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Did you know that a VA manufactured loan requires a down payment and has a shorter term?
If
you're a veteran of the United
States armed forces, you may be
eligible for a manufactured home
loan backed by the Department of
Veterans Affairs. VA-approved
lenders supply VA home loans and
manufactured homes, and the
Veteran's Administration does
not loan money directly for VA
mortgages.
VA Manufactured Home Down Payment Requirement
It's common knowledge that VA home loans are zero down payment, and that's true for new and existing homes. But did you know manufactured homes require a 5% minimum down payment?
Manufactured homes tend to have a higher default rate than stick-built or modular homes. Consequently, many VA lenders avoid financing manufactured homes. The VA Department of Veteran Affairs establishes guidelines for lenders who finance manufactured homes, and one of the lending rules is a 5% minimum down payment for a manufactured home.
Manufactured Home Loan Terms
Another requirement for manufactured housing is the
loan term. The VA loan program offers 30 and 15-year
repayment terms. However, manufactured homes have a
shorter repayment term.
Here's a chart that illustrates the loan term for a
manufactured home.
| Manufactured home scenario | Maximum VA loan term |
|---|---|
| Double-wide manufactured home | 23 years and 32 days |
| Double-wide manufactured home plus land | 25 years and 32 days |
| Land purchased for a home you already own | 15 years and 32 days |
| Single-family manufactured home and land purchase | 20 years and 32 days |
What is a Manufactured Home?
HUD has established building regulations that must be adhered to when constructing a prefabricated house. The prefabricated home can be identified by its HUD tag, which is one of the effective methods.
These dwellings are built entirely in a factory and are constructed on wheels that can be removed after being towed to a permanent place, either privately owned or rented. Manufactured homes, also known as mobile homes or trailers, must have been built after June 15th, 1976, and meet the Mobile Home Construction and Safety Act requirements to qualify.
Manufactured Home Requirements
HUD requires that manufactured houses comply with specific construction regulations to qualify for a VA prefabricated house. These regulations include a permanently attached structure that is not removable, a minimum interior floor size of 700 square feet, designation as a real estate entity in accordance with state law, and satisfaction of all municipal zoning criteria for real estate as outlined in Chapter 12 of VA Pamphlet 26-7, a metal identification plate (also known as the "red tag" or "HUD tag") attached to the structure, and a "data plate" attached to the wall of a bedroom closet or kitchen cabinet to provide details about the home.
Frequently Asked Questions
Q. Is there a VA funding fee with a manufactured home loan?
A. Yes, there is a funding fee with a manufactured home loan. This fee is typically a percentage of the loan amount and is used to cover the costs of originating and servicing the loan.
Q. Can I roll in the closing costs into a manufactured home loan?
A. VA manufactured home loan borrowers cannot roll typical closing costs into their loans. However, if they agree, the seller can defray most or all of the closing costs. Alternatively, borrowers can ask their lender to pay a portion of the closing costs in exchange for a higher mortgage rate.
Manufactured Home Calculator
To calculate your mortgage payment on a VA manufactured home loan, use our handy calculator tool. Just enter in your loan amount, interest rate, and loan term, and we'll do the rest!
Note: The minimum down payment for a VA mobile home loan is 5%.
Learn more about VA backed manufactured loans