Short answer
Sometimes. When you buy the house but lease the land from someone else, it's called a leasehold. Fannie Mae and FHA both finance leaseholds, but the ground lease must run well past the end of the loan, be recorded, and let the home be sold or mortgaged. The ground rent is added to your monthly housing payment. Have your loan officer read the lease before you sign a purchase agreement.
What is a leasehold?
HUD's Handbook 4000.1 describes a leasehold interest as a home on land that is under a long-term lease from the landowner, which splits ownership of the property in two. You own the house and the right to use the land; the landowner keeps the land. Units in a condo or planned community can also sit on a ground lease.
How long does the lease need to run?
- FHA: a renewable lease of at least 99 years, or one that runs at least 10 years past the loan's maturity date.
- Fannie Mae (B2-3-03): the unexpired term must be at least five years longer than the loan.
If the lease is too short, the loan can't go ahead as is, so ask for the full lease early.
What else does the lender look for in the lease?
Fannie Mae requires the lease to be recorded in the land records and in good standing, with all rent paid. When you are the lessee, the lease must let it be sold, transferred and mortgaged without a credit review of the next owner, protect the lender if the land is taken by eminent domain, and give the lender notice and time to fix a default before the lease could end. The appraisal and title insurance have their own leasehold rules too.
Does ground rent affect how much I qualify for?
Yes. HUD lists ground rent as part of your total monthly mortgage payment, along with principal, interest, taxes, insurance and any association fees. A higher ground rent means a higher payment in your debt-to-income ratio.
See also manufactured homes in NH and condo mortgages.
Sources
- Fannie Mae Selling Guide, B2-3-03, Leasehold Estates (08/05/2026)
- HUD Single Family Housing Policy Handbook 4000.1, Update 18 (August 2026), Leasehold Interest and Total Mortgage Payment
Checked November 2, 2026. Rules and dates change, so confirm current details before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.