VA guarantees loans for manufactured housing or mobile homes. The rules are a little different; for example, your maximum loan amount will probably be lower. The VA guarantees up to 40 percent of the loan amount or the veteran's available entitlement, up to a maximum amount of $20,000. Because most lenders limit VA loans to a maximum of four times the guaranty amount, you’ll have a hard time finding a loan exceeding $80,000.
You’ll need a down payment
The maximum loan amount for a new manufactured home is the lesser of the following:
- 95 percent of the purchase price of the property securing the loan, plus the VA funding fee, or
- The manufacturer's invoice cost, plus or minus the cost of any items added or removed by the dealer, plus certain other costs (up to certain maximums), plus the VA funding fee.
The maximum loan amount for a used manufactured home or a lot and/or necessary site preparation is determined by an appraisal.
Your repayment term is shorter as well. The maximum terms for manufactured home loans are: 20 years and 32 days for a single-wide unit or a combination single-wide unit and lot; 23 years and 32 days for a double-wide unit only; 25 years and 32 days for a double-wide unit and lot; and 15 years and 32 days for a lot only on which to place a manufactured home you already own.
Mobile homes that can be financed with VA loans
A manufactured home is built on a permanent frame and is made to be moved in one or more sections. It must be built to be lived in year round by a single family and there must be permanent eating, cooking, sleeping and sanitary facilities. A single-wide manufactured (mobile) home must be at least 10 feet wide, with a minimum floor area of 400 square feet; double-wide units must be at least 20 feet wide, with at least 700 square feet of floor space.
A modular home is not the same as a manufactured home for VA purposes. Although the parts or sections of a modular home are built in the factory and then brought to your lot, the home must still be assembled at the building site. You could finance such a home, however, with a traditional VA mortgage for single family homes.
How can you use VA loans for manufactured homes?
You may use a VA-guaranteed loan to:
- Buy a manufactured home and/or lot;
- Buy and improve a lot on which to place a manufactured home you already own and occupy;
- Refinance a manufactured home loan in order to buy a lot;
- Refinance your VA manufactured home loan to reduce the interest rate (IRRRL).
Can the mobile home be in a park?
A manufactured home may be located on any rental site or lot owned or to be purchased by you, as long as it’s been approved by VA.
How should you choose your mobile home site?
If you are placing a manufactured home on land you are buying or already own, consider the distance from utility hookups and how much it will cost to install your home there. If service from a public or community water or sewage system is not available, make sure that the ground water and subsoil would allow you to install an individual well and/or sewage disposal system.
If you are buying a manufactured home that will be placed in a park, determine the rental cost, miscellaneous services, and other rules and requirements established by the owner of the park.
Remember that if you want to move your home at a later date, you’ll need to hire a professional mover and the relocating could be expensive.