Is a manufactured home your idea of the perfect place to hang your hat? If you’re hoping to purchase a manufactured home with a loan from the U.S. Department of Veterans Affairs’ home loan program, then you’re in luck. There are VA loans for manufactured homes. What do you need to know to utilize a VA loan to purchase a manufactured home?
VA Loans for Manufactured Homes
When exploring VA loans for manufactured homes, you first need to have a clear definition of what a manufactured home is. Then, it’s time to weigh the VA loan program’s requirements. Are you ready to get started?
Mobile vs. Manufactured
While many people use the terms mobile home and manufactured home interchangeably, there is a distinct difference, and that difference matters a lot when you’re seeking a home loan. In the eyes of lenders, what separates mobile homes from manufactured homes? It’s a matter of timing.
According to Clayton Homes, the roots of today’s manufactured homes can easily be traced back to the demands of Americans in the early 1900s who often needed to relocate to find work. They appreciated the convenience of a home that could move with them. While the first mobile homes resembled modern-day campers, these homes evolved and grew more sophisticated as the years went by. Unfortunately, the industry that built them was poorly regulated, raising safety concerns. That changed in the 1970s when Congress enacted new safety standards, which are commonly referred to as the HUD Code. To differentiate between homes built before the safety standards took effect and those built in accordance with them, legislators insisted that homes built after 1976 be called “manufactured homes.” Meanwhile, homes built before 1976 retained the label “mobile homes.”
VA Requirements for the Borrower
VA loans come with significant advantages that make them a popular pick, but they aren’t available to everyone. Access to these loans is earned through service – and simply serving isn’t enough to guarantee you the VA loan that you’re hoping for. There are specific requirements that both the borrower and the property must meet. According to the VA, a borrower must have a valid Certificate of Eligibility, acceptable credit, and sufficient income to qualify for the loan in order to be approved for a VA loan. In addition, they must intend to use the property as their primary residence.
VA Requirements for the Property
What requirements must the property meet? The VA offers a list:
- A manufactured home must meet the HUD Code.
- A manufactured home must comply with all relevant sections of the VA Minimum Property Requirements.
- A manufactured home and its site must be classified and taxed as real property and meet any local zoning requirements for real estate. It cannot be classified as a vehicle or personal property.
- A manufactured home must be on a permanent foundation that meets state and local requirements. In addition, the foundation must support both standing and wind-overturning loads.
- A single-wide manufactured home must have a floor area of at least 400 square feet. A double-wide must offer a minimum of 700 square feet.
If both the borrower and the manufactured home are a good fit for a VA loan, what else do you need to consider? As Smart Asset points out, stick-built and modular homes that are properly maintained generally gain value as years pass, but manufactured homes often do the opposite. No matter how well they are maintained, they tend to depreciate in value. In addition, borrowers who purchase manufactured homes have been historically more likely to default. As a result, lenders are wary of making loans for manufactured homes. Finding a lender willing to offer VA loans for manufactured homes may be challenging.
At PrimeLending: Manhattan, Kansas, we understand that people are unique, and their housing goals are too. Whether you’re interested in a move-in ready starter home, a condo, a fixer-upper, a manufactured home, or a rental property, we’re ready to listen to your objectives and help you work toward them. Our team of friendly, knowledgeable loan experts offers personal service, local expertise, and professional-grade guidance. To learn how we can help you, contact us today.