A $3.2 Million Manufactured Home with Zero Property Taxes?
Recently, a two-bedroom manufactured home in Montauk, New York—one of the trendiest beach towns in the country—was listed for $3.2 million. Given that Suffolk County homes in this price range typically carry an annual property tax bill of nearly $60,000, this listing stood out for one surprising reason: The annual property tax was $0.
Why? The home was classified as a manufactured home sitting on leased land within a mobile home park. This unique scenario highlights just how nuanced property taxes can be when it comes to manufactured housing
Manufactured Housing on the Rise
Manufactured homes are an increasingly popular housing option in the U.S., offering affordability in a challenging market.
- More than 20 million Americans live in manufactured homes.
- Manufactured homes make up approximately 6% of the U.S. housing stock.
- In 2023, 170,000 buyers financed a manufactured home (new or used).
- According to HMDA data, 2,863 lenders made at least one manufactured housing loan in 2023—an 18% increase from 2022.
While manufactured homes remain more affordable than site-built homes, regional price differences are significant. For example, the national average price of a manufactured home in 2024 was $148,1000. However, in Maricopa, AZ, a relatively high-volume county for manufactured homes, the average loan amount was $210,660, while in Riverside, CA, it was $354,000 and more than $431,000 in LA County.
How Manufactured Homes Are Taxed
As discussed in previous blogs, how a manufactured home is purchased and titled—and where it is situated— can all factor into how it is taxed from a property tax perspective.
Key Determinants of Taxation:
- Ownership of the land: The biggest factor affecting property tax status.
- Owned land: The home is treated as real property, can qualify for GSE-backed loans, and is usually taxed like a single-family home.
- Leased land: Still may be taxed, but handled differently across jurisdictions.
State-Level Examples:
- Texas: Issues two tax bills—one for the home and one for the land.
- Tennessee: Considers a manufactured home as a land improvement regardless of land ownership, so property taxes apply.
- New York, Florida, Wisconsin: Manufactured homes with chattel loans (home-only financing) may or may not receive a separate tax bill, particularly in places like Indian reservations.
Chattel Loans and Escrow Considerations
- Chattel loans apply when the borrower owns the home but not the land.
- Escrowing taxes can be complex, depending on state and county-level regulations.
- Errors in setup can lead to compliance risks and poor borrower experience.
How LERETA Supports Lenders in the Manufactured Housing Market
LERETA, has been helping specialty lenders and mortgage companies navigate the complexities of property taxes on manufactured homes for more than 35 years. We understand the various nuances at both the state and county levels and can assist lenders with tax certificates and in setting up escrow accounts and non-escrow monitoring.
As manufactured homes continue to grow in popularity—and prices rise—lenders must be prepared to handle the increasingly complex and varied property tax requirements that come with them. From determining how a home is classified to ensuring accurate escrow setup and ongoing tax monitoring, navigating manufactured housing taxes requires specialized knowledge. With decades of experience working with manufactured housing lenders, LERETA delivers the expertise, tools and support needed to help lenders minimize risk, avoid tax errors and provide a better borrower experience. As the manufactured housing market evolves, having a trusted tax partner like LERETA has never been more important.
