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Using a VA Loan for Manufactured Homes or Modular Homes

Manufactured and modular homes are an attractive option for many VA borrowers, but must meet minimum property requirements and other guidelines specified by the lender.

Veterans and military members can look to use their hard-earned VA loan benefits to purchase a manufactured (mobile) home or a modular home.

But it’s important to understand the difference between these two housing types and some of the challenges of trying to purchase them.

Most importantly, prospective borrowers should know that modular homes and manufactured homes are not the same things. Finding VA financing for a manufactured home can be difficult due to specific property requirements, but it is possible.

Additionally, borrowers looking at brand-new modular housing can face challenges when trying to use VA financing.

Manufactured Homes & VA Loans

Manufactured homes often look more modern than the traditional single- or double-wide trailers many people imagine. However, there are specific guidelines that manufactured homes must meet for VA financing. Note: manufactured homes have been called 'mobile homes' but to be VA-eligible, a manufactured home can not be moved.

VA Manufactured Home Guidelines

Manufactured homes are entirely built in factories and must meet building codes set by the U.S. Department of Housing and Urban Development (HUD). The following is required for a VA manufactured home:

  • Affixed to a permanent foundation
  • Minimum 700 sq ft of interior floor space
  • Must be considered a real estate entity per state law and meet all local zoning requirements for real estate per Chapter 12 of VA Pamphlet 26-7

Manufactured homes must also have a metal identification plate outside the structure. You might hear this called a “HUD tag” or a “red tag.”

Additionally, manufactured homes need to have a “data plate” inside the home, often on a bedroom closet wall or inside a kitchen cabinet. The data plate is a sticker with information about the house and its specifications.

Will the VA finance a manufactured home that has been moved?

Most lenders will not finance a manufactured home if it is moved. Whether brand new or existing, manufactured homes typically need to be affixed to a permanent foundation and classified as real property to qualify for a 30-year VA loan. They’ll also need to conform with the VA’s Minimum Property Requirements.

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Andrea

Andrea's Question:

I am considering buying a plot of land and then having a manufactured home brought to the property. Would a VA construction loan cover the cost of the land as well as the brand new manufactured home?

VA Loan Expert's Answer:

Thanks for writing. Our construction loan post gives a good explanation surrounding VA financing and new build purchases. Most VA lenders will not actually front the costs of new construction. Instead, it's more common to find a builder or local lender to help with a short-term construction loan, and then refinance that into a long-term VA loan upon the home's completion. Our loan specialists are more than happy to talk you through the VA refinance process or any other questions you may have at 1-800-884-5560.

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Can you use a VA loan for a mobile home?

No, the VA cannot lend on mobile homes, but it can finance a manufactured home. The challenge can be finding VA lenders willing to make loans for manufactured housing. That’s because manufactured homes rarely appreciate over time, and they’re often susceptible to storm damage and shorter economic lifespans. These properties also tend to have higher default rates than traditional, stick-built homes.

Veterans and military members interested in manufactured housing should check with lenders at the outset about whether they make loans for this property type. Those who do can explain their policies and guidelines.

Veterans United does not lend on all manufactured homes. However, it is possible to refinance into a VA loan on an existing manufactured home with a permanent foundation. Note: Veterans United does not finance single-wide manufactured homes as they do not meet minimum property requirements.

Modular Homes & VA Loans

Modular homes are treated differently from manufactured homes. Generally, sections of a modular home are built in a factory and then shipped to a home site. From there, the pieces are assembled by professional contractors, much like a traditional, stick-built home. Modular homes must meet local or state building codes rather than federal guidelines.

Veterans looking to purchase an existing modular home encounter the same lending process as those buying a stick-built home.

VA Modular Home Guidelines

  • May be built in pieces/sections and then constructed on site
  • Must be affixed to a permanent foundation
  • Must meet local building code standards
  • Local building inspectors must sign off on structure meeting local requirements
  • Cannot be moved after it has been placed on property

Can I Build a Modular Home with a VA Loan?

Things can get more complicated if you want to buy a new modular home and install it on a piece of land. Lenders will often consider this new construction, which changes the complexion when you’re talking about VA home loans. It’s tough to find VA lenders willing to do a true $0 down construction loan.

Often, borrowers need to obtain a construction loan from a builder or a local lender, then look to refinance that short-term loan into a permanent VA mortgage once the home is ready. This is a common pathway for both stick-built and modular-new constructions.

Like most lenders, Veterans United doesn’t offer a VA construction loan. But we do handle the permanent financing for many Veterans who get construction loans from builders or local lenders.

Talk with a Veterans United loan specialist at 855-259-6455 to learn more.

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