How to Convert a Manufactured Home to Real Property in Texas

Converting a manufactured home from personal property to real property in Texas is one of the highest-ROI paperwork moves a homeowner can make. It unlocks conventional and government-backed mortgages, expands your homestead exemption, often raises resale value by 10–20%, and simplifies the sale process. The conversion is handled through the Texas Department of Housing and Community Affairs (TDHCA) using a formal Statement of Ownership election, combined with a county-level Statement of Location recording. This guide walks you through the full process.

Quick Answer: To convert a Texas manufactured home to real property, you must own the land, install the home on a permanent foundation that meets HUD's PFGMH, remove wheels/axles/hitch, obtain written lienholder consent, file a Statement of Ownership with TDHCA electing real property status, and record a Statement of Location with the county clerk. Typical timeline: 30 to 90 days.

This article is general information and is not legal advice. Texas real property elections can have significant legal, tax, and lender implications. Consult a licensed Texas attorney and your lender before making the election.

Why Convert? The Real-World Benefits

Most homeowners convert for one of four reasons, and usually all four apply at once.

1. Better financing. Personal-property homes generally need chattel loans at higher interest rates. Real-property homes qualify for 30-year conventional, FHA Title II, and VA loans at rates often 2–4 points lower.
2. Expanded homestead exemption. The Texas homestead exemption applies to both home and land only when the home is real property. See our detailed property tax guide for the full savings picture.
3. Higher resale value. Real-property manufactured homes sell faster and at better prices because the buyer pool (and their financing options) is much larger.
4. Simpler sale. Sales use a standard Texas warranty deed rather than a TDHCA Statement of Ownership transfer plus a separate land deed.

Who Can Convert?

Not every manufactured home is eligible. You need all of the following:

• Land ownership. You must own the land in fee simple, or hold a qualifying long-term lease (35 years or more, depending on lender requirements).
• Permanent foundation. The home must sit on a foundation that complies with HUD's Permanent Foundations Guide for Manufactured Housing (PFGMH).
• Home configuration. Wheels, axles, tongue, and hitch must be removed. The home must be connected to permanent utilities.
• Lienholder consent. Every lienholder on the home or land must sign off on the election.
• HUD-code home. The home must have been built after June 15, 1976 with an intact HUD certification label.

If your home is currently in a community or on leased land you cannot buy, conversion is usually off the table. Our guide on park vs private land walks through the alternatives.

Step-by-Step: The Conversion Process

The conversion happens at two levels — state (TDHCA) and county (clerk's office). Both pieces are required.

Step 1: Confirm the Foundation Meets PFGMH

Hire a Texas-licensed professional engineer to inspect the foundation and certify compliance with HUD's PFGMH. If the current foundation does not comply, you will need to retrofit it with runners, piers, anchors, and skirting that meet the guide. Expect $2,000–$8,000 for certification and any retrofit work. The engineer issues a HUD-7 or equivalent foundation certification.

Step 2: Remove the Running Gear

If it has not been done already, have the wheels, axles, tongue, and hitch removed. Keep receipts and photos; TDHCA and some lenders ask for proof. Running gear is usually sold for scrap to offset the cost of removal (typically $400–$800).

Step 3: Clear All Liens

Every lienholder on the home or the underlying land must consent to the real-property election, in writing, on a form acceptable to TDHCA. If you still owe on a chattel loan, your lender must either release the lien, subordinate it, or convert it to a mortgage on the combined property. This step commonly takes the longest.

Step 4: File the Statement of Ownership With TDHCA

Submit a new Statement of Ownership to the TDHCA Manufactured Housing Division, electing real-property status. Required documents typically include:

• Completed Statement of Ownership application (electing real property).
• Engineer-certified foundation report (HUD-7 or equivalent).
• Current deed to the land.
• Signed lienholder consent(s).
• Filing fee (currently around $55, subject to change).

Processing time is usually 15 to 30 business days once a complete application is submitted, but backlogs can extend that. The TDHCA Statement of Ownership application page has current forms and fees.

Step 5: Record a Statement of Location With the County Clerk

Once TDHCA issues the new Statement of Ownership, file a Statement of Location (TDHCA Form) with the county clerk where the land sits. This records the physical location of the home in the county real-property records and serves as constructive notice that the home is real property. Recording fees vary by county, typically $20–$50.

Step 6: Update the Appraisal District and Insurance

Send copies of the new Statement of Ownership and recorded Statement of Location to your county appraisal district. They will update the tax roll to list the home as real property alongside the land. Notify your insurer — some carriers reclassify the policy, and some offer a lower premium for homes on a qualifying foundation.

Documents You Will Collect Along the Way

Document	Issued By	Typical Cost
Foundation compliance (HUD-7)	Licensed Texas engineer	$400–$900
Foundation retrofit (if needed)	Licensed installer	$2,000–$8,000
Lienholder consent	Current lenders	$0–$150 per lender
New Statement of Ownership	TDHCA	~$55
Statement of Location recording	County clerk	$20–$50
Attorney review (optional)	Texas attorney	$300–$800

Total out-of-pocket for a typical conversion (with minor retrofit): $3,000–$10,000, often recouped in the first year through financing savings or reduced property tax.

Before You File: Common Mistakes to Avoid

• Missing HUD label. Without the red certification label, the home cannot be real property. Order a replacement label letter from IBTS before starting.
• Land not fully paid or under wrong name. The landowner and home owner must match (or be clearly linked) on the Statement of Ownership.
• Skipping lienholder consent. TDHCA will reject the election without written consent from every lienholder.
• Forgetting the county recording. The TDHCA election alone does not update your county real-property records.
• Not communicating with your lender early. Converting while a chattel loan is in place can trigger prepayment or acceleration clauses if your lender does not agree first.
• Assuming the appraisal district will update automatically. They will not. Send them the paperwork.

What Changes After Conversion

Once the election is complete and recorded, several things change:

• The home appears on county real-property tax rolls as an improvement.
• A real estate deed transfer at sale is now the standard (alongside a Statement of Ownership update).
• Conventional, FHA Title II, and VA lenders become available.
• You can apply the full Texas homestead exemption on both home and land.
• The home's depreciation curve flattens, and in many Texas markets the combined property appreciates like a site-built home.
• Insurance often shifts to a standard HO-3 policy rather than HO-7, sometimes lowering premiums.

Overall, conversion aligns your manufactured home with the rules and benefits of site-built housing. Combined with strong compliance on Texas manufactured home regulations, it is how serious owners build long-term wealth on a manufactured home.

Frequently Asked Questions

Do I have to convert to real property to get a mortgage?

For most competitive loan products in Texas — conventional, FHA Title II, and VA — yes. Some lenders will issue chattel loans on manufactured homes classified as personal property, but rates and terms are typically less favorable. If you want the lowest rate and longest term, conversion is the standard path.

Can I convert if I am still paying off a chattel loan?

Often yes, but only with your lender's written consent. Many chattel lenders will subordinate or convert the loan to a traditional mortgage when you provide the new Statement of Ownership. Others will not allow conversion while their lien is active, so you may need to refinance first.

Does Texas Property Code Section 2.001 apply?

Yes. Texas Property Code Section 2.001 describes the fixture and real-property status of manufactured homes and works alongside Texas Occupations Code Chapter 1201 (administered by TDHCA). The key statutory trigger is the Statement of Ownership election plus the recorded Statement of Location.

What if I later want to move the home?

You can, but you would first file a reverse election through TDHCA to change the home back to personal property, obtain any needed lienholder consents, and often record a release of the Statement of Location. Moving a home that has been converted without filing these is a legal and title mess. Plan ahead.

Is conversion the same as getting a mortgage?

No. Conversion only changes the legal classification of the home. You still need to apply, qualify, and close on a mortgage. Most homeowners pair conversion with a refinance so the real-property status and the new mortgage come together in one closing.

Thinking about converting your Texas manufactured home to real property? Mobile Buy Buy helps Texas owners evaluate the numbers and coordinate with engineers, TDHCA, and lenders. Call (737) 777-9437 or send us a message.