Everything You Need to Know About Getting a VA Loan for a Manufactured Home

Buying a manufactured home with a VA loan can be an affordable path to homeownership for eligible veterans, active duty service members, and surviving spouses Manufactured homes cost significantly less per square foot compared to site-built homes, and VA loans typically have competitive interest rates and flexible terms

However, there are specific requirements and limitations to be aware of when using a VA loan for a manufactured home. This comprehensive guide covers how VA loans work for manufactured housing, eligibility criteria, property standards, loan terms, lender tips, alternatives, and frequently asked questions.

Overview of VA Loans for Manufactured Homes

Also commonly known as mobile homes, manufactured homes are factory-built residences constructed after June 15, 1976 that comply with federal building codes administered by the US. Department of Housing and Urban Development (HUD)

To qualify for VA loan financing, manufactured homes must meet certain criteria:

• Classified as real property, not personal property
• Placed on a permanent foundation
• At least 400 sq. ft. for single-wide and 700 sq. ft. for double-wide
• Have HUD certification tags/labels

A VA loan can be used to purchase both the manufactured home and land together. Or, if you already own the land, you can use a VA loan just for the home. The loan proceeds cover the cost of the home, land purchase, transportation, set-up costs, and permanent anchoring on the site.

VA loans can also refinance existing loans on manufactured housing as long as it meets VA requirements. This provides an opportunity to get a lower rate or cash out equity.

Benefits of a VA Manufactured Home Loan

VA loans offer significant advantages for eligible borrowers, including:

• No down payment requirement – 100% financing available
• No monthly mortgage insurance – Saving hundreds per month
• Flexible credit guidelines – Minimum 620 FICO score
• Low interest rates – Rates near historic lows
• No prepayment penalties – Pay off early with no fees
• Streamlined refinancing – Easy process to lower rate/payment

These features make VA loans one of the most affordable and borrower-friendly mortgage programs on the market today

Am I Eligible for a VA Manufactured Home Loan?

To qualify for a VA manufactured home loan, you must meet the eligibility requirements for regular VA loans regarding your military service and the property standards.

Borrower Eligibility

In order to get a VA loan, you must be one of the following:

• Active duty service member
• Veteran who served minimum 90 days active duty
• Surviving spouse of eligible veteran
• Reservist/National Guard with 6+ years of service

You’ll also need a valid Certificate of Eligibility (COE) to give to your lender proving you qualify.

Property Eligibility

The manufactured home and land must meet certain criteria to be eligible:

• Classified as real estate, not personal property
• Placed on a permanent foundation
• Connected to utilities – water, electricity, sewer
• Minimum 400 sq. ft. for single-wide homes
• Minimum 700 sq. ft for double-wide homes
• HUD tags verifying home was built after 1976
• Appraisal determines home is in livable condition

The home also cannot have any health/safety defects. Appraisers inspect the property for compliance with VA minimum property requirements.

Loan Terms for VA Manufactured Home Loans

VA loans for manufactured housing allow shorter repayment terms than traditional 30-year mortgages:

• Single-wide: Up to 20 years
• Single-wide + land: Up to 20 years
• Double-wide: Up to 23 years
• Double-wide + land: Up to 25 years

So your monthly payments will be higher than a comparable 30-year mortgage for the same loan amount. Make sure you can fit the payment into your budget.

Down payment requirements are also higher than regular VA loans:

• Single-wide: 10% down payment required
• Double-wide: 5% down payment required

VA funding fees apply as follows:

• First time use: 2.3% of loan amount
• Subsequent use: 3.6% of loan amount
• Active duty exempt from fees

Tips for Getting the Best VA Manufactured Home Loan

Follow these tips when shopping for the right VA manufactured home loan:

• Get quotes specifically for manufactured housing. Rates are higher than site-built homes.
• Compare quotes from multiple lenders on the same day for accurate rate comparisons.
• Ask lenders to lock in your interest rate once you choose a loan option.
• Calculate your estimated monthly payments based on the shorter loan terms to ensure affordability.
• Ask lenders if they handle the title work to convert your home to real property.

Work with a reputable VA-approved lender that specializes in manufactured home financing. They will guide you through meeting the VA requirements.

Alternative Loan Options for Manufactured Housing

If you have trouble finding a lender willing to do a VA manufactured home loan, here are some alternative financing options:

• FHA loans – Offer manufactured home loans with 3.5% down payments.
• Conventional loans – Programs like Fannie Mae MH Advantage with 5% down.
• USDA loans – For properties in rural areas, 100% financing available.
• Personal loans -Typically higher rates than mortgages but easier to qualify.
• Chattel loans – Financing option when land is leased, not owned.

Each loan program has its own eligibility guidelines and rates/terms. Shop around to find the most affordable option if a VA loan doesn’t work.

Frequently Asked Questions

How much does a manufactured home cost?

The average price nationally is around $125,200 for a manufactured home in 2022. This is significantly less than the $453,300 average for a site-built single family home.

What’s the difference between manufactured and mobile homes?

They are essentially the same thing but with different terminology:

• Mobile home: Built before June 15, 1976
• Manufactured home: Built after June 15, 1976 and complies with HUD codes

Only manufactured homes are eligible for VA loans and most other mortgage programs.

Can I buy just the manufactured home with a VA loan?

No, the VA requires the home be permanently affixed on land that you own. The loan can cover purchasing both together.

Is a modular home eligible for a VA loan?

Yes, modular homes meet the same building codes as site-built homes, so they qualify for VA loans. Manufactured homes have separate federal building requirements.

How do I get my manufactured home classified as real estate?

You’ll need to go through a process dictated by your state laws to convert the title from personal property to real estate. Ask your lender for guidance on the specific steps.

The Bottom Line

VA loans let eligible borrowers purchase manufactured housing with flexible terms and 100% financing. Just be sure the home meets VA property standards and work with a lender experienced in manufactured home loans. Shop around and compare options to find the best financing solution for your needs.