Mobile Home Loan Financing in California: Down Payments, Loan Terms, and Approval Process Explained

Mobile homes are an affordable housing solution in California, but securing financing can feel complex. If you're considering mobile home loan financing, understanding down payments, loan terms, and the approval process is crucial. This guide breaks it all down so you can confidently navigate your loan options.

How Much Do You Need for a Down Payment?

One of the most common questions about mobile home loan financing is how much down payment is required. The amount depends on the loan type and intended use of the home.

1. Primary residence: Minimum 5% down payment (up to 95% financing available with good credit).
2. Second home/vacation home: Minimum 15% down payment with strong credit.
3. Investment property: Minimum 20% down payment required.
4. Buy-for loans (purchasing for a family member): Requires at least 20% down, and the occupant cannot be on the loan.

If your credit score is below 600, you may need to provide a higher down payment (sometimes 35% or more).

Loan Terms: Why Can’t You Get a 30-Year Mortgage?

Unlike traditional mortgages, mobile home loan terms are typically shorter. The maximum loan term is 25 years, not 30 years like conventional home loans. Here’s why:

1. Mobile homes depreciate differently from traditional homes.
2. Lenders consider them personal property unless permanently affixed to land.
3. Shorter loan terms protect lenders from excessive depreciation risks.

However, lenders do offer fixed-rate loans, ensuring your monthly payments stay predictable.

How to Get Approved for a Mobile Home Loan

Credit Score & Income Requirements

Lenders consider your credit score, income, and debt-to-income ratio when evaluating loan applications. A score of 640 or higher improves approval odds, but loans are available for scores under 600 with compensating factors (higher down payment, stable income, or a co-borrower).

Your total monthly home payment cannot exceed 45% of your gross income, and all other debts (car payments, credit cards) are also factored into approval.

Can a Co-Borrower Help?

Yes! If your credit score is low, adding a co-borrower can improve loan terms. Some mobile home lenders use a blended credit score, averaging both applicants’ scores.

Mobile Home Park Approval

If you're financing a mobile home in a park, you need park approval before finalizing your loan. The approval process can take 1-2 weeks, and the park may have its own credit or income requirements.

Can You Finance Closing Costs?

Yes—most closing costs can be financed, reducing your upfront expenses. However, prepaid costs like notary fees, homeowner’s insurance, and property tax prorations usually cannot be included in the loan.

Final Thoughts

Understanding the ins and outs of mobile home loan financing in California is essential for securing the best loan. Whether you're buying a primary residence, vacation home, or investment property, knowing down payments, loan terms, and approval steps can help you prepare for a smooth purchase.

Need Expert Help?

At Smart Money Mortgage, we specialize in mobile home loan financing in California. Contact us at (866) 900-6868 or visit smartmoneymortgage.com to explore your options!