Veterans Administration Loans (VA Loans) Available with Zero Down Payment, But Have Unique Complicated Features
A VA Loan for a manufactured or modular home is a special type of home loan, and therefore has special rules and regulations. As a result of its uniqueness, the VA home loan program is very much under-utilized by many manufactured home lenders.
VA manufactured home loans are funded by private lenders, but guaranteed by the Veterans Administration. Interest rates are determined by the lender, but often rates offered are similar to FHA loans.
A VA manufactured home loan can cover 100% of the total costs, which means the qualified veteran may be able to obtain the home with a $0 down payment. However, VA manufactured home loans do require a VA funding fee to help defray the lender’s costs of the home loan program. The amount of that fee is determined by the lender. A disabled veteran may have their funding fee waived.
Like other loans, VA loan borrowers must have satisfactory credit and ability to repay. Typically, lenders will have a minimum credit score threshold of 620 or higher. Those with lower scores may be qualified for an FHA loan with less restrictive guidelines.
To be eligible for VA manufactured home financing, the veteran must meet a few basic criteria. Appropriate length and character of military service is required to utilize the VA home loan benefit.
The loan limit in most cases is $144,000. Veterans should have a 25% entitlement ($36,000) as determined by the lender securing a Certificate of Eligibility (CEO) direct from the Veteran’s Administration. There are only a few lenders in the United States that offer VA mobile home loans with construction financing included in the loan.