While many lenders shy away from financing manufactured homes, Cascade is proud to be one of the few lenders in the United States that offers VA modular and manufactured home loans with construction financing included in the loan. These loans are meant to honor American military members by making it easier to secure an affordable loan for modular and manufactured homes.
What Are the Qualifications for VA Manufactured Home Loans?
A manufactured home needs to be attached to a permanent foundation to qualify for a VA loan. This applies whether you're purchasing a brand-new manufactured home or an existing one. Having the manufactured home affixed to a permanent foundation allows the house to be classified as real property which is necessary for the manufactured house to be eligible for a 30-year VA loan.
There are additional aspects a manufactured home must meet to qualify for a VA loan. These have been set forth by the Veteran's Administration to assure that veterans and their families will be living in a safe, secure, sanitary, and structurally sound home.
What Manufactured Homes are Eligible for a VA Loan?
Criteria specific to VA loans for manufactured home includes:
- The home's electrical, heating, and cooling systems must all be in proper working order.
- The roofing on the home must be of high enough quality that it will withstand the elements for the foreseeable future.
- The manufactured home is of an adequate size that will support all the necessities for living.
- The home's water supply is clean and continuous and leads to sanitary facilities such as the bathroom, kitchen, and laundry area.
- The sewage disposal system within the house must be safe and sanitary.
- The house's structure must be free of dry rot, fungus, or wood-destroying insects.
- The entire home needs to be free of any lead-based paint.
- The home must be accessible and on an all-weather street that's public or private. For example, the manufactured home can't be located on a dirt road that can get flooded. This is so the house can be reached in emergencies, such as a natural disaster or a family member's medical crisis.
In short, appraisers will be looking for any significant issues in the home that could potentially cause problems for you at the outset of your purchase or in the near future. An appraiser can't foresee every possibility, but they want to make sure you're purchasing a home that's sanitary, structurally sound, and safe from the start. Make sure to read our blog about the advantages of manufactured homes to learn more.
This laundry list of requirements may seem excessive to you, but the standards are in place for VA loan qualifying manufactured homes to protect you from unforeseen, potentially costly hassles later.
Facts about VA Manufactured Home Loans
- Loans are funded by the private lender, but are guaranteed by VA.
- They can cover 100% of the loan. This means you may be able to obtain your home with no down payment*
- They require a VA funding fee which may be financed. A disabled veteran may have their VA funding fee waived.
- VA loans do not require mortgage insurance. On a comparable FHA loan of $200,000, this may save the borrower $141 per month**
- Loan must be for a primary residence.
- The minimum credit score is 620, however, if your score is below 620, Cascade may still be able to qualify you.
- Veterans who have had a bankruptcy or foreclosure must wait two years from the finalization date to qualify for a VA modular or manufactured home loan.
- Seller may pay as much as 4% of the contract sales price towards the Buyer’s closing costs
- These are some of the main facts about VA manufactured home loans but you can also learn more in the VA lenders handbook.
*For example, a $200,000 loan with a 30-year term with no down payment, a rate of 3.25% (3.557% APR) is repayable in 360 monthly payments of $870.41. This example assumes a Funding Fee of 2.30%. It does not include the cost of property insurance or property taxes, which will increase the monthly payment.
**A $200,000 FHA loan with a 30-year term, a 3.5% down payment, a rate of 3.25% (3.967% APR) is repayable in 360 monthly payments of $1,012.08, which includes $167.41 in FHA Mortgage Insurance. This FHA monthly payment does not include the cost of property insurance or property taxes, which will increase the monthly payment.
Other VA Manufactured HomeLoan Requirements
Several other requirements must be met for a VA loan, including:
- The land where the manufactured home will be located can't be leased. The land constituting the homesite must be owned free and clear or at the very least, come with a lien that's payable to a title company or bank.
- The manufactured home's permanent foundation must be classified as a dwelling and built to meet HUD criteria, which includes the requirement that the manufactured home's foundation have a finished grade elevation at or above the 100-year return frequency flood elevation.
- The manufactured home must be constructed after June 15th, 1976, to conform to the Federal Manufactured Home Construction and Safety Standards. Under 24 CFR 3280.11, the manufactured home must show proof of this in the form of an affixed certification label.
Proving Your Veteran Status
Before applying for a VA loan, it's a good idea to request your Certificate of Eligibility (COE) from the Department of Veterans Affairs if you don't already have a copy of it handy. Your COE verifies that your military service requirements for a VA loan have been met. However, you don't need to have it to start your application. Just make sure you get a copy of it during the loan application process. You'll need to have it before closing as any question about your veteran status can delay or even capsize your entire loan.
Interested in Learning More About VA Manufactured Home Loans? Contact Us Today to See If You Qualify
Cascade is proud to support the U.S. military with VA modular and manufactured home loans that are otherwise difficult to obtain. Contact us at 877-869-7082 to learn more about our VA modular and manufactured home loan programs, or get started right away by filling out our online prequalification.