Does the VA finance manufactured homes? The VA backs mortgages for all kinds of properties -- traditional "stick-built" houses, condominiums and manufactured homes that meet the agency's specifications. VA home loan programs offer flexible credit requirements and are available to eligible home buyers wishing to build or purchase qualified manufactured homes.
Borrower Eligibility Requirements
VA lenders review home loan applicants' income, assets, employment and credit history. As with other types of VA home loans, qualifying for a mortgage for a manufactured home requires applicants to obtain a Certificate of Eligibility (COE) from the VA. In most cases, VA-approved mortgage lenders are able to help borrowers obtain a COE.
Terms and Costs for VA Manufactured Home Loans
Property purchased or refinanced through VA loan programs must meet minimum property requirements (MPR) as determined by licensed appraisers.
Loan amounts for manufactured homes may not exceed 95 percent of the purchase price of property securing a VA loan. This means that if a manufactured home and lot are purchased together for $150,000, the maximum allowed loan amount is $142,500.
According to the Catalog of Federal Domestic Assistance (CFDA), repayment terms for manufactured homes vary according to the type of manufactured home and/or land being purchased:
- Maximum loan term for single-wide manufactured home or a single-wide manufactured home and lot is 20 years and 32 days.
- Maximum loan term for a double-wide manufactured home is 23 years and 32 days.
- Maximum loan term for a double-wide manufactured home and lot is 25 years and 32 days.
- Maximum term for a loan to purchase a lot on which a manufactured home already owned by the borrower is 15 years and 32 days.
The one-time VA loan funding fee for loans on manufactured homes is one percent in 2014; that's $1,425 for the $142,500 mortgage in the example above. This fee can be paid at closing or financed (wrapped into the mortgage). The fee is a one-time charge and there is no monthly mortgage insurance premium. The funding fee functions as an insurance premium; when a borrower defaults on a VA-backed home loan, the lender is reimbursed by the VA.
VA Eligibility Requirements for Purchasing a Manufactured Home
According to the VA, an existing manufactured home is eligible for financing if it meets the following qualifications in addition to the VA's minimum property requirements (MPR) required of all homes financed with VA loans:
- Manufactured homes must be designated as real estate (not personal property like trailers or cars) and taxed as such in the jurisdictions in which they are located.
- Manufactured homes must be affixed to permanent foundations.
- An eligible manufactured home must "substantially"conform to VA minimum property requirements (MPR).
- Manufactured homes are required to comply with all local building codes and zoning regulations for real estate.
VA Requirements for Installing a Manufactured Home
In addition to financing the purchase or refinance of sited manufactured homes, VA also finances the installation of manufactured homes on land purchased by loan applicants. In addition to MPRs required of existing homes financed by VA, there are additional VA compliance guidelines for homes under construction. In the case of manufactured homes, this typically means installation of a manufactured home onto a lot.
VA-approved mortgage lenders work with the VA to ensure that building codes and zoning regulations applicable to manufactured homes are met. In cases where a manufactured home doesn't meet minimum property requirements, the VA may issue exemptions or alterations to its MPRs. The VA reviews requests for exemptions and variances from minimum property requirements under certain conditions, but the home buyer and mortgage lender must submit a written request for variation or exemption to the VA.
Does the VA finance manufactured homes? The answer is yes! Interested buyers should contact LendingTree's network of VA-approved mortgage lenders to request mortgage quotes and to learn more about VA financing for manufactured homes.
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