Sometimes. A note on a mobile home that sits on rented land, or on land belonging to someone else, can be sold, but only a small number of buyers take them and the discount is steep. A note where the home and the land were sold together is much easier to place.
Why the land makes such a difference
A mobile or manufactured home with no land is generally treated as personal property, like a vehicle. Where that is so, the home has a title document and a lender’s claim appears as a lien on that title, with no mortgage or deed of trust in the county land records because no land is in the deal. This kind of note is sometimes called a chattel note, chattel being the legal word for movable personal property.
Where the home is permanently attached to land the same person owns, a state may allow it to be converted to real property. The note is then secured by a mortgage or deed of trust on land and home together, and buyers treat it much like the other real estate notes in our note types guide. The process and paperwork differ by state, so a title company or an attorney is the place to confirm which kind you hold. When you send us the note details, say plainly whether the land is included, since that one fact decides which buyers we would approach. The rest of this page is about the home-only kind.
What worries a buyer about a home-only note
- The collateral can lose value. A home with no land under it ages like other manufactured goods, so the cushion behind the note can shrink while the balance is still being paid down.
- The home can be moved. Moving one is costly, but it is possible, and collateral that can leave is harder to rely on.
- Lot rent sits alongside the note. If the home is in a park and the payer falls behind on lot rent, the park owner may have rights that affect the home. A buyer who takes the home back also has lot rent to pay while they resell it.
- Repossession follows different rules. Taking back a titled home is a separate process from foreclosing on real estate, and it varies by state.
- The balance may be small. A buyer’s review and closing costs do not shrink with the note, so a small balance leaves little room.
Each of these raises the return a buyer needs, and the price comes down as that return goes up. A home-only note is a plain case of the type of property changing a note’s value.
What makes one easier to sell
Buyers of mobile home notes look more kindly on a newer home in good condition, and on a multi-section home more than an old single-section one. They prefer a well-run park with stable lot rent, or private land with a long written lease. A large down payment helps, because the payer’s own money in the home is the main protection a buyer has. So does a long record of on-time payments, both to you and to the park, and a short remaining term.
One item can undo the rest: your name has to be on the title as lienholder. If the lien was never noted there, a buyer may treat the note as unsecured.
Documents a buyer will ask for
- The note, and the security agreement if there is one.
- A copy of the title showing your lien.
- The home’s year, make, size and serial number.
- The lot lease, or the park’s name and current rent.
- Your payment ledger and proof the home is insured.
- Proof that any tax charged on the home where you live is paid.
If the offers are too low
Keeping the note may be the right answer. A steep discount means a sale hands over a large share of what a reliable payer would otherwise pay you over the remaining years, so holding it can leave you with more. You could also ask the payer whether an early payoff is possible, or look at selling only some of the payments, though buyers who do partials on home-only notes are scarce.
If you hold on, keep in order the things a later buyer would ask about: insurance on the home with you named as lienholder, a ledger of every payment, and your lien on the title. Ask the payer to keep the home up as well, because the condition of the property counts toward the note’s value whenever you do sell.
Related questions
What if the home is on land the payer owns but my note only covers the home?
Then your collateral is still only the home. A buyer will treat it as a home-only note unless the land is added to the security, which needs the payer's agreement and proper documents. An attorney or title company can explain what your state requires.
Does the park owner have to be involved in the sale of my note?
Not in the sale itself. Expect a buyer to confirm the lot rent, whether it is current and the park's rules on approving residents, which means they will contact the park during their review.
My name is not on the title as lienholder. Can I still sell?
It makes a sale much harder, because a buyer may see the note as unsecured. Ask the agency that issues home titles in your state how to have your lien added, then gather your documents again.