The federal government created VA loans to make it easier for veterans and service members to become homeowners. The program helps equip our deserving military with adequate and affordable housing.
If you’re using a VA loan for manufactured homes, the guidelines and requirements can be a little confusing. Before diving in, you will want to familiarize yourself with the differences between mobile, manufactured, and modular homes. VA loans have particular criteria that affect these types of homes differently.
Learn more about what it takes to get a VA loan for manufactured or modular homes.
What Is a VA Loan?
A VA loan refers to a government mortgage loan backed by the United States Department of Veterans Affairs (VA), previously known as the Veterans Administration. While the government backs these loans, private lenders issue them.
This type of loan is available for the following people with little or no down payment:
- Service members
- Surviving spouses
VA loans usually have generous terms and conditions, but you and your home must first meet a few prerequisites.
General Requirements for VA Loans
You must meet certain requirements to be eligible for a VA home loan. Before receiving the loan, you need to request a Certificate of Eligibility (COE). You will show this as proof to your lender that you qualify for this type of loan, thanks to your service history.
As long as you did not receive a dishonorable discharge and meet the minimum active-duty service requirements, you will likely be able to obtain a COE. Specific eligibility requirements differ depending on the following categories:
- Veterans and service members on active duty
- National Guard members
- Reserve members
VA Loan Benefits
There are some key benefits of VA loans, including:
- Competitive interest rates
- Closing cost limits
- Funding fee exemptions
- Foreclosure avoidance
- No prepayment penalties
- No loan limits
- No down payment
- No private mortgage insurance
- Relaxed credit requirements
Difference Between Mobile, Manufactured and Modular Homes
While many people use the terms mobile, manufactured, and modular interchangeably when it comes to homes, they are different and have unique characteristics.
Mobile and Manufactured Homes
Mobile homes are manufactured homes built before June 15, 1976. Modern manufactured homes replaced these after the United States Housing and Urban Development (HUD) division ruled them obsolete with new policy changes that year.
Builders construct manufactured houses according to federal construction codes outlined by HUD. These codes allow for greater consistency and accuracy during the building process. They are used for long-term housing and typically have better loan terms, especially when you either already have land or purchase a lot along with the home.
Modular homes are slightly different and often resemble traditional stick-built single-family homes. The primary differentiator between modular and manufactured homes is that modular homes must abide by state and local government building codes rather than federal guidelines.
There are two kinds of chassis for this style of home. Contractors either build modular homes on-frame or off-frame. On-frame homes are typically cheaper and don’t require the builders to incorporate a permanent foundation.
Minimum Property Requirements for VA Home Loans
The VA loan program intends to make it easier for veterans to become homeowners and find a proper place to live. There are both property and occupancy requirements.
VA loans require veterans to occupy a home for a minimum of one year after buying. VA professionals also must appraise any property purchased with one of these loans. This appraisal will ensure that the property meets the minimum requirements set forth by the VA, including, but not limited to the following:
- Working mechanical systems
- Adequate roofing
- Working electrical systems
- Sanitary water supply
- No lead-based paint
- No dry rot or fungus
- No signs of wood-destroying insects
- Sanitary sewage disposal
- Accessibility to an all-weather street
- Proper ventilation
- No signs of leaks
Getting a VA Loan for Manufactured Homes
Does a VA home loan cover manufactured homes? In short, the answer is yes, though there are some conditions.
The manufactured home must meet the following requirements to be eligible for a VA loan:
- Real estate: The state government must classify and tax both the home and property as real estate.
- Zoning: The home needs to abide by all local zoning requirements.
- Size: There are two common types of manufactured homes – single- and double-wide. Single-wide options require at least 400 square feet of land, while double-wide homes need at least 700 square feet.
- Foundation: VA loans require manufactured homes to have a permanent foundation.
Having a permanent foundation is important because manufactured homes without a fixed foundation are generally not considered real property and often must be registered as vehicles rather than real estate.
There are three mortgage options regarding manufactured homes and VA loans, including:
- Already owning land and using the loan solely for your manufactured home.
- Purchasing land and the manufactured home at the same time with the VA loan.
- Refinancing a manufactured home you already own and using the VA loan to purchase the land.
Does a VA Home Loan Cover Mobile Homes?
Technically, no. Because mobile homes were manufactured before June 15, 1976, these houses do not meet VA loan requirements.
Getting a VA Loan for Modular Homes
Can you buy a modular home with a VA loan? The answer is yes!
Finding a lender is typically easier for a modular home rather than a manufactured one. Again, modular homes must comply with all local and state building codes rather than federal guidelines.
Buying an existing modular home is similar to buying a traditional single-family house. Obtaining a VA loan will become more complicated for buyers looking to install a new modular home on a property, as this could require a construction loan.
Construction loans with $0 down can be very challenging to get as lenders often find this too risky. Veterans and service members may need to find a local lender or builder for the construction loan, then refinance into a permanent VA mortgage after the building is complete.
See if You Qualify for a VA Loan
While CIS Home Loans does offer VA loans for manufactured homes, we do offer standard VA loans for veterans interested in traditional homes. Our team is knowledgeable and willing to help you through your journey. We prioritize a streamlined application process and have decades of experience providing our customers with speedy services.
Contact us or visit CIS Home Loans to learn more about our financing programs and VA loan options today!