If you’re new to the world of real estate, terms like *mobile homes*, *modular homes*, and *manufactured homes* can be confusing. What’s the difference? And why does it matter? Let’s break it down in simple terms that the BANKS care about for financing.
Mobile vs. Manufactured vs. Modular Homes
Mobile and Manufactured homes: These are essentially the same thing. They’re built in a factory and transported to a site.
Modular Homes: These are considered “regular” houses. They’re also built in a factory but are constructed to the same building codes as traditional homes.
Key Differences
Age Matters: If a home was built before 1995, it’s classified as a *mobile home*. Before 1995, these homes were built using RV codes, not housing codes. After 1995, they were built to stricter housing standards.
Size Doesn’t Change the Classification. Whether it’s a single-wide, double-wide, or even a triple-wide with additions or attached garages, it’s still a *mobile home.
CSA Sticker: The classification of a home is determined by its CSA sticker number, which indicates the building code it was constructed under. If the code on the home is A-277, then it is considered to be a modular home, whereas a Z-240 is a mobile home.
Mortgaging Mobile Homes
If you’re buying a mobile home, here’s what you need to know:
Foundation Requirements: Mobile homes must be secured (tied down) and placed on pilings or a concrete foundation to qualify for a mortgage.
Land Ownership: Purchasing a mobile home on land you own is far easier than buying one in a park.
Lenders will consider the home’s *remaining life expectancy*. For example, if the appraisal says the home has 20 years left, the maximum mortgage amortization might be 15 years. This can make financing tricky for older mobile homes.
Leased Land: If the mobile home is in a trailer park or on leased land, financing becomes more complicated. Banks may offer *chattel loans* (similar to loans for RVs or trucks) since there’s no land title to secure the mortgage. TD, BMO, CIBC, RBC are the top go to for this.
Like other types of homes, mobile homes (site-built homes) are covered under the CMHC (Canada Mortgage and Housing Corporation) insurance, and you can purchase a mobile with only a 5% down payment if you are a first-time home buyer
Modular (not MOBILE) Homes Are Easier to Finance
Modular homes are treated like traditional houses by lenders. They don’t come with the extra requirements or restrictions that mobile homes do. They are insured
Watch Out for Misleading Listings
Some real estate listings might describe a home as *modular* instead of *mobile* to make it more appealing. However, lenders will always verify the home’s classification using the CSA sticker or an appraiser’s opinion. Misclassification can delay or derail financing, so it’s important to be upfront about the home’s true nature.
Exceptions to the Rules
In some cases, a mobile home that’s been extensively renovated might no longer “look” like a mobile home. If the CSA sticker is missing, the appraiser’s opinion will determine how the home is classified.
Finding the Right Lender
Local Credit Unions: These are often the best option for financing mobile homes.
Private Lenders: Some private lenders or B-lenders may consider mobile homes, especially if they’re 1995 or newer and on owned land.
Brokers: Unfortunately, mortgage brokers typically can’t assist with mobile homes on leased land—you’ll need to go directly to a bank. We as brokers, can assist with private financing if the bank says no.
Final Thoughts
While mobile, modular, and manufactured homes might seem similar, the differences are important—especially when it comes to financing. If you’re considering buying one of these homes, do your homework and work with a lender who understands the unique requirements.
Whether you’re a first-time homebuyer or a real estate professional, knowing these details can save you time, money, and headaches down the road.
Kiki Berg - Professional Mortgage Broker
778-808-7756
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