VA Loans for Modular and Manufactured (Mobile) Homes
Purchasing a modular or mobile home may be possible with a VA loan, but you will need to meet some unique requirements.
The VA loan program makes homeownership possible for hundreds of thousands of Veterans every year. Veterans are choosing a VA loan over other mortgage options to take advantage of its unique benefits like $0 down and no PMI.
It is possible to buy a modular, manufactured or mobile home with your VA loan benefit, but it can be difficult. VA minimum property requirements and local building codes are in effect, so many VA lenders don’t offer financing for manufactured or mobile homes.
The VA treats manufactured and mobile homes the same, which can make it especially challenging to get a VA loan for either home type. However, modular homes are different, and it’s important to understand why.
Modular vs. Manufactured Homes
While there are differences in the eyes of the VA, mobile homes and manufactured homes are one and the same. However, modular homes do not fall into the same category.
Unlike mobile or manufactured homes, modular homes have permanent foundations and may have other features similar to traditional or "stick-built" homes—such as basements and crawl spaces. These homes are delivered to the property in two or more pieces, or “modules.” They're assembled on-site, typically under the supervision of a local contractor.
From the outside, modular homes often look very similar to traditional single-family homes. When it comes to lending, an already constructed modular home will often be treated the same as a traditional "stick-built" home.
VA Loans for Modular Homes
Homebuyers can use a VA loan to purchase a modular home in the same way they would a traditional “stick-built” home. VA lenders are much more likely to offer loans for modular homes than for manufactured as true modular homes often meet VA minimum property requirements.
What is a Manufactured Home?
Before exploring the VA’s rules regarding manufactured homes, it’s helpful to define exactly what is meant by a "manufactured home." You may hear the terms manufactured and mobile home used interchangeably, but they're not the same.
A mobile home is a dwelling built at a factory and transported to a property where it’s set up. These domiciles may have a traditional foundation or use metal tie-downs.
Much like mobile homes, manufactured homes are also built in a factory. They can either be set up on a permanent foundation, on blocks or on metal piers. One major difference between manufactured homes and mobile homes is that manufactured homes are intended to remain in one location after they’re set up, while mobile homes can easily be moved from one location to another.
Can You Buy a Manufactured Home with a VA Loan?
You can buy a manufactured home or a mobile home using a VA loan—but you’ll need to meet certain requirements. To qualify for a VA loan, the home you purchase must meet the codes and construction guidelines set by the HUD.
Your home must also meet strict VA requirements, so finding a lender can be tough.
VA Loan Requirements for Manufactured and Mobile Homes
If being able to move your home around is what makes the idea of a mobile home attractive to you, then you may be disappointed to learn that a VA loan might not be an option.
According to HUD guidelines, to qualify for purchase using a VA loan, a mobile home must be properly attached to a permanent foundation and classified and taxed as real property. The home must also meet all applicable zoning requirements and building codes.
In addition, mobile or manufactured homes must “substantially conform” with the VA’s minimum property requirements (MPRs), including:
- Having an enclosed crawl space
- No structural additions
- Manufactured homes must be a maximum of 20 years old
- The property must also be appraised by a VA-certified appraiser
Finally, when purchasing a mobile or manufactured home, you'll have a few options when it comes to location. You can either request a VA loan to buy a mobile home that will go on a piece of land you already own or take out a VA loan to purchase the mobile home and the land at the same time. If you’re purchasing a mobile home that has not yet been moved to its permanent location, you’ll also need to provide your lender with information regarding how you plan to move and install the home.
Maximum VA Loan Term for Manufactured Homes
The maximum loan term for most traditional VA loans is 30 years, you may not be able to get a 30-year mortgage on a manufactured or mobile home. For a single-wide manufactured home, the maximum loan term is generally 20 years and 32 days, regardless of whether you're purchasing the home by itself or with a piece of land.
If you're thinking of purchasing a double-wide, your maximum loan term will be 23 years and 32 days. With the purchase of a lot, this term increases to a maximum of 25 years and 32 days.
There are pros and cons to shorter loan repayment periods. You’ll pay less in interest overall and pay off your home in fewer years. However, your monthly payment will be larger than it would be for a 30-year loan. You'll want to keep this in mind and ensure you can afford the monthly payment.
However, as with most things, be sure to check with your VA lender regarding maximum loan terms for manufactured homes.
Credit Requirements for Manufactured Homes
It's important to note that VA loans are not actually issued by the VA. Instead, they're issued by private lenders and guaranteed by the VA. This means that it's ultimately up to the lender to set their own requirements for approval.
Often, lenders will require slightly higher credit scores for borrowers looking for VA loans for manufactured or mobile home purchases. While there’s no set minimum, many VA lenders look for a credit score of 620 or higher.
Limited Lender Options for Manufactured and Mobile Homes
While all VA lenders can write loans for manufactured or mobile homes, very few do. There are a few reasons for this.
Historically, borrowers purchasing these types of homes have been more likely to default. In addition, manufactured homes tend to decrease in value over time, making them less attractive to lenders. Since these loans involve a bit more risk, you may find that you have difficulty connecting with a VA lender who is willing to finance your manufactured or mobile home purchase.