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.
Manufactured homes, also known as mobile homes, offer an affordable way for many Americans to achieve homeownership With prices often tens of thousands below comparable stick-built homes, mobile homes are an attractive option for first-time homebuyers and veterans alike
But financing a manufactured home does come with some unique considerations, Mortgage options are more limited than with traditional site-built housing And securing financing with a low down payment can be tricky,
This is where VA loans can help. VA loans guarantee mortgages for eligible military members, veterans, and surviving spouses. And they can be used to purchase manufactured housing.
In this complete guide, we’ll cover topics like:
- What are VA loans and how do they work?
- Can you get a VA loan for a mobile home?
- What are the specific guidelines and requirements to qualify?
- Tips for finding and choosing the best VA lender.
- Steps to take to ensure your manufactured home qualifies.
- Pros and cons of using VA financing for your mobile home.
Let’s get started!
What Are VA Loans and How Do They Work?
The VA home loan program was created in 1944 as part of the GI Bill to help veterans buy homes after returning from World War II. Today, VA loans are still some of the best mortgages available thanks to these features:
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No down payment required. Unlike conventional loans that typically need 3-20% down VA borrowers can finance 100% of the purchase price plus closing costs.
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No mortgage insurance. With conventional loans under 20% down, you have to pay private mortgage insurance (PMI). But VA loans don’t have PMI.
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Competitive rates. VA mortgages often have lower rates than even conventional loans with 20% down.
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Limited closing costs. The VA caps origination fees at 1% of the loan amount.
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Easier to qualify. VA uses more lenient debt-to-income calculations. And they don’t have a minimum credit score requirement.
VA loans are provided by private mortgage lenders but guaranteed by the Department of Veterans Affairs. That means the VA promises to reimburse the lender if the borrower defaults.
To qualify for a VA loan as a military borrower, you need to meet the VA’s service requirements. Then you’ll get a Certificate of Eligibility (COE) that proves to lenders you qualify.
Can You Get a VA Loan for a Mobile Home?
Yes! VA loans can be used to purchase a manufactured or mobile home in many cases.
However, VA lenders set their own requirements. So not every lender will offer VA loans for mobile homes.
Your first step is finding a lender that does offer VA manufactured housing loans. Ask loan officers specifically if they handle these types of mortgages.
Once you find a lender, the loan process follows the standard VA loan steps:
- Pre-approval
- Underwriting
- Closing
A VA loan can finance:
- Buying just a manufactured home to put on land you already own
- Purchasing the home and land together
- Refinancing an existing mobile home loan (including streamline refis to lower the rate)
Next, let’s look at the specific guidelines mobile homes must meet to qualify for VA financing.
VA Manufactured Housing Loan Requirements
The VA has particular regulations mobile homes must comply with to be eligible. These include:
Classified as real estate
The home cannot be considered a vehicle or personal property under state laws. It must be classified as real property.
This often requires converting the title from a vehicle title to a regular real estate title.
Permanent foundation
The home must be attached permanently to the ground according to federal and state regulations.
HUD code compliant
All construction and safety standards defined by HUD must be met. The home should have HUD certification labels.
Minimum size
Single-wide units must be at least 400 square feet. Double-wides at least 700 square feet.
Proper zoning
The home must comply with all local zoning laws regarding manufactured housing.
Meeting these requirements ensures quality and safety regulations are met. It also guarantees the home and land are classified as real estate eligible for mortgages.
Tips for Finding the Best VA Lender
Only some VA lenders offer financing for manufactured housing. So you’ll need to shop around to find one. Consider these tips:
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Ask specifically if the lender handles VA loans for mobile homes. Don’t assume they will.
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Get quotes from multiple lenders. Compare interest rates and fees to find the best deal.
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Look for an experienced lender. Those who do a lot of these loans will best guide you through the process.
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Check reviews. Make sure the lender has satisfied borrowers and few complaints.
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Compare down payment options. While VA loans themselves don’t require a down payment, some lenders ask for one anyway.
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Ask about land requirements. Some lenders require you to purchase land along with the home.
Taking the time to find the right lender ensures your VA loan app goes smoothly and you get the best financing deal.
How to Ensure Your Manufactured Home Qualifies
Beyond finding a lender, you’ll also need to make sure your particular mobile home meets all the VA requirements. Here are some steps to take:
Inspect the foundation – Ensure the home is permanently attached and anchored according to federal standards.
Check the title – Make sure the home is classified as real estate, not personal property. If not, you’ll need to convert it.
Look for HUD labels – Find the required HUD certification tags indicating compliance with construction and safety regulations.
Verify size – Measure that single-wides are at least 400 sq ft and double-wides at least 700 sq ft.
Check zoning laws – Confirm with the local planning office that the home meets all requirements.
Consider upgrades – You may need to make some improvements to meet the VA’s minimum property requirements.
Taking these proactive steps will ensure your mobile home purchase goes off without a hitch!
Pros and Cons of VA Loans for Manufactured Housing
VA loans offer homebuyers several advantages:
Pros
- Requires no down payment
- No need to pay mortgage insurance
- Offers competitive interest rates
- Caps closing costs and origination fees
- More flexible qualifying than conventional loans
However, there are also some potential drawbacks:
Cons
- Fewer lenders offer these loans
- Can be trickier on the appraisal side
- Loan amounts may be lower than site-built homes
- Some lenders require a down payment anyway
But for eligible borrowers, it’s hard to beat a zero-down VA loan at a great rate! Just be sure to find an experienced VA lender that handles manufactured housing.
Ready to Move Forward with a VA Mobile Home Loan?
Buying a manufactured home with a VA loan offers military borrowers an affordable path to homeownership.
Now that you understand the guidelines, requirements, and steps to follow, you can move forward confidently.
The very first thing to do is start shopping around for VA lenders who offer these specialized loans. Get quotes from multiple lenders to find the best rates and terms.
Then inspect the home carefully to ensure it meets the VA’s criteria. Your lender can also guide you through any steps needed to get the title and foundation right.
Once approved, you’ll be well on your way to buying your new manufactured home for thousands less than a comparable site-built home!
Estimate your monthly payment amount
The shorter your loan term, the more expensive your payments are for the same loan amount. And since there’s no 30-year fixed-rate option available to finance a manufactured home with a VA loan, you’ll need to adjust your expectations to fit the available VA loan repayment terms.
Use a mortgage payment calculator to estimate your monthly payments before committing to a loan.
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.
Can I get a VA loan for a manufactured home?
FAQ
Can you use a VA home loan on a manufactured home?
What property Cannot be financed with a VA loan?
Does VA require tie-downs for manufactured homes?
Does VA require a foundation inspection on 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 are the VA requirements for a manufactured home loan?
If you’re interested in a VA loan for a manufactured home, here are the key requirements: 1.The manufactured home must be **attached to a permanent foundation**.2.It should be **classified and taxed as
What is the difference between a mobile home and a VA loan?
The VA treats manufactured and mobile homes the same, which can make it especially challenging to get a VA loan for either home type. However, modular homes are different, and it’s important to understand why. While there are differences in the eyes of the VA, mobile homes and manufactured homes are one and the same.
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.