You can buy a manufactured home with a VA loan. But it's important to understand the full picture before you pursue this option. Here's what you need to know.
Can you buy a manufactured home with a VA loan? The short answer is yes.
The U.S. Department of Veterans Affairs(VA) allows eligible VA borrowers to purchase a variety of home types, including manufactured homes (also known as mobile homes).
However, the home must meet the VA’s strict standards for safety and livability, along with your lender’s guidelines.
We break down everything you need to know about buying a manufactured home with a 0% down VA loan*.
VA loan requirements for manufactured homes
The VA has strict requirements for properties borrowers can buy with a VA loan. While these requirements may seem like a hurdle for homebuyers, they’re in place to protect veterans and active-duty service members. The VA guidelines ensure that any home a VA borrower purchases is safe and in good condition.
After you get an offer accepted on a house with a VA loan, a VA-licensed appraiser will conduct the appraisal on the house.
They’ll ensure that the property meets all of the minimum property requirements and will make recommendations on repairs that need to be made (if any) before you can close on the loan.
Of course, the ideal scenario is finding a house that meets the minimum property requirements right off the bat. If you’re looking for a manufactured home with a VA loan, here’s what to know:
● Single-wide homes must be at least 400 square feet; double-wide homes must be at least 700 square feet.
● The home must be on a permanent foundation.
● The home must be classified as real estate for tax and zoning purposes.
● The home must meet the manufactured home standards set by the U.S. Department of Housing and Urban Development (HUD).
If you are purchasing a new construction manufactured home, you will need to provide your lender with the floor plan and the foundation plan for the home, as well as documentation related to heating, plumbing, electrical, and other systems that will be installed on the property.
Who can buy a manufactured home with a VA loan?
In addition to finding a property that meets VA loan guidelines, you’ll need to meet the VA borrower criteria:
● Veteran, active-duty service member, or eligible surviving spouse from any U.S. military branch
● Must have entitlement available on your certificate of eligibility (COE)
● 580 or higher credit score
● Debt-to-income ratio (DTI)† of 41%or less
● Must meet residual income requirements
If you are a veteran or active-duty service member and you don’t meet the credit score or DTI requirements, it’s still worth applying. The VA gives lenders the flexibility to approve borrowers with lower scores or higher DTIs if they are otherwise qualified for a loan.
Alternatives to manufactured homes
Manufactured homes can be a great option for homebuyers, as they are often less expensive than site-built homes. However, they also come with additional costs and complexities if you’re buying a new manufactured home and putting it on a new site.
If you own the land on which your manufactured home will sit, you’ll need to arrange to have a foundation poured and the home affixed to it. You’ll also be responsible for establishing road access and a driveway, water and sewage access, and any other utility hook-ups required in the area.
Depending on the condition of the land, you may also have to pay to have it cleared and leveled.
If the home is situated in a manufactured home community, you’ll have fewer logistics to work through.
However, if you decide that the additional considerations with a manufactured home are more than you bargained for, there are alternatives. Consider:
● A fixer-upper that is in livable condition but needs cosmetic upgrades you can make over time. Fixer-uppers are often less costly than newer or more recently renovated homes, so you may be able to find one for roughly the total cost of a new manufactured home plus land. You can also get a 0% down VA renovation loan that allows you to cover the purchase price plus repairs.
● A modest site-built house. Opting for a smaller home, or one outside pricier areas, can be an affordable alternative to manufactured housing. You avoid the headaches or clearing and preparing of the land, but may still be able to keep your mortgage costs relatively low.
The bottom line on buying a manufactured home with a VA loan:
The VA gives members of the military community a number of options for the types of homes they can buy with a VA loan, including manufactured homes.
VA manufactured home loans are particularly attractive because you don’t need a down payment — just your closing costs and the VA funding fee, which you may be able to roll into your loan.
If your homeownership goals include one of these unique properties, the next step is to talk with a loan officer who is knowledgeable about VA mortgages. They will walk you through the loan process and tell you exactly what’s needed to qualify.
Start the journey to your new home here.
*A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits.
†Debt-to-income (DTI) ratio is monthly debt/expenses divided by gross monthly income.
Copyright©2022 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. Fairway is not affiliated with any government agencies. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity.