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Manufactured Home
Loans to Veterans
Questions and Answers on Manufactured Home Loans for
Veterans
VA Pamphlet 26-71-01, Revised February 1993
The questions and answers included in
this pamphlet are intended to cover major items of
interest to veterans interested in buying a
manufactured (mobile) home. The questions do not
cover all possible situations involved in financing
the purchase of manufactured homes. Full information
about such situations may be obtained from VA
regional offices at 1-800-827-1000.
What is a VA-Guaranteed Manufactured Home Loan?
VA-guaranteed manufactured home loans
are made by private lenders such as finance
companies. The guaranty means that VA will protect
the lender against loss if the veteran or a later
owner fails to repay the loan. The amount VA will
guarantee is 40 percent of the loan amount or the
veteran's available entitlement, up to a maximum
amount of $20,000. The guaranty amount is not the
same as the amount a veteran can borrow (see
question concerning loan amounts).
Who is Eligible for a Manufactured Home Loan?
All veterans with sufficient
qualifying service subsequent to September 15, 1940,
including service in the Selective Reserve, and
active duty service personnel who have served
continuously for at least 90 days are eligible for
manufactured home loans. When an ending date is set
for the Persian Gulf War, those who enter on active
duty after that date must complete more than 180
days of continuous active duty. Additional details
are contained in
VA Form 26-1880, Request for
Certificate of Eligibility for VA Home Loan
Benefits;
VA Pamphlet 26-4, VA-Guaranteed Home Loans
for Veterans; or may be obtained by contacting the
nearest VA regional office or center.
How is Eligibility Determined?
A veteran may request a Certificate
of Eligibility from the nearest VA regional office.
This request should be made on
VA Form 26-1880,
Request for Certificate of Eligibility for VA Home
Loan Benefits, and accompanied by the discharge or
separation papers (DD Form 214), or evidence of
current active duty status.
What are the Requirements for Loan Approval?
To obtain a VA loan, the law requires
that:
- You must be an eligible
veteran who has available home loan entitlement;
- The loan must be for an
eligible purpose;
- You must occupy or intend to
occupy the property as your home within a
reasonable period of time after closing the
loan;
- You must have enough income
to meet the payments on the loan, cover the
costs of owning a home, take care of other
obligations and expenses, and still have enough
income left over for family support (a spouse's
income is considered in the same manner as the
veteran's); and
- You must have a good credit
record.
What is the Maximum Amount a
Veteran May Borrow?
The maximum loan amount for a new
manufactured home is the lesser of the following:
- 95 percent of the purchase
price of the property securing the loan, plus
the VA funding fee, or
- Determination of the
manufacturer's invoice cost, plus or minus the
cost of any items added or removed by the
dealer, plus certain other costs (up to certain
maximums), plus the VA funding fee.
- The maximum loan amount for a
used manufactured home or a lot and/or necessary
site preparation is determined by appraisal.
- Additional information on
maximum loan amounts may be obtained from the
nearest VA regional office or center.
What are the Loan Repayment
Terms?
The maximum terms for manufactured
home loans are: 20 years and 32 days for a
single-wide unit or a combination single-wide unit
and lot; 23 years and 32 days for a double-wide unit
only; 25 years and 32 days for a double-wide unit
and lot; and 15 years and 32 days for a lot only on
which to place a manufactured home you already own.
What is a Manufactured Home for VA Loan Purposes?
A manufactured home is built on a
permanent frame and is made to be moved in one or
more sections. It must be built to be lived in year
round by a single family and there must be permanent
eating, cooking, sleeping and sanitary facilities. A
single-wide manufactured (mobile) home must be at
least 10 feet wide, with a minimum floor area of 400
square feet; double-wide units must be at least 20
feet wide, with at least 700 square feet of floor
space.
A modular home is not the same as a manufactured
home for VA purposes. Although the parts or sections
of a modular home are built in the factory and then
moved to the building site, the home must still be
put up and completed at the building site. You may,
however, obtain a loan to purchase a modular home
under VA's regular home loan program. (See
VA Pamphlet 26-4, for information about that loan
program.)
What Types of VA Manufactured Home Loans are
Available?
You may use a VA-guaranteed loan
to:
- Buy a manufactured home
and/or lot
- Buy and improve a lot on
which to place a manufactured home you already
own and occupy.
- Refinance a manufactured home
loan in order to buy a lot.
- Refinance an existing VA
manufactured home loan to reduce the interest
rate.
Where Must a Manufactured Home
be Located?
Any rental site, or lot owned or
to be purchased by the veteran which has been
approved by VA.
What Factors Should be Considered in Choosing a
Site?
If you are placing a manufactured
home on land you are buying or already own, consider
how far away the utilities are and the cost of
hookup. If service from a public or community water
or sewage system is not available, find out if the
ground water and subsoil conditions are satisfactory
for an individual well and/or sewage disposal
system.
If you are buying a manufactured home that will be
placed in a park, find out about the rental cost,
miscellaneous services, and other rules and
requirements established by the owner of the park.
Remember, if you want to move your home at a later
date, you will need a professional mover and the
costs involved will be expensive.
How Does a Veteran Go About Getting a Loan?
You should:
- Get a Certificate of
Eligibility from the nearest VA regional office
or center if you have not already received one
from VA.
- Find a manufactured home
which meets VA standards.
- Arrange for rental or
purchase of a manufactured home lot.
- Arrange a VA loan through the
dealer or apply directly to a lender for a VA
loan.
What is the Interest Rate?
The rate depends on market
conditions. VA does not set the interest rate.
Can the Interest Rate be Changed?
Once a loan is made, the interest
rage generally remains the same for the life of the
loan. However, if interest rates on manufactured
home loans go down, a veteran who still owns a
manufactured home obtained with a previous VA loan
may apply to a lender for a new VA loan to refinance
the first loan at a lower interest rate.
Is a VA-Guaranteed Loan a Gift?
No. It must be repaid, just as you
must repay any money you borrow. If you fail to make
the payments you agree to make, you may lose your
home through foreclosure, and you and your family
would probably lose all the time and money you had
invested in it. In addition, if the lender takes a
loss, VA must pay the guaranty to the lender, and
you will be required to repay the amount paid by VA.
If a Manufactured Home is Sold, Can the VA Loan
be Assumed?
Yes. However, for loans made after
March 1, 1988, the veteran is required to apply to
the holder of the loan for approval of the
assumption and release from liability. If the loan
was obtained prior to that date, it may be assumed
without the approval of the loan holder or VA, but
the veteran will usually remain liable on the loan
unless he or she applies to VA for a release from
liability and VA grants the release in writing.
Will a Release of Liability Restore the
Entitlement the Veteran Originally Used in Getting
the Loan?
No. To have entitlement restored,
the veteran must dispose of the manufactured home
and/or lot and the loan must either be paid in full
or assumed by a qualified veteran-transferee who
agrees to substitute his/her entitlement for that
used originally by the selling veteran. Restoration
or substitution of entitlement is not automatic. You
must apply for restoration of entitlement by
completing and returning
VA Form 26-1880 to any VA
regional office or center. Applications for
substitution of entitlement must be requested from
the VA office that guaranteed the loan.
How Can a Veteran Get a Release From Liability
From VA?
The veteran will be released from
liability on the VA loan if you lender or VA
determines that the loan is current and the
purchaser of the property is able to make the
payments, and assumes full liability on the loan and
all the veteran's obligations regarding the loan.
For loans closed prior to March 1, 1988, the
application forms for a release from liability must
be requested from the VA office that guaranteed the
loan. For loans closed on or after March 1, 1988,
the application forms must be requested from the
lender to whom the payments are made.
Can a Veteran Get More Than One VA Manufactured
Home Loan?
Yes, if you qualify for
restoration of entitlement, or you have enough
entitlement left to buy another manufactured home
and you have disposed of the previous manufactured
home.
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