can you use a va loan for a manufactured home

Yes, it is possible to use a VA loan for a manufactured home. The Department of Veterans Affairs (VA) provides a loan program specifically designed to assist veterans, active-duty service members, and their eligible spouses in financing their homes. While VA loans are commonly associated with traditional stick-built homes, they can also be used to purchase or refinance a manufactured home under certain conditions.

Requirements for Using a VA Loan for a Manufactured Home

In order to use a VA loan for a manufactured home, you must meet certain requirements:

  • The manufactured home must be classified as real estate and affixed to a permanent foundation or included in a lease or purchase agreement for a minimum of 60 years.
  • The home must be built after June 15, 1976, and meet the HUD Code for manufactured homes.
  • The borrower must also meet the basic eligibility requirements for a VA loan, including having a valid Certificate of Eligibility (COE) and meeting minimum credit and income standards.

It is important to note that the manufactured home you intend to purchase must be your primary residence, as VA loans are not available for investment or vacation properties. Additionally, the VA has additional requirements for the appraisal of manufactured homes to ensure they meet minimum property standards.

Loan Limits and Down Payment for Manufactured Homes

The loan limits for VA loans on manufactured homes are the same as those for traditional stick-built homes. The amount of the loan you can qualify for will depend on factors such as your income, credit score, and the appraised value of the property.

When it comes to the down payment, the VA does not require a down payment for loans up to the loan limit. However, if the purchase price of the manufactured home exceeds the loan limit, you may be required to make a down payment for the amount that exceeds the limit.

Streamline Refinance for Manufactured Homes

VA offers a streamline refinance option known as the Interest Rate Reduction Refinance Loan (IRRRL) for manufactured homes. This allows eligible borrowers with an existing VA loan on their manufactured home to reduce their interest rate and monthly payment without the need for a new appraisal or credit underwriting. The IRRRL can be a beneficial option to lower monthly mortgage payments.

Other Financing Options for Manufactured Homes

If you are unable to meet the requirements for a VA loan for a manufactured home, there are other financing options available:

  1. FHA Loans: The Federal Housing Administration (FHA) offers loans for manufactured homes with low down payment requirements and flexible eligibility criteria.
  2. Conventional Loans: Some lenders may offer conventional loans for manufactured homes, although they typically have stricter requirements compared to VA or FHA loans.
  3. Chattel Loans: Chattel loans are a type of personal property loan specifically designed for manufactured homes that are not classified as real estate. These loans often have higher interest rates and shorter terms.

Advantages of Using a VA Loan for a Manufactured Home

Using a VA loan for a manufactured home offers several advantages:

No down payment required (up to the loan limit)
Competitive interest rates
No monthly mortgage insurance premiums
Flexible credit and income requirements
Potential for streamline refinance

It is recommended to work with a knowledgeable VA-approved lender who can guide you through the loan process and help you determine if a VA loan is the right choice for your manufactured home purchase or refinance.

Closing Thoughts

If you are a veteran, active-duty service member, or an eligible spouse, you have the opportunity to use a VA loan for a manufactured home. By meeting the specific requirements and working with a VA-approved lender, you can take advantage of the benefits offered by the VA loan program. Whether you are purchasing a new manufactured home or refinancing an existing loan, exploring your options with a VA loan is worth considering.