Selling Guide

Published December 16, 2020

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What is the minimum borrower contribution for a manufactured home?

Down Payment Requirements

A minimum down payment of 5% must come from the borrower’s own funds unless:

  • the LTV or CLTV ratio is less than or equal to 80%;
  • the borrower is purchasing a one-unit principal residence and meets the requirements to use gifts, donated grant funds, or funds received from an employer to pay for some or all of the borrower's minimum contribution. See B3-4.3-04, Personal Gifts; B3-4.3-06, Donations From Entities; and B3-4.3-08, Employer Assistance, for additional information; or
  • the property meets the MH Advantage requirements and the loan meets the requirements for LTV ratios of 95.01-97%. In this case, the borrower must contribute a minimum down payment of 3%, which must come from his or her own funds unless the loan meets the gift, grant, or funds from an employer policy referenced above.

The borrower's equity in the land is considered the borrower’s own funds. Where the borrower holds title to the land on which the manufactured home will be permanently attached, the value of the land may be credited toward the borrower’s minimum down payment (or equity requirement for a refinance). The borrower’s equity contribution will be the difference between any outstanding liens against the land and the market value of the land.

The following table describes how to determine the value of the land based on when and how the borrower acquired the land.

Date of Land Purchase Value of the Land Documentation Requirements
More than 12 months preceding the loan application. The current appraised value. None.
12 or fewer months preceding the date of the loan application. The lesser of the sales price or the current appraised value. The lender must document the borrower’s cash investment by obtaining:
  • a copy of the settlement statement,
  • a copy of the warranty deed that shows there are no outstanding liens against the property, or
  • a copy of the release of any prior liens(s).
The borrower acquired the land at any time as a gift, inheritance, or other non-purchase transaction. The current appraised value. The lender must obtain appropriate documentation to verify the acquisition and transfer of ownership of the land.

For additional information, see B5-2-03, Manufactured Housing Underwriting Requirements 

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