Last Updated: January 2026
50+ Specialized Lenders
Modular Home Financing
Made Simple
Most banks don’t understand prefab construction—leading to delays, denials, and lost deposits. ModFii connects you with lenders who specialize in modular home financing, so you close faster and save thousands.
Here’s the truth: Modular homes are built in factories to the same building codes as site-built homes. They’re real property. They appreciate like traditional homes. And they qualify for FHA, VA, USDA, and conventional mortgages—just like any other home.
But most lenders don’t understand that. The result? Good buyers get rejected, overpay on rates, or wait months for approvals that should take days. Manufacturers lose sales. Deposits get forfeited.
ModFii exists to solve this. We match you with lenders who specialize in factory-built construction and close loans in days, not months—with a 94% approval rate.
94%
Approval rate
7 days
Avg. approval
0.5%
Our fee
$0
Pre-qual cost
Written by
Jane Morrison
NMLS Licensed
Senior Mortgage Analyst
Reviewed by
ModFii Editorial Team
Content Team
What Is Modular Home Financing?
ModFii is the leading marketplace connecting prefab, modular, and tiny home buyers with lenders who specialize in factory-built construction financing. We help you get approved faster, with better rates, and without the confusion that comes from working with traditional mortgage lenders.
Modular Homes Qualify for Traditional Mortgages
Modular homes are built to state and local building codes—the same codes as site-built homes.[4] When placed on a permanent foundation, they’re classified as real property, not personal property.
This means all standard mortgage programs apply: FHA, VA, USDA, and conventional loans are all available for modular homes—with the same rates and terms as traditional construction.[1]
This is different from manufactured homes, which are built to federal HUD code and may require different financing depending on whether they’re on a permanent foundation.
Modular Homes Qualify for Traditional Mortgages
Despite qualifying for normal loans, modular buyers face unique challenges:
Inexperience: Most loan officers process 0-1 modular loans per year and don't understand the difference from manufactured homes
Timeline confusion: Banks don't understand factory timelines and draw schedules
Appraisal challenges: Appraisers struggle to find comparable sales for modular homes
Construction complexity: Construction-to-permanent loans are more complex than standard purchases
The result: Delays, rejections, and lost deposits for buyers who go to the wrong lender.
What ModFii Does Differently
We pre-vet lenders specifically for modular and prefab expertise
Our lenders understand factory construction timelines and draw schedules
They know how to structure construction-to-permanent loans correctly
Result: 7-day average approvals vs. 45-60+ days at traditional banks
See What You Qualify For
Pre-qualify in 2 minutes — no credit impact, no obligation.
Types of Modular Home Financing
Choose the financing option that fits your situation. Each has different requirements, benefits, and ideal use cases.
Construction-to-Permanent Loans (Most Common)
How it works: Single loan covers land, construction, and permanent mortgage. Also called one-time close or single-close construction loan.
Key Details:
- • Loan closes before construction begins
- • Interest-only payments during build phase
- • Converts to permanent mortgage at completion
- • Funds released in stages via draw schedule
Requirements:
- • Down payment: 10-20% (land equity counts)
- • Credit score: 680+ typical
- • Detailed plans and manufacturer contract
Best for: Buyers building a new modular home on land they own or are purchasing.
FHA Loans for Modular Homes
Government-backed option with flexible credit requirements and low down payment.[1]
Key Details:
- • Down payment: 3.5% with 580+ credit
- • Credit requirements: More flexible (580+)
- • Loan limits: $472,030 - $1,089,300 by county
- • Available to all buyers, no income limits
Mortgage Insurance:
- • Upfront: 1.75% of loan amount
- • Annual: 0.55% (paid monthly)
- • FHA One-Time Close available for new builds
Best for: Buyers with lower credit scores or limited down payment.
VA Loans for Modular Homes
$0 down financing for eligible veterans with no private mortgage insurance.[2]
Key Details:
- • Down payment: $0 for eligible veterans
- • No PMI: Significant monthly savings
- • VA funding fee: 1.25% - 3.3%
- • Disabled veterans: Funding fee waived
Eligibility:
- • Veterans and active duty
- • National Guard/Reserves
- • Surviving spouses
- • VA One-Time Close (limited lenders)
Best for: Eligible veterans who want the lowest down payment and no PMI.
USDA Loans for Modular Homes
$0 down financing in eligible rural and suburban areas.[3]
Key Details:
- • Down payment: $0 in eligible areas
- • Guarantee fees: 1% upfront + 0.35% annual
- • Lower fees than FHA
- • USDA Single-Close construction available
Eligibility:
- • Property in USDA-eligible area
- • Income under 115% of area median
- • More areas qualify than you'd think
- • Credit: 640+ typical
Best for: Buyers in rural/suburban areas within income limits. Many modular-friendly locations are USDA-eligible.
Conventional Loans for Modular Homes
Standard mortgage financing with the widest variety of lenders and terms.[4]
Key Details:
- • Down payment: 3% - 20%
- • Credit requirements: 620+ (700+ for best rates)
- • Loan limits: $766,550 in most areas (2024)
- • Most lender options
PMI:
- • Required under 20% down
- • Cost: 0.5% - 1.5% annually
- • Key advantage: Can be removed at 20% equity
Best for: Buyers with good credit who want PMI removal option or have 20% down.
Land-Home Packages
Combined financing for land purchase and modular home construction in a single transaction.
How It Works:
- • Single closing for land and home
- • Simplified process vs. separate loans
- • Some manufacturers offer packages
Best For:
- • Buyers who need to purchase land
- • Those wanting simplified financing
- • First-time modular buyers
Best for: Buyers with good credit who want PMI removal option or have 20% down.
Modular Home Financing Comparison
Compare your options at a glance
| Loan Type | Down Payment | Credit Min | PMI/MIP | Best For |
|---|---|---|---|---|
| FHA | 3.5% | 580+ | Yes (life of loan) | Lower credit, limited cash |
| VA | 0% | Flexible (620+ typical) | No | Eligible veterans |
| USDA | 0% | 640+ typical | Yes (lower than FHA) | Rural buyers within income limits |
| Conventional | 3-20% | 620+ | Yes (removable at 20%) | Good credit, want PMI removal |
| Construction-to-Perm | 10-20% | 680+ typical | Varies | Building new on land |
Not Sure Which Loan Is Right for You?
Tell us about your situation and we’ll match you with the best options.
The Modular Home Financing Process
From pre-qualification to move-in: Here’s what to expect
2-5 minutes
Get Pre-Qualified (No Credit Impact)
Answer basic questions about your finances and project. Get matched with lenders who specialize in modular construction. Understand your budget range before shopping for homes or land.
Varies
Choose Your Modular Home and Land
Select a manufacturer and floor plan. Find land (if you don't already own it). Get preliminary pricing for home, site work, and total project. Your pre-qualification helps you know what you can afford.
7-14 days with specialized lenders
Full Loan Application
Provide documentation: income, assets, debts, project details. Lender orders appraisal (may use plans and specs for new construction). Underwriting reviews your file.
1-2 weeks
Loan Approval and Closing
Receive final approval and clear to close. Sign closing documents. For construction loans: funds are held for draw schedule. For purchase loans: funds released at closing.
3-5 months
Construction (If Building New)
Foundation and site work completed. Modular home manufactured in factory. Home delivered and set on foundation. Final inspections and certificate of occupancy. Construction loan converts to permanent mortgage.
Welcome home!
Move In
Home is yours. Make regular mortgage payments. Build equity in your modular home.
Total Timeline:
- • Existing modular home purchase: 30-45 days
- • New construction with specialized lender: 3-5 months
- • New construction with traditional bank: 6-9+ months (if approved at all)
Why Most Banks Reject Modular Home Loans
Understanding the problem helps you find the solution
The Knowledge Gap
Most loan officers process 0-1 modular loans per year. They don’t understand the difference between modular and manufactured homes. Their default response to unfamiliar situations is “no” or endless delays.
The Appraisal Challenge
Appraisers struggle to find comparable sales for modular homes. Unique floor plans and custom features complicate valuation. Under-appraisals can kill deals.
The Construction Complexity
Factory timelines don’t match traditional construction draw schedules. Banks want to inspect “progress” but modules are built in a factory. Loan officers don’t know how to structure modular construction loans.
The Documentation Confusion
Banks ask for wrong documents. They don’t understand manufacturer contracts. Simple questions turn into weeks of back-and-forth.
The Result
- • Good buyers get rejected for loans they should qualify for
- • Approved buyers wait 60+ days instead of 7-14
- • Delays cost deposits, rate locks, and sanity
- • Manufacturers lose sales to financing confusion
The ModFii Solution
- • Our lenders process modular loans daily, not annually
- • They know the documentation, timelines, and structures
- • They work with experienced modular appraisers
- • Result: 7-day average approvals, 94% approval rate
Modular Home Financing Comparison
Compare your options at a glance
| Factor | Modular Homes | Manufactured Homes |
|---|---|---|
| Building code | State/local (same as site-built) | Federal HUD code |
| Foundation | Permanent (required) | May or may not have |
| Legal classification | Real property | Often personal property |
| Financing options | All mortgage types | Chattel loans common |
| Appreciation | Similar to site-built | Often less |
| Quality perception | High | Varies |
Key Point: Modular homes qualify for the same financing as site-built homes. Manufactured homes may have more limited options. ModFii specializes in modular/prefab financing—if you’re buying a manufactured home, confirm it’s on a permanent foundation and titled as real property for the best financing options.
What You'll Need to Apply
Set your expectations for documentation
For All Loan Types
- Proof of income (pay stubs, W-2s, tax returns)
- Asset statements (bank accounts, investments)
- Credit authorization
- ID and Social Security number
For Construction Loans
- Signed contract with modular home manufacturer
- Detailed plans and specifications
- Land ownership or purchase contract
- Site work and foundation bids
- Builder/contractor information
- Project timeline
For Land Purchase
- Land purchase contract
- Survey
- Title commitment
- Zoning confirmation
What ModFii's Lenders DON'T Require
- Endless explanations of what a modular home is
- Weeks of "let me check with my manager"
- Re-submission of the same documents multiple times
Modular Home Financing Costs
What you’ll pay for your mortgage
Interest Rates
Modular home rates are the same as site-built home rates because they’re classified as real property.
Your rate depends on: credit score, down payment, loan type, and market conditions.
Construction loan rates: Often 0.5-1% higher during construction, then convert to permanent rate.
Closing Costs
Typical range: 2-5% of loan amount
Includes: origination fees, appraisal, title insurance, escrow, prepaid taxes/insurance
Construction loans may have slightly higher fees due to complexity
Mortgage Insurance
- FHA MIP: 1.75% upfront + 0.55% annually
- Conventional PMI: 0.5-1.5% annually (removable at 20% equity)
- VA: No PMI (funding fee instead)
- USDA: 1% upfront + 0.35% annually
ModFii's Fee
We charge 0.5% — significantly less than the typical 2-3% broker fee.
This is built into your closing costs.
On a $250,000 loan: $1,250 vs. $5,000-$7,500 typical
Modular Home Financing by Situation
Find the path that matches your needs
Building a New Modular Home
- You'll need: Construction-to-permanent loan
- Consider: Land ownership, total project budget, manufacturer selection
- Best loans: Conventional construction, FHA One-Time Close, VA construction
Buying an Existing Modular Home
- You'll need:Standard purchase mortgage
- Consider: Same as any home purchase—it's real property
- Best loans: FHA, VA, USDA, Conventional—whatever fits
Make sure home is on permanent foundation and titled as real property.
Own Land and Want to Build
- You'll need:Construction-to-permanent loan
- Key benefit: Land equity counts toward down payment
Example: $50,000 land + $200,000 build = 20% effective down payment
Need to Buy Land and Build
- You'll need: Land-home package or construction loan including land
- Options: Combined loan (one closing) or separate loans (two closings)
Why Choose ModFii for Modular Home Financing?
Traditional lenders see “modular” and panic. We see opportunity.
7-Day Approvals
Specialized lenders who understand modular construction close faster
Save $12,400 Average
Our 0.5% fee vs. 2-3% typical broker fees means thousands saved
94% Approval Rate
Lenders pre-vetted for modular expertise means fewer rejections
Green Mortgage Discounts
Energy-efficient prefab homes qualify for rate reductions
Explore Loan Options
Quick links to our detailed loan guides
FHA Loans
3.5% down, credit scores 580+
- Low down payment
- Flexible credit
- Government-backed
Construction Loans
One-time close financing
- Single closing
- Interest-only during build
- Converts to permanent
Explore Loan Options
Answer a few questions and we’ll match you with lenders who specialize in modular construction. No credit impact. No obligation.
- Compare rates from 50+ specialized lenders
- Pre-qualify in 2 minutes, no credit impact
- Get matched based on your specific situation
- Close faster with prefab-experienced lenders
Modular Home Financing FAQ
Can you get a mortgage on a modular home?
Yes. Modular homes built to local building codes and placed on permanent foundations qualify for conventional mortgages, FHA loans, VA loans, and USDA loans—just like site-built homes. The key is working with lenders who understand modular construction.
What's the difference between financing a modular home and a regular home?
The financing products are identical—modular homes qualify for all the same mortgages as site-built homes. The difference is in lender expertise. Most loan officers rarely process modular loans and don’t understand factory timelines, causing delays or rejections. Specialized lenders close these loans in 7-14 days.
Do modular homes qualify for FHA loans?
Yes. FHA loans are available for modular homes on permanent foundations built to state/local building codes. You can get 3.5% down with a 580+ credit score. FHA also offers One-Time Close construction loans for new modular builds.
Can I use a VA loan for a modular home?
Yes. Eligible veterans can use VA loans for modular homes with $0 down payment and no PMI. The home must be on a permanent foundation and built to local codes. VA One-Time Close construction loans are available but offered by fewer lenders.
Are modular home interest rates higher?
No. Modular homes on permanent foundations get the same interest rates as site-built homes because they’re classified as real property. Your rate depends on credit score, down payment, loan type, and market conditions—not whether the home is modular.
How much down payment do I need for a modular home?
Down payment requirements match standard mortgage programs: VA loans offer $0 down, USDA loans offer $0 down in eligible areas, FHA requires 3.5% down, and conventional loans require 3-20% down. Land equity can count toward your down payment on construction loans.
Can I get a modular home with no money down?
Yes, if you qualify for a VA loan (eligible veterans) or USDA loan (rural areas within income limits). These programs offer true $0 down financing for modular homes on permanent foundations.
What are closing costs for a modular home?
Closing costs typically range from 2-5% of the loan amount, same as any mortgage. Construction loans may have slightly higher fees due to complexity. ModFii charges only 0.5% vs. the typical 2-3% broker fee, saving you thousands.
How do construction loans work for modular homes?
Construction-to-permanent loans (one-time close) cover land, factory construction, delivery, and site work in a single loan. You pay interest-only during construction, then the loan converts to a permanent mortgage when the home is complete. This avoids two separate closings.
Can I finance land and a modular home together?
Yes. Construction-to-permanent loans can include land purchase, or you can use a land-home package loan. If you already own land, its appraised value counts toward your down payment.
How long does modular home financing take?
With specialized lenders, approvals take 7-14 days. Traditional banks unfamiliar with modular construction may take 45-60+ days—or reject the loan entirely. For new construction, the full process (approval through move-in) takes 3-5 months with specialized lenders vs. 6-9+ months with traditional banks.
What if I already own land?
If you own land, its equity counts toward your down payment on a construction loan. For example, if your land is worth $50,000 and you’re building a $200,000 home, you effectively have a 20% down payment already.
Why do banks reject modular home loans?
Most loan officers process 0-1 modular loans per year and don’t understand the difference from manufactured homes. They ask for wrong documents, can’t structure construction draws correctly, and default to ‘no’ when confused. Specialized lenders process these loans daily.
Is it hard to get financing for a modular home?
Not if you work with the right lender. ModFii’s lenders have a 94% approval rate for modular homes because they understand the product. Traditional banks have much lower approval rates due to unfamiliarity.
What credit score do I need for modular home financing?
Credit requirements vary by loan type: FHA accepts 580+, conventional typically requires 620+, VA has no set minimum (though lenders usually want 620+), and USDA typically requires 640+. Higher scores get better rates.
What if my modular home appraises low?
Low appraisals can happen when appraisers can’t find comparable sales. Specialized lenders work with appraisers experienced in modular valuation. If an appraisal comes in low, options include challenging it with better comps, negotiating price, or bringing more cash to close.
How is ModFii different from a bank?
ModFii is not a lender—we’re a matching service that connects you with lenders who specialize in modular and prefab financing. Banks often reject or delay these loans; our pre-vetted lenders understand the product and close faster.
What does ModFii charge?
ModFii charges 0.5% of the loan amount, built into your closing costs. This is significantly less than the typical 2-3% broker fee. On a $250,000 loan, you’d pay $1,250 vs. $5,000-$7,500 typical.
How does ModFii make money?
ModFii receives a referral fee from lenders when you close a loan through our platform. This is our 0.5% fee, which is built into your closing costs—you pay nothing extra, and often less than you would with a traditional broker.
Is ModFii a lender?
No. ModFii is a mortgage marketplace that matches borrowers with specialized modular home lenders. We don’t make lending decisions or fund loans—we connect you with lenders best suited for your situation.
Ready to Finance Your Modular Home?
Pre-qualify in 2 minutes. No credit impact. Get matched with lenders who understand modular construction.