When it comes to manufactured homes, most states still consider them “mobile” (like actual mobile homes). This is probably because they can potentially be disassembled and moved from site to site, unlike conventional homes.

While there are clear differences in conventional homes and manufactured homes, few people actually understand the various loan and mortgage options pertaining to manufactured home ownership. Personal property loans and mortgages do come with many differences and both can pertain to manufactured home lending.

Personal property loans, which once were the sole means of financing for manufactured homes, still serve most homeowners. Their pay scale requires 10% down and the rest paid over a 10- or 15-year schedule. Interest rates are usually higher than mortgages and tax benefits are limited.

On the other hand, mortgages are much more beneficial to homeowners. Although fewer than 1 out of 6 homeowners have mortgages, the pay scale for these requires 5% down and the rest paid through either a 20-years or 30-year schedule, with considerably lower interest rates (equal to those of conventional homes). In addition they come with tax benefits which include credits and deductibles. The longer the schedule, the smaller monthly premiums traditionally are.

As attractive as small monthly payments can be, it is a wonder why most owners of manufactured homes have personal property loans. That could be because mortgages are contingent on whether or not the homeowners own the underlying land, which can be much more expensive. If they do, their manufactured home qualifies for an actual mortgage.