VA Loans for Manufactured Homes

Two types of manufactured home loans

The VA benefit can be used for a manufactured home in two different ways, and the rules differ:

1. Permanently affixed to land and treated as real estate. The home sits on a permanent foundation on land you own, and it is titled as real property. These are generally treated like a regular VA purchase loan.
2. Not permanently affixed. The home is treated more like personal property, such as a home in a park on rented land. VA calls this a manufactured home loan, and it has its own rules and a 1% funding fee.

Permanently affixed homes

Most lenders that do VA manufactured home loans only finance homes that are permanently affixed. Typical requirements include:

• The home was built to the federal HUD manufactured housing code (homes built after June 15, 1976, carry a HUD certification label).
• It sits on a permanent foundation that meets the manufacturer's or an engineer's standards.
• Wheels, axles and hitch are removed.
• It is titled as real estate with the land, under your state's rules.
• It meets VA's Minimum Property Requirements, like any other home.
• Many lenders want a minimum size and require that the home has never been moved from its original site.

The funding fee is the regular purchase rate, based on your down payment and prior use.

Not permanently affixed homes

VA does allow loans on manufactured homes that are not attached to land, but few lenders offer them. The terms are usually shorter, and the loan must meet extra VA rules. The funding fee is 1% no matter your down payment or prior use.

What you can buy

• A manufactured home alone
• A lot to put a manufactured home you already own on
• A home and lot together
• Site prep for a lot, in some cases

Lender overlays

Many lenders set stricter rules for manufactured homes than VA does. You may see higher credit score minimums, a down payment requirement, or limits on homes in parks or on leased land. Shop around, and ask direct questions about these rules before you apply.

Prior use rule

If your only earlier VA loan was used to buy a manufactured home, you still pay the first-use funding fee rate on your next VA purchase. That can save you money.

Step by step: buying a manufactured home with VA

1. Confirm the home type. Is it on a permanent foundation and titled as real estate, or not?
2. Find a lender that finances that type. Ask about credit score, down payment and size rules.
3. Gather home details: HUD label or data plate, year built, foundation info, and title status.
4. Get preapproved and make an offer with the VA escape clause.
5. Order the VA appraisal. The appraiser checks MPRs and may need a foundation certification from an engineer.
6. Handle title. Your closing agent may need to retire a vehicle-style title so the home becomes real property.
7. Close and set up your payments.

Things to watch

• Foundation certification: Lenders often require a licensed engineer to sign off. Budget a few hundred dollars.
• Resale value: Homes on owned land tend to hold value better than homes in parks.
• Insurance: Get a policy written for manufactured homes.

Bottom line

A manufactured home on its own land can be a low-cost path to ownership with a VA loan. The key is making sure the home meets the foundation and title rules, and finding a lender that does these loans.