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VA Loans For Manufactured Homes: What They Are and How They Work
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Manufactured homes are a low-cost housing alternative to single-family homes built on site. Military borrowers can finance manufactured homes through lenders approved by the U.S. Department of Veterans Affairs (VA). To qualify for a VA loan on a manufactured home, the property must meet specific VA standards.
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 that you own. By itself, a manufactured home is considered personal property similar to a car. However, once the home is permanently attached to land, it’s 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 meet VA manufactured home foundation requirements.
Here are three of the most common mortgage options VA-approved lenders offer to help you 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. You can use a VA loan to finance the cost of the home plus any improvements needed to bring electricity and water to the lot. You can also roll VA funding fees 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 may cover the land purchase and site preparation expenses for the home to be permanently anchored to your land. You can also finance the cost of transporting and assembling 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 rented land, consider buying your own lot. Once you find the perfect plot, the manufactured home can be transported to the new site and permanently attached, using a VA loan to buy the land and move the manufactured home. 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?
The VA requirements for a manufactured home are 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% for a manufactured home, compared with 0% 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 with your income, a measure more commonly referred to as your debt-to-income ratio (DTI).
A recorded affidavit of affixture
The title company handling your refinance or purchase must record a document called an affidavit of affixture to meet VA manufactured home guidelines. The affidavit of affixture proves the property is attached to land you own and adheres to 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-rate mortgage is popular because it offers a stable, low monthly payment, but VA financing for manufactured homes requires shorter payoff periods. The chart below shows the longest terms available for a VA mortgage based on different 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 manufactured home loans. 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. Mortgage rates and fees are usually marked-up for manufactured homes, and if you don’t let lenders know upfront that you want to buy a manufactured home, you’ll likely get a quote for a single-family home.
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 term depends 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.
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 check your credit score to avoid surprises when it’s time to lock your loan.