Can You Use a VA Loan to Buy Land and a Manufactured Home?

The VA loan program offers a significant benefit to eligible service members, veterans, and surviving spouses by facilitating homeownership. This program, backed by the U.S. Department of Veterans Affairs, provides a pathway to affordable housing, often without requiring a down payment. It is possible to use a VA loan for purchasing both land and a manufactured home, provided certain criteria are met for both the home and the land.

VA Loan Requirements for Manufactured Homes and Land

For a manufactured home to qualify for VA loan financing, it must meet specific structural and classification requirements. The home needs to be permanently affixed to a foundation, classifying it as real property rather than personal property. This means its wheels and axles should be removed, and it must be titled with the land at the local recorder’s office. Homes built before June 15, 1976, generally do not qualify for VA financing because they predate federal construction and safety standards set by the U.S. Department of Housing and Urban Development (HUD).

The manufactured home must also comply with HUD’s construction and safety standards, indicated by a HUD tag on the exterior and a data plate inside the home. Additionally, the home must meet the VA’s Minimum Property Requirements (MPRs), which ensure the property is safe, structurally sound, and sanitary. Minimum size requirements also apply, with single-wide homes typically needing at least 400 square feet of living space and double-wide homes requiring a minimum of 700 square feet.

The land on which the manufactured home is placed also has specific requirements. The borrower must own the land in fee simple, and the property cannot be on leased land. The land must have access to public roads and comply with all local zoning laws and regulations. When purchasing a new manufactured home, the home and land are typically acquired together as a single transaction to ensure the property is classified as real estate from the outset.

Financing Considerations

Using a VA loan for a manufactured home and land involves unique financial aspects that differ from traditional home purchases. VA loans often do not require a down payment, though some lenders might impose their own requirements.

The VA funding fee is a one-time charge paid by the borrower that helps sustain the VA loan program, offsetting the cost to taxpayers. This fee typically ranges from 0.5% to 3.3% of the loan amount, varying based on factors such as the type of loan, whether it’s a first-time or subsequent use of VA loan benefits, and the amount of any down payment made. For instance, a first-time user with no down payment might pay a fee of 2.15%, which can be financed into the loan amount to avoid an upfront expense. Certain exemptions exist for this fee, most notably for veterans receiving VA compensation for service-connected disabilities.

Interest rates for VA loans are generally competitive and often lower than those for conventional or FHA loans. However, interest rates for manufactured home loans might be slightly higher than those for traditional stick-built homes due to perceived differences in risk. A VA-approved appraiser will assess the property’s value, ensuring it meets VA minimum property requirements and HUD codes. The appraisal will confirm the home is properly installed on a permanent foundation and evaluate its structural integrity.

The Application and Approval Process

The process for a VA loan to acquire a manufactured home and land begins with obtaining a Certificate of Eligibility (COE) from the VA. This document verifies a borrower’s eligibility for VA loan benefits based on their service history. Once the COE is secured, finding a VA-approved lender experienced in manufactured home loans is important, as not all lenders offer this specific type of financing.

After selecting a lender, the pre-approval process involves submitting personal and financial documentation, including income verification and credit history, to determine the loan amount for which the borrower qualifies. While the VA does not set a minimum credit score, many lenders typically look for a score of at least 620. With pre-approval in hand, borrowers can then identify a manufactured home that meets the VA and HUD standards, ensuring it is permanently affixed to land.

The VA appraisal, mandatory for all VA loans, must be conducted by a VA-certified appraiser. The appraiser evaluates the property’s value and confirms it adheres to the VA’s Minimum Property Requirements and HUD construction standards. This includes verification of the permanent foundation and structural integrity. Following a successful appraisal, the loan moves into underwriting, where the lender reviews documentation to ensure compliance with VA guidelines and makes a final decision. The final stage is closing, where paperwork is signed, and ownership of the manufactured home and land is transferred.