For many prospective homeowners, traditional brick-and-mortar homes may seem out of reach due to escalating prices and low housing inventory. However, an alternative form of housing is rapidly gaining popularity: manufactured and mobile homes.
Fortunately, Veterans can use their VA loan benefit to purchase a manufactured home. Below well guide you through securing a VA loan for a manufactured or mobile home, highlighting the benefits, property requirements and practical considerations you need to know.
Buying a manufactured home with a VA loan offers many benefits for eligible homebuyers VA loans require little down payment, have competitive interest rates, and allow borrowers to avoid paying private mortgage insurance (PMI) While VA loans can be used to purchase site-built homes and condos, they are also one of the best sources of financing for manufactured homes.
In this comprehensive guide we will cover all the key details requirements and guidelines for obtaining a VA manufactured home loan.
What is a VA Loan?
VA loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs. They allow eligible borrowers to purchase a home with favorable terms, including:
- Requires little or no down payment
- No monthly mortgage insurance premiums
- Competitive interest rates
- Lower credit score requirements
- Allows gift funds for down payment
- No limit on loan amount
To be eligible for a VA loan, you must be an active duty or veteran member of the military who served a minimum of 90 days. Spouses of deceased veterans may also qualify. VA loans can only be used to purchase or refinance a primary residence.
VA loans are provided by private lenders, such as banks and mortgage companies. The VA guarantees a portion of the loan, protecting the lender against loss if the borrower defaults. This allows lenders to offer more flexible terms.
Manufactured Home Loan Basics
A manufactured home, formerly known as a “mobile home,” is a prefabricated house that is constructed in a factory and transported to a site where it is installed on a permanent foundation.
Manufactured homes come in single-wide or multi-section units and can range from basic to luxurious. They offer an affordable way to become a homeowner, with prices typically ranging from $50,000 to $150,000.
VA loans can be used to purchase both new and existing manufactured homes. The home must meet certain construction standards and be classified as real property, not personal property. This means it is considered part of the real estate, not a vehicle.
Manufactured Home Requirements for VA Loans
While VA loans provide flexible financing for manufactured housing these types of properties must meet certain criteria to be eligible. Key requirements include
Home Size – The manufactured home must have a floor area of at least 400 square feet.
Foundation – The home must be attached to a permanent foundation system, such as a slab, pier footing, or permanent concrete footings.
Tow Package – The towing hitch, wheels, and axles must be removed.
HUD Certification – The manufactured home must have HUD Code compliance certification. This confirms it was constructed to meet federal building standards.
Real Estate Classification – The home must be classified and taxed as real property, not personal property.
Zoning – Placement of the manufactured home must comply with applicable zoning and land use regulations.
Access – There must be adequate all-weather access from a public or private road.
Conventional Appearance – The home should have a traditional style consistent with site-built homes.
In addition to these standards, manufactured homes must meet all other typical VA minimum property requirements related to safety, soundness, sanitation, utilities, and more. VA appraisers will inspect properties to ensure compliance.
How to Purchase a Manufactured Home with a VA Loan
Purchasing a manufactured home with VA financing follows similar steps to buying a traditional site-built home:
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Get pre-approved – Work with a lender to get pre-approved and determine your borrowing power. Shop and compare VA loan rates and fees.
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Find a home – Search for manufactured homes that meet VA requirements and fit your needs. Focus your search on homes classified as real property.
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Make an offer – Make an offer once you find the perfect home. Hire a buyer agent to assist you with negotiations.
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Inspection – Schedule a home inspection to evaluate the condition of the manufactured home and identify any necessary repairs.
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Appraisal – The lender will order a VA appraisal to ensure the purchase price falls in line with the home’s value and confirm the property meets minimum standards.
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Loan approval – The lender will underwrite and approve the loan once conditions are cleared.
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Closing – At closing, you will sign the final loan documents and take ownership of the manufactured home.
Throughout the process, work closely with your lender and real estate agent to ensure a smooth closing.
Tips for Finding and Purchasing a VA-Approved Manufactured Home
When buying a manufactured home with VA financing, keep these tips in mind:
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Look for homes placed in “all-age” communities without restrictions. Age restrictions will not allow VA financing.
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Search listings for phrases like “real property,” “permanent foundation,” or “HUD approved” to find compliant manufactured homes.
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Hire a knowledgeable real estate agent who specializes in manufactured housing. They can help you identify eligible properties.
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Involve your lender early to determine if the property will qualify for a VA loan.
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Negotiate with sellers to have hitches, wheels and axles removed and provide documentation proving real property classification.
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Order a home inspection by a licensed inspector familiar with manufactured homes.
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Compare multiple VA lenders to find the best rates and ensure smooth financing.
Benefits of Buying a Manufactured Home with a VA Loan
There are many advantages to purchasing a manufactured home with VA-guaranteed financing:
More affordable – Manufactured homes tend to cost significantly less than site-built homes, so you can get into a home for less.
Lower upfront costs – Little or no down payment is required for a VA loan. You also avoid private mortgage insurance.
Favorable rates – VA loans often have lower interest rates compared to conventional mortgages. This makes your monthly payments more affordable.
Customizable features – Manufactured homes allow you to select customizable finishes and layouts to suit your lifestyle.
Energy efficiency – New manufactured homes are constructed to be energy efficient, helping lower utility costs.
Loan portability – VA loans can be assumable, allowing qualified buyers to take over your financing and purchase from you.
Overall, VA manufactured home loans provide affordable homeownership opportunities with flexible financing. By following VA guidelines, you can reap the benefits of owning a manufactured home. Consult with lenders and real estate professionals to successfully navigate the loan process. With proper guidance, your dream of buying a manufactured home can become a reality.
Can I Use a VA Loan to Purchase a Manufactured Home?
Yes, you can use a VA loan to buy a manufactured or mobile home, but its important to understand the distinction. When people talk about “mobile homes” or “trailers,” theyre typically referring to a manufactured home.
The difference between “manufactured” and “mobile” homes dates back to the 1970s when federal building and safety standards emerged. Veterans might struggle to get financing for manufactured homes built before 1976.
Veterans and military members interested in manufactured housing should check with lenders at the outset about whether they make loans for this property type, as policies and guidelines vary by lender.
Veterans United does help Veterans use their benefit to buy new manufactured homes. The company does not finance single-wide manufactured homes or homes installed at a previous location.
Can I Build a Modular Home with a VA Loan?
Things can get more complicated if you want to buy a new modular home and install it on a piece of land. Lenders will often consider this new construction, which changes the complexion when you’re talking about VA home loans. It’s tough to find VA lenders willing to do a true $0 down construction loan.
Often, borrowers need to obtain a construction loan from a builder or a local lender, then look to refinance that short-term loan into a permanent VA mortgage once the home is ready. This is a common pathway for both stick-built and modular-new constructions.
Like most lenders, Veterans United doesn’t offer a VA construction loan. But we do handle the permanent financing for many Veterans who get construction loans from builders or local lenders.
Talk with a Veterans United VA Loan Expert at 855-259-6455 to learn more.
Answer a few questions below to speak with a specialist about what your military service has earned you.
About Our Editorial Process
Veterans United is recognized as the leading VA lender in the nation, unmatched in our specialization and expertise in VA loans. Our strict adherence to accuracy and the highest editorial standards guarantees our information is based on thoroughly vetted, unbiased research. Committed to excellence, we offer guidance to our nations Veterans, ensuring their homebuying experience is informed, seamless and secured with integrity.
VA Manufactured Home Loan
FAQ
Can you use a VA home loan on a manufactured home?
Does VA require a structural inspection on manufactured homes?
What will fail a VA home inspection?
Does VA require tie-downs on manufactured homes?
Can I use my VA loan to buy a mobile home?
The VA requires the following for using a VA loan to purchase a mobile home: Single-wide manufactured homes must have at least 400 sq. ft., and double-wide homes require at least 700 sq. ft.
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.
How do I get a VA loan for a manufactured home?
When getting a VA loan for a manufactured home, the following requirements apply to the property in construction standards for the manufactured home itself: Permanent foundation: VA policy generally requires that the manufactured home is attached to a permanent foundation.
What are the VA requirements for a manufactured home loan?
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.