One of the first questions buyers ask about floating home financing is the down payment. The short answer: plan for 20–30%, and be prepared for variation depending on lender type, home price, and home condition. Here's a complete breakdown.
Why Down Payments Are Higher Than Conventional Mortgages
Conventional home mortgages can go as low as 3–5% down (with PMI). Floating home financing doesn't work that way, for two reasons:
- The lender pool is smaller. Fewer lenders compete for these loans, so there's less pressure on down payment requirements.
- The collateral is specialized. A floating home is harder to liquidate than a house if the borrower defaults — lenders protect themselves with larger equity cushions.
Down Payment Requirements by Loan Type
Marine / Chattel Lenders
Specialty marine lenders typically require 20–25% down for well-qualified borrowers (740+ credit score, strong income, standard hull type). Homes with older hulls, short remaining slip leases, or unusual construction may trigger higher requirements.
Portfolio Lenders
Community banks and credit unions offering portfolio loans typically require 25–30% down. They're more conservative on LTV because they're holding the risk on their own books and these aren't standardized products.
Private Lenders
Private lending for floating homes is available when other options don't fit. Down payments vary widely — 30–40% is common for bridge loans or situations where credit, income, or property characteristics make conventional options unavailable.
Factors That Can Increase Your Required Down Payment
- Credit score below 700
- Steel hull (higher maintenance risk in lender's view)
- Short remaining slip lease term (under 5 years)
- High-value home (above $1.5M)
- Self-employed with complex income documentation
- Foreign national buyer
What Counts as Down Payment?
Floating home lenders want to see that the down payment comes from your own assets — not gifts or loans. Seasoned funds (sitting in your bank account for 2+ months) are ideal. Lenders will review your bank statements to verify sourcing. Investment account assets can usually count; retirement accounts sometimes require additional documentation.
Don't Forget the Other Cash Needs
Beyond the down payment, budget for:
- Marine survey: $1,000–$3,000
- Closing costs: 1–3% of loan amount (varies by lender)
- Reserves: Most lenders want 2–6 months of payments in reserves after closing
- Insurance deposit: First year of liveaboard insurance often due at closing
- Slip fee deposit: Some docks require a deposit or advance payment
How to Maximize Your Loan Terms
The biggest lever you have on down payment requirements is lender selection. Some lenders are more aggressive on LTV for the right borrower profile; others are conservative across the board. A broker who has active relationships with multiple floating-home lenders can identify which ones will offer the best terms for your specific situation — which often means less money down than you'd get going direct.
Call Paul at (415) 332-7539 for a current read on what you'll need for your specific purchase.
Ready to talk financing?
Paul Bergeron is the only Sausalito broker who handles both the home and the loan. Call (415) 332-7539 or reach out below.