Does VA Loan Cover Manufactured Homes?
Navigate the complexities of securing a VA loan for a manufactured home. Understand the critical requirements and application steps.
A VA loan, backed by the U.S. Department of Veterans Affairs, helps eligible service members, veterans, and surviving spouses purchase homes with favorable terms, often with no down payment or private mortgage insurance. A VA loan can be used to finance a manufactured home, provided specific conditions related to both the borrower and the property are met.
VA Loan Eligibility for Manufactured Homes
Manufactured homes are built in factories to federal building codes, typically after June 15, 1976, when the U.S. Department of Housing and Urban Development (HUD) established these standards. Older “mobile homes” generally predate these HUD standards and are not eligible for VA financing due to safety and structural concerns. VA loans for manufactured homes can be used for purchases, refinances, and improvements.
Standard VA loan borrower eligibility criteria, including service requirements, apply to manufactured home loans. Most veterans are eligible with at least 90 days of active service during wartime or 181 continuous days during peacetime. A Certificate of Eligibility (COE) from the VA confirms a borrower’s eligibility based on their service time.
Not all VA-approved lenders offer financing for manufactured homes. Some lenders have stricter internal policies, known as “lender overlays,” which add requirements beyond the VA’s minimum guidelines. These policies reflect perceived risks or specialized appraisal processes associated with manufactured housing. Therefore, finding a lender with experience in manufactured home financing is a practical first step.
Specific Property Requirements
For a manufactured home to qualify for VA loan financing, it must meet several physical and legal requirements. The home must be permanently affixed to a foundation that complies with VA and HUD guidelines. This often necessitates an engineer’s certification, confirming the foundation meets the standards outlined in the HUD Permanent Foundation Guide for Manufactured Homes.
Ownership of the land on which the manufactured home sits is a non-negotiable requirement. The home and land must be classified as real property, not personal property, under state and local laws. This often involves “title elimination,” where the home’s vehicle title is retired and it becomes permanently affixed to the land, taxed as real estate. Manufactured homes located in parks where the land is leased are not eligible for VA loans.
Compliance with HUD construction and safety standards is mandatory, meaning the home must have been built on or after June 15, 1976. This compliance is evidenced by a HUD certification label, often called a HUD tag, affixed to the home’s exterior, and an interior data plate. The home must also meet VA Minimum Property Requirements (MPRs), ensuring it is safe, structurally sound, and sanitary, with adequate utilities. Single-wide homes typically require a minimum of 400 square feet of living space, while double-wide homes generally need at least 700 square feet.
The VA Loan Application Process
The application process for a VA loan on a manufactured home begins with securing a lender. Since not all lenders finance manufactured homes, it is advisable to seek out those with demonstrated experience in this specialized area. Engaging with a knowledgeable lender early in the process can streamline the subsequent stages.
Once a suitable lender is identified, the next step is often pre-approval, which provides an estimate of the loan amount for which a borrower may qualify. This pre-approval helps set a realistic budget and guides the property search towards manufactured homes that meet VA and lender-specific requirements.
A VA appraisal is a mandatory part of the process for all VA home loans, including those for manufactured homes. This appraisal establishes the property’s fair market value and ensures it meets the VA’s Minimum Property Requirements. For manufactured homes, the appraiser confirms the home is on a permanent foundation and complies with HUD codes, often requiring an engineer’s certification.
Following the appraisal, the loan moves into the underwriting phase. The lender reviews all documentation to ensure compliance with VA guidelines and their own internal policies. This includes verifying the borrower’s income, creditworthiness, and confirming all property requirements are satisfied. Key documents specific to manufactured homes, such as the engineer’s foundation certification and proof of title elimination, will be thoroughly examined. The final step is closing, where all loan documents are signed, and ownership is transferred.