Glossary
34 financing terms, explained plainly.
Jump to a letter, or scroll — every term is defined in one or two plain-English sentences.
A
- Amortization
- The process of paying off a loan through regular, scheduled payments that cover both interest and principal, with the interest portion shrinking and the principal portion growing over the loan's life.
- APR (Annual Percentage Rate)
- The yearly cost of a loan expressed as a percentage, including the interest rate and (depending on the lender and loan type) certain fees. It's the figure most useful for comparing offers, since it reflects more than the sticker interest rate alone.
B
- Balloon payment
- A large lump-sum payment due at the end of some loan terms, after smaller regular payments haven't fully paid off the balance. Uncommon in standard chattel or mortgage products, but worth checking for on unusual seller-financing terms.
C
- Chattel loan
- A loan secured by the manufactured home itself as personal property, rather than by real estate. Used when the borrower doesn't own the land — most commonly homes placed in leased-lot communities.
- Community (manufactured home community)
- A development where individual homeowners own their manufactured home but lease the lot it sits on from a community operator. Sometimes still called a 'trailer park,' though the industry has moved away from that term.
- Credit tier
- A lender's bucket for borrower credit quality (commonly labeled something like Excellent, Good, Fair, and Building/Poor), used to set the interest rate offered. Exact score cutoffs vary by lender.
D
- Debt-to-income ratio (DTI)
- The share of your gross monthly income that goes toward debt payments, including the new home loan. Lenders use DTI, alongside credit and down payment, to judge how much loan you can reasonably carry.
- Depreciation
- A decline in an asset's value over time. Manufactured homes titled as personal property (chattel) often depreciate similarly to vehicles, especially early on — one reason chattel loans carry more lender risk, and higher rates, than mortgages on appreciating real estate.
- Down payment
- The portion of the home's purchase price paid upfront, in cash, rather than financed. A larger down payment lowers the loan amount, often improves the rate offered, and reduces total interest paid.
E
- Escrow
- A third-party account that holds funds — often for property taxes and insurance on mortgage loans — and disburses them on the borrower's behalf. Less common on chattel loans, more standard on real-property mortgages.
F
- FHA Title I
- A federal loan-insurance program for manufactured homes (and manufactured home lots), usable whether or not the home is on owned land. Program terms and limits change periodically — confirm current terms with a HUD-approved lender before relying on them.
- FHA Title II
- A federal loan-insurance program that can cover manufactured homes permanently affixed to land the borrower owns, treated as real property — closer to a standard FHA mortgage than Title I. Eligibility depends on foundation, titling, and other requirements that change periodically — verify current terms with a HUD-approved lender.
- Foundation certification
- An engineer's certification confirming a manufactured home is permanently and properly affixed to its foundation, meeting the standards (often HUD's) required for the home to be titled and financed as real property.
H
- HUD Certification Label (data plate / HUD tag)
- A metal plate affixed to a manufactured home certifying it was built to the federal HUD Code. Lenders and insurers look for this tag; its absence, or a home built before the Code existed, materially limits financing options.
- HUD Code
- The federal Manufactured Home Construction and Safety Standards, in effect since June 15, 1976. It's the reason 'manufactured home' (post-1976, HUD Code-built) and 'mobile home' (commonly, pre-1976) are treated differently by lenders, even though people use the terms interchangeably in conversation.
L
- Land-home package
- A single financing arrangement covering both the purchase of land and a manufactured or modular home to be placed on it, typically structured as a construction-to-permanent loan.
M
- Manufactured home
- A home built entirely in a factory to the federal HUD Code (in effect since June 15, 1976) and transported to its site. The modern, legally precise term for what's often still called a 'mobile home' in everyday speech.
- Mobile home
- Technically, a factory-built home constructed before June 15, 1976, predating the HUD Code. Colloquially, many people use 'mobile home' for any manufactured home — but the legal distinction matters for financing eligibility.
- Modular home
- A factory-built home constructed to state and local building codes (not the federal HUD Code) and installed on a permanent foundation. Modular homes are usually financed like site-built homes, with more mortgage options than manufactured homes.
O
- One-time close (construction loan)
- A construction-to-permanent loan structure with a single closing that covers both the construction/purchase phase and the resulting long-term mortgage, avoiding a second round of closing costs.
P
- Park approval
- The process by which a manufactured home community's management approves a resident's home purchase, application, or move-in — separate from, and in addition to, lender loan approval. Some lenders require park approval before funding a chattel loan.
- Permanently affixed
- A home installed on a permanent foundation in a way that removes its ability to be easily relocated — typically a prerequisite for titling a manufactured home as real property and qualifying for a mortgage.
- Personal property
- Movable property not permanently attached to land — the classification used for manufactured homes financed via chattel loan, similar in concept to how a vehicle is titled.
- Pre-HUD home
- A factory-built home constructed before June 15, 1976, and therefore not built to the federal HUD Code. Financing, insuring, and in some jurisdictions placing these homes is significantly harder than for HUD Code homes.
- Principal
- The original amount borrowed (or the remaining unpaid balance), not counting interest. Monthly payments are split between reducing principal and paying interest.
R
- Real property
- Land, plus anything permanently attached to it — including a manufactured home that's been affixed to a foundation and titled accordingly. Real property is what a mortgage is secured against.
- Refinance
- Replacing an existing loan with a new one, usually to get a better rate, change the term, or (for manufactured homes) convert a chattel loan into a mortgage after acquiring the underlying land.
- Retailer financing
- A loan arranged through the manufactured home retailer or dealer at the point of sale, often via a partner lender. Convenient, but worth comparing against an independent chattel lender's rate before signing.
S
- Site lease (ground lease)
- The rental agreement between a homeowner and a manufactured home community for the lot the home sits on. Site lease terms, fee increases, and renewal rules can affect financing and resale.
- Skirting
- The material enclosing the space between a manufactured home's floor and the ground, hiding the chassis and utilities. Some lenders and communities require skirting as a condition of financing or approval.
T
- Title (certificate of title)
- The legal document establishing ownership. Manufactured homes financed as personal property carry a vehicle-style certificate of title; homes converted to real property have that title retired and are instead recorded with the land's deed.
- Two-time close (construction loan)
- A construction-to-permanent loan structure with two separate closings — one for the construction/purchase phase, another when it converts to the permanent mortgage — typically with two sets of closing costs.
U
- USDA loan
- A federal loan-guarantee program supporting home purchases (including some manufactured and land-home purchases) in eligible rural areas, generally requiring little or no down payment for qualifying borrowers. Eligibility rules change periodically — verify current requirements before relying on them.
V
- VA loan
- A federal loan-guarantee program for eligible veterans, service members, and some surviving spouses, which can apply to manufactured and land-home purchases under program-specific requirements that change periodically — verify current eligibility rules before relying on them.