Last updated: September 2026
— Quick answer
Yes — Canadians can get a mortgage on most modular and manufactured homes, and the financing options widened in 2026. CMHC's new Prefab Plus program allows insured mortgages on factory-built homes with as little as 5% down and funds advanced across up to four construction-milestone draws. Lenders typically require a valid CSA A277 sticker (modular) or CSA Z240 (mobile/manufactured), a permanent foundation, and land the buyer owns. Homes on leased land often still require a chattel loan rather than a true mortgage.
Many Canadians who look into a modular or manufactured home hear the same discouraging answer at their bank branch: your home does not qualify. That answer was often true. It is now increasingly out of date.
Canada Mortgage and Housing Corporation (CMHC) expanded its insurance rules in May 2026 to include factory-built homes, and independent brokers now have access to a much wider group of lenders willing to underwrite them. If you have been quoted a wall of confusion, or told to look at personal loans instead of a mortgage, you may simply have been talking to the wrong lender.
This guide walks through what has changed, what lenders actually look at when you buy or build a modular or manufactured home, and how to line up a mortgage that treats a factory-built home the same way it treats a house built on site. Terms like modular, manufactured, and chattel — see the full mortgage terms glossary — are defined as we go.
— Quick start: pick your path
- Building a new modular home on land you own. CMHC Prefab Plus is often the fit — insured financing with 5% down and funds advanced in stages as your build hits milestones.
- Buying an existing modular or manufactured home, land included. A standard mortgage often applies, insured or conventional, depending on your down payment.
- Home on leased land or in a land-lease community. Most banks will not issue a traditional mortgage. A chattel loan — financing the home as personal property rather than real estate — is typically the only path.
- Building modular multi-unit rental housing. CMHC's MLI Select program now covers modular construction, opening insured financing to developers on the same basis as conventional builds. If you are a first-time home buyer, start with the first lane.
— Modular, manufactured, or mobile: what lenders actually see
The confusion is understandable. "Modular," "manufactured," "mobile," "prefab," and "trailer" get used interchangeably in everyday speech, but a lender sees three distinct products.
A modular home is built in factory sections that are shipped to a site, assembled on a permanent foundation, and finished to the same National Building Code standards as a house built entirely on site. It carries a CSA A277 sticker. Most lenders treat a completed modular home as real property, no different from a stick-built house of the same value.
A manufactured home — sometimes still called a mobile home — is built on a permanent steel chassis under CSA Z240. It may sit on a foundation or on blocks. When it sits on an owned lot with a permanent foundation, some lenders will offer a mortgage. When it sits in a land-lease community or on non-permanent footings, chattel financing is usually the only option.
An older mobile home without a current CSA sticker is the hardest to finance. Many mainstream lenders decline it outright. Specialty lenders may consider it, but rates and down-payment requirements are typically higher.
| What lenders look at | Modular | Manufactured | Older mobile |
|---|---|---|---|
| CSA standard | A277 (current) | Z240 (current) | No current sticker |
| Foundation type | Permanent concrete | Permanent or blocks | Often non-permanent |
| Typical land tenure | Owner | Owner or leased | Often leased land |
| Financing type | Mortgage | Mortgage or chattel | Chattel typical |
| CMHC insurable | Yes — Prefab Plus eligible | Case-by-case | Rarely |
| Rate positioning | Tracks conventional | Conventional or higher | Materially higher |
— What changed in 2026: CMHC Prefab Plus and MLI Select
The single biggest change for individual buyers is the staged draw structure. A traditional construction mortgage is built around pouring a foundation, framing, and finishing on site. That model does not fit a factory-built home, where much of the work happens at the factory before the home ever reaches the lot.
Under Prefab Plus, funds can be released at up to four milestones. A first draw may cover buying and preparing the site. A second draw may fund the home while it is being built in the factory. A third draw may cover installation on the permanent foundation. A final draw may release at occupancy. Your lender confirms the exact schedule for your file.
For investors, the MLI Select expansion means modular multi-unit projects can now access the same insurance products as conventional builds. CMHC has pointed to an 84-unit affordable housing complex in Calgary — built and occupied in under a year — as a working example.
You can estimate the CMHC insurance cost on your own file using the CMHC insurance calculator.
— How lenders qualify a factory-built home
Five inputs decide whether a lender treats your factory-built home as real property and offers a mortgage, or treats it as personal property and offers only a chattel loan.
The CSA sticker. A current A277 sticker on a modular home opens the widest lender pool. A current Z240 on a manufactured home narrows it. No current sticker narrows it further.
The foundation. A permanent concrete foundation, poured to code, is what most mainstream mortgage lenders require. Homes on blocks, screw piles, or skirting-only setups typically fall out of standard mortgage eligibility.
Land ownership. Owning the lot the home sits on is what makes real-property financing possible. Leased land in a park or community usually pushes the file toward chattel.
The appraisal. The lender orders an appraisal that confirms the home's value and its permanence. Some appraisers specialize in factory-built product; others do not. A broker often knows which are which.
The mortgage stress test. Federally regulated lenders qualify borrowers at the greater of contract rate plus 2% or 5.25% under OSFI's Guideline B-20. That rule applies to modular and manufactured home mortgages the same as any other. When default insurance is required, it comes from one of CMHC, Sagen, and Canada Guaranty. Working with an independent broker — see why work with a broker — often shortens the search across these five inputs.
— Your step-by-step roadmap to approval
The path from first phone call to funded mortgage on a factory-built home follows a predictable sequence.
- 1Confirm the CSA classification.Ask the seller or builder for the CSA sticker number and standard. A277 or Z240 with a current sticker keeps your options open. No sticker is a red flag worth resolving before you go further.
- 2Confirm land tenure and foundation plan.Do you own the land? Will the home sit on a permanent foundation? If either answer is no, the financing conversation shifts toward chattel rather than mortgage.
- 3Pull the credit and income snapshot.A broker or lender needs your credit report, two years of income, current debts, and the down payment source. This is the same package required for any Canadian mortgage.
- 4Get a pre-approval that specifies factory-built eligibility.A generic pre-approval is not enough. Ask specifically whether the lender will finance the home type, foundation, and land tenure combination you are planning.
- 5Order an appraisal that accepts the home type.For an existing home, an appraiser familiar with factory-built product avoids surprises at closing.
- 6Choose Prefab Plus or conventional.If you are building new with less than 20% down, Prefab Plus is often the best fit. If you are buying an existing home and can put 20% down, conventional may be simpler.
- 7Close or draw through construction.For an existing home, closing looks like any other real estate transaction. For a new build under Prefab Plus, funds release across the milestones you and your lender agreed on.
Razi Khan, Founder and Mortgage Broker at Pegasus, and the team walk clients through this sequence one file at a time — including the harder cases where a big-bank branch has already said no.
— Costs, rates, and down payment: what to budget
For an insured mortgage — under Prefab Plus or on an existing modular home — the 5% minimum down payment applies to the first $500,000 of the purchase price under CMHC rules, with 10% required on the portion above. This is the same tiered structure as any other insured mortgage in Canada. Insurance premiums from CMHC, Sagen, or Canada Guaranty are added to the loan and repaid over the amortization.
For a conventional mortgage — 20% down or more — you avoid default insurance, but the pool of lenders willing to finance a factory-built home may still narrow if the home is older or the foundation is anything less than permanent concrete.
Rates on modular mortgages typically track conventional rates when the file is clean: current CSA, permanent foundation, owned land. Chattel loans on leased-land manufactured homes price higher because the lender is financing personal property rather than real estate.
Estimate your numbers using the down payment calculator, mortgage payment calculator, and current rate details (illustrative only — not a forecast).
— Common mistakes buyers make
Six mistakes come up again and again on factory-built home files.
- Assuming any bank will finance any prefab. The big five have different appetites for factory-built product; some decline categorically.
- Confusing modular with mobile. The CSA standard and foundation type change the financing path entirely.
- Signing a purchase agreement before confirming CSA compliance. A missing or expired sticker can kill the mortgage after the deposit is in.
- Overlooking a land-lease constraint. A beautiful home on leased land often means chattel financing at higher rates, not a mortgage.
- Skipping the appraisal question. Not every appraiser accepts factory-built product; ask before you order.
- Ignoring the stress test or credit overlays. Qualifying at the greater of contract rate plus 2% or 5.25% applies here too. If credit is part of the picture, see bad credit mortgage solutions before you apply.
— Frequently asked questions
Can I actually get a CMHC-insured mortgage on a modular home in Canada?
Yes. As of May 2026, CMHC's Prefab Plus program allows insured mortgages on factory-built homes with a 5% minimum down payment. The home typically needs a current CSA A277 or Z240 sticker, a permanent foundation, and owned land.
Your broker or lender confirms eligibility for your specific file, including which lenders in their network offer Prefab Plus.
What's the minimum down payment for a modular or manufactured home?
Under CMHC Prefab Plus and other insured mortgage products, the minimum down payment is 5% on the first $500,000 of purchase price and 10% on the portion above. Conventional mortgages typically require 20% or more. Chattel loans often require 10% to 20%.
Do banks give mortgages on mobile homes on leased land?
Most banks do not offer a traditional mortgage on a home the borrower does not own the land under. A chattel loan, which finances the home as personal property rather than real estate, is typically the only path available.
Rates and terms on chattel loans usually differ from real-property mortgages, so it is worth comparing before you commit.
What's the difference between a chattel loan and a mortgage?
A mortgage finances real property: the land and the home permanently affixed to it. A chattel loan finances a home as movable personal property. Chattel loans typically price at higher rates, offer shorter terms, and do not qualify for CMHC insurance.
Does the mortgage stress test apply to modular and manufactured homes?
Yes. Federally regulated lenders qualify borrowers at the greater of contract rate plus 2% or 5.25% under OSFI Guideline B-20. This applies to modular and manufactured home mortgages the same as any other.
Chattel loans from non-federally-regulated lenders may follow different qualification rules.
Which CSA standard do I need for factory-built home financing, A277 or Z240?
A277 covers modular homes built to the National Building Code and assembled on site. Z240 covers manufactured and mobile homes built on a permanent steel chassis. The home you buy carries the sticker. A current sticker of either standard opens more lender options than no sticker.
Can I use CMHC Prefab Plus if I am buying an existing modular home rather than building one?
Prefab Plus is designed for factory-built home purchases where funds are advanced across construction milestones. For an existing, already-installed modular home, other CMHC insured mortgage products such as CMHC Purchase typically apply.
Ask your broker to match your situation to the right product from the start.
Are mortgage rates higher on modular or manufactured homes than on regular houses?
For a modular home with a current CSA sticker, permanent foundation, and owned land, mortgage rates typically track conventional single-family rates. For older mobile homes or homes on leased land, chattel financing usually prices materially higher because it is not secured against real estate.
Can I use MLI Select to build a modular apartment building?
Yes. Following a 2025 pilot that financed more than 800 rental units across five provinces, CMHC expanded MLI Select in May 2026 to cover modular construction across all its multi-unit products. Modular multi-unit projects can now access the same insurance products as conventional builds.
Ready to see what you qualify for?
Factory-built homes have moved from the edge of Canadian mortgage financing to the middle. Start with an Instant Pre-Approval to see where you stand — before you commit to a home or a builder.
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About the author
Razi Khan
Founder, CEO & Licensed Mortgage Broker · Pegasus Mortgage Lending · Toronto, Ontario · FSRA Lic # 11479
Razi Khan is the Founder, CEO, and a licensed Mortgage Broker at Pegasus Mortgage Lending Center Inc., based in Toronto. With over 20 years of experience in the Canadian mortgage industry, Razi has personally guided more than 3,000 clients through some of the most complex and high-stakes financial decisions of their lives — from first-time purchases in the GTA to refinancing strategies, alternative lending solutions, and cross-border mortgages for Canadians buying in the United States.
Razi founded Pegasus in October 2008, launching the brokerage at the height of a global financial crisis. He works across the full spectrum of borrower profiles, with particular expertise in complex files including self-employed borrowers, credit-challenged clients, and investors building multi-property portfolios.
Learn more about Razi Khan →Sources & references
- CMHC — Expands mortgage insurance to support prefab and modular construction, May 7 2026
- CMHC — Modular rental housing construction (multi-unit MLI)
- CMHC — Mortgage loan insurance for consumers
- OSFI — Guideline B-20, Residential Mortgage Underwriting Practices and Procedures
- FCAC — Down payment on a home
- CSA Group — Factory-built housing standards (A277 modular; Z240 manufactured/mobile)
- FSRA — Ontario mortgage brokerage regulation