How VA Loans May Be Used When Purchasing a Manufactured Home
Yes, VA loans can be used to purchase a new or preowned manufactured home or a mobile home.
The Department of Veterans Affairs guarantees VA loans, which features competitive interest rates, no down payment requirement, and no private mortgage insurance. These loans are available to military borrowers; active-duty service members, veterans, and surviving spouses.
How do I use a VA loan for a manufactured home/mobile home?
The VA itself doesn’t lend money. It just guarantees them. Mortgage lenders are free to set independent loan eligibility requirements. That means that not all VA lenders offer manufactured home/mobile home loans:
This means you’ll need to do some research to find a VA lender who does offer them. But they do exist.
However, once you find a lender who offers VA home loans, the loan process is the same as a regular VA loan. You’ll go through the standard pre-approval, underwriting and closing steps.
A VA home loan can be used to:
- Buy a mobile home that will be professionally affixed to a lot you already own.
- Purchase a manufactured home and lot at the same time when the home is already affixed to the lot.
- Buy a mobile home and lot at the same time if the home is not yet affixed, but will be.
- Refinance an existing loan on the mobile home and purchase the lot at the same time.
- Use a streamline refinance to lower the rate on a mobile home and lot you already own (as long as there’s a VA loan on the home currently).
- Lower the mortgage rate, pay off a non-VA loan, or obtain cash from your mobile home’s equity through a cash-out refinance.
But remember that every lender determines its own rules so not all of these options will be available from every lender and you may need to shop around.
What’s unique about VA manufactured home loans?
There are differences between a regular mortgage and a mobile home/manufactured home mortgage, Including;
- Manufactured home and mobile home mortgages are subject to a maximum loan term of 25 years for larger units and 30 years for smaller ones.
- Lenders will typically look for better credit scores for mobile homes.
- It may be difficult to find a lender, as few lenders offer VA loans for manufactured/mobile homes.
The default rate for VA loans is higher than other loan types, which is part of the reason lenders will require higher credit scores, or may not offer these types of loans at all.
But many lenders are willing to offer VA manufactured home loans to homebuyers who are seeking them, so its good to shop around.
Source: The Mortgage Reports
