Can You Use a VA Loan on a Manufactured Home?

VA loans assist military service members, veterans, and eligible surviving spouses in achieving homeownership. These loans can be used for manufactured homes, but specific conditions apply. The process involves requirements for the property and a detailed application and appraisal procedure.

VA Loan Eligibility for Manufactured Homes

Financing a manufactured home with a VA loan requires the property to meet specific criteria. A manufactured home must have been built on or after June 15, 1976, when the U.S. Department of Housing and Urban Development (HUD) established comprehensive construction and safety standards for these dwellings. Homes built before this date generally do not qualify for VA financing due to lacking these federal standards.

The manufactured home must be permanently affixed to a foundation and classified as real property. This means its wheels, axles, and towing hitches must be removed, and it must be titled as real estate at the local recorder’s office. The foundation itself must meet VA standards, ensuring stability and durability, and be engineered to support the home’s loads and withstand environmental factors.

The veteran must own the land where the manufactured home is situated, or be in the process of purchasing it simultaneously with the home. VA loans typically do not permit financing for manufactured homes located on leased land. The property must also comply with all local zoning laws and regulations.

A single-wide manufactured home must have a minimum of 400 square feet of living space, while a double-wide home requires at least 700 square feet. The manufactured home must also display a HUD tag and an interior data plate. These certifications verify that the home was built to federal standards.

It is generally challenging to obtain a VA loan for a manufactured home that has been moved from a previous site. Most lenders prefer homes that have been installed only once, at their current and permanent location, due to potential structural and inspection complexities. Homes with all necessary utility hookups, including water, sewer, and electricity, are also a standard requirement.

Property Appraisal and Inspection

Once a suitable manufactured home and land are identified, the property undergoes a specific VA appraisal process. A VA-approved appraiser evaluates the property to determine its fair market value and ensure it meets the VA’s Minimum Property Requirements (MPRs). These MPRs are designed to ensure the home is safe, structurally sound, and sanitary for habitation.

The appraiser will closely examine the home’s foundation to confirm its permanence and adherence to VA and HUD guidelines. Often, a professional structural engineer’s certification is required to confirm that the foundation meets established standards, such as those outlined in the “Permanent Foundations Guide for Manufactured Homes” (1996). This certification ensures the foundation’s integrity and compliance.

The appraisal also involves verifying the presence of the required HUD labels. These identifiers confirm the home’s compliance with federal construction standards. The appraiser will assess the overall condition of the home, noting any signs of damage, safety hazards, or issues that could affect its longevity.

While the VA appraisal assesses the property’s value and compliance with MPRs, it is not a substitute for a comprehensive home inspection. Buyers often choose to obtain a separate home inspection to gain a more detailed understanding of the home’s physical condition and identify any potential issues not covered by the appraisal. Any repairs noted by the appraiser as necessary to meet MPRs must be completed before the loan can be finalized.

Loan Application and Closing

Initiating the process for a VA loan on a manufactured home begins with finding a lender experienced in this specific type of financing. Not all VA-approved lenders offer loans for manufactured homes, so it is important to research and identify those who do. Some lenders specialize in these loans and can provide specific guidance.

Before formally applying, borrowers will need to obtain a Certificate of Eligibility (COE) from the Department of Veterans Affairs, which confirms their eligibility for the VA loan benefit. Following this, the pre-approval process involves submitting financial documentation, including income verification and credit history. While the VA does not set a minimum credit score, most lenders typically require a score of at least 620 to 640.

Once the property has been selected and the appraisal and any necessary inspections are completed, the loan application is formally submitted. The lender then proceeds with underwriting, a stage where all documentation is thoroughly reviewed to ensure it meets both VA guidelines and the lender’s specific requirements. This includes assessing the borrower’s debt-to-income ratio and overall financial stability.

The final step is the closing process, where all necessary documents are signed, and the loan is funded. Borrowers should anticipate closing costs, which typically range from 1% to 5% of the total loan amount. These costs can include the VA funding fee, loan origination fees, appraisal fees, and title insurance. The VA funding fee, a mandatory charge that helps sustain the VA loan program, can range from 0.5% to 3.3% of the loan amount, depending on factors such as first-time use, down payment, and disability status.