Tuesday, June 19, 2012

Can You Buy a Manufactured Home With a VA Loan

By Jay Motes

One of the benefits of serving in the military is eligibility for a mortgage loan backed by the Department of Veterans Affairs. Eligible veterans may use a VA loan to purchase both a traditionally built home as well as a manufactured home. While there are specific guidelines for using a VA loan to buy a manufactured home, the guidelines are not particularly strict. VA loans offer a number of advantages that make using these loans an attractive option.

Rules for determining eligibility are specific and complex. However, most veterans other than those dishonorably discharged likely will be eligible. For a determination of eligibility, veterans or active duty service members should apply to the Department of Veterans Affairs for a Certificate of Eligibility. When received, the certificate will state the amount of loan that the VA will insure. This does not mean that the veteran can borrow this much; the lending institution will decide the amount of loan that a borrower will receive.

While the VA may approve an individual as eligible for a loan based on service, the individual must still receive approval from a lender. As with any mortgage, the borrower applies for a VA loan from a financial institution such as a bank or credit union. The lender will approve the loan based on the borrower's income, credit score and other factors. The backing by the VA will improve the odds of approval and likely will allow for more generous loan terms. VA loans do not require mortgage insurance, which further makes the loan terms more attractive by lowering the amount of the monthly payments compared to a traditional loan.

A manufactured or mobile home must meet certain requirements in order to qualify for a VA loan. However, most manufactured homes will easily meet the requirements. For example, a single-wide home must be at least 10 feet wide with a minimum of 400 square feet of floor space. For a double-wide, the requirements are at least 20 feet wide and a minimum 700 square feet of floor space. Modular homes are not treated the same as manufactured homes by the VA, but the VA will back loans for modular homes as well.

The VA will approve loans for manufactured homes placed on owned as well as rented lots or land. The loan can include the cost of purchasing a lot for the placement of the home. The home site must provide a permanent foundation and the home must be anchored to it. In addition to the foundation guidelines, the home site must meet some other reasonable requirements such as access by an all-season road as well as water and sanitary services that meet local guidelines.


http://www.lenderva.com

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