The VA is lenient when it comes to approving veterans for a VA loan. They have flexible credit score, debt ratio, and LTV guidelines. What they are particular on, though, is the type of property that you buy. The VA provides a guarantee to the lender that they will pay the lender back 25% of the amount a veteran defaults on their loan, if they do.
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Among the types of properties that the VA allows are single-family homes, condos (if approved by the VA), module homes, and in some cases manufactured homes.
Why Manufactured Homes Aren’t Always Allowed
You might think that it makes perfect sense to buy a manufactured home. After all, they are usually much less expensive than a single-family home. However, there are generally issues with manufactured or mobile homes that put the VA lender at risk.
The VA allows manufactured homes under the following circumstances:
- The county recognizes the home as ‘real property’ and taxes it as such
- The property is permanently affixed to the land
- The home passes the VA appraisal requirements
- The home must be on its own property
Remember, these are the VA’s requirements. VA lenders can add additional requirements to this. In fact, any VA lender can refuse to finance a manufactured home. It may be hard to find a willing VA lender that will finance a manufactured home in certain areas, especially if they aren’t common in the area.
The Largest Risk
The largest risk with a manufactured home is its ability to be driven away. That’s why the VA requires that the home be permanently affixed to the property. You can either finance a mobile home on property you already own or finance the cost of the land in with the home, as you would with any other type of loan.
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Having the home affixed to the ground decreases the lender’s risk of losing the home. If it’s not permanently affixed, there is a large risk of serious damage occurring to the home during certain types of weather. If the home is completely ruined, the lender could face a serious loss, as could you of course.
The Manufactured Home Must Meet the Size Requirements
The VA is very strict about the size requirements of a mobile home. It must meet the Minimum Property Requirements that the VA set including the following size requirements:
- A single wide manufactured home must be at least 10 feet wide
- A double wide manufactured home must be at least 20 feet wide
The home must also have adequate sleeping quarters for your family size, adequate bathroom space, and a working kitchen. The home must be immediately livable and considered safe and sanitary.
If you want to buy a manufactured home with a VA loan, be prepared to shop around for a lender. Many lenders just won’t do it, but don’t’ give up. There are plenty of VA lenders out there that will allow 100% financing on a manufactured home as long as it meets the above requirements.
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