VA Loan Mobile Home Requirements: A Guide to Financing Manufactured Housing

The VA home loan program is an amazing benefit for eligible veterans, active-duty military, reservists, and surviving spouses These government-backed mortgages require no down payment and offer competitive interest rates But did you know VA loans can also be used to buy manufactured homes?

While not all lenders offer VA financing on manufactured housing, it is possible if the home meets certain requirements. This opens the door for borrowers to achieve affordable homeownership through modern factory-built properties.

Let’s explore key details on VA mobile home loans, from eligibility and entitlement to property requirements and loan limits With proper planning and research, you can determine if this overlooked financing option could be a good fit for your family.

VA Loan Overview

Before diving into guidelines for manufactured housing specifically, let’s review some quick facts on VA loans:

• Available to veterans, active-duty military, reservists, and surviving spouses
• Requires no down payment in most cases
• No monthly mortgage insurance
• Competitive fixed interest rates
• Can be used up to 4 times for purchases and again for refinancing

These features make VA mortgages one of the most flexible and affordable financing options for eligible borrowers. Now let’s see how they can be applied to manufactured homes.

What is a Manufactured Home?

A manufactured home refers to a residential property that is largely assembled in a factory environment. These were previously known as “mobile homes” but have advanced significantly in quality, design, and construction.

To qualify for VA financing, manufactured homes must:

• Have been built after June 1976 when HUD standards were established.
• Carry a HUD Certification Label verifying construction meets all code requirements.
• Be attached to a permanent foundation on land owned by the borrower.
• Be taxed as real estate, not personal property.

Older mobile homes typically cannot be financed with a mortgage, limiting options to chattel loans and other alternative financing.

Basic VA Loan Requirements

While the program is flexible, VA mortgages do come with borrowing requirements:

• Eligible Borrowers – Veterans, active-duty, reservists, and surviving spouses. Certain spouses may have eligibility restored.

• Certificate of Eligibility – Documentation of service length to qualify for VA loan benefit.

• Income/Employment – Stable income sources and employment history are required.

• Credit – VA has no minimum score but most lenders require at least 620 FICO.

• Debt-to-Income Ratio – Your total debt payments, including the new mortgage, normally cannot exceed 41% of gross income.

• Funding Fee – Ranges from 1.4% – 3.6% of the loan amount based on your down payment and military category.

Meeting these requirements along with finding an eligible property are key steps in getting approved.

Requirements for Manufactured Homes

In addition to general VA loan requirements, there are a few extra property guidelines for manufactured housing:

• HUD Certification – The home must have been built after June 1976 and have a HUD tag certifying it meets all construction safety standards.

• Foundation – The home must be permanently attached and anchored to a foundation on land owned by the borrower.

• Minimum Size – VA requires manufactured homes to be at least 400 square feet if single-wide, or 700 square feet if multi-section.

• Property Classification – The home and land must be classified as real property and taxed as such, not as personal property.

• Condition – Like traditional housing, the home and site must meet VA minimum property requirements related to safety, sanitation, and structural integrity.

Meeting these requirements provides assurance to lenders that the home will be safe, sound, and secure as collateral for the mortgage.

How Much Can You Borrow?

One of the best features of VA loans is flexible loan limits. There are no set maximum limits based on property location like other mortgages. Instead, you can qualify for a loan up to the full appraised value of the manufactured home and land.

It’s even possible to finance the VA funding fee and roll it into the overall loan amount. This avoids having to pay the fee out of pocket.

Some key points:

• Loan amounts are based on the appraised value, your income, and debt.

• You can typically borrow up to 100% of the home’s value with no down payment.

• The loan term is up to 30 years on new manufactured housing.

• Cash-out refinancing is available if equity permits.

Always discuss loan amount options with a lender early in the process.

Finding a Lender

The most important tip when seeking financing for a manufactured home is to find an experienced VA lender. Not all banks and lenders are able to underwrite VA loans on factory built housing.

Mortgage brokers that work frequently with VA borrowers and know all the intricacies are going to be best equipped to help you through the process. Be sure to ask upfront if they have experience with manufactured home financing.

Additionally, consider checking if the manufactured home retailer has relationships with lenders familiar with the requirements. This can really smooth the path to fast and efficient approval.

The Benefits of VA Mobile Home Loans

Financing a manufactured home with a VA loan offers several advantages:

• Requires no down payment in most cases
• Avoid private mortgage insurance (PMI)
• Competitive interest rates
• More flexible debt-to-income ratios than conventional loans
• No minimum credit score requirement
• Ability to roll closing costs into loan amount

These features can really help eligible borrowers get into affordable housing, even if you don’t qualify for a traditional mortgage. Just be sure the home meets all VA property requirements.

Alternative Financing Options

If you don’t qualify for a VA loan on a manufactured home, you may consider:

• FHA loans – Allow for 3.5% down payments but require mortgage insurance.

• Conventional loans – Require at least 5% down and 620 FICO score. Not ideal for limited budgets.

• USDA loans – For low-income borrowers in designated rural areas. Can be zero down payment.

• Chattel loans – Higher interest rates and limited protections but easier to qualify.

• Personal loans – Unsecured so higher rates, but funds can be used for anything.

Be sure to discuss the pros and cons of each option for your financial situation.

Key Takeaways

The key points to remember when it comes to VA mobile home loans include:

• Manufactured homes must be built after 1976 and have HUD certification.

• The home must be attached to a permanent foundation.

• VA has minimum size requirements.

• There are no max loan limits – you can borrow up to the appraised value.

• Finding an experienced manufactured home lender is crucial.

While not as widely available as financing for traditional homes, VA loans can be a great option for eligible borrowers to get into a quality manufactured home. Be sure to explore programs in your local area if this path interests you.

FAQs on VA Manufactured Home Loans

Can I get a VA loan for a used manufactured home?

Yes, VA loans can be used to purchase both new and existing manufactured homes as long as they meet all the property requirements.

How much down payment is needed?

VA loans require no down payment in most cases. However, if you have previously used your entitlement, a down payment may be needed.

What credit score is needed?

The VA itself does not require a minimum credit score. However, most lenders will want at least a 620 FICO score to approve financing.

Can I use a VA loan for a mobile home?

No, VA loans cannot be used on mobile homes built prior to June 1976. Only manufactured homes built after this date under HUD standards can be eligible.

Can I roll closing costs into my VA loan amount?

Yes, you can have eligible closing costs rolled into the loan amount to avoid paying them out of pocket. This can help get financing with minimal cash needed.

Ready for Your New Home?

A VA mortgage can be the key to getting you into quality affordable housing – whether site-built or manufactured. Be sure to check your eligibility and research lenders experienced with both VA loans and factory built homes. With the right approach, you can soon be in your new place to call home.