Applying for a VA loan in order to purchase a manufactured home or mobile home can be different than the procedure for buying a typical suburban home. The VA minimum property requirements for manufactured homes are part of the reason for this. For starters, the VA will issue a typical “full guaranty” VA loan only for manufactured homes which are to be permanently installed on a foundation.
Let’s look at the VA loan rules from Chapter 12 of the VA Lender’s Handbook, which says “This section only addresses manufactured homes which are, or will be, permanently affixed to a lot and considered real estate under state law.”
The rulebook adds, “Lenders considering making a loan involving a manufactured home that is not permanently affixed should contact the local VA office for processing instructions.” If this applies to you, contact the Department of Veterans Affairs for more information.
All information presented here is for mobile homes, manufactured homes and modular homes to be permanently fixed to a foundation.
VA Loan Amounts For Manufactured Homes
The VA allows loans for the purchase of a manufactured home to be installed on land already owned by the borrower and for purchases that include both the manufactured home and the land.
According to Chapter Seven of the VA Lender’s Handbook, for home-and-purchase loans, the VA loan amount will be the lesser of:
• the total purchase price of the manufactured home unit and the lot plus the cost of all other real property improvements,
• the purchase price of the manufactured home unit plus the cost of all other real property improvements plus the balance owed by the veteran on a deferred purchase money mortgage or contract given for the purchase of the lot,
• the total reasonable value of the unit, lot, and property improvements, plus
• the VA funding fee.
For purchases of the manufactured home alone, the VA loan will be the lesser of:
• the sum of the purchase price plus the cost of all other real property improvements,
• the total reasonable value of the unit, lot, and real property improvements, plus
• the VA funding fee.
VA loan rules in Chapter 12 say the home must, after purchase, “be properly attached to a permanent foundation system which is constructed to withstand both supporting loads and wind-overturning loads, and is acceptable to the building authority having jurisdiction.” That addresses several common questions about VA loans at once for manufactured homes, trailers, or modular homes. For starters, some borrowers want to know if they can use a VA loan to purchase an RV or houseboat. This is not possible because such purchases do not involve a dwelling that can be affixed to a permanent foundation as described above.
That foundation is governed by VA requirements for piers and footings, concrete slabs, anchoring, and hurricane ties.
When the mobile home or manufactured home is appraised by a VA fee appraiser, these areas must be inspected. Appraisals are governed by both VA requirements and local building codes. In some cases there may not be any local governing authority over manufactured homes, but the VA makes provisions for this.
Chapter 12 of the VA loan rulebook says, “If the fee appraiser has reasonable doubts as to the acceptability of the foundation system where there are no local requirements, a statement from a registered professional engineer is acceptable. Considering their cost, such statements should be required only when necessary and not just as a measure of liability protection for fee appraisers.”