FHA Single Family Housing Policy Handbook 4000.1, Part II — b. Allowable Loan Parameters (03/29/2024)

FHA Single Family Housing Policy Handbook 4000.1, Part II — b. Allowable Loan Parameters (03/29/2024)

b. Allowable Loan Parameters (03/29/2024) i. Maximum Loan Amounts All Loans are subject to loan amount limits based on all of the following: • Nationwide Loan Limits; • Minimum Cash Investment (MCI); • Minimum Decision Credit Score limitations; • maximum Loan-to-Value (LTV); and • LTV calculation applicable to the transaction type. Unless explicitly stated for a transaction type, the loan limits apply to all property types and loan purposes. (A) Nationwide Loan Limits The final Loan amount must not exceed the loan limit set by HUD, which includes any portion of the Upfront Insurance Premium (UFIP) and Financeable Fees and Charges that are to be financed. The loan limits are available at Financing Manufactured (Mobile) Homes. Title I Manufactured Housing Nationwide Loan Limits are established in accordance with Title I Section 2(b) of the National Housing Act based upon loan type: II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1030 Last Revised: 11/26/2025 • Manufactured Home Loan (Single-section), $105,532 • Manufactured Home Loan (Multi-section), $193,719 • Combination Loan (Single-section), $148,909 • Combination Loan (Multi-section), $237,096 • Manufactured Home Lot Loan, $43,377 The Nationwide Loan Limits will be reviewed annually and adjusted accordingly. (B) Required Investment (1) Total Required Investment Total Required Investment refers to the amount the Borrower must contribute to the transaction including the Borrower’s downpayment and the Borrower-paid transaction costs. The Total Required Investment includes the MCI. (2) Minimum Cash Investment Minimum Cash Investment (MCI) refers to the Borrower’s contribution in cash or its equivalent required, which represents at least 5 percent of the total purchase price for a maximum LTV of 95 percent. The MCI for a Borrower with a credit score of 500 and below will be 10 percent of the total purchase price. When the credit report reflects that a score is not available from any of the three credit reporting agencies, and non-traditional underwriting demonstrates that the Borrower has satisfactory credit, then an MCI of at least 5 percent of the total purchase price is required. See Credit Requirements for credit report requirements. Credit Score Minimum Downpayment Maximum LTV Above 500 5% 95% 500 and Below 10% 90% (C) LTV Limitations Based on Borrower’s Credit Score The Lender must review the credit report to determine the Borrower’s Minimum Decision Credit Score (MDCS). The MDCS will be used to determine the maximum insured financing available to a Borrower with traditional credit. The table below describes the relationship between the Borrower’s MDCS and the LTV ratio for which they are eligible. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1031 Last Revised: 11/26/2025 If the Borrower’s Minimum Decision Credit Score is... Then the maximum Loan-to- Value is... Above 500 95% 500 and below 90% (D) Calculating the Loan-to-Value The Lender must calculate the LTV to determine the maximum Base Loan Amount, which is the amount prior to adding in the Upfront Insurance Premium (UFIP). The Base Loan Amount may be increased by the financed UFIP amount, but must not exceed the Nationwide Loan Limits. The LTV is calculated according to the specific loan purpose. (E) Calculating the Maximum Loan Amount Purchase Transactions (1) Maximum Base Loan Amount for New Manufactured Home The maximum Base Loan Amount is determined by applying the LTV (95 percent or 90 percent) to the sum of the following amounts: • 130 percent of the sum of the wholesale (base) price of the home plus eligible itemized options, including the charge for freight, as detailed on the Manufacturer’s Invoice; • sales tax to be paid by the Borrower, as detailed in the retail sales contract; • Dealer’s actual cost of transportation to the home site, set-up and anchoring, including the rental of wheels and axles (if not included in the freight charges); • Dealer’s actual cost for skirting, garage, carport, patio, or other appurtenance, and for purchase and installation of a central air conditioning system or heat pump (if not installed by the manufacturer); and • Financeable Fees and Charges. (2) Maximum Base Loan Amount for Existing Manufactured Home The maximum Base Loan Amount is determined by multiplying the appropriate LTV factor (95 percent or 90 percent) to the lesser of: • the appraised value of the home as described in the sales contract, including any Eligible Options and Accessories itemized in the sales contract or documented in the file; or • the purchase price of the home, including costs to the Borrower for all items described in the sales contract and any Eligible Options and Accessories as documented in the file. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1032 Last Revised: 11/26/2025 (3) Eligible Options or Costs Eligible options or costs include: • sales tax to be paid by the Borrower, as described in the sales contract; • actual costs of transportation to the home site, setup and anchoring, including the rental of wheels and axles (if home is being relocated); • actual cost for new skirting, garage, carport, patio, or other appurtenance, and for purchase and installation of a central air conditioning system or heat pump; • actual cost of running and connecting electric power lines to the home, but only for borrower-owned land; and • Financeable Fees and Charges in the Loan. (4) Ineligible Costs Ineligible costs cannot be financed into the loan amount. Ineligible costs include furniture, personal items (rugs, draperies, lamps, etc.), small appliances that are not part of the Property (toasters, TVs, etc.), and the purchase of wheels and axles. (F) Required Documentation for LTV Calculation The case binder must contain: • a summary page that itemizes the expenses and reflects calculations used to determine the LTV ratio; and • the supporting documents for itemized costs, as applicable: o sales contract; and o receipts or invoices to evidence actual cost of allowable items, when not reflected in the sales contract. ii. Loan Term (A) Minimum Loan Term The minimum loan term for all property types and purposes is six months. (B) Maximum Loan Term The maximum term is limited according to the type of Property secured. The maximum loan term for a single-unit Combination Loan may not exceed 20 years and 32 Days from the date of the Loan. The maximum loan term for a multi-unit Combination Loan may not exceed 25 years and 32 Days from the date of the Loan. Property Type Maximum Loan Term Manufactured Home 20 years, plus 32 Days II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1033 Last Revised: 11/26/2025 Property Type Maximum Loan Term Manufactured Home Lot 15 years, plus 32 Days Single Unit Manufactured Home and Lot 20 years, plus 32 Days Multi-Unit Manufactured Home and Lot 25 years, plus 32 Days iii. Loan Insurance Premiums FHA collects a UFIP and an annual insurance premium charge for eligible Loans originated under the FHA Title I Manufactured Home Loan program. (A) Upfront Insurance Premium (1) Upfront Insurance Premium Amount FHA’s Manufactured Home insurance program requires the payment of UFIP, which may be financed into the Loan. The UFIP is 2.25 percent of the Base Loan Amount. The UFIP charge may be financed into the Loan in full or in part, provided that the Total Loan Amount does not exceed the Nationwide Loan Limits. If all or part of the UFIP exceeds the Nationwide Loan Limits, the Borrower must pay the excess in cash. Unless otherwise stated in this section (Underwriting the Transaction), restrictions to loan amounts and LTVs are based upon the amount prior to the financing of the UFIP (Base Loan Amount). The Total Loan Amount may be increased by the financed UFIP amount. (2) Refund and Credit of Upfront Insurance Premium FHA will only refund the UFIP if a Loan is not endorsed for insurance. The refund will be returned to the Lender who must apply the refund to the principal balance of the subject Loan. (B) Annual Loan Insurance Premium The periodic loan insurance premium is an annual loan insurance premium that is payable monthly. The loan insurance premium charge is 1 percent of the remaining principal balance, based upon the Loan’s scheduled amortization. The loan insurance premium must be paid for the full term of the Loan unless the Loan is prepaid in full or the Lender files a claim with FHA. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1034 Last Revised: 11/26/2025 (C) Lender Responsibilities (1) Insuring an Advance of Credit Manufactured Home Loans may be evidenced by advances of credit, such as retail sales installment contracts, in which the Borrower(s) agrees to pay the Dealer over a period of time. To insure an advance of credit as a Title I Loan, an FHA- approved Lender purchases the advance of credit. Because the Dealer is not eligible to insure such a Loan, Title I insurance charges cannot be included in the retail sales installment contract. (2) Passing Insurance Premiums to Borrower The UFIP and annual insurance premiums are obligations of the Lender. The Lender may pass the premium charges on to the Borrower, provided that such charges are fully disclosed. To pass the obligation to pay UFIP and annual insurance premiums to the Borrower, the Lender must obtain a signed agreement from the Borrower in which the Borrower agrees to: • an increase in the principal amount of the Loan from what is shown on the retail sales installment contract to an amount that includes both the principal amount on the retail sales installment contract and the amount of the financeable upfront insurance charge; • pay the Lender for any portion of the upfront insurance charge that cannot be financed; and • pay the Lender for the monthly insurance charge (1/12th of the annual premium) in addition to the monthly Loan Payment set in the retail sales installment contract. Lenders are free to adopt any method that does not violate applicable law, but FHA suggests that the agreement be effectuated by a rider to the retail installment sales contract, if applicable. The rider must be executed by all Borrowers on the Loan at the same time that the retail installment sales contract is executed. (D) Required Documentation (1) Borrower’s Agreement to Pay Loan Insurance Premiums The Lender’s file must contain the Borrower’s agreement to pay loan insurance premiums. The agreement may be effectuated through the form of a rider to the retail installment contract or other method, and must be signed by all Borrowers. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1035 Last Revised: 11/26/2025 (2) Rider for Insurance Premiums Loans originated by Dealers must have the Borrower execute a rider for loan insurance premiums, which authorizes the Lender to charge the Borrower for the charges. (3) Suggested Language for Rider for Insurance Premiums FHA does not supply a form for the rider. Lenders may use the suggested language as follows on their letterhead. The form must be signed by all Borrowers obligated on the Loan. RIDER – UPFRONT INSURANCE PREMIUM This rider is made this ____ day of ____________, and is incorporated into and shall be deemed to amend and supplement the retail installment sales contract of the same date given by the undersigned borrower(s) to (insert name of dealer) to finance the purchase of (insert description of the manufactured home). The loan to whom this retail installment sales contract (the loan) has been assigned will be insured against loss in the event of a borrower default by the Federal Housing Administration (FHA) of the U.S. Department of Housing and Urban Development (HUD). FHA charges the lender an upfront insurance premium at the time the loan is insured and annual premiums during the term of the loan. The lender is authorized by FHA to collect such premiums from the borrower(s), and this rider constitutes the consent of the borrower(s) to reimburse the lender for such premiums, as follows: CHECK APPLICABLE BOXES Upfront Insurance Premium Fully Financed. The upfront premium is (insert number) percent of $ ___________, the amount financed shown on the face of the retail sale installment contract, which equals $(insert number). The upfront premium, when added to the amount financed, results in a new amount financed that is equal to or less than FHA’s maximum loan amount, and therefore the upfront premium is financed in its entirety with this lender. The new amount financed is $(insert original amount financed + upfront premium). This results in an increased monthly payment. The revised monthly payment is $(insert new amount). Upfront Insurance is Partially Financed. The upfront premium is (insert number) percent of $___________, the amount financed shown on the face of the retail sale installment contract, which equals $(insert number). The upfront premium, when added to the amount financed, results in a new amount financed that exceeds FHA’s maximum loan amount, and II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs 4. Manufactured Home Loan Program Handbook 4000.1 1036 Last Revised: 11/26/2025 therefore the upfront premium is partially financed with this lender, to the extent that it results in a new amount financed equal to the FHA maximum loan amount. Borrower(s) will pay the lender the balance of the upfront premium... The new amount financed is $(insert original amount financed + financeable amount of upfront premium). As a result of the increase in the amount financed, the monthly payment is $(insert new amount). Upfront Insurance Cannot be Financed. The upfront premium is (insert number) percent of $___________, the amount financed shown on the face of the retail sale installment contract, which equals $(insert number). The upfront premium cannot be financed because the amount financed is equal to FHA’s maximum loan amount. Borrower(s) will pay the lender the upfront premium. Annual Premium Cannot be Financed The annual premiums are based upon the declining balance of the original amount financed, and thus will change every year. Borrower(s) will pay 1/12 of each annual premium each month in addition to the monthly loan payment set forth in paragraph (a). The initial monthly premium payment is $(insert number). The lender will advise the borrower(s) of each annual change in the monthly premium payment.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part II — b. Allowable Loan Parameters (03/29/2024) · source URL · snapshot 8c03836f77f317e1