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VA Loans For Manufactured Homes: A Complete Guide

Mobile homes, or manufactured homes as they’re more commonly called today, are a low-cost housing alternative to homes built on site. Military borrowers can finance manufactured homes through lenders approved by the U.S. Department of Veterans Affairs, or VA. To qualify for VA loans, manufactured homes must meet specific standards set by the VA.

In this article, we’ll cover:

How to use a VA loan to buy a manufactured home

To get a VA loan for a manufactured home, it must be attached to land. By itself, a manufactured home is considered personal property similar to a car. However, once the home is permanently affixed to the land, it becomes eligible for VA financing.

A VA loan can finance the purchase or refinance of both the home and the land, as well as the improvements necessary to attach the home to the lot. We’ll discuss three of the most common options VA-approved lenders offer to help buy or refinance manufactured homes.

1. Buy a manufactured home and put it on land you already own.

Maybe you own the perfect lot that’s ready to add a home. A VA loan can be used to finance the cost of the home plus any improvements you might need to bring electricity and water to the lot. Applicable funding fees can be rolled into the loan balance.

2. Purchase a manufactured home and land at the same time.

If you want to buy land and a manufactured home together, a VA loan can cover the land purchase as well as site preparation expenses for the home to be permanently anchored to your land. Expenses that are eligible for financing include the cost to transport and assemble the home at the new site.

3. Refinance a manufactured home to put on a lot you purchase.

If you own a manufactured home that’s on leased or rented land, you may be considering buying your own lot. Once you find the perfect plot of land, the manufactured home can be transported to the new site and permanently attached, using a VA loan to finance the land purchase and the mobile home move.

The proceeds of the VA loan can also be used to pay off some, or all of the balance of any existing manufactured home loan.

Am I eligible for a VA loan for a manufactured home?

Qualifying for a VA loan to buy a manufactured home is not the same as buying a site-built home. Here’s what to expect:

Higher down payment. The VA requires a minimum down payment of 5%, compared to zero percent down for a site-built home.

Stricter credit and debt guidelines. Credit score requirements may be more stringent because VA-approved lenders consider manufactured homes a slightly riskier investment. Lenders may require less total debt compared to your income, a measure more commonly referred to as your debt-to-income ratio or DTI.

A recorded affidavit of affixture. The title company handling your refinance or purchase will have to record a document called an affidavit of affixture. The affidavit of affixture proves the property is attached to land you own in accordance with local building, wind and VA overturn requirements. The affidavit converts the manufactured home from personal property to “improved real estate” so you can close a VA loan.

Loan terms for VA loans for manufactured homes

A 30-year, fixed mortgage is popular because it offers a stable, low monthly payment, but VA financing for manufactured homes requires shorter payoff periods. The chart below displays the longest terms available for a VA mortgage based on different manufactured home financing scenarios.

Manufactured home scenario Maximum VA loan term
Land purchased for a home you already own 15 years and 32 days
Single family manufactured home and land purchase 20 years and 32 days
Double-wide manufactured home 23 years and 32 days
Double-wide manufactured home plus land 25 years and 32 days

Shopping tips for a VA loan for a manufactured home

Not all lenders offer financing on manufactured homes. Here are four tips to follow when shopping for a VA lender to finance a manufactured home.

1. Make sure interest rate quotes are for a manufactured home

Whether you’re using a comparison tool website or calling loan officers directly, make sure all the quotes are for manufactured home financing. Rates and fees are usually marked-up for mobile homes, and if you don’t let lenders know up front, chances are you’re  getting a quote for a single-family residence.

2. Explain your scenario to the loan officer

There’s no 30-year fixed-rate option available to finance a manufactured home with a VA mortgage. The maximum terms depend on the loan scenario outlined in the table above, and each lender needs to know what your plans are for your manufactured home and land.

3. Gather rate quotes on the same day

Interest rates change daily and comparing quotes from the same day is the only way to look at apples-to-apples offers. An online mortgage rate comparison site may be the fastest portal to accurate quotes because you can select your property type and  avoid contacting lenders that don’t offer financing on manufactured homes.

4. Get written confirmation of the rate-lock

Once you review competing lender loan estimates and make your choice, ask for a rate lock. Your credit score will be verified by a credit report so it may be helpful to check your credit score to avoid surprises when it’s time to lock your loan.

The bottom line

As the cost of site-built homes continues to rise, manufactured homes present a more affordable option to become a homeowner. Newer manufactured homes offer amenities found in newly-constructed homes like vaulted ceilings, custom kitchens and fireplaces, to name a few.

For military borrowers, combining the benefits of a VA loan with the lower costs of a manufactured home is one cost-effective path to homeownership that’s worth exploring.

 

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