Can You Buy a Modular Home With a VA Loan?
Navigate the path to buying a modular home with a VA loan. Understand the essential criteria and procedural steps for veteran homeownership.
A VA loan provides a path to homeownership for eligible service members, veterans, and surviving spouses, and it is possible to use this benefit to purchase a modular home. While modular homes share many characteristics with traditional site-built residences, distinct considerations apply when financing them with a VA loan. This article details what modular homes entail, the VA’s property standards for them, and the process involved in securing a VA loan for such a dwelling.
Understanding Modular Homes
Modular homes are a segment of prefabricated housing, constructed in sections within a factory setting. These individual sections, or modules, are then transported to the building site and assembled onto a permanent foundation. Once assembled, modular homes are indistinguishable from traditional site-built homes and are considered real property.
A key distinction lies in the building codes that govern their construction. Modular homes are built to the same local, state, and regional building codes that apply to homes constructed entirely on-site. This contrasts with manufactured homes, which are constructed to a federal standard known as the HUD Code and often retain a steel chassis for potential relocation. Because modular homes adhere to conventional building codes and are permanently affixed to land, they are treated similarly to site-built homes in terms of financing and legal classification.
VA Loan Property Requirements for Modular Homes
For a modular home to be eligible for VA loan financing, it must satisfy specific property requirements. The home must be permanently affixed to a foundation designed and constructed to meet both local building codes and VA standards. This includes the removal of any temporary wheels, axles, or towing hitches, solidifying its status as immovable real property.
The modular home’s construction and installation must comply with all applicable local building codes and zoning ordinances. Appraisers evaluating the property for a VA loan will verify this adherence. Properties must also be free from hazards, such as flood zones or environmental contamination, and have year-round access via a public or private road.
The modular home must be legally classified and taxed as real property. This classification is a prerequisite for VA loan eligibility, as the VA does not finance personal property or chattel loans. The home must also have permanent and functional utility connections, including water, sewer, and electricity, to meet the VA’s Minimum Property Requirements (MPRs). MPRs also cover adequate heating and cooling systems, proper ventilation, and sound structural integrity.
The VA Loan Process for Modular Home Purchases
Securing a VA loan for a modular home involves several procedural steps that align closely with those for traditional site-built homes. The initial step involves finding a lender experienced with VA loans for modular homes, as not all lenders offer financing for this property type. Prospective borrowers should obtain a Certificate of Eligibility (COE) from the VA, which verifies their eligibility for the loan benefit.
The appraisal process is a key part of VA loans on modular homes. A VA-approved appraiser will assess the property’s fair market value and confirm it meets all VA Minimum Property Requirements (MPRs). The appraiser specifically evaluates the modular home’s permanent foundation, adherence to local building codes, and overall structural integrity, ensuring it is considered real property comparable to other site-built homes.
While the VA does not mandate a separate home inspection, it is recommended. The VA appraisal itself includes a review of the home’s working systems, such as electrical, plumbing, and heating, as well as its general safety and condition. Any necessary repairs identified during the appraisal to meet MPRs must be completed before loan closing. Documentation required for the loan typically includes the sales contract, the Certificate of Eligibility, and specific details about the modular home, such as manufacturer’s certifications and foundation plans.