Understanding Chattel Loans

A Smart Financing Option for Manufactured Home Buyers

Chattel loans, often referred to as home-only or manufactured home loans, are a specialized type of financing designed for buyers purchasing a manufactured or mobile home without owning the land underneath it. Unlike a traditional mortgage, a chattel loan treats the home as personal property rather than real estate.

This type of loan plays an important role in expanding access to homeownership, particularly for buyers looking to purchase homes in mobile home parks or leased-land communities.

What Is a Chattel Loan?

A chattel loan finances only the manufactured home itself, not the land. Because the home is considered personal property, the loan structure is more similar to an auto loan than a traditional mortgage.

This makes chattel loans ideal for buyers who:

• Plan to place their home in a leased-land community

• Are purchasing a manufactured home that is not permanently affixed to land

• Want a faster, simpler financing process

• Do not want or need to purchase land

How Chattel Loans Work

With a chattel loan:

• The manufactured home is the collateral

• The loan does not include land

• Terms are typically fixed-rate and fixed-term

• Approval focuses on the home, borrower qualifications, and affordability rather than land value

Because land is not involved, the underwriting process is often more streamlined than a traditional mortgage.

Key Benefits of Chattel Loans

Lower Down Payment Options

Many chattel loan programs allow down payments as low as 5%, making homeownership more accessible for buyers who may not have large savings.

No Private Mortgage Insurance (PMI)

Some chattel loan programs do not require PMI, even with low down payments, helping keep monthly payments manageable.

Faster Approval and Closing

Since land appraisals and real estate title processes are not required, chattel loans often close more quickly than traditional mortgages.

Fixed Payments and Predictability

Borrowers benefit from fixed interest rates and fixed monthly payments, allowing for easier budgeting.

Accessible Path to Homeownership

Chattel loans provide a financing solution for buyers who might not qualify for traditional mortgage options but still want to own their home.

Important Considerations

While chattel loans offer flexibility, it’s important to understand the trade-offs:

Higher Interest Rates

Because the lender is financing personal property rather than real estate, interest rates are typically higher than traditional mortgage rates.

Shorter Loan Terms

Chattel loans often have shorter repayment periods, which can result in higher monthly payments compared to 30-year mortgages.

Limited Tax Benefits

Interest paid on a chattel loan may not receive the same tax treatment as mortgage interest. Borrowers should consult a tax professional for guidance.

Repossession Risk

If payments are not made, the lender may repossess the home since it is the collateral for the loan.

Chattel Loans vs Traditional Mortgages

Chattel Loans

• Finance the home only

• Do not require land ownership

• Offer quicker approvals

• Typically have higher rates and shorter terms

Traditional Mortgages

• Finance both home and land

• Usually offer lower interest rates

• Require land ownership

• Have longer loan terms and potential tax advantages

The right option depends on how and where the home will be placed, as well as the buyer’s long-term financial goals.

Is a Chattel Loan Right for You?

A chattel loan can be a strong option if you are purchasing a manufactured home in a leased-land community or want a faster, more flexible path to ownership. For some buyers, it serves as a stepping stone—allowing them to own a home now, with the possibility of refinancing later if land ownership becomes part of their future plan.

Understanding how chattel loans work helps ensure you choose a financing solution that aligns with your lifestyle, budget, and long-term goals.

If you’re considering a manufactured home and want to know whether a chattel loan is the right fit for you, the next step is to explore your options with a professional who understands these programs.

👉 Schedule a consultation to review your financing options
👉 Find out what you qualify for and what your monthly payment could look like
👉 Get personalized guidance based on your goals and location

Owning a manufactured home can be an affordable and practical path to homeownership—and the right financing makes all the difference.

Ebonie Beaco | NMLS #2389954
Loan Factory, Inc. | NMLS #320841