Manufactured Home

A manufactured home is a dwelling built in a factory, then transported and assembled on its final site. In Canada, how such a home is financed depends less on how it was built than on how it is attached to the land and who owns that land.

Modular, mobile, and the title question

Factory-built housing covers a range. A modular home is assembled on a permanent foundation, usually under provincial building codes, so it is commonly treated like a site-built house: it is affixed to the land and registered on title with it. A manufactured or mobile home built to the CSA Z240 standard may instead sit on a leased pad in a land-lease community. Where the unit is never permanently affixed, it can remain personal property rather than part of the real property.

Chattel loan vs mortgage

When the home is affixed to land you own, a lender can register security against the land and building, so ordinary mortgage financing and mortgage default insurance may be available. When it is not affixed, or the pad is leased, the lender typically takes a chattel loan, registered against the home itself as personal property under provincial personal property legislation. Chattel loans commonly come with shorter amortizations, higher rates, larger down payment requirements, and a smaller pool of lenders, and they may not be insurable under federal default insurance programs.

Why it matters to a borrower

• Cost of borrowing: chattel financing generally costs more than a comparable mortgage, because the lender's security is weaker and harder to resell.
• Loan-to-value: the loan-to-value ratio on a chattel loan is often capped below typical mortgage limits, so your down payment must be larger.
• Resale: an unmortgageable home narrows the pool of buyers, and some lenders decline to renew on leased land.

Rules vary by province, by land tenure, and by whether the unit is affixed, so the financing path is decided case by case rather than by the label on the home.