Tax Deductions for Manufactured Homes

Manufactured homes are an attractive and affordable housing option for many individuals. Whether you buy one for your land or another location to rent out, these homes can be a great investment opportunity.

As long as your manufactured home has sleeping, cooking and toilet facilities, the IRS Publication 936 considers it a “qualified home.” As a qualified home, you’ll be eligible for several tax deductions with a few limitations.

At CIS Home Loans, we are committed to helping our customers get the home of their dreams. We’ll help you secure a competitive loan and determine if you qualify for any tax breaks as a manufactured home owner.

Manufactured Home Tax Deductions You May Qualify For

There are several manufactured home tax deductions and credits that you may qualify for:

  • Interest: You can deduct your manufactured home loan interest by filing Form 1040 and itemizing deductions on Schedule A. If you use your home as a business, use Schedule C instead. You’ll be able to take an itemized deduction on any loan used to purchase a manufactured home. To claim the deduction, the home must be used as a residence and collateral for the loan. If it’s your second home and you rent it out, you need to live in it for at least 15 days or for 10 percent of the time you rent it out to qualify.
  • Points: Points are also deductible. If the manufactured home is for a residence, all of the points can be written off. This needs to be done in the year you took out the loan. You’ll also be able to deduct the amount you paid in interest.
  • Property taxes: The annual property taxes you pay on your manufactured home can also be deducted, which is the case whether the home is on your own land or on a rented property. In the year you buy the home, you’ll also be able to write off the portion you pay at closing.
  • Energy efficiency tax credits: If you make any improvements to your manufactured home to make it more energy-efficient, you may be able to qualify for tax credits. This can include everything from installing solar panels to changing out your windows and doors with something that’s more energy-efficient. Use IRS Form 5695 to claim your home energy tax credits.
  • Sales tax: Both the state and local sales tax can be deducted. The amount you can write off will depend on the general sales tax rate in either your state, city or county. Also, keep in mind that you won’t be able to write off the sales tax if you use the manufactured home for business use or if the home is already on the property when you buy it.
  • Insurance premiums: If you have insurance premiums on your manufactured home, you can also potentially write off what you pay in premiums.

Deduction Limitations to Consider

While buying a manufactured home can be tax-deductible, there are a few limitations to consider. Several factors can influence whether or not you’ll be able to claim the home on your tax return, including if:

  • Your manufactured home serves as collateral for your loan.
  • It’s used as your primary or secondary residence. It’s also possible to claim deductions if the home is used for business purposes.
  • You are the one who is legally liable for the loan. In other words, you won’t be able to claim deductions if you are either a co-signer or making payments on another individual’s loan.

Learn More About Manufactured Home Loans

At CIS Home Loans, we believe that affordable housing doesn’t have to look different. If you’re interested in moving your family into a manufactured home, running your business out of one or using it as a rental property, we are here to help you reach your dreams.

We offer a Home Only loan for individuals who want to purchase a manufactured home but don’t own the property and a Land in Lieu loan for those who’d like to add a manufactured home to their property.

Whichever loan you’re interested in, you can trust that you’ll have access to some of the most competitive rates in the industry. We’ll be 100% transparent with you throughout the entire process and help you choose the right loan for you.

We’ve designed our application process to be simple and streamlined. Ready to learn more about our home loans and start claiming a mobile home on your taxes? Contact us today to get started.