Manufactured homes can be excellent options for first-time home buyers, growing families, and retirees who need less space. These homes can be affordable alternatives to traditional site-built homes, which is why they appeal to such a broad range of California homeowners. You can finance many of these homes through avenues such as Veteran's-Administration-backed loans. The VA provides veterans and their families with these loan options as a benefit for serving in the United States military. A VA loan for your manufactured home, and possibly the land you'll place it on, could be right for you.
What Is a VA Loan?
VA loans are guaranteed by the Veteran's Administration and funded through lenders the VA authorizes to grant these loans. These loan options are often more affordable than traditional funding and easier for veterans to secure. VA loans have special rules and regulations, such as:
- The veteran must make the financed home their primary residence.
- A private lender determines the rate, not the VA. Cascade Financial Services offers competitive rates.
- VA loans require a 5% down payment for manufactured homes.
- The loan cost includes a required VA funding fee to help offset the expenses of the program. A disabled veteran might appeal to have this fee waived.
- VA loans don't include monthly mortgage insurance.
- Veterans need a credit score of 620 or higher to qualify. Cascade will try to work with you if you're below this threshold.
- Your record must not have any foreclosures or bankruptcies in the past two years.
- The VA, not the lender, selects the home appraiser.
Who Qualifies for a VA Loan?
To qualify for a VA loan, you must have served at least 90 days during active wartime, 181 continuous days during peacetime, or six years in the National Guard. The spouse of a veteran who died in the line of service might also qualify for a VA loan. All applicants must obtain a Certificate of Eligibility from the VA to be eligible for any VA loan through the authorized lender of their choosing. The VA website offers more information on how to qualify and apply for the certificate.
What Is a Manufactured Home?
Manufactured homes are a type of prefabricated house. Two types of prefabricated homes qualify for VA loans, provided they were built after June 15, 1976. The Department of Housing and Urban Development released stricter guidelines for prefabricated house construction on that date, and the VA can only fund homes that meet these new criteria. You can take out a VA loan for either a manufactured or modular home.
A manufactured home is constructed off-site in a factory-type setting and moved to the homeowner's desired location. These homes get moved in one or more sections, depending on their size. Manufactured homes come in single-wide, double-wide, and multi-wide options. A single-wide is no more than 18 feet wide and 90 feet long in transportation mode. A double-wide is at least 20 feet wide and no more than 90 feet long.
You can place manufactured homes in mobile home parks, on land you rent, or on land you own. They typically don't sit on a permanent foundation, giving you the option to move them in the future.
A modular home is mostly built off-site in a factory-type setting and transported to its destination in multiple sections. It differs from a manufactured home as it's assembled on a permanent foundation.
Manufactured and modular homes go through their final construction phases on-site, including being hooked up to sewer lines and electricity. Today's prefabricated homes are almost indistinguishable from site-built homes, offering stylish exteriors and modern interior touches.
What Are the Limits on VA Loans for Manufactured Homes?
Any loan has limits on the amount of total financing you can receive, as well as the length or term of the loan. A VA loan can finance up to 95% of a manufactured home value, leaving you with a 5% down payment. A VA loan can offer you considerable savings compared to a traditional loan down payment requirement of 20% to avoid monthly mortgage insurance. This savings helps make a manufactured home more affordable for many U.S. veterans.
Where Can I Get a VA Loan for a Manufactured Home?
The VA authorizes private lenders to provide VA loans for traditional and manufactured homes. Authorized lenders include banks, mortgage companies, and specialty loan services. Not all authorized lenders offer VA loans for manufactured homes, even if they offer VA loans for traditional site-built homes. You'll need to determine if your preferred lender offers VA loans for manufactured homes before you start the process.
Cascade Financial Services offers VA loans for manufactured homes, as well as several other financing options. If you want to finance a manufactured home, reach out to the knowledgeable staff at Cascade to see if you qualify for one of our loan options.
How Do I Get a VA Loan for a Manufactured Home?
VA loans follow the same application process as traditional loans, including prequalification, preapproval, contract, underwriting, and closing. You need the following information to start the process:
- Proof of income from pay stubs or tax returns.
- Credit history and credit report check.
- The loan terms, including term and interest rate.
- The authorized lender with whom you want to work.
If you're ready to finance your manufactured home in California with a VA loan, give Cascade Financial Services a call. We proudly serve the areas of San Diego, Sacramento as well. A team member will be happy to answer any questions about your financing options. You can also start the application process online via our convenient home loan onboarding process. Contact us by phone at 855-517-2158 today! You'll be on the road toward homeownership.