Helpful terms
Manufactured home loan glossary
Use this glossary while you compare chattel loans, park-community purchases, and leased-land financing. Every definition is written for manufactured home buyers, not generic mortgages.
Chattel Loan
A loan secured by the manufactured home as personal property, not by land. Common for homes in parks or on leased lots.
HUD Code
Federal construction standard for manufactured homes built after June 15, 1976. Lenders typically require HUD-code homes.
Manufactured Home
A factory-built home constructed to the HUD code and transported to a site. Different from a site-built or modular home.
Mobile Home
A common term for manufactured housing. Older pre-HUD homes can be harder to finance than HUD-code manufactured homes.
Lot Rent
Monthly rent paid to a community or landowner for the space under the home. Lot rent is not usually bundled into the chattel loan.
Leased Land
Land the buyer does not own. The home sits on a rented lot or in a park. These purchases are typically financed as chattel.
Interest
The cost of borrowing money (paid to the lender).
Interest Rate
The percentage charged for borrowing money.
Fixed Rate Loan
A loan with an interest rate that remains constant for the life of the loan. Common terms are 20 or 25 years, but 10 and 15-year options are available.
Adjustable-Rate Loan
A loan with an interest rate that periodically adjusts up or down based on a set index. Common terms are five years fixed, with a single rate increase for the remaining 15 years of the loan.
Debt-to-Income Ratio (DTI)
Monthly debt payments, including the proposed housing payment, divided by gross monthly income. Chattel programs often look for DTI under about 48%.
Gross Income
Total income before taxes and expenses. Includes all income derived from business or property.
Amortization
The process of paying off the principal and interest on a loan through scheduled installments.
Annual Percentage Rate (APR)
The total cost of interest for your loan, including associated costs such as closing fees.
Appraisal
An estimate of the value of a manufactured home, based on recent comparable sales and the condition of the home being purchased.
Closing
The meeting between the buyer, seller, and sales agent where the home and funds legally change hands. Also known as settlement.
Closing Fees
The fees associated with transferring ownership of the home and obtaining the loan, assessed at closing.
Cosigner
Someone who signs a loan obligation with you, agreeing to make payments if you default. The cosigner must go through the same application and approval process as the primary borrower. Cosigners can only be used if the primary applicant has limited to no credit history.
Credit Report
A review of your credit history by a qualified bureau to determine your payment history on previous debts.
Down Payment
The money you pay upfront towards the purchase of a home, usually between 5% and 35% of the purchase price.
Escrow
A special account set up by the lender to hold money for taxes and insurance.
Loan Origination Fee
The fee charged by a broker for their services.
LTV (Loan to Value)
The proposed loan amount divided by the value of the home.
Mortgage Broker
An entity that arranges loans for borrowers with multiple lenders, rather than funding the loan from its own balance sheet.
PITI
Principal, interest, taxes, and insurance - your estimated monthly payments.
Prepayment Penalty
A fee for paying off a loan before it is due. There are no prepayment penalties for our brokered loans.
Pre-Qualification
The process of determining the amount of money a particular lender will allow you to borrow.
Principal
The amount of debt remaining on a loan, not including interest. The face amount of the loan.
Refinance
The renewal of an existing loan, often for the purpose of reducing the interest rate or monthly payments. Cash-out refinances and HELOCs are not available from our lenders on leased-land homes.
Term
The length of time to repay a loan.
Title
The legal document that confirms ownership of a manufactured home.
Underwriting
The process of deciding whether to approve a loan based on credit, income, assets, and other factors.