A manufactured home is a viable option for those thinking about moving to Phoenix and those who already live in Phoenix and want to become homeowners. A manufactured home can be an affordable option for families just starting out, retirees, and anyone else who would like to own a home without a high mortgage payment. Manufactured homes can be financed through several options, including government-backed loans such as VA loans.
The Veteran's Administration authorizes lenders to offer VA loans to those who have served in our military as a way to honor their sacrifice and provide them with affordable homeownership options. You qualify for a VA loan after serving 90 days of busy times of war, 181 continuous days during times of peace, or six years in the National Guard. A service member's spouse who died in the line of duty is also eligible for a VA loan.
VA loans typically offer service members lower interest rates and down payments than conventional loans, making them attractive financing options for those who qualify. VA loans also don't require payments for monthly mortgage insurance if borrowers don't have the usual 20% down payment required to avoid these additional fees.
Before applying for a VA loan, you will need to have a Certificate of Eligibility from the VA. The VA website provides information and assistance to those applying for this certificate and the opportunity to apply online. To qualify for a VA loan, you will need to plan to make the home your primary residence.
A manufactured home is a home that is pre-built off-site in a factory-type setting, then transported to the place it will be located, with final construction steps including setting up sewer, water, and electricity completed at the final destination. A manufactured home must meet strict construction and safety standards set forth by the Department of Housing and Urban Development as of June 14, 1976.
Prefabricated homes also include modular homes manufactured off-site and then assembled at the homesite and permanently affixed to the property. Modular homes qualify for conventional mortgages because they're considered permanent fixtures for real estate. Typically, a prefabricated house is a mobile home if constructed prior to 1976, although some people use the terms interchangeably. A mobile home is often used as an umbrella term to describe any home that was prefabricated off-site.
Manufactured homes must be a minimum of 40-feet long and at least 8-feet wide when traveling. They are available as single-wide, double-wide, and multi-wide. Today's manufactured homes provide homeowners with modern exteriors and stylish appliances and fixtures, making them nearly indistinguishable from traditional site-built homes.
As with conventional mortgages, VA loans have limits to terms and the amount you're able to borrow. A VA loan can cover up to 95% of the cost of a manufactured home. Term limits will depend on the type of manufactured home you purchase.
You can apply for a VA loan through a private lender, like a mortgage company or bank. Not all companies offer VA loans for manufactured homes or any financing for manufactured homes, so you'll want to ask any potential lenders before starting the process. VA loans are backed by the government, which means that the VA guarantees a portion of the loan, making them more attractive to lenders and borrowers alike. Cascade Financial Services provides several loan options for manufactured homes, including VA loans, for Phoenix residents.
Smaller down payments, lower interest rates, and the lack of monthly mortgage insurance payments all make VA loans appealing to borrowers. At Cascade Financial Services, we can offer a competitive interest rate to borrowers with moderate income levels. Lower interest rates provide savings that add up over the years of your loan.
VA loan benefits are available to you more than once if you sell your home, buy another home, or pay off your loan. You can also use VA loans for refinancing for an interest rate reduction or other streamlined options. Applications for a VA loan are usually less restrictive in regards to credit score and history.
The Veteran's Administration requires a funding fee on VA loans to help offset the program's overall cost. This fee can range from 1.4% to 3.6% of the total home purchase price. Adding this funding fee, along with a low down payment requirement, may mean that the total loan amount exceeds the home's value. Homes purchased with a VA loan cannot be rented out, restricting the property's future use if you decide to move to a new location while keeping the manufactured home.
Once you have your Certificate of Eligibility, the next steps include:
When you're ready to finance your manufactured home in Phoenix, Arizona, reach out to the knowledgeable team at Cascade Financial Services. We offer several options for financing your manufactured home, including VA loans. You can even start the application process online to get prequalified and get on the road to homeownership.