VA Mobile Home Loans | Requirements 2024

Can VA loans be used for a mobile home?

Yes, VA loans can be used to purchase a manufactured home, also sometimes known as modular homes or mobile homes. So read on as we navigate through the world of VA manufactured home loans.

In this article (Skip to...)

• What is a mobile home loan?
• How do I use a VA loan for a manufactured home?
• What’s unique about VA manufactured home loans?
• VA mobile home guidelines
• Why get a manufactured home loan?
• Using a VA streamline loan
• VA loan eligibility requirements
• Is a manufactured home right for you?

What is a mobile home loan?

A mobile home loan is a mortgage to purchase a manufactured home. But not all mobile home loan financing is the same. There are a few different loan programs to choose from, including:

Chattel loans

Since mobile homes are designed to be moved from location to location, buying one doesn’t necessarily mean purchasing the land where it’s placed. Chattel loans are for purchasing a mobile home unit without the land. For these kinds of transactions, the home financing is considered a personal property loan rather than a real estate loan.

FHA loans

FHA loans are mortgages guaranteed by the Federal Housing Administration (FHA). These loans typically feature a low down payment and more flexible credit score requirements. They can be used to purchase a mobile home.

VA loans

The Department of Veterans Affairs guarantees VA loans, which feature 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.

VA home loan guidelines allow for the purchase of a mobile home.

How do I use a VA loan for a 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 mobile home loans.

That 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 mobile 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 VA 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 a few differences between regular mortgages and VA manufactured home loans, including:

• Mobile home mortgages are subject to a maximum loan term of 25 years for larger units and 20 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 homes.

The default rate for VA loans on manufactured homes 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 it’s good to shop around.

VA mobile home guidelines

The VA updated its rules for manufactured homes in March 2019. To be eligible for a VA loan, the mobile home must:

• Meet the VA’s standard minimum property requirements (MPRs) to ensure the property is livable.
• Count as real estate (as opposed to a chattel or vehicle) under state law and local zoning requirements.
• Have a permanent foundation that complies with state law in respect of bearing the required loan and withstand strong winds.
• Be built to the manufactured home construction and safety standards defined by the U.S. Department of Housing and Urban Development (HUD). It should come with a HUD certificate and HUD tags attached to the home.
• Have a minimum floor area of 400 square feet if it’s a single-wide unit or 700 square feet if it’s a double-wide.
• Comply with state and local regulations over manufactured homes, especially if the home has been altered and is missing its HUD tags.

Must be classified as real property

Manufactured homes often start out classified as vehicles as they travel on public roads to get to their location.

If the home is still classified as a vehicle, or chattel, then it will need to undergo a “title elimination” to be eligible for a mortgage loan.

If the current owner pays annual fees to the DMV rather than property taxes, that’s a sign the home is still classified as a vehicle.

In most states, it’s not difficult to reclassify the home. Typically, the homeowner will need to file some forms with the county records office and pay some modest fees.

To reclassify the home, you will need:

• Rights to the land where the home is situated
• To remove any wheels and axles
• To install utilities
• Often these steps will have already been taken, even if the home is still currently classified as a vehicle or chattel.

Must be its own lot/property

To be eligible for a VA mortgage, the homebuyer must be purchasing the structure itself, and the lot that it’s on.

As a result, mobile homes in a park or community where they rent the land are not eligible for a VA loan.

Why get a manufactured home loan?

Often, a manufactured home is much more affordable than a stick-built equivalent. This is one of the biggest advantages, particularly for first-time home buyers.

Increasingly, mobile homes are designed to be more comfortable and spacious, and offer more advanced energy efficiency.

Other considerations with a mobile home

If you’re considering a mobile home, here are two important points to keep in mind:

1. Manufactured homes don’t typically “appreciate” in value. While they don’t typically depreciate as quickly as a car, they do gradually become less valuable. This is partially because they have a shorter life expectancy than other types of homes, though it may be possible to offset this, at least in part, by maintaining your home well.
2. Maintenance for a mobile home is one of the homeownership expenses you can expect, but you’ll also have other costs, including property taxes, and homeowner’s insurance premiums. A lender will factor in these costs when reviewing your loan application.

Using a VA streamline loan

Some lenders will allow refinancing of a mobile home with a VA streamline refinance — also known as a VA Interest Rate Reduction Refinance Loan — which could help you to lower the interest rate on your existing mortgage.

VA loan eligibility requirements 2024

The VA loan program is intended for military borrowers to purchase a primary residence.

To be eligible, borrowers will need to demonstrate that they meet the VA loan requirements, including service requirements. A lender can help you request your Certificate of Eligibility (COE), which indicates the details of your military service.

Is a VA manufactured home loan right for you?

Whether or not a manufactured home is right for you will depend on your unique financial circumstances.
If you decide to proceed, a VA loan could help you to save money on your new home purchase.