Questions and Answers on Manufactured Home Loans for Veterans

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 amounti 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).

Veterans who had a VA loan before may still have "remaining entitlement" to use for another VA loan. The current amount of entitlement available
to each eligible veteran is $36,000. This was much lower in years past
and has been increased over time by changes in the law. For example, a
veteran who obtained a $25,000 loan in 1974 would have used $12,500 guaranty
entitlement, the maximum then available. Even if that loan is not paid
off, the veteran could use the $23,500 difference between the $12,500
entitlement originally used and the current maximum of $36,000 to buy
another home with VA financing. An additional $14,750, up to a maximum
entitlement of $50,750 is available for loans above $144,000 to purchase
or construct a home.

A basic funding fee of 2.0 percent must be paid to VA by all but certain exempt veterans. A down paymenti of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent down payment will reduce it to 1.25 percent.

History

In the early 1980's, the government launched a new refinancei program called VA Streamline Mortgages. This program allows anyone with a VA loan to lower their rates at any time to the lowest rates then available, without added paperwork or crediti checks thus allowing people the opportunity to lower their mortgagei payments and save thousands of dollars in interesti.

What is the Purpose of the VA Loan?

• To buy a home, including townhouse or condominiumi unit in a VA-approved project.
• To build a home.
• To simultaneously purchase and improve a home.