided by banks and private vendors, without government guarantees. While they often require higher credit scores and down payments, they may offer more flexible terms and competitive interest rates with strong credit.

Eligibility requirements, down payment minimums, and terms can vary for each type of loan. When you partner with an experienced manufactured home retailer like Len’s Home Center, we are more than happy to explain your options and assist you with the application process.

What Lenders Evaluate During Pre-Approval

During the loan pre-approval process, lenders will run a comprehensive check on your financial history. While lender requirements vary, they will typically look at:

• Credit History: Lenders will evaluate your borrowing patterns and credit scores to determine your reliability as a borrower.
• Debt-to-Income Ratio (DTI): Compares how much you owe to your gross monthly income, helping lenders assess how you will manage repayments should you get the loan.
• Income Verification: Lenders will confirm your income based on pay stubs, tax returns, or communication with your employer.
• Down Payment: The more funds you are able to pay upfront, the less risk is involved for lenders, demonstrating your financial stability.

If all the criteria are met, you will be given a detailed pre-approval letter that states your maximum approved loan amount and estimated interest rate. Once you’re pre-approved, you’ll have a clear budget and can confidently begin searching for the right piece of land for your future dream home.

Step 3: Find Land Zoned for Manufactured Homes

Next, it’s time to start searching for a property. Not every parcel of land allows you to build a manufactured home, so it’s essential to confirm zoning and site suitability before the purchase process begins.

Verify Local Zoning and Land Use Regulations

City and county zoning rules determine whether or not you can install a manufactured home on a specific lot, as well as where on the site the home can be placed.

While zoning requirements vary by location, HUD-coded manufactured homes are generally permitted in the following zones:

• R-1 (Single-Family): Typically permits manufactured home construction, as long as it’s a real property and meets size, foundation, and design standards.
• R-2 (Low-Density): Often allows real-property manufactured homes alongside single-family or duplex housing, if it meets requirements.
• R-R (Rural Residential): Rural residential zones typically include multi-acre lots outside of urban centers. Some jurisdictions allow manufactured homes here if they are HUD certified and installed on a permanent foundation.

Even if the zoning lines up, you will also need to check if there are any private community rules set by local HOAs or developers that restrict property use. These rules are called Covenants, Conditions, and Restrictions (CC&Rs), and they can determine how you can use and modify your property even if manufactured homes are allowed.

Zoning varies heavily between different cities and counties, so it’s essential to confirm the exact requirements with your local planning department before choosing a property.

Evaluate the Property for Installation

Once you’ve narrowed down your options to one prospective property, it needs to be evaluated to ensure it can support manufactured home installation.

Thorough property evaluations typically include:

• Topography Inspections: This includes assessing the property’s slope, drainage, soil conditions, flood risk, and accessibility to determine if it can support a manufactured home, and what site improvements may be needed.
• Utility Availability: This determines if the property has access to utilities like electricity, water, sewer, or natural gas. If they are not already available, you’ll need to plan alternatives like a well, septic system, or propane.
• Access: This includes verifying that transportation teams, construction crews, and their equipment can successfully reach the property for delivery and installation. Low bridges, narrow roads, steep slopes, or overhead power lines can all impact the complexity and cost of the setup process.

Taking the time to confirm these details upfront can help prevent surprise costs, avoid construction delays, and ensure a smoother installation process. Once the land is fully evaluated and deemed suitable for the project, the next step is choosing a floor plan.

Step 4: Choose a Manufactured Home That Meets Lender Requirements

Finding the perfect home is an exciting milestone, but not every manufactured home qualifies for land-home loan financing programs. As you explore floor plans that fit your lifestyle and your land, you’ll also want to make sure your choice satisfies lender guidelines. Since requirements vary for different types of loans, it’s important to understand your specific financing criteria.

Most land-home loans require the manufactured home to meet these core standards:

• Manufacture Date: The home must have been built on or after June 15, 1976, and display a red HUD certification label to prove it meets federal safety and construction codes.
• Size Requirements: Most lending programs require the home to have a minimum square footage of at least 400 square feet.
• Land Ownership: Land-home loans require you to own the land the manufactured home is installed on.
• Foundation System: The chassis, wheels, axles, and towing hitch must be completely removed. The home must be secured to a permanent foundation that complies with the manufacturer and HUD guidelines.
• Structural Certification: Lenders will require an engineer’s report certifying the foundation structurally complies with HUD standards.

By confirming these details early on, you can choose a manufactured home floor plan that meets all the requirements necessary. With those boxes checked, you can confidently move forward with purchasing the home of your dreams and preparing your land to install it.

Step 5: Secure Permits and Prepare the Land for Installation

Once you have chosen a floor plan, the next step is to prepare your land for installation. Before any site work can begin, you will need to obtain all the necessary permits.

Obtain the Necessary Permits

Installing a manufactured home on land typically requires multiple permits, including:

• Building Permit: Covers installation and setup for the manufactured home.
• Utility Permits: Includes plumbing, electrical, and gas hookups, or any well or septic systems you need to install.
• Site Grading: If the property is not already graded, this permit authorizes any earthwork, excavation, or filling needed to prepare the land for installation.

Permit requirements vary by location, and some areas may need additional approvals. This is something your team will handle entirely on your behalf.

Prepare the Site

Site preparation is essential to ensure your property is suitable for your manufactured home, both during the delivery and installation process and long after. The amount of work required depends on the condition of the land, with undeveloped lots requiring the most.

Preparing undeveloped land for a manufactured home typically includes:

• Clearing and Grading: All unnecessary obstructions and vegetation are removed, and the property is leveled and graded for proper drainage.
• Utility Installation: Trenches are dug and backfilled to connect utilities like water, sewer or septic, electrical, and natural gas.
• Access Improvements: Access improvements like adding driveways, widening pathways, clearing overhead obstructions, grading turns, and stabilizing soft ground are made so delivery goes as smoothly as possible.

Once all site preparation steps are complete, it’s time to build a permanent foundation for the home to be installed on.

Build a Permanent Foundation

A permanent foundation is required for your manufactured home to be classified as real property and qualify for most land-home loans. The foundation needs to be either a concrete slab reinforced with steel rebar, or a pier and beam foundation that uses sturdy wooden beams and columns to hold up the home, often with a crawl space beneath.

In many areas, official inspections are required throughout the foundation installation process to ensure it can properly support the home. Lenders also require foundation certification from a qualified engineer to verify that it complies with HUD codes.

Once your land is fully prepared, it’s finally time to watch your vision come to life with delivery and installation.

Step 6: Delivery, Installation, and Final Inspection

With land prepared and a foundation built, now it’s time for the exciting part: delivering and setting up your manufactured home. Your team will coordinate the delivery and installation of your manufactured home on your behalf and ensure it is placed according to the approved site plan.

Your home will be transported to your property on a heavy-duty truck called a toter, which requires clear access to your site, free of obstructions like overhanging branches or vegetation. Once the truck arrives, the home is driven straight to the foundation and placed using crane-lifting or jacking and rolling.

Home Setup and Anchoring to the Foundation

Next, the home is permanently installed on its foundation:

• Joining: Double-wide and multi-section floorplans are transported in sections and joined together on-site using heavy-duty bolts and metal straps.
• Anchoring: Next, the home is permanently attached to the foundation using ground anchors that secure it against wind, weather, and seismic activity.
• Utility Connections: Utility setups for electrical, water, sewer, and natural gas are finalized to prepare the home for occupancy.
• Exterior Finishes: All exterior features and finishes are installed, including skirting, steps, porches, decks, and final touches.
• Landscaping: Your property is beautified with any desired landscaping, walkways, and outdoor living areas like patios, gazebos, or kitchens.

After these steps, your home is nearly move-in ready and prepared for final inspections.

Final Inspections

Once the home is installed, your contractor will arrange final inspections to ensure everything is safe, compliant, and functioning properly. These inspections typically check the foundation and anchoring, utility connections, and more.

After final inspections, a Certificate of Occupancy is provided to your local building department to confirm that the home is safe, compliant, and ready for move-in. This certification is essential for avoiding fines, insurance denials, or legal penalties.

When you have received this official documentation, the next step is to get your manufactured home officially recognized as real property.

Step 7: Title Your Manufactured Home as Real Property

Congratulations! The heavy lifting is done, and your home is on your land and ready to go. The final step of the process is to legally classify your manufactured home as real property. This unifies your home with the land beneath it, finalizes your mortgage, and helps your property build equity over time.

While legal requirements vary by state, below is an overview of how the process works in Oregon:

Complete the Title Conversion Process

In Oregon, converting a manufactured home to real property requires completing the proper documentation and recording process through the Oregon Building Codes Division (BCD) and the county where the property is located. The process removes the home from the manufactured home ownership record system and records it as part of the real estate.

The process typically involves:

• Tax Certification: Obtain a County Tax Certification from the county assessor’s office where the manufactured home is located. This certification confirms that there are no unresolved tax issues related to the home and is required as part of the recording process.
• Required Application: Complete the Application for Recording Manufactured Home as Real Property (Form 5176). This application verifies that the manufactured home and land meet Oregon’s requirements for being treated as one real property asset.
• County Recording: Record the approved documentation with the county clerk where the property is located and provide copies to the appropriate county and state offices.

Once your manufactured home is recorded as real property, the home and land are treated as a single piece of real estate. This final step helps protect your investment and provides many of the same benefits associated with traditional site-built homeownership.

Our Manufactured Home Experts Are Here to Help Guide You Home

Buying a manufactured home and land together doesn’t have to be complicated when you have the right team guiding you. At Len’s Home Center, we’ve spent over 50 years helping homeowners navigate this process. As a fully licensed general contractor, our team can help you evaluate land, compare financing, and coordinate everything from permits to delivery and installation.

Contact us online or call (541)-269-9326 today to start planning your manufactured home project today.

Disclaimer: This article is for informational purposes only and does not constitute financial advice from a qualified professional.