VA Loans and Modular Homes

va loan

VA Loans and Modular Homes

Are you wondering if you can use a VA loan to finance your new modular home? VA loans are both possible and popular for qualified candidates who are interested in prefab homebuilding, but there are a few things you need to know.

What you need to know about VA loans and modular homes

1. Modular home loans are different than manufactured home loans.

While modular homes are factory-built in sections and then assembled on location, mobile homes are simply portable houses that often look similar to trailers. It can be very difficult to obtain a VA loan on a manufactured (mobile) home. Mobile homes depreciate in value over time, while modular homes usually appreciate. Before applying for a VA loan, make sure you understand the distinction between mobile and modular homes.

2. From the lender’s perspective, an existing modular home is similar to a traditional home.

If you aren’t building a new modular home, your lender will probably view the situation as if you were buying a traditional, stick-built home. The lending process will be very similar. However, if you are custom-building a modular home, it might look a little different. The lender will have to consider factors such as price, location, etc.

3. VA loans generally require a down payment on the construction loan.

When you build a new modular home and have it assembled on a piece of land, you probably won’t be able to obtain a $0 down construction loan. What you can do is get a loan from another builder or lender, and then refinance (transfer) that loan to a VA loan.

4. VA loans usually have a lower interest rate.

If you’ve done much research on VA loans, you probably know their pros and cons. The leading factor that makes VA loans desirable is the lower interest rate.

5. VA lenders look for homeowners who are putting down permanent roots.

If you aren’t planning on sticking to one house and one location, you might have more trouble obtaining a loan. VA lenders look for homebuyers who are putting down roots.

How can you obtain a VA loan for your modular home?

Contact your local lender and ask to speak with a VA loan specialist to learn more about your personal loan qualifications. A specialist will evaluate each factor and let you know how you can obtain a VA loan for your modular home.

Next Modular knows that choosing a home is likely one of the most important financial decisions you will make. As an experienced modular home builder, we are committed to being your guiding light through this process. If you have further questions, do not hesitate to call us today.