What is a mortgage on manufactured homes and when does it apply?
A manufactured home mortgage is a loan secured against an industrial home, provided it is anchored to the ground and comply with the regulations to be a real estate. Applies when the house is built with a project, license, and is registered in the Property Registry.
In practice, many banks process it as self-promotion mortgage: They finance the construction in phases, and upon completion, it becomes a "normal" mortgage. If the house is mobile or not secured with a foundation, it cannot be mortgaged; in that case, the financing is usually a personal loan.
Quick Tip: Before comparing offers, confirm with the manufacturer that the home complies with CTE (Technical Building Code) and will be delivered with final work certificate and first occupancy license. More technical information: Technical Building Code.
Requirements or keys that you must meet
You need suitable land, an approved project and licenses; and the bank must accept the operation as self-promotionWithout a foundation and registration, there is no mortgage on the house.
Land and urban planning legality
- Be the holder of the developable or urban land.
- That the planning allows for residential use and the prefabricated typology.
- Building permit granted by the City Council.
- Geotechnical and foundation project suitable for the modular system.
Prefabricated housing and technical documentation
- Project written by architect and visa.
- Facultative direction (architect and surveyor).
- Contract with the manufacturer/construction company, with payment milestones and qualities.
- In the end: final work certificate, certificate of habitability or first occupancy license and registration.
Bank and usual conditions
- Self-promotion mortgage with provisions for certifications.
- Financing on the minor between appraisal of the finished home and budget, with limits (typically 70–80%).
- Own contribution for land, taxes and part of the work.
Feasibility micro-checklist
- Will the house go with fixed foundation and anchors? Yes/No
- Do I have suitable land Or will I have it before applying for the mortgage? Yes/No
- Does the manufacturer deliver? approved project and does it comply with the CTE? Yes/No
- Can I cover the 20–30% contribution and expenses? Yes/No
- The manufacturer's payment schedule fits with the bank's provisions? Yes/No
A typical case: Ana had the land and a budget agreed upon with her modular manufacturer. The bank accepted the transaction as a self-promotion because the house was anchored to a foundation, met the CTE (Construction and Construction Code) and would be registered in the Registry.
Reference guide for bank customers: Bank Customer Portal (Bank of Spain).
How to do it step by step
The safest route is to close the technical, legal, and financial processes in parallel. These steps avoid blockages and cost overruns.
- Analyze the terrain: urban planning qualification, setbacks, connections and basic geotechnical study.
- Define the project: Choose the manufacturer, configure the model and finalize the specifications and budget.
- Project visa and license: Your architect presents the project and you obtain the municipal license.
- Apply for a self-promotion mortgage: Provides land title, project, license, and budget. Requests an appraisal of the finished home.
- Signature and first provisions: The bank sets milestones (foundation, structure, closure, finishes, etc.). You receive payment based on certifications.
- End of work and discharge: final certificates, first occupancy license, supply registration and registration in the Registry.
- Novation to definitive mortgage: The construction loan is transformed into a mortgage for a finished home with a standard installment.
Practical tip: coordinate with the manufacturer so that your payment schedule coincides with the certifiable milestones by the technician, so the bank can release funds in time.
Options or alternatives (brief comparison)
If you're not eligible for a self-promoted mortgage, there are alternative options: extending a mortgage on another home, a personal loan, or a plan with the manufacturer. Choose based on the amount, term, and repayment capacity.
| Option | What is | Pros | Cons | When to use |
|---|---|---|---|---|
| Self-promotion mortgage | It finances the work in phases and then converts into a normal mortgage. | Lower rates, high amounts, long terms. | Technical paperwork, milestone arrangements, initial contribution. | Housing with foundations and registration; you have land/license. |
| Mortgage on completed home | Turnkey purchase, already registered and habitable. | Simple processing, single release. | Only if the house is already finished and registered. | Purchases from developers with completed work. |
| Personal loan | Credit without real guarantee on the house. | Speed, fewer technical requirements. | High rates, short terms, limited amounts. | Mobile homes or small amounts. |
| Mortgage on another home | You expand or remortgage your current home to finance the prefabricated one. | Mortgage types, higher amounts. | Risk on your current home. | You have assets and need immediate liquidity. |
| Manufacturer's Payment Plan | Split calendar directly with the company. | Simplicity, aligns with manufacturing. | It's not financing; it requires your own funds or separate credit. | When the bank takes its time and the cost is affordable. |
If you are hesitating between two options, ask your bank for one. pre-approval and the manufacturer a schedule compatible with certifications. General resource on loan types: financing (Bank of Spain).
Costs/benefits and what's worth it
Self-promoted mortgages are usually more affordable due to their rates and terms. In return, they require more documentary control and require you to contribute part of the cost upfront.
Usual costs
- Land: purchase, taxes and notary (not always financeable).
- Project and licenses: technical fees, rates and construction taxes.
- Construction site: foundation, modules, transport, assembly, connections.
- Mortgage: appraisal, opening commission (if any), interest during the work.
- Legalization: completion of work, first occupancy, registration and supplies.
Key benefits
- Rate of interest lower than a personal loan.
- Long term and affordable fee after delivery.
- Mortgage consumer protection and option of early repayment.
What compensates in each case?
- If your house is modular with foundation and you're going to register it: it almost always compensates for the self-promotion.
- If it is mobile or temporary: consider a personal loan or mortgage on another home.
- If the bank doesn't arrive on time: use equity and synchronizes with the first bank provision.
Realistic example: Luis and Marta had 30% in savings and the land paid off. The bank loaned them 75% of the construction cost, releasing funds in four installments. They paid interest only on the amount borrowed and, in the end, converted to a standard mortgage with a fixed rate.
Typical mortgage costs and customer fees: mortgages (Bank of Spain).
Common mistakes and how to avoid them
The most expensive setbacks come from licensing and payment schedules. With planning, these can be avoided.
- Buying unsuitable land
Solution: Request a preliminary urban planning report and check setbacks and occupation before signing. - Failure to align manufacturer payments with the bank
Solution: fixed certifiable milestones (foundation, structure, enclosures, finish) and attach them to the contract. - House without foundation or “mobile”
Solution: Decide from the start if you want a mortgage; request foundations and anchors with a project. - Underestimating construction and licensing costs
Solution: add a 10–15% contingency and request a detailed quote. - Lack of final documentation
Solution: agree by contract the delivery of completion of construction, habitability and building book. - Ten-year insurance ignored
Solution: If you can sell in 10 years or your bank requires it, sign up from the start to avoid lock-ins.
Clear and short FAQs
Can a prefabricated house be mortgaged?
Yes, if it is anchored to the ground, has a project and license, complies with the CTE and is registered in the Property Registry. In that case, it is processed as a mortgage self-promotionIf it's a mobile home without a foundation, it's not mortgageable: it can be financed with a personal loan or other collateral.
What percentage does the bank finance on a prefabricated house?
They usually finance between 70% and 80% The lower of the appraisal of the finished home and the estimate, minus the value of the land if you already own it. You'll need to contribute savings for the remainder, as well as for licensing, technical, and deed fees.
Can I include the land in the mortgage?
It depends on the bank and the timing. If you've already paid for the land, it's taken into account in the appraisal of the final project. If you buy it now, some banks allow you to include it in the self-promotion transaction, although the financeable percentage of the land is usually more conservative.
How are funds released in self-promotion?
By construction milestonesAfter technical certification: foundation, structure/modules, enclosures, installations, and final finish. The bank performs an appraisal or inspection visit at each stage and releases the agreed percentage. This way, you pay interest only on the capital drawn down.
What documentation will the bank ask for?
Land title, approved project, building permit, contract with manufacturer, detailed budget, geotechnical study, appraisal, ID and income. Finally, a certificate of completion of work, habitability or first occupancy, and registration to convert to a permanent mortgage.
Do I need ten-year insurance on a manufactured home?
As a self-builder for your own use, it's not always mandatory. However, some banks require it, and it will be necessary if you plan to sell the home within 10 years. Confirm this with your bank and the technician from the start of the project.
What if the house is mobile or on wheels?
It is not considered real estate and it is not mortgageableTypical financing options include a personal loan, a rental agreement, or a mortgage on another property as collateral. Also, check municipal regulations for mobile home installation and the required permits.
Is the appraisal done before construction?
Yes. A is performed off-plan appraisal of the finished home, using the project, specifications, and land value. The appraiser or agency then verifies in stages that the work is progressing according to the project in order to release funds.
How long does the whole process take?
From closing project and license to moving, a realistic timeframe is several months, depending on municipal procedures, manufacturing, and assembly. Bank approval usually takes weeks; plan for the first payment to coincide with the start of the foundation and assembly.
Can I start the work without a mortgage?
It's not recommended. Without an approved mortgage, you could run out of cash halfway through the project. The prudent thing to do is to have pre-approval, favorable appraisal and schedule of provisions agreed with the bank and the manufacturer before starting work.
Key ideaIf your prefabricated home will be a registered property, a self-promotion mortgage is usually the most solid option. Next step: Validate the land, project, and deadlines with your architect and request bank pre-approval with an off-plan appraisal.
