If you’re a first time home buyer, you’ve probably had the idea to purchase a manufactured home since they are significantly less expensive than single family homes. And a lot of the time, it’s hard to tell them apart from a traditional home in appearance and quality. Here’s how to go about buying a manufactured home with a VA loan.
Buying a Manufactured Home with a VA Loan
The first step to buying a manufactured home with a VA loan is to confirm that your lender will approve a VA loan on a manufactured home. Most lenders will, but it’s good to check so you don’t get too far down the road. The next step is to get pre-approved for the loan. Often times it can be more difficult to obtain a VA loan on a manufactured home than for a conventional home since default rates are higher on manufactured homes. Next, you’ll need to discuss the VA loan term. The maximum term for a manufactured with the land is 25 years instead of the traditional 30-year conventional term. This could result in a slightly higher monthly payment.
Manufactured home requirements
As far as the property itself, here are the requirements the manufactured home must meet to be eligible for a VA loan:
- Be classified as a real property
- Be affixed to a permanent foundation
- Conform with VA minimum property requirements
- Conform with building codes and zoning requirements
Manufactured homes not yet to the site
If your manufactured home is not yet delivered to the site, it’s considered under construction. In this case, plans and drawings must be submitted to the lender. If any modifications occur before the placement of the manufactured home, those need to be submitted to the lender as well.
Allowable ways to use a VA loan to refinance a manufactured home
You can refinance a manufactured home using a VA loan in these situations:
- Refinance an existing loan in the manufactured home and purchase a lot at the same time
- Use a VA streamline refinance to lower the rate on the manufactured home and lot that your currently own (if the home is currently financed through a VA loan)
- Use a cash out refinance to lower the rate, pay off a non VA loan, or obtain cash from your manufactured home’s equity
Make sure to check with your specific lender as each lender is a little different and may not participate in all of these types of refinances.
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