The short answer
Not always. Land may still be used in a manufactured-home loan when money is owed on it, but the lender must approve the existing lien and available equity.
Start with the land documents
Give the lender the deed, current loan balance, and any other recorded lien information. The lender can then explain whether the land works for that loan program.
Do not change the deed before asking
Tell the lender who owns the land and whether anyone else has an ownership interest. If it belongs to family, explain that before discussing a land-and-home loan. Ask what ownership and lien arrangements the program accepts before paying off a loan, transferring a deed, or promising the property as collateral.
Land value and equity are different
The value of the property is not necessarily the amount available to put toward a purchase. An existing loan or other lien affects the equity, and the lender decides how much, if any, can be used for the proposed financing. Bring the current loan balance and ownership documents so the lender can review your situation.
Ask separately about cash needed for closing and site work. Using land equity does not automatically cover every project expense or mean that no money is due out of pocket.