VA Loan Requirements for Modulars
- To be eligible for a VA loan, you must meet all military service requirements. During wartime, borrowers must have at least 90 days of active duty and be discharged honorably. Disabled veterans may not need the full 90 days to qualify. In peacetime, you must serve at least 181 days of continuous active duty and be discharged under any form other than dishonorable conditions. Those who are still on active duty may qualify for a VA loan after serving at least 181 days, or 90 days during the Gulf War period (any date after August, 2, 1990).
- A Certificate of Eligibility for a VA loan can be obtained through an application at the VA's Website. It may also be available at a local VA office. This form establishes the military's approval for eligibility, not for the loan itself. The form, VA Form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement, then it goes to lenders when you apply for the loan.
- Loans are not available directly through the VA. Rather, the VA provides a guarantee to a loan provided by a traditional mortgage lender. Should the home buyer default on the home loan, the VA will cover as much as 80 percent of the borrowed principal of that loan. This is why it is important to work with an approved VA lender. Many financial institutions and national mortgage lenders are approved VA lenders. This simply means the lender has agreed to provide an affordable loan to veterans and met other qualifications of the VA.
- Meet credit qualifications set forth by the lender. The VA loan will help to lower these requirements somewhat. Those who have filed bankruptcy must wait at least two years before applying for a VA loan. You must show the ability to pay back the loan. Income and employment verification is necessary. There is no necessary down payment from the VA, but the lender may request one. You may roll closing costs and the VA funding fee into the loan. There are no mortgage insurance premiums with VA home loans.
- The loan officer orders a VA appraisal of the modular. This will happen after the property is completely constructed. At this point, a request goes to the Department of Veterans Affairs. The appraisal fee is a cost of the borrower, often running between $250-$400. This appraisal ensures the value of the home is at least as much as the funds borrowed to pay for it. In addition, the VA appraiser is looking for any safety issues and concerns. Things like broken railings, step problems, insect infestations, water damage and peeling paint must be in good repair before the VA will approve the home loan.
