Mortgages for Modular Homes

When financing a new construction home, financing companies do not discriminate between a modular home on a permanent foundation and a site-built new home.

2 Most Common Mortgage Options for A New Home Build:

  1. Traditional Mortgage – Some builders will sell the land and house in a more traditional manner. In this case, you would agree on a contract, submit a downpayment, and then upon completion, your traditional mortgage would kick in. This time of mortgage for a new home is more common in builder-run developments or with builder spec. homes.
  2. Construction Mortgage –¬†With a construction mortgage, a loan is borrowed to finance the construction of a home. The funds are advanced incrementally during construction in what are commonly called draws. Typically, only interest is paid during the construction period. Once construction is completed and the home-buyers have occupancy, the loan will convert to a traditional mortgage and mortgage payments will begin. With a construction mortgage, there are a few more details to submit, such as completed house plans, estimates, and copies of permits etc.When entering into a construction mortgage, the longer the time-frame of the build, the more interest that will be paid. This is a good reason to choose a factory-built home as it cuts down on construction time.

Something Else To Consider When Thinking About Mortgages:

Of course, the larger your down payment the better. If your down payment is 20% or above, it will be easier to qualify for conventional financing, however, a lower down payment usually has a few extra CMHC rules and requirements to meet, and will include higher insurance rates to ensure financial security for the mortgage lender.


Many modular home construction companies in Canada work with certified mortgage brokers to help you find the financing to build a modular house.

If you are considering financing a custom-build modular house, talk to us, we can help point you in the right direction, so you can own the custom modular home built just the way you like it.