Can You Buy a Manufactured Home with a VA Loan? A Complete Guide

Buying a home is one of the most significant financial decisions you can make. For many, a manufactured or mobile home represents an affordable way to achieve the dream of homeownership. If you’re a veteran, service member, or surviving spouse, you may wonder whether you can use your VA home loan benefit to buy this type of home.

The short answer is yes, you can buy a manufactured home with a VA loan under certain conditions. VA loans can be used to purchase manufactured homes as well as the land they sit on. This offers veterans a flexible and affordable path to owning their own home.

Keep reading to learn everything you need to know about using a VA loan for a manufactured home. This guide covers:

• What is a manufactured home?
• Manufactured home loan basics
• VA loan requirements for manufactured homes
• How to buy a manufactured home and land with a VA loan
• Tips for financing a manufactured home with a VA loan

What is Considered a Manufactured Home?

The term “manufactured home” refers to factory-built housing that meets federal construction and safety standards administered by the U.S Department of Housing and Urban Development (HUD)

Manufactured homes were previously known as “mobile homes” because they could be moved from one location to another. However, the industry prefers the term manufactured home because these properties are designed to be permanent residences installed on foundations.

There are three main types of factory-built housing:

• Manufactured homes These are built entirely in a factory on a chassis with axles and wheels They are then transported to the home site and installed on a permanent foundation, Manufactured homes can be single- or multi-section and must be at least 400 square feet in size

• Modular homes: These are factory-built homes constructed in sections or modules that are transported to the site and joined together. Modular homes must meet local building codes where they are installed.

• Prefabricated homes: These are factory-built homes assembled partially or completely at the manufacturer. The home is then disassembled and reconstructed on site.

The VA has specific guidelines for manufactured housing but treats modular homes the same as traditional site-built houses. Prefabricated homes are evaluated on a case-by-case basis.

Manufactured Home Loan Basics

Manufactured homes are usually financed with chattel loans or mortgage loans. Here’s an overview of how each loan works:

• Chattel loans: With this type of loan, the home and land are treated as separate assets. The loan is secured by the home only, so it’s considered personal property instead of real estate.

• Mortgage loans: These loans treat the manufactured home and land as a single real estate asset. The property can be mortgaged together under one loan.

Mortgage loans usually have lower interest rates and better terms than chattel loans. VA loans for manufactured homes are mortgage loans, so you get the benefits of treating the home and land as real property.

VA Loan Requirements for Manufactured Homes

The VA has specific guidelines for manufactured housing under VA Pamphlet 26-7, Chapter 12. Here are some key requirements to be eligible for a VA-backed manufactured home loan:

• The home must have a floor area of at least 400 square feet for a single-wide or 700 square feet for a double-wide.

• The manufactured home and land must be classified as real estate under state law.

• The home must be attached to a permanent foundation that meets VA guidelines.

• The home must conform to HUD construction and safety standards outlined in the Federal Manufactured Home Construction and Safety Standards.

• The home must be classified and taxed as real estate. States that don’t tax real estate are exempt from this rule.

In addition to these VA requirements, manufactured homes must meet any local zoning regulations and building codes. The home also needs to have access to utilities and other infrastructure.

VA loans can be used to purchase both new and existing manufactured homes, as long as they satisfy VA guidelines. You can also purchase a manufactured home and land in the same transaction with one VA loan.

How to Buy a Manufactured Home and Land with a VA Loan

If you want to buy a manufactured home and the land it sits on, you have a few options for structuring the transaction with a VA loan:

Purchase home and land together: You can buy both the manufactured home and land in one transaction financed with a single VA loan. The loan amount can include the purchase price of the home, the purchase price of the land, and the funding fee.

Buy land outright: If you already own the land the home will be placed on, you can use a VA loan just to purchase the manufactured home. The loan amount can cover the price of the home plus the funding fee.

Buy home and land separately: It’s possible to buy the manufactured home first with a VA loan, then purchase the land separately with a second VA loan. This avoids having to pay for land before the home is ready to be sited.

Pay off land loan: If you already own land with an outstanding mortgage, you may be able to include the payoff amount for that loan in your VA manufactured home loan.

A VA lender can guide you through the best structure and loan amount based on your specific situation.

Tips for Financing a Manufactured Home with VA Loan

If you’re interested in buying a manufactured home with a VA loan, keep these tips in mind:

• Shop around for a lender that offers VA loans for manufactured housing. Not all lenders provide these loans.

• Understand the VA’s construction and foundation requirements before selecting a property.

• Look for homes that meet HUD’s Federal Manufactured Home Construction and Safety Standards to ensure VA loan eligibility.

• Consider buying in a community specifically designed for manufactured homes to avoid any zoning issues.

• Know the value of the home and land separately so you don’t overpay if buying both.

• Work with a real estate agent familiar with manufactured home loans and regulations in your area.

• Get a home inspection to identify any repairs needed to meet VA property standards.

The Bottom Line

VA loans offer a great financing solution for buying manufactured homes. These loans provide affordable options for veterans to purchase factory-built housing and land. Just be sure any property you’re interested in satisfies the VA’s specific guidelines for manufactured housing. This ensures your VA loan eligibility and helps you fully access your earned home loan benefit.