Can You Get a Mobile Home With a VA Loan?

Can You Get a Mobile Home With a VA Loan?

A common question for many individuals exploring homeownership involves the possibility of financing a manufactured home using a VA loan. The answer is yes, a VA loan can be utilized to purchase a manufactured home, provided specific criteria are met for the property and the borrower. VA loans are a benefit extended to eligible service members, veterans, and surviving spouses, facilitating homeownership with favorable terms. While “mobile home” is often used, the Department of Veterans Affairs (VA) and lenders refer to “manufactured homes” for properties built after June 15, 1976, which adhere to federal construction standards.

VA loans offer advantages, such as competitive interest rates and, for many eligible borrowers, no down payment requirement. This makes them a valuable tool for affordable housing solutions, including manufactured homes. The process involves meeting requirements that ensure the home is a suitable long-term residence and a sound investment.

Eligibility Criteria for VA Loans on Manufactured Homes

For a manufactured home to qualify for VA loan financing, it must meet property requirements. The home must be permanently affixed to a foundation that meets VA and local building codes. An engineer’s certification may be required to confirm the foundation’s compliance.

The manufactured home and the land it occupies must be classified as real property. This means the home’s title must be retired or converted, legally joining it with the land. The home must have been constructed to Department of Housing and Urban Development (HUD) standards, indicated by a HUD certification label or “HUD tag.”

The manufactured home must be in good condition, structurally sound, and meet the VA’s Minimum Property Requirements (MPRs). MPRs ensure the property is safe, sanitary, and structurally sound, including requirements such as adequate heating, proper utilities, and the absence of hazards. The borrower must own the land on which the manufactured home is permanently located; VA loans do not finance manufactured homes on rented or leased land. Manufactured homes must also meet minimum size requirements, often 400 square feet for single-wide and 700 square feet for double-wide units.

Beyond the property itself, borrowers must satisfy standard VA loan eligibility requirements. This includes obtaining a Certificate of Eligibility (COE), which confirms military service and entitlement to VA loan benefits. Most lenders require a credit score of at least 620. Lenders also assess a borrower’s income and debt-to-income (DTI) ratio to ensure the ability to repay the loan. The preferred DTI for a VA loan is 41% or lower.

The Application and Approval Process for Manufactured Home VA Loans

Initiating the process for a manufactured home VA loan begins with finding a VA-approved lender. Not all lenders offer VA loans for manufactured homes, making it important to seek out those with specific experience.

Once a lender is identified, the next step involves pre-qualification or pre-approval. This stage requires providing financial information, including income, assets, and credit history, to the lender. The lender uses this information to determine the maximum loan amount for which the borrower may qualify. A pre-approval letter can also strengthen an offer when a suitable manufactured home is found.

The formal loan application requires submitting various documents, such as the Certificate of Eligibility, income verification (e.g., pay stubs, W-2s), and bank statements. Following the application, a crucial step is the manufactured home appraisal and inspection. A VA-assigned appraiser will assess the property’s value and confirm it meets the VA’s Minimum Property Requirements and HUD code compliance. The appraiser verifies the presence and compliance of the permanent foundation and overall structural integrity.

After the appraisal, the loan moves into underwriting, where the lender conducts a comprehensive review of the application, property details, and the borrower’s financial profile. Underwriters ensure all documentation is complete and that the loan adheres to both VA guidelines and the lender’s specific criteria. The final stage is the closing process, where all necessary documents are signed, funds are disbursed, and ownership of the manufactured home is transferred to the borrower. This involves signing the mortgage note, deed of trust, and reviewing closing costs, which may include a VA funding fee.