The struggle to buy a home today is an ever-increasing issue. Home prices and the cost of living have gone up. The dream of buying a home seems like an almost impossible accomplishment. Luckily, VA Loans are an option for veterans when trying to buy a home. But you may be wondering if a manufactured or mobile home is an option.
Under the right circumstances, you can get a manufactured or mobile home with a VA loan. The home has to live up to standards to qualify, plus the loan terms are not as long and the process can be tedious. With diligence though, you can possibly secure an affordable manufactured or mobile home.
There are some specific requirements for VA loans for manufactured or mobile homes. You may be wondering how you should approach the loan office. Continue reading to find out more about the process and what to expect when trying to secure a VA loan for a manufactured or mobile home.
VA Loan Requirements for Mobile Homes
VA loans can be difficult to secure for a mobile home. These homes tend not to hold value for long and can quickly decrease in value after purchase. Lenders do not want to risk being unable to get a turnaround on the home if you are unable to make the payments. However, some expectations of willing lenders are:
- It needs to be on a permanent foundation
- The home has to meet HUD code
- It cannot be built before June 15th, 1976
There are more requirements that you can expect when getting a manufactured or mobile home as well, and they are not all regarding your loan.
Permanent Foundation Requirements for Mobile Homes
To secure a VA loan for a mobile home, it has to be attached to a permanent foundation. This foundation must have concrete footers, protection from the elements, and anchors in the concrete. The towing hitch or running gear for the home must be removed and can not be attached even during the inspection in the following year.
The mobile home has to be on a piece of property with utility access and must stay in the spot in which it is assembled. The inspector is expected to check all of this, even so far as crawling into the crawl space, to ensure that the home is secure on its foundation and cannot be moved.
HUD Code Requirements for a Mobile Home
For a mobile home to be able to secure a VA loan, it must also meet other HUD Code requirements besides just a permanent foundation. A few other necessities for a mobile home to meet HUD requirements are:
- Having an adequate road that serves the property
- Property must be able to be taxed
- Sits above the 100-year flood level
The home must also not have been damaged during transportation. There should be no structural damage what-so-ever and the home must be secure and stable on its permanent foundation.
Cannot Be Built Prior to June 15th, 1976
Mobile homes built after June 15th, 1976 are red tagged, letting an inspector know that the home is part of the generation of mobile homes that were built up to safety standards. Homes without these red tags do not get VA loans due to several safety concerns.
Mobile homes built before this date tended to have an abundance of issues, including:
- Electrical issues
- Wiring concerns
- Bedrooms built too close to cooking areas
If kitchens were too close to sleeping areas, it became a large cause for concern if the home were ever to catch fire. Therefore, VA loan lenders do not loan money for these homes to avoid any major concerns such as what has been mentioned.
A great resource to find a list of all HUD requirements for mobile homes can be found here. If you find yourself with more questions about the code requirements for mobile homes, then looking over this resource from the HUD website may clear up some of those questions.
Other Things to Think About
A permanent foundation and HUD code requirements are not the only things to consider when trying to acquire a VA loan for a manufactured or mobile home. A typical VA loan for a home is stretched out over a 30 year repayment term.
With a mobile home, you will not get those terms. You are looking at a max of 23 years for a larger mobile home. You can possibly stretch it to 25 years if you buy a plot of land along with your mobile home.
This means you will pay off the loan faster, but payments will be larger. So if you were avoiding a regular home in hopes of getting a smaller, more manageable payment, then a mobile home may not be the way to go.
The Credit Problem to Consider
Because a mobile home does not hold value like a regular home, there is another problem to consider if you are trying to use your VA loan for a mobile home. VA loan lenders are more likely to loan money for a regular home to someone with bad credit because the home will hold its value if you cannot make your payments.
They will probably not lend money on a mobile home if you have bad credit because the home depreciates so much. This means they will not be able to get back what they put into the loan if you cannot make your payments. Because they do not want the risk, a higher credit score is a must if you want to purchase a mobile home with your VA loan.
Other Options for Purchasing a Mobile Home
If, for some reason, you have a hard time finding a lender for a mobile home, or something mentioned above makes you hesitant to get a VA loan for a mobile home, there are other options. Some other things you might consider are:
- Getting a personal loan
- Securing a private loan
- Using your VA loan to purchase a regular home
Personal loans and private loans will be able to help you secure a mobile home if that is really what you want. But if you want to take advantage of a 30 years’ term, it might be best to just consider buying a regular home with your VA loan. You can always find something on the smaller side to help with lowering the cost.
With a smaller home, you will still be able to save on price, and have a lower payment since it will stretch the full 30-year term. Some of the hassles you would face with a mobile home will also not be such a problem, such as a permanent foundation since houses are already built on a foundation.
It is possible to get a manufactured or mobile home using a VA loan. It may take time and you may have to talk to a lot of different lenders, but persistence may get you what you want. But there are a lot of things to consider if you take this path.
If you do not want to jump through all the hoops required for a lender to loan on a mobile home, a better option might be to just buy a regular home. Contact ADPI’s in-house lending team and get a better feel for how the process may go for you and to better prepare yourself for your home buying journey.