How to Apply for a VA Manufactured Home Loan

USA flag and key from home as symbol of VA loan - Sprint Funding

How to Apply for a VA Manufactured Home Loan

Manufactured homes, also known as mobile homes, offer significant benefits such as affordability, flexibility, and energy efficiency. 

If you are a veteran or active-duty service member looking to buy a manufactured home, applying for a VA loan can be an excellent option that helps you achieve your homeownership goals. 

If you’re a veteran, active-duty service member, or qualifying spouse or dependent looking to purchase a manufactured home, you may want to consider a VA manufactured home loan. This loan is specifically designed to assist veterans in achieving home ownership, and the process can be quite straightforward if you have the proper documentation and meet the qualifying criteria. 

Manufactured Home Eligibility Requirements

The eligibility criteria for a VA-guaranteed manufactured home loan vary slightly from the eligibility criteria for a traditional home loan. 

  • A manufactured home is a factory-built home that is designed to be moved to a specific location. 
  • The veteran or active-duty service member must have a Certificate of Eligibility (COE) and meet the necessary credit score and income requirements. 
  • The manufactured home must meet certain specifications such as:
    • Must be a minimum of 400 sq. ft. and be permanently affixed to a foundation on the property. 
    • Must also be built after 1976, and meet the manufactured home construction and safety standards. 
    • The manufactured home must also be classified and taxed as real estate, and the veteran must have a lease or ownership interest in the land where the home will be placed.

Credit Score Requirements

The credit score required for a VA manufactured home loan will vary depending on the lender. However, the VA does not have a minimum credit score requirement. 

In general, most lenders prefer applicants with a credit score of at least 620. 

A score of 680 or above will increase the chances of getting approval for the loan. A lower credit score may still be considered, but it might require a higher down payment or interest rate. 

Additionally, the lender may consider other factors such as employment history and debt-to-income ratio when deciding on whether to approve the loan application. 

It is important to note that a lower credit score does not automatically disqualify you from obtaining a VA manufactured home loan, but it may affect the terms of the loan. 

Income Requirements

Borrowers must have a steady source of income that can cover the mortgage payments, property taxes, and insurance premiums. 

A borrower’s income can come from a variety of sources, including full-time or part-time employment, retirement benefits, disability payments, or self-employment income. 

The VA requires borrowers to provide 2 years of W-2s, tax returns, and pay stubs to verify their employment and income history. 

Any other sources of income must be documented and verified by the VA. Borrowers should be aware that their debt-to-income ratio, which compares their monthly debt payments to their monthly income, must be below 41% to be eligible for a VA manufactured home loan.

Borrowers should also provide accurate and complete information about their income to ensure the VA can make an informed decision about their loan application. \

Borrowers who are self-employed or have irregular income may need to provide additional documentation, such as profit and loss statements, to prove their income.

It is important to note that having a high income does not guarantee approval for a VA Manufactured Home Loan. 

The VA considers a borrower’s income in conjunction with their debt-to-income ratio and credit history to determine if they are eligible for a loan. 

Debt-to-Income Ratio Requirements

This ratio measures your monthly debt payments against your monthly income, and it plays a significant role in determining your eligibility for a loan. 

Generally, the VA requires a debt-to-income ratio of 41% or less, although some lenders may allow for higher ratios if certain eligibility criteria are met.

If your debt-to-income ratio falls above the VA’s guidelines, you may still be able to qualify for a loan if you can demonstrate that you have sufficient residual income. 

Residual income is the money you have left over each month after your necessary expenses are paid, and it can be used to offset a higher debt-to-income ratio. 

To calculate your residual income, the VA will take into account your family size, your geographical location, and other factors that may affect your expenses.

Call Sprint Funding to Know More

To know more about VA loans, give Sprint Funding a call.

©2024 Sprint Funding, Inc. All Rights Reserved | NMLS ID: 348300