Can You Get a VA Loan for a Mobile Home?
Unlock the potential of your VA loan for manufactured homes. Understand the nuanced requirements and process to finance your mobile home purchase.
A VA loan is a mortgage program guaranteed by the U.S. Department of Veterans Affairs (VA), designed to help eligible service members, veterans, and their surviving spouses achieve homeownership. These loans are issued by private lenders, such as banks and mortgage companies, rather than directly by the VA itself. They offer competitive interest rates and often do not require a down payment.
Many individuals wonder if this benefit extends to mobile homes. VA loans can finance certain manufactured homes, provided specific borrower and property conditions are met.
VA Loan Eligibility for Mobile Homes and Land
Accessing a VA loan for a manufactured home begins with meeting the standard eligibility criteria for all VA loans. This includes specific service requirements, such as minimum active-duty service, or service in the National Guard or Reserves. Spouses of deceased service members may also qualify for this benefit.
After meeting service requirements, borrowers must obtain a Certificate of Eligibility (COE) from the VA. This document confirms their entitlement to VA home loan benefits.
A manufactured home is a structure built after June 15, 1976, adhering to federal building and safety standards set by the Department of Housing and Urban Development (HUD). For VA financing, the manufactured home must be permanently affixed to a foundation, becoming part of the real estate. Homes built before these HUD standards are not eligible for VA financing. Recreational vehicles (RVs) and tiny homes not on a permanent foundation also do not qualify for VA loans.
The land on which the manufactured home sits also has specific requirements for VA loan eligibility. The property must be owned by the borrower, with the manufactured home being titled as real property. If the land is not owned outright, it must be held under a long-term, transferable lease. For leases, the VA requires a minimum duration, such as 40 years for the home and 20 years for the lot. Homes in mobile home parks where the land is rented are not eligible for VA financing because the borrower does not own the underlying land.
Financing Options and Loan Specifics
VA loans offer financing for manufactured homes, either for the home only (often with leased land) or for both the home and land. A single VA loan can also purchase both the manufactured home and the land simultaneously. This combined financing simplifies the process.
VA loans for manufactured homes feature competitive interest rates. A key benefit is the zero down payment option, and private mortgage insurance (PMI) is not required, leading to lower monthly payments compared to conventional loans.
Repayment periods for VA manufactured home loans vary. Loans including both home and land can have terms up to 25 years, while home-only financing may be around 20 years. Loan limits are based on the appraised property value.
Finding a lender for a VA manufactured home loan can be challenging, as not all VA-approved lenders offer this financing. Borrowers should seek specialized lenders experienced with manufactured homes and their unique appraisal and property requirements.
Applying for a VA Mobile Home Loan
The application process for a VA manufactured home loan begins with pre-approval. First, secure a Certificate of Eligibility (COE) to confirm your entitlement. Then, seek pre-approval from a VA-approved lender to understand your maximum loan amount.
Required documents include income verification (pay stubs, W-2s, tax returns) and a credit report to assess financial stability and creditworthiness. Your COE must also be provided.
A VA-approved appraiser conducts an appraisal to ensure the manufactured home meets the VA’s Minimum Property Requirements (MPRs). This includes verifying the home is permanently affixed to a foundation and complies with local building codes, addressing safety, structural soundness, and sanitation.
The closing process finalizes the loan. This involves a title review to ensure clear property ownership, signing all loan documents, and paying or financing the VA funding fee, if applicable. Some veterans, such as those receiving VA disability compensation, may be exempt from this fee.