A VA loan for a manufactured home can offer military borrowers a low-cost, accessible path to homeownership. Manufactured homes are roughly half as expensive as traditional site-built homes on a per-square-foot basis, and VA loans typically offer competitive interest rates and loan terms.
However, only VA-approved lenders can provide VA loans for manufactured homes. In addition, the property must meet specific VA standards in order to qualify for a VA loan.
The VA home loan program offers many benefits to eligible veterans and service members. One common question is whether VA loans can be used to purchase manufactured or mobile homes. The answer is yes, under certain conditions. VA loans may cover single-wide and double-wide manufactured homes providing an affordable housing option for some borrowers.
Overview of VA Loans
The VA home loan program helps military families buy, build, repair, or improve a home. Key features include
- Requires no down payment for most borrowers
- Allows gift funds or grants for closing costs
- No monthly mortgage insurance premiums
- Competitive interest rates
- Can be assumed by qualified veterans when a home is sold
VA loans are provided by private lenders but guaranteed by the Department of Veterans Affairs. This reduces risks to lenders and allows better terms for eligible borrowers.
VA Loan Uses
VA loans can be used to purchase an existing home or build a custom home. The property can be a single-family house, condo, townhome, or manufactured or mobile home.
Primary uses of VA loans include:
- Purchase a home as a primary residence
- Refinance an existing VA loan to lower payments or tap home equity
- Make energy efficiency improvements with the VA Energy Efficient Mortgage
- Buy, build, or improve a home with the VA Cash-Out Refinance
VA also offers loans to Native American veterans on federal trust lands through its Native American Direct Loan program.
Requirements for Manufactured Homes
The VA has specific requirements when financing manufactured housing with a VA loan:
- The home must have at least 400 square feet for single-wide models or 700 square feet for double-wide models.
- It must be classified and taxed as real estate, not personal property.
- The home must be on a permanent foundation.
- It must conform to HUD manufactured home construction standards and display a HUD data plate/compliance certificate.
Modular homes assembled on-site and built to local building codes can also qualify, as they are considered stick-built homes.
Challenges with Manufactured Home Loans
While VA guidelines allow manufactured home financing, some limitations exist:
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Limited lender options – Not all lenders offer VA loans for manufactured housing. Veterans may need to shop around.
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Construction loans – It can be difficult to find lenders willing to provide true $0 down VA construction loans for manufactured homes.
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Lower appraisals – Manufactured homes may appraise for less than site-built homes, limiting financing options.
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Resale challenges – Manufactured homes tend to appreciate slower than site-built houses, making resale more difficult.
As a result, veterans should carefully consider both purchase price and loan amount when buying a manufactured home with a VA loan. Shopping with multiple lenders can help find the best financing option.
Tips for Buying a Manufactured Home with a VA Loan
If you’re eligible for a VA home loan, here are some tips for purchasing a manufactured or mobile home:
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Find a lender – Work with a lender familiar with VA loans for manufactured housing. Ask about construction loans if building new.
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Research insurance – Make sure you can get homeowners insurance that meets VA requirements. Rates may be higher.
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Check zoning laws – Ensure the home and property comply with local zoning for manufactured housing.
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Inspect carefully – Get an independent inspection to identify any repairs needed to meet VA minimum property standards.
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Know resale limits – Understand that manufactured homes come with more limited resale value before purchase.
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Compare costs – Weigh the overall purchase price, loan amount, insurance, maintenance, utilities, and more against site-built homes in the area.
With proper research and planning, a manufactured home can provide an affordable option for veterans and service members buying with a VA loan.
Alternatives Beyond Manufactured Homes
If you find that VA loan options are limited for manufactured housing, other alternative types of affordable properties to consider include:
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Modular homes – These stick-built homes are assembled on-site from factory components. They appreciate better than manufactured homes.
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Class B multifamily – Duplexes, triplexes, and quads can provide rental income to offset costs. Make sure it meets VA occupancy rules.
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Condos/townhomes – Attached housing often costs less than detached single-family homes. Condo fees cover exterior maintenance.
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Fixer-uppers – Properties needing rehab work can provide sweat equity opportunities if you have DIY skills.
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** Rural properties** – Homes outside metro areas in small towns can offer lower prices and land. Qualify for the VA’s Rural Development Direct Loan as well.
Don’t limit yourself to just manufactured housing if you have trouble finding a lender or locating an ideal property. Talk to a qualified VA loan specialist to explore all your options for affordable homeownership.
Weigh Your VA Loan Benefits
VA home loans present a great chance for eligible veterans and service members to buy a home with little to no down payment. While manufactured and mobile homes can be financed, make sure to understand the pros and cons. Do your homework and look at all available types of properties within your budget. A VA loan gives you the power to receive favorable financing terms – take advantage by becoming an informed buyer. Consult a VA lender to determine the optimal home loan solution for your needs and family.
Shopping tips for VA loans for manufactured homes
Whether you’re using an online rates comparison tool or calling loan officers directly, be sure to gather quotes specifically for manufactured home financing. Mortgage rates and fees for manufactured homes are usually more expensive, and if you don’t let lenders know upfront that you want to buy a manufactured home, you’ll likely get quotes for a single-family home.
Am I eligible for a VA loan for a manufactured home?
The VA requirements for manufactured home loans aren’t the same as a loan for a traditional, site-built home. Here’s what to expect:
The VA requires a minimum 5% down payment for a manufactured home, compared with 0% down for a site-built home.
The VA doesn’t set a minimum credit score for any loan type, but lenders’ requirements may be more stringent than the 620 score they commonly require for a traditional home loan. Lenders consider manufactured homes a slightly riskier investment.
VA-approved lenders may also expect you to carry less total debt compared to your income than they would for a site-built home. The metric they use to measure this is called your debt-to-income ratio. The VA recommends a maximum 41% DTI ratio, but be prepared for lenders to lower that ratio as a safeguard against risk.
Most borrowers must pay a VA funding fee between 1.4% and 1.65% of the loan amount. Borrowers with a qualifying disability may qualify for a VA funding fee exemption.
The easiest way to find out if you’re eligible for VA loan benefits — as well as how much of your benefit remains — is to look at your certificate of eligibility (COE). You can request a COE online using the Veterans Information Portal.
Each regional VA loan center has unique local requirements for the manufactured houses in its region, which address things like installation procedures, required utilities and weatherproofing measures. The home must also meet general VA minimum property requirements, which ensure that it’s safe and sanitary.
The home must meet HUD Manufactured Home Construction and Safety Standards, and should have HUD tags. Homes manufactured before June 15, 1976, aren’t eligible.
The manufactured home must have at least 400 square feet of living space.
The title company handling your purchase or refinance must prove that your home is permanently affixed to the land and classified as real property to meet VA manufactured home guidelines. A document called an affidavit of affixture is often used to prove that the property is attached to land you own.
The manufactured home must be classified as real property, not personal property (also known as “chattel”).
- In states that have adopted the Uniform Manufactured Housing Act, the owner of the manufactured home can get the home reclassified through a straightforward process set out in the statute.
- In states where there is no established way to reclassify a piece of property — Connecticut, Hawaii, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, as well as the District of Columbia — the VA will accept an ALTA Endorsement 7-06 instead.
VA Manufactured Home Loan
FAQ
Can you use a VA home loan on a manufactured home?
Can I use the VA home loan to build a home?
What is considered a permanent foundation for a manufactured home?
What is the difference between modular and manufactured homes?
Can a VA loan buy a mobile home?
Yes, you can use a VA loan to buy a manufactured or mobile home, but it’s important to understand the distinction. When people talk about “mobile homes” or “trailers,” they’re typically referring to a manufactured home.
What is the difference between a regular mortgage and VA manufactured home?
There are a few differences between regular mortgages and VA manufactured home loans, including: Mobile home mortgages are subject to a maximum loan term of 25 years for larger units and 20 years for smaller ones. Lenders will typically look for better credit scores for mobile homes.
Do manufactured homes qualify for a VA loan?
Whether brand new or existing, manufactured homes typically need to be affixed to a permanent foundation and classified as real property to qualify for a 30-year VA loan. They’ll also need to conform with the VA’s Minimum Property Requirements. Modular homes are treated differently from manufactured homes.
Can you refinance a mobile home with a VA loan?
VA loan rules also allow cash-out refinancing of a mobile home or manufactured home, but you will need to see if there is a participating VA lender willing to offer such an option for a mobile home. Get a free, no-obligation consultation regarding your VA Loan!