Carter Commercial Advisors

Buying Mobile/Manufactured Homes

Understanding the Buying Options

Purchasing a mobile or manufactured home in a rented space within a mobile home park presents unique challenges compared to traditional homeownership. Here’s a breakdown of the key differences in mortgage programs and taxes:

Mortgage Programs

• Chattel Loan: This is the most common type of loan for a mobile home in a park. It’s essentially a personal property loan, as the home is considered personal property, not real estate.  
  • Pros: Easier to qualify, often lower interest rates.
  • Cons: Shorter loan terms, typically 10-15 years, and the loan is tied to the home, not the land. If you move the home, the loan moves with it.  
• Land Lease Loan: Some lenders offer loans that cover both the mobile home and the land lease. This can be a good option if the park allows ownership of the land lease.
  • Pros: Combines the home and land lease into one loan.
  • Cons: May have stricter qualifications and higher interest rates.
• Traditional Mortgage: In rare cases, if the mobile home is permanently affixed to a foundation and meets specific criteria, it might qualify for a traditional mortgage. This is typically not the case for homes in mobile home parks.

Taxes

• Property Taxes: You typically do not pay property taxes on the mobile home itself. Instead, you pay rent to the park owner, which includes property taxes for the land.
• Personal Property Taxes: Some states may impose personal property taxes on the mobile home. Check with your local tax assessor’s office.  
• Sales Tax: You may be subject to sales tax on the purchase of the mobile home, similar to buying a car.

Additional Considerations

• Park Rules and Regulations: Understand the park’s rules regarding home ownership, residency requirements, and potential rent increases.
• Home Value: Mobile homes typically depreciate faster than traditional homes, impacting resale value.
• Insurance: You’ll need homeowners insurance, but coverage might be different than for a traditional home.

California Manufactured Homes (FAQs)

The Board of Equalization maintains a FAQs list that we strongly recommend to anyone seeking to understand tax implications of owning manufactured homes in California.

Important: Laws and regulations vary by state, and the information provided here is a general overview. It’s crucial to consult with local experts, such as real estate agents, lenders, and tax professionals, for specific guidance tailored to your situation.