VA loans are now used to buy manufactured homes.
The Department of Veterans Affairs guarantees VA loans. These loans are open to all military personnel. Service members on active duty and veterans can avail of this loan. Surviving spouses of military members can also apply for a VA loan.
This government-sponsored loan has competitive interest rates. There are no down payment rules or private mortgage insurance.
Take note that Veterans Affairs doesn’t lend the money outright. The department only guarantees the loan. This gives mortgage lenders the freedom to set their requirements. Most lending companies do have similar eligibility demands.
Prospective borrowers will have to do some leg work. Not all legitimate VA lenders offer loans for manufactured or mobile homes. There are a fair few that do offer this loan. You have to do some research.
The good news is the process for applying for a manufactured home loan is the same as a regular VA loan. Borrowers will have to go through a pre-approval procedure. They will also have to wait for the underwriting and closing process.
Various Ways You Can Use a VA Loan
There are many ways to use a VA loan for manufactured homes.
- Borrowers can use it to buy a mobile home that’s set for installation on a property they own.
- Borrowers can use a VA loan to buy land and a manufactured home at the same time. It’s possible even when the home’s already attached to the property.
- It’s used to buy a manufactured home and lot at the same time. This covers mobile homes that aren’t attached yet.
- It’s used to refinance an existing loan on a manufactured home. The borrower can also use the same loan to buy property.
- A borrower with an existing VA loan on the mobile home can get a lower interest rate. They can use a streamlined refinance on the home and property.
- A borrower can use a VA loan to pay off another loan. They can also use it to lower their mortgage rate. They can also use it to get cash on their equity via a cash-out refinance.
- Borrowers should remember that every lending company follows their own rules. This means some lenders might not offer all these options.
What Makes VA Manufactured Home Loans Unique
VA loans are unlike most conventional loans. The mortgages for homes bought using VA loans are different. The same applies to a manufactured home mortgage. The mortgage for manufactured homes runs anywhere from 25 to 30 years. Larger units have a 25-year loan term. Smaller mobile homes have a mortgage of 30 years.
Lending companies prefer VA mobile home loan borrowers to have good credit scores. VA loan default rate is higher than other mortgage loan types. It’s why many lending companies want borrowers to have higher credit scores. It’s also the reason why many lenders don’t offer this loan.