Modular Home Financing – What are My Options?

modular home financing

While there are several options for modular home financing, the important thing to remember is that we can help you get financing! Please reach out if you have any questions about this. We have many lenders who are ready to get you approved for your new modular home loan, and we would love to send you some great options.

There are a lot of things to think about when considering building or buying a new modular home. Probably the most pressing question on everyone’s mind is “how do I pay for this”?  Modular home financing will differ from one person to the next. It is important to be informed of your options. So what are they?

Modular Home Financing Options

Most homeowners pay for their modular homes in one of three ways.


The most common way for people to finance their primary residence is by far the traditional loan (“traditional” meaning a conventional construction loan. Read more about construction loans here). Banks are typically happy to lend money for primary residences because people are highly motivated to keep current on payments in order to preserve the equity they have in their home by avoiding a foreclosure. People who own their own homes are also more likely to take care of the residence, and typically want to stay in their home medium to long term. And due to this, conventional construction loans are among the most popular types of modular home loans.

Getting a traditional mortgage to build your new prefabricated home will require gathering a lot of paperwork, but it is well worth the effort.

Typically, the bank will want to gather these items from you for modular home financing.

  • A “personal financial statement” – this is a document in which you list all your income, assets, current loans (including car loans) and other monthly payments and liabilities. It gives the bank a quick overview of your financial health.
  • Pay stubs for the last couple weeks/months – they will call your employer to verify employment and salary.
  • Bank statements for the past few months – the bank wants to know if you are able to consistently save money as you earn it.
  • 2 – 3 years worth of tax returns – this will give the bank a good idea of your historic financial health and will help them determine how much of a loan you can afford.
  • A credit report – they won’t get this from you directly, but you will have to agree to let them run your credit score in order to qualify for a loan.
  • Other documentation/references – depending on the bank and on your personal situation they may ask for other personal or work references, verification of non-work-related income such as child support or SSI payments, or any number of additional items.


There are many great government backed loan options available today. An FHA Construction Loan has a 3.5% minimum down payment requirement, and the VA and USDA Construction Loans have options for a ZERO down construction loan! Other than the down payment amounts, these loan options have basically the same underwriting requirements as a traditional loan. We have contacts with many lenders who are ready and willing to get you financed, so contact us today to get started on this modular home financing option.


If you can swing it, the all-around easiest way to finance your new prefab home purchase is by paying cash. Paying cash eliminates closing costs, mortgage interest, appraisal fees, and a HUGE pile of paperwork. When you get a mortgage the bank is going to make sure to do their due diligence on you before handing over large chunks of cash, and you can be certain that they are very thorough! The bank or lending institution you seek to work with will require some documentation for your modular home loan including:

  • Personal Financial Statement
  • Pay Stubs
  • Prior Bank Statements
  • Work References
  • A Good Credit Score

There may be other items depending on the bank. Once they get ALL this information from you, there is still no absolute guarantee that they’ll finance the home for you until the day you actually close on the loan. Paying cash for your home eliminates all of this! That said, we understand that only a small portion of our customers are able or even want to pay cash (even if they have the money), so most likely you will be financing your new home using one of the methods above.


Now that you’re armed with the proper knowledge, let’s get started today!

At Next Modular, we know that choosing a home is one of the most important decisions you will make. As an experienced modular home builder, we are committed to being your guiding light through this process.

If you need a modular home built near Goshen IN, or anywhere else in Indiana or Michigan, call Next Modular at (574) 334-9590.


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