Can I Get a Mortgage on a Prefabricated Home?

If you’re considering buying a prefabricated home, you’re probably wondering how mortgage lenders will view these types of properties, and whether securing a mortgage for a prefabricated home is as straightforward as it is for a conventional home.

With today’s growing desire for sustainable, affordable living, modern prefabricated houses are quickly gaining popularity across the UK. These new and unique home set-ups can offer faster build times, lower energy costs, and innovative designs.

But can you get a mortgage on a prefabricated house?

In this article, we break down everything you need to know about securing a mortgage for a prefabricated home. From the different types of prefab housing and lender criteria to the different loan types and most common challenges. Let’s get started.

What Are the Different Types of Prefab Homes Available?

First and foremost, if you’re considering a prefabricated home, then you need to know that not all prefab properties are the same. In fact, there are several different types of prefabricated homes, each with their mortgage eligibility criteria.

Understanding the key differences can help you explore your mortgage options, assess the risks, and find the most suitable lender for your tailored needs. Let’s take a look at the three most common types of prefab homes to get started, including:

Modular Homes

Modular homes are built in sections and are typically transported to the final site, where they are assembled on a permanent foundation. Modular builds are often high quality, energy-efficient, and can look like a modern lick of fresh paint on a traditional house

Most importantly, Modular Homes must reach the same building standards as traditional homes – making them very attractive to lenders. Consequently, there are a wide range of mortgages for modular homes, often qualifying for many of the same mortgages as you would for a standard residential mortgage.

Manufactured Homes

Unlike modular homes, manufactured homes are usually built on a fixed steel chassis and will likely not be placed onto a permanent foundation. While they are similarly constructed off-site, manufactured homes typically follow a different set of building codes.

Because manufactured homes follow a different set of building codes and are not built on permanent foundations, lenders are likely to consider mortgage applications for manufactured homes as higher-risk applications.

That being said, there are still lenders and specialist lenders on the market today who may review and approve your specific case – particularly if the manufactured home has been upgraded or secured to land that you own.

Mobile Homes

Mobile homes are – as the name suggests – mobile, and they are typically classified as personal property rather than real estate.

As such, it is extremely rare to be able to qualify for standard mortgage products if you’re looking to purchase a mobile home. Instead, lenders may offer what is called a chattel loan. A chattel mortgage loan is a specific type of loan that is secured against tangible property as collateral. These types of loans can be tailored to vehicles, machinery, and much more – specifically including mobile homes.

It is important to note that chattel mortgage loan eligibility can also depend on whether the mobile home is permanently attached to land, has proper utility connections, and meets local zoning laws.

What Are the Lender Requirements for Financing a Prefab Home?

Lender requirements are typically based on risk assessments. That is to say, most lenders will fundamentally want proof that:

• You can reliably afford the agreed upon repayments of your mortgage terms
• The property or purchase retains its value in the event of a default

Typically, the problems with prefabricated houses will often come down to how the property is classified, built, and situated. As such, securing a mortgage on a prefabricated home can be more complex than for a traditional build.

That’s because lenders have specific criteria they use to assess risk – and problems with prefabricated houses often come down to how the property is classified, built, and situated.

In addition to assessing your personal financial circumstances, in order to qualify for prefab mortgage loan, most mortgage lenders for prefabricated houses will evaluate the following:

Foundation Type

Lenders will favour prefabricated homes that are permanently installed. Prefabricated houses that are placed on a permanent foundation – such as a concrete slab or crawl space – are far more likely to be treated as standard real estate, reducing the overall risk to lenders.

Conversely, unstable or unconventional foundations – such as wooden piers, blocks, or temporary footings – will be much more susceptible to movement, weather damage, and deterioration over time. As such, in the event of a repossession, these factors will make the home considerably harder to resell.

Home Classification

The main question lenders will be asking: Is your home classified as real estate or personal property?

For a lender to offer a mortgage, your prefab home must typically be titled as real estate. If it’s still classified as a vehicle or chattel, you’ll likely need a different type of loan – typically a chattel loan – or you may need to convert the classification first.

Utility Connections

For a prefabricated home to be considered eligible for a mortgage application, it must be fully connected/have access to essential utilities. These include:

• Running water
• Electricity
• A permanent sewage system

These connections are a key indicator that the property is liveable, functional, and meets minimum standards for residential occupancy.

In the context of a traditional mortgage loan, lenders are unlikely to approve any mortgages on any type of property that needs to rely on temporary or non-standard utility setups, such as generators, water tanks, or chemical toilets.

Zoning Laws

Local zoning laws play a big part in a lender’s decision. In the UK, local councils enforce zoning and planning regulations that determine where and how different property types can be built.

Some areas in the UK, particularly urban locations, conservation zones, or Areas of Outstanding Natural Beauty (AONBs), may impose restrictions on modern prefabricated houses. This is ordinarily  due to concerns over design uniformity, environmental impact, or infrastructure limits.

If a prefabricated home does not meet local planning requirements or lacks the correct residential planning permission, lenders may view it as higher risk and could reject the mortgage application.

What Should I Know Before Getting a Mortgage for a Prefab Home?

If you’re set on securing a mortgage for a prefabricated home, it is essential that you have a clear understanding of what financing options are available to you before you apply.

In short: While these properties may look and function like traditional homes, lenders will often apply a much stricter criteria than a traditional mortgage.

Step 1) Speak to a Trusted Mortgage Broker Early

Working with a trusted mortgage broker from the start will help streamline your entire mortgage application, placing you in the front seat of all the latest mortgage products that are on the market today.

At Boon Brokers, our dedicated team of mortgage advisers will assess your situation, identify any potential issues, and guide you through the entire mortgage process, from start-to-finish. We can match you with lenders who specialise in prefabricated housing and improve your chances of approval.

Step 2) Confirm the Property is Classified as Real Estate

For a prefab home to qualify for a standard mortgage, it must be legally recognised as real estate property. Ensuring the property is classified as real estate will not only greatly increase your mortgage options, but it may also lead to better interest rates.

Step 3) Get an Accurate, Specialist Appraisal

While the lenders may choose to complete their own valuation during the complete application process, having an independent valuation is a vital part of the mortgage process. Make sure your home is appraised by someone with experience in modern prefabricated houses, as they’ll understand the nuances in design, construction, and long-term value.

Step 4) Choose the Right Lender

The reality is that not all lenders are willing to finance non-standard properties. Making sure that you research which lenders have experience with prefabricated homes can ensure you secure a mortgage deal that matches your financial goals.

Working with a trusted whole-of-market mortgage broker – like Boon Brokers – can provide you with complete access to a wide range of lenders. Our dedicated mortgage advisers will be able to compare mortgage deals that are tailored to your needs, presenting you with the best mortgage products that are on the market today.

Step 5) Gather the Correct Documentation

In addition to the standard mortgage paperwork, you may need to provide foundation certificates, title information, and evidence of utility connections or planning permission. Having these ready can prevent costly delays.

Once again, working with a trusted and regulated mortgage broker can help you understand exactly what your lender will require. At Boon Brokers, our dedicated advisers will help order all the documentation you will require for your application and send this to your chosen lender in a professional format.

Why Use a Mortgage Broker When Buying a Prefab Home?

Buying a prefabricated home should be an exciting time, but with the increased lending stipulations and documentation requirements,  the mortgage process can feel overwhelming.

Enter an experienced mortgage broker…

Established and reputable mortgage brokers understand the complexities involved in financing non-standard properties. Specifically, whole-of-market mortgage brokers – like Boon Brokers- have access to a wide panel of lenders, many of whom aren’t available directly to consumers. This gives you a stronger foundation to find mortgage options that are truly tailored to your individual circumstances.

In essence, a good mortgage broker won’t just search for the lowest rate – they take time to understand your goals, match you with eligible lenders, and personally ensure that all the documentation is submitted correctly.

With a trusted whole-of-market mortgage broker in your corner, you’ll be able to focus on what matters and safely avoid any pitfalls that could delay or derail your application.

Our team understands the unique lending criteria associated with prefabricated homes, from foundation and classification requirements to planning and utility considerations. By choosing Boon Brokers, you benefit from industry experts, whole-of-market lender access, and a commitment to securing the most appropriate outcome for your property finance needs.

How to Find a Mortgage Broker Specialising in Prefab Homes

When it comes to securing a mortgage for a prefabricated home – you want to work with a broker who has industry knowledge, understands lender expectations, and can confidently support your application from start to finish.

Don’t worry – we’re here to help.

Boon Brokers is a trusted, fee-free mortgage brokerage with a strong track record in securing mortgages for non-standard properties, including modular, manufactured, and mobile homes.

We provide expert mortgage advice – completely free. Our whole-of-market service allows our dedicated mortgage advisers to compare mortgage products across a broad range of lenders, finding you the perfect mortgage for your needs.

Whether you’re at the research stage or ready to apply, we’re here to help you move forward with confidence.  Contact Boon Brokers today and arrange a free, no-obligation consultation, to start your mortgage journey.