Using Your VA Loan for Manufactured and Modular Homes
The VA home loan benefit is a powerful tool for Veterans, active-duty service members, and eligible surviving spouses to achieve homeownership. While commonly used for traditional "stick-built" homes, your VA loan can also finance manufactured and modular homes, provided they meet specific guidelines.
Understanding the Home Types
It’s crucial to understand the distinction between the two types of factory-built homes:
- Manufactured Homes: Built entirely in a factory on a permanent chassis, these homes must conform to the federal HUD Code. Homes built before June 15, 1976, are considered "mobile homes" and are generally not eligible for VA financing.
- Modular Homes: Built in sections in a factory and assembled on a permanent foundation on-site, these homes meet state and local building codes, similar to traditional site-built homes.
Key VA Loan Guidelines
To use your VA loan for a manufactured or modular home, the property must meet VA and lender-specific requirements.
Eligibility Criteria (For All VA Loans)
Borrowers must meet standard VA eligibility criteria:
- Certificate of Eligibility (COE): A valid COE proves you meet minimum service requirements.
- Sufficient Income and Credit: Most lenders require a minimum credit score (often 620 or higher) and sufficient income for mortgage payments.
- Occupancy: The property must be your primary residence.
Property Requirements (Manufactured Homes)
Manufactured homes have stricter requirements:
| Requirement | Guideline |
|---|---|
| Date of Construction | Must be built on or after June 15, 1976, to comply with HUD Code. |
| Classification | Must be legally classified and taxed as real property, not personal property. |
| Foundation | Must be permanently affixed to a foundation; axles, wheels, and tow hitch removed. |
| Land Ownership | Must be on land owned by the borrower or purchased concurrently. |
| Minimum Property Requirements (MPRs) | Must meet VA MPRs for safety, sanitation, and structural soundness. |
| Minimum Size | Single-wide: 400 sq ft minimum; Double-wide: 700 sq ft minimum (lender-dependent). |
| Home Condition | Must have HUD Certification Label and Data Plate present. |
| Previous Movement | Most lenders won’t finance homes moved from their original site. |
Property Requirements (Modular Homes)
Modular homes have simpler requirements:
- Foundation: Must be permanently affixed to a foundation.
- Building Codes: Must meet local and state building codes.
- Real Property: Must be classified as real property.
- Appraisal: Treated like traditional site-built homes.
Other Important Considerations
Additional factors to consider:
- Lender Availability: Not all VA lenders finance manufactured homes; choose one experienced with these loans.
- Loan Terms: Shorter terms for manufactured homes (20 years for single-wide, 25 years for double-wide).
- Down Payment: Some lenders may require 5% down for manufactured homes, though VA allows 0% down.
- Appraisal: Manufactured homes require Form 1004C; must meet MPRs and be titled as real property.
- New Construction: May require a Construction-to-Permanent Loan, which can be challenging to find.
- Resale/Depreciation: Manufactured homes may depreciate, impacting long-term equity.
Frequently Asked Questions
Yes, but it must meet VA and lender requirements, including being built after June 15, 1976, affixed to a permanent foundation, and meeting minimum square footage requirements (often 400 sq ft or more).
Generally, yes. Modular homes are built to local building codes and treated similarly to traditional site-built homes, resulting in a smoother approval process.
No. The VA requires the home to be classified as real property, meaning the borrower must own or purchase the land the home sits on.
While the VA allows 100% financing, many lenders require a small down payment (e.g., 5%) for manufactured homes due to their risk profile.
No, mobile homes built before June 15, 1976, are not eligible. Homes built after this date qualify as manufactured homes.
