A certificate of title for a mobile (or manufactured) home does not have to be surrendered if your security interest in the home will be perfected by a UCC Financing Statement, essentially treating the home as personal property. However, if your security interest in the home will be perfected by a mortgage on the mobile (or manufactured) home, treating the home as real property, the owner must surrender the certificate of title (or Manufacturer’s Statement of Origin, if applicable) to the Illinois Secretary of State and comply with the other steps necessary under the Illinois Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act for a manufactured home to be deemed real property.

Additionally, we note that you are correct that both Fannie Mae and Freddie Mac require that if a mortgage on a manufactured home is located in a state that permits surrender of the certificate of title (such as Illinois), the certificate of title must be surrendered to the appropriate state government authority.

For resources related to our guidance, please see:

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-5 (“For the purposes of this Act, ‘manufactured home’ means a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code. . . . For the purposes of this Act, a manufactured home is ‘affixed to a permanent foundation’ if the wheels, axles, and towing hitch are removed, and it is anchored to real property by attachment to a permanent foundation and connected to residential utilities (such as water, gas, electricity, or sewer or septic service). The certification of a certified residential real estate appraiser, a certified general real estate appraiser, a licensed manufactured home installer, or a licensed professional engineer that the home is affixed to a permanent foundation shall establish conclusively that the home is affixed to a permanent foundation.”)

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-2(b) (“The purpose of this Act is to establish a clear statutory procedure for converting to real property manufactured homes located outside of mobile home parks that are affixed to real property and for the severance of manufactured homes from real property.”)

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-30 (“A manufactured home shall be deemed to be real property when all of the following events have occurred: (1) the manufactured home is affixed to a permanent foundation as provided in Section 5-5 of this Act; (2) an affidavit of affixation conforming to the requirements of Section 5-15 of this Act has been recorded; (3) a certified copy of the recorded affidavit of affixation has been delivered for filing to the Secretary of State as provided in Section 5-25 of this Act; and (4) the requirements of Section 3-116.1 or 3-116.2 of the Illinois Vehicle Code, as applicable, have been satisfied. A conclusive presumption shall arise that the averments of the recorded affidavit of affixation establish that, for all purposes, the manufactured home is real property.”)

• Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-35 (“Upon the satisfaction of the requirements of Section 5-30 of this Act and the requirements of Section 3-116.1 or 3-116.2 of the Illinois Vehicle Code, as applicable, such manufactured home shall be deemed to be real property; any mortgage, deed of trust, lien, or security interest that can attach to land, buildings erected thereon, or fixtures affixed thereto shall attach as of the date of its recording in the same manner as if the manufactured home were built from ordinary building materials on site