Modular Home Financing in Texas: Loan Types and Who Qualifies

In Texas you can finance a modular home six ways: a conventional mortgage, an FHA loan, a VA loan, a USDA loan, a construction to permanent loan, or a chattel loan. Which ones you can actually use comes down to three things. Is the home titled as real property or personal property, do you own the land it sits on, and where does your credit sit. A modular home built to local code is real property from the day it lands, so it reaches all six. A manufactured home has to earn its way into the first five.

That distinction is where most buyers lose money without realizing it, and it is the part lenders tend to gloss over. Here is what each loan type means, what it really requires, and the Texas programs that almost never show up on a lender’s page.

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Modular and manufactured homes follow different loan rules

A modular home is built in sections in a factory to the same state and local building codes as a site built house, then set on a permanent foundation. It is real property from the outset. It qualifies for the same loans a stick built home does, full stop.

A manufactured home is built to the federal HUD code and carries a red certification label on the outside. In Texas it starts life as personal property, titled through the Texas Department of Housing and Community Affairs. To reach a real property mortgage it has to be reclassified. That means you own both the home and the land, the home is permanently affixed to a foundation, and you file a Statement of Ownership and Location with the TDHCA. Do that and conventional, FHA, VA, and USDA financing open up. Skip it, or place the home on leased land in a community, and a chattel loan is usually all that is left.

The numbers show how often Texas buyers land in that second bucket. Federal mortgage data show that chattel loans account for a large share of manufactured home purchase loans in Texas. Many of those buyers either do not own land or never convert the title, and they pay for it in the rate.

One more thing is moving in the background. Texas SB 785, effective September 1 2026, puts manufactured homes onto city zoning maps and creates a path to conforming classification in towns that previously had functional bans. It widens where you can legally place a home, which over time widens financing options too.

The six loan types for a modular home in Texas

Conventional mortgage

The standard conventional loan needs a permanent foundation, real property classification, and a borrower who owns the land. Expect a 620 credit floor at most lenders, with the best pricing reserved for 680 and up, and a down payment between 5% and 20%. Manufactured homes usually take a 0.50% loan level price adjustment that nudges the rate.

Two programs sidestep that surcharge. Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome both finance higher specification factory built homes at terms close to a site built house, with as little as 3% down and the manufactured surcharge waived. The catch is the home has to carry the right certification sticker near the HUD data plate, so not every home qualifies.

FHA loan

FHA is the forgiving option on credit. You can put 3.5% down at 580, or 10% down between 500 and 579. The version that matters for most manufactured buyers is Title II, which treats a home on a permanent foundation as real property. Title I exists for home only personal property loans but carries lower limits and is far less common. The home has to be your primary residence, on a permanent foundation, classified as real property.

VA loan

For eligible veterans with full entitlement, VA means 0% down and no monthly mortgage insurance. There is no VA credit floor, though lenders generally want 620 on a manufactured home. The property rules are specific: built on or after June 15 1976, HUD label present, permanently affixed, classified as real property, and at least 400 sq ft for a single wide or 700 sq ft for a double wide. Terms run up to 25 years on larger units. The funding fee on first use is 2.15% and can be rolled into the loan. Most lenders will not finance a manufactured home that has been moved from its original installation site, which is a lender overlay rather than a VA rule, but a near universal one.

USDA loan

USDA Rural Development also offers 0% down, capped by income and geography. The 2026 limits run to $119,850 for households of one to four and $158,250 for five to eight, and the home has to sit in a USDA designated rural area, which covers a large share of Texas. The home needs its HUD label, a permanent foundation, real property tax treatment, at least 400 sq ft, and a manufacture date within 20 years of the application. It also has to have gone straight from the manufacturer to its final site, never installed somewhere else first. Most lenders look for a 640 score.

Texas carries one advantage here that rarely surfaces in search results. The state is part of the USDA existing manufactured housing pilot, which allows financing of existing manufactured homes that Rural Development does not currently finance. That option is closed in much of the country.

Construction to permanent loan

Also called a one time close, this rolls the build phase and the permanent mortgage into a single loan with one approval and one closing. Funds release to the builder in draws as work hits each milestone. Down payments usually sit between 10% and 20%, and folding two loans into one saves an estimated $3,000 to $8,000 in duplicate closing costs. FHA, VA, and conventional all offer a one time close version. This is the route when you want to order a specific model and finance the land, the home, the foundation, and the utility hookups together.

Chattel loan

A chattel loan finances the home only, with the home pledged as personal property the way a car secures an auto loan. Credit floors start around 575, loan amounts at one major Texas lender run from $35,000 to $275,000, and debt to income can stretch to 50%. Terms are shorter than a mortgage, 15 to 25 years, and rates in 2026 sit anywhere from 7% to past 12% depending on credit and lender. That is meaningfully above a comparable conventional mortgage rate, with the premium varying by lender and credit profile.

The trade is speed and access against cost and risk. Chattel closes in about 30 days rather than the two to three months a mortgage can take, and it needs no land. But it locks you out of FHA, VA, and USDA, and repossession runs faster than foreclosure. For a buyer who owns no land and has no path to convert, it is often the only door. For one who could convert and chooses not to, it is the expensive door.

Comparing the loan types side by side

These are program guidelines as of June 2026. Actual terms move with your credit, the lender, the loan size, and the market, so read the table as a starting map and confirm any figure with a lender.

Loan type	Min credit score	Down payment	Land required	Key restriction	Rate vs conventional
Conventional (standard)	620	5-20%	Yes	Real property, you own the land	+0 to 0.5% surcharge
Conventional MH Advantage	620	3%	Yes	Home must carry the MH Advantage sticker	Surcharge waived
FHA Title II	580 (500 with 10% down)	3.5%	Yes	Permanent foundation, real property only	Annual MIP applies
VA	None (lenders ~620)	0%	Yes	Built on or after 6/15/1976, never moved, size minimums	2.15% funding fee, first use
USDA	640 typical	0%	Yes	Rural area, income limits, home under 20 years old	Guarantee fee applies
Construction to permanent	620 (varies)	10-20%	Yes (or bought in the deal)	New build, one time close	Varies by program
Chattel	575	Often 5-10%	No	Home only, shorter term, no FHA/VA/USDA	Higher than conventional; varies by lender

Texas programs most lenders skip

Texas Veterans Land Board

The Texas General Land Office runs the Veterans Land Board, a Texas only program with below market rates, little or no down payment, and home loans up to $832,750 on terms of 15, 20, 25, or 30 years. Veterans with a service connected disability rating of 30% or more qualify for further reduced rates.

There is a gap veterans hit late, usually on the phone. The VLB standard home loan lists eligible property types as single family attached and detached homes, townhomes, and condominiums. Manufactured homes are not named among them. A separate VLB Land Loan covers buying the land itself, which opens a stacking strategy that rarely gets written down: use a VLB Land Loan to buy the lot, then finance the home with a separate construction or chattel loan, or a VA loan once the home is affixed and converted. Confirm current eligibility at glo.texas.gov before you count on the standard home loan for a manufactured home.

Texas Department of Housing and Community Affairs

TDHCA runs the state down payment assistance programs. Income qualified buyers can get up to 5% of the loan amount as a 0% interest deferred second lien, forgiven after roughly three years of living in the home. On a $300,000 loan that is up to $15,000 toward closing. The minimum credit score is 620, FHA approved manufactured homes are eligible, and 2026 income limits run near $97,000 for one to two person households and $111,550 for three or more, varying by county. You cannot apply directly. Applications go through approved local providers, reachable at TDHCA on 800-792-1119. TDHCA is also the agency that handles the titling and real property conversion described above.

Property tax treatment

Classification follows you into the tax bill. As real property, the home and land are assessed together by the county appraisal district as one parcel, with a single tax bill. As personal property, the home is taxed separately from the land, often at a higher effective rate. Converting to real property simplifies the long run cost and matches how the rest of the street is taxed. After conversion, tell the county appraisal district so the records update.

Buying the land changes everything

A land home package loan bundles the land, the home, and the site work into one transaction with one closing and one monthly payment. The structural benefit is bigger than the convenience. When the land comes in the deal, the home can be permanently affixed at purchase, which makes it real property from day one and puts conventional, FHA, VA, and USDA all back on the table.

The cost difference compounds. On a $150,000 home, a 25 year chattel loan at 9% runs roughly $60,000 more in interest than a 30 year mortgage at 6.75% on a comparable land home package. The figures shift with the actual rates and balances, but the direction does not. Owning or buying the land is usually the single biggest lever on what you pay over the life of the loan.

Lenders active in Texas

This is a reference list, not an endorsement, and it is not exhaustive. Rates and programs change, so verify directly.

• 21st Mortgage Corporation, one of the largest manufactured home lenders in the country, offering both chattel and real property loans.
• Cascade Loans, a chattel specialist with a 575 floor and loan amounts from $35,000 to $275,000.
• Capital Home Mortgage, a Texas lender running conventional, FHA, USDA, VA, and chattel for manufactured homes.
• Triad Financial Services, focused on land home packages.
• Metroplex Mortgage, a regional Texas option.
• Builder affiliated lenders, such as Palm Harbor’s partner network, which finance the builder’s own homes but are not independent.

How to line up financing, step by step

1. Settle the home type and land status first. Modular or manufactured, and do you own land, are you buying it, or will you be in a leased community. That answer decides which loans exist for you before any lender weighs in.
2. Pull your credit from all three bureaus and work out your debt to income. Fix errors before you apply. Treat 620 as the practical floor.
3. Get pre approved with a lender that actually does this. Not every lender finances factory built homes, and the program experience matters.
4. Find the home and the site together. For a package, line up the land first or alongside. For chattel, confirm the site allows the home and zoning permits it.
5. Order the appraisal and inspection. Mortgage programs require both. Chattel lenders are lighter but still appraise.
6. File the Statement of Ownership and Location with the TDHCA if you are converting to real property, then close and notify the county appraisal district.

Comparing factory built homes is the work that comes before any of this. Browse the modular home directory to see how manufacturers and models stack up on price and specification, and read the wider buyer guides for the build and siting questions that decide which loan you end up needing.

Frequently asked questions

The questions above cover the loan types, the credit floors, the land requirement, and the chattel versus mortgage split. Two more come up often.

What is the down payment for a manufactured home in Texas? It depends entirely on the program. VA and USDA can be 0% for buyers who qualify. FHA is 3.5% at 580 or better. Conventional MH Advantage is 3%, standard conventional 5% to 20%, and construction to permanent 10% to 20%. On top of any of these, TDHCA assistance can cover up to 5% of the loan for income qualified buyers with a 620 score.

Can I convert a manufactured home to real property in Texas? Yes. Own both the home and the land, affix the home permanently to a foundation, meet local zoning and building codes, and file a Statement of Ownership and Location with the TDHCA. Once it is converted, conventional, FHA, VA, and USDA financing become available, and the home and land get taxed together as one parcel.