Understanding VA loans for mobile homes
VA loans are an excellent option for Veterans seeking to buy a home. They offer many benefits, including low or no down payment requirements, competitive interest rates, and no need for private mortgage insurance (PMI).
The Department of Housing and Urban Development (HUD) established strict guidelines for VA loans concerning manufactured homes. It all began on June 15, 1976, when HUD implemented rigorous regulations to ensure the quality and safety of manufactured homes, including single-family homes.
What qualifies as a manufactured or mobile home?
Your manufactured home must meet specific criteria to qualify for a VA loan, including:
- A single-family home with a minimum living space of 400 square feet for a single-wide and 700 square feet for a double wide
- Built in a factory
- Classified as real property
- Be placed on a permanent foundation and classified as real estate.
- Built after June 15, 1976f and adhere to HUD Manufactured Home Construction and Safety Standards
VA loan benefits
Now that we’ve established the eligibility criteria, let’s delve into the benefits of using a VA loan for your manufactured home purchase.
Competitive interest rates
VA loans typically offer some of the most competitive interest rates in the market. This means you’ll save money over the life of your loan, allowing you to invest in other aspects of your life while still enjoying the pride of homeownership.
No down payment or PMI
One of the most significant advantages of VA loans is the ability to purchase a home without a down payment when you have full entitlement available to use.
This is especially helpful when buying a manufactured home, as it can be challenging to come up with a substantial down payment. Additionally, you won’t need to worry about private mortgage insurance (PMI), saving you even more money.
This is especially helpful when buying a manufactured home, as it can be challenging to come up with a substantial down payment. Additionally, you won’t need to worry about private mortgage insurance, saving you even more money.
Easier credit score requirements
While good credit is always beneficial, VA loans tend to be more forgiving when it comes to credit scores. If your credit score is less than perfect, you still have a good chance of qualifying for a VA mortgage.
How to get a VA loan
Now that you’re familiar with the perks of using a VA loan for a manufactured home, let’s walk through the process step by step.
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Determine your eligibility
Generally, you need to have served in the Military for at least 90 consecutive days during wartime or 181 days during peacetime, however, there are instances where a greater length of service is required. Certain National Guard and Reserve members may also qualify, as well as Surviving Spouses.
OR:
To qualify, you must have served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard after September 15, 1940, and were discharged under conditions other than dishonorable. The length of service depends on whether it was Wartime or Peacetime and when your service began.
Most Veterans are eligible with 90 days or more, any part of which occurred during wartime, or 181 continuous days or more during peacetime.
However, a greater length of service is required for Veterans who enlisted (and service began) after September 7, 1980, or entered service as an officer after October 16, 1981.
If your service dates fall within the date range above, you must have completed 24 continuous months of active duty, or the full period for which called or ordered to active duty, but not less than 90 days (any part during wartime) or 181 continuous days in peacetime.
Members of the Reserves or National Guard who are not otherwise eligible with the above-stated service history, are eligible upon completion of 6 years of service for an active or drilling status and received an honorable character of discharge.
A general or under honorable conditions discharge does not qualify for a VA loan.
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2. Obtain a Certificate of Eligibility (COE)
To apply for a VA loan, you’ll need to obtain a Certificate of Eligibility (COE) from the VA. This document proves your eligibility for the loan. You can usually obtain it online through the VA’s eBenefits portal or you can ask your lender for assistance.
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Find a lender
Choose a mortgage lender that specializes in VA loans for manufactured homes. They can guide you through the process, explain your options, and help you get pre-approved for a loan.
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4. Shop for mobile homes
Once you’re pre-approved, it’s time to start shopping for your manufactured home. Ensure it meets all the HUD requirements for a VA loan, including being attached to a permanent foundation and classified as real estate.
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Apply for the loan
With your chosen home in mind, submit your loan application to your lender. They will review your financial situation, credit score, and the property itself to determine if you qualify for a VA loan.
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VA appraisal and underwriting
VA loans require a VA appraisal to ensure the property’s value matches the loan amount. After appraisal, the loan goes through underwriting, where the lender reviews your financial documents, ensures the loan meets all VA requirements, and makes a final decision on your loan approval. In a few circumstances, the lender may need to send your loan documentation directly to the VA for approval.
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Closing on your loan
Once your loan is approved, you’ll schedule a closing date. At closing, you’ll sign all the necessary paperwork, and the funds will be disbursed to complete the purchase of your manufactured home.
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Move into your new home
Congratulations! You’re now the proud owner of a manufactured home by obtaining a VA-guaranteed loan! Move in, personalize it, and enjoy the benefits of homeownership.
Conclusion
In conclusion, VA loans for manufactured homes are a valuable resource for Veterans looking to become homeowners. These loans offer competitive interest rates, no down payment, and more lenient credit score requirements. To make the most of this opportunity, ensure that the manufactured home you choose adheres to HUD’s guidelines.
Don’t let misconceptions hold you back from your homeownership dreams. With a VA loan, you can turn that dream into a reality, whether you’re interested in a single-wide, double-wide, or modular home. Take the first step toward homeownership and explore your VA loan options today!
