FHA Loans

FHA loans are mortgages that require you to finance both home and land on one loan. FHA is the Federal Housing Administration which is a Government entity. You actually obtain your loan from an FHA approved bank or lender. What the Federal Housing Administration does is sets the terms and guidelines that the bank or lender must comply with to loan you money under the FHA loan program. The FHA then insures or guarantees your loan with FHA mortgage insurance. This basically means if you default on your loan and the bank loses money, they can make a claim against the FHA insurance program to recover their loss.

FHA’s guidelines for qualifying tend to be easier that what most banks would require. Because FHA sets the guidelines and then insures the mortgages, banks are often able to approve a borrower for an FHA Loan that might otherwise be denied. Though FHA guidelines are more forgiving, buyers must still demonstrate they have a reasonable willingness and ability to repay the loan. Buyers with tainted credit histories should be relatively free of delinquent credit for the past 12 months. At this time a minimum 580 middle credit score is required. The middle credit score is determined by your lender requesting a credit report from all 3 major credit reporting agencies (Equifax, Transunion & Experian) and using the middle score. For instance scores of 567, 585 & 660 would give us a qualifying score of 585.

Your ability to repay an FHA loan is largely dependent on your debt ratio. In other words

FHA Loans require a minimum down payment of 3.5% of the total purchase price of your land and home with all improvements. FHA will require that you prove you down payment comes from an acceptable source. Acceptable sources include the savings, retirement plans, commissions, bonuses or gift funds from a relative.

VA Loans

What a great benefit for our nation’s active duty and retired military personnel! Eligible veterans are able to obtain a loan for 100% of the total purchase price of home, land and all improvements. Similar to FHA, the Veterans Administration insures VA Loans. You will obtain your loan from a VA approved bank or lender.


Eligibility to apply does not mean that you qualify for the loan. The Veterans Administration set it’s own loan terms and criteria that veterans must meet. At present, banks are requiring a minimum middle credit score of 620 to qualify for a VA insured mortgage.

Conventional Mortgage Loans

All mortgage loans are essentially the same. The biggest difference between a conventional mortgage and a Government (VA or FHA) loan is who insures the mortgage. With conventional loans you have the option not to pay mortgage insurance by paying 20% down. When you make a payment less than 20% and mortgage insurance is required, private mortgage companies insure the loan. This is where the term “PMI” (Private Mortgage Insurance) comes from. Unlike Government insured loans, private mortgage insurers tend to have more stringent qualifying guidelines. These loans usually are lower cost loans but require excellent credit and a larger down payment. For manufactured housing you must make a minimum of a 10% Down Payment.

Home Only Loans

Home only loans are just as they sound. These loans are for buyers who only need or want to finance just the mobile home. These loans are often referred to as chattel loans. Buyers who already own their land sometimes choose to finance just the home on one of these programs. These loans are also for buyers who rent land, want to place the home on family owned property or for buyers interested in placing a home in a mobile home park.

At present there are many banks offering home only financing. Across the board minimum credit score requirements are 620. You must make at least a 5% down payment and unlike mortgage loans, interest rates get better the larger the down payment you make.

Click here to pre-qualify.