Can I Get a VA Loan for a Modular Home?

Modular homes are becoming an increasingly popular housing option for many buyers. They provide the benefits of a site-built home at a lower cost. If you’re a veteran considering purchasing a modular home, you may be wondering if you can get a VA loan for it. The short answer is yes, VA loans can be used to finance modular homes in most cases.

What is a Modular Home?

A modular home is a type of factory-built housing. The modules (or boxes) are constructed off-site in a production facility, then delivered to the building site and assembled. Modular homes must meet all local building codes and standards. Here are some key things to know about modular homes:

• Built to the same local codes as site-built homes.
• Constructed off-site in climate controlled factories.
• Transported to the site and assembled.
• Offered in different floor plan configurations.
• Customizable with various finishes and features.
• Generally 10-15% less expensive than comparable site-built homes.

Modular homes differ from manufactured or mobile homes in that they are not built on a permanent chassis. Sections are transported on flatbed trucks and craned onto the foundation.

VA Loan Eligibility for Modular Homes

The Department of Veterans Affairs has specific guidelines regarding what types of factory-built homes are eligible for VA loans. Here are the requirements for modular homes:

• The modular home must be designed to be permanently affixed to a foundation.
• It must be deemed real estate under applicable state law.
• The modular home must conform to all VA minimum property requirements and meet or exceed applicable building codes.
• It must be classified and taxed as real estate versus personal property.
• The foundation and “on-frame” construction of the home must be inspected and approved by third-party inspection agency.

As long as the modular home meets all of these conditions, it can be financed with a VA loan. The VA considers modular construction as equivalent to stick-built homes in terms of quality and performance.

The VA Loan Process for Modular Homes

The process of obtaining a VA loan for a modular home is very similar to that of a site-built home Here are the key steps

• Get pre-approved – Work with a VA approved lender to get pre-approved for a loan amount. This helps you know your budget when shopping.

• Find a home – Search for modular homes the same way you would site-built homes. Visit model homes or dealerships and select a floor plan.

• Select a site – Choose a lot or land to place the modular home on It must meet VA requirements,

• Sign purchase agreements – Sign the sales contract for the modular home and purchase agreement for the land if needed.

• Secure permits – The builder will obtain all needed permits for delivery and installation.

• Complete loan process – Provide all required documentation to your lender to move through underwriting.

• Foundation inspection – VA appraiser inspects the foundation after set.

• Home delivery – The modular is delivered to the site in sections and assembled on the foundation.

• Final inspection – VA appraiser does a final inspection after assembly is complete.

• Closing and move-in – After final approval, close on the loan and move into your new home!

The VA underwriting and appraisal process will validate that the modular home meets all site and construction requirements for guaranty.

Tips for Getting Approved

When applying for a VA loan for a modular home, keep these tips in mind:

• Check zoning laws – Modular homes must meet local zoning requirements for your neighborhood.

• Validation letter – Obtain a validation letter from the manufacturer verifying the home is built to local codes.

• HUD Certification Label – Look for a HUD Certification Label which indicates construction meets codes.

• Research builders – Choose a reputable manufacturer with a good local reputation.

• Planned assemby – Use an experienced installer for delivery and assemby on-site.

• Professional inspector – Hire an independent inspector to examine the modular home before purchase.

Following VA guidelines and taking these steps will help ensure your approval for a modular home loan.

Pros of Using a VA Loan

There are many advantages to financing your modular home with a VA loan versus other loan types:

• No downpayment required – 100% financing available with no downpayment in most cases.

• Lower mortgage rates – VA loans typically have lower interest rates than conventional loans.

• No PMI – VA loans do not require private mortgage insurance.

• No prepayment penalties – The loan can be paid off early with no prepayment penalty.

• Relaxed credit guidelines – VA has more flexible credit standards than conventional loans.

• No income limits – There are no income limits to qualify for a VA loan.

• No minimum credit score – VA does not mandate a certain minimum credit score.

• Limits on closing costs – Closing costs cannot exceed a certain percentage of the loan amount.

Using your VA home loan benefit to purchase a modular home can make financing this housing option much more budget-friendly.

Final Thoughts

Modular homes present an affordable way for veterans to achieve homeownership. As long as the modular home meets VA requirements, it can be financed with a VA loan in most cases. Be sure to work with a VA approved lender who is experienced with manufactured housing loans. They can guide you through the steps and requirements to purchase your modular home. With proper planning and preparation, you can build and finance your dream modular home utilizing your well-earned VA home loan benefit.