386 basically says that you can't finance credit insurance or sell it to a borrower within 30 days of getting a covered loan unless it's a monthly payment type deal. So it's primarily single-pay insurance they're prohibiting.
And the law also says that it follows Section 32 guidance on types of property covered, so you would look to that. I believe that Section 32 does cover mobile homes, as discussed somewhere up above in these threads.
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I disbelieved what he was saying so hard, I probably created an alternate universe where it wasn't true.