VA loans can be a great resource. They offer low-interest rates with low or zero down payments. To take advantage of this opportunity, you’ll need to know when and how to use VA loans.
Can You Get A VA Loan For A Mobile or Manufactured Home?
VA loans can be used to purchase a manufactured home, but you’ll have to meet several requirements.
Acquiring a VA loan for a mobile home will also depend on the lender. Some VA-approved lenders won’t approve loans for manufactured homes, so you’ll have to find one that does. It can be difficult to find one of these lenders, so you might need to spend some time looking for one.
How Do Mobile And Manufactured Homes Differ?
The terms mobile home and manufactured home are often used interchangeably. However, they do refer to different types of homes. Legally speaking, manufactured homes are built after the Manufactured Home Construction and Safety Standards law was passed in 1976. If a movable home was built before that date, it’s considered to be a mobile home.
Oftentimes, the term mobile home is really used to describe a manufactured home. You’ll want to see what date your mobile home was built to see if you qualify for a VA loan.
Although lenders may use the term mobile home loans, VA loans cannot be used for mobile homes. They can only be used for manufactured homes.
VA Manufactured Home Guidelines
To use VA loans, you need to follow a set of guidelines. When this comes to purchasing mobile homes, there are a few more VA loan requirements to follow.
There are several property requirements to qualify for a VA manufactured home loan. First, the manufactured home must be attached to a permanent foundation. Approval from the VA would create an exception to this rule.
Additionally, the home must be at least 700 square feet. This measurement must be done of the interior space. The home must also comply with real estate zoning and building code requirements.
Must Be Classified as Real Property
The home must also classify as real property to qualify. This means that the home is titled with the land it sits on. Some home buyers may obtain an exception from the VA for this guideline.
Must Be On Its Own Lot/Property
To comply with federal regulations, your manufactured home must have its own lot. You can either buy a home for a lot that you already own, or you’ll need to buy a lot with the mobile home. Either way, the manufactured home will need to be located on property you own to be in compliance.
As long as you meet this property requirement, you can also use a VA loan to refinance a manufactured home.
Will the VA Finance a Manufactured Home That Has Been Moved?
Because manufactured homes need to be permanently fixed to a foundation to qualify for a VA loan, most lenders will not approve a loan for a home that has been moved. For this reason, homes that can be moved or used as a vehicle cannot be used for VA loans.
However, as long as you attach the property to a permanent foundation, the home will still meet the government requirements for a VA loan. You might also need to re-title the home with the new location.
Challenges to Obtaining a VA Loan for a Mobile Home
Finding a Lender
The biggest challenge to obtaining a VA loan for a mobile home is finding the right lender. Many VA lenders don’t support mobile home loans. For those that do, your options for lenders may be more limited than lender options for other VA home loans.
Higher Down Payment
Using VA loans for manufactured homes also requires a higher downpayment. While most VA loan programs boast a zero money-down option, this is not the case for mobile home loans. There is a minimum down payment requirement of 5% to use your VA loan for a manufactured home.
Stricter Credit Requirements
There can also be stricter credit requirements for VA mobile home loans. Manufactured homes tend to be considered a riskier investment than on-site homes. As a result, lenders will require a higher credit score and a lower debt-to-income ratio. If your loan application is denied, you might need to raise your credit score or pay off some of your debt before you can qualify.
Loan Terms for VA Loans for Manufactured Homes
Loan terms for manufactured home loans tend to be shorter than other home loans. A typical VA mortgage loan has a 30-year repayment term. However, VA loans for manufactured homes cannot be longer than 20 years and 32 days.
For double wide-homes, the loan term may be longer. Depending on the home, the maximum loan term could be between 23-25 years.
Applying for a VA Manufactured Home Loan
Applying for a VA manufactured home loan will follow the same process as any other loan. You’ll need to send the lender documents regarding your finances and income, meet all federal requirements to use a VA loan, and be approved by a loan underwriter.
Who Qualifies for VA Loans
To use a VA loan you’ll need to meet one of the following eligibility requirements.
- A veteran
- An active duty service member
- A member or discharged member of the National Guard and Reserve
- A surviving spouse
Tips for VA Loans
If you’re unsure how to make the most of your VA loan, talk to an expert. The loan process can get complicated, and applying for VA loans can be more so. It can be difficult to know what home purchases can use VA loans and what guidelines you’ll need to follow. VA Loans for Vets can help you navigate the VA loan process. Call us at 602-908-5849 to get started.