The very first thing you think of when it comes to your standard of living, is your home. But with housing and property prices increasing dramatically year on year in the U.S., finding affordable housing that offers a high quality of living can be a challenge. Even more so for the many unfortunate veterans who have found it challenging to reintegrate and be self-sufficient.
Over the last decade or so, the trend of homeless veterans has been decreasing. However, 2016 to 2017 saw the first rise in these numbers for seven years. This raises fresh concerns over how we can create opportunities for these deserving, yet unfortunate, members of our society. One solution seems to lie with mobile homes.
What is a mobile home? Why consider it as a veteran?
Mobile homes are technically no longer called by that name. Today, they are officially recognized as “manufactured housing.” This transition was brought about with the Manufactured Home Construction and Safety Standards Act of 1976. This act targeted the relatively bad construction and safety standards of mobile homes at the time which were closer to trailer homes.
Manufactured homes are still recognizable as mobile homes. However, they have evolved drastically during the last few decades. Manufactured homes are bigger, built according to stricter standards, and must adhere to heightened safety (e.g. fire safety) protocols. They are also no longer as mobile as they used to be. In fact, moving them can damage the home, make it ineligible for financing, and is extremely expensive.
Manufactured homes are:
- Built within a factory-like setting in either one single section (single-wides) or multiple sections (double, triple, or multi-wides).
- Manufactured homes have a chassis, axle, and wheels on which they are transported from location to location.
- These sections are then transported separately to the site where the home is to be placed on a pre-prepared foundation.
- Contractors attach these sections to each other on site and affix them to the foundation and lot using tie downs. Fixing the sections together is a permanent move and cannot be undone to move the home later.
We’ve written an article that goes into more detail of how mobile homes are constructed.
Financing your home with a VA loan
Since secure housing is often a problem faced by veterans, the Department of Veteran Affairs offers to back up loans to veterans. By backing the loan, it means that the DVA will guarantee the loan amount. This essentially means they will pay the remainder of the loan should the loanee become unable to do so.
The fact that the loan will be guaranteed like this makes it more likely that it will be approved. The lender is also in a position to offer better terms. These improved terms could include:
- A lower interest rate, typically around 3-4%
- Up to 100% financing with 0 down payment
- No prepayment penalties
- A limit to how much closing costs you will pay
There are also maximum repayment terms of 20 years for single-wides, 23 years for double-wides, and 25 years for a double-wide and a lot.
The only caveat is that you will need to pay a funding fee to the VA of about 1 to 2.5% depending on your status as a veteran and down payment.
The good news is that these VA loans can also be used for mortgages on mobile homes. In other words, an affordable form of housing is even more obtainable with a VA loan. And this virtually erases whatever advantage traditional home mortgages hold over mobile home mortgages. You still apply for the VA loan through a conventional lender who will then apply for the backing of the loan by the VA.
A VA loan is useful for all of the following reasons:
- The purchase of a mobile home
- To purchase a mobile home as well as land
- To refinance an existing loan
- Repairing or buying and fixing up a mobile home
You can also obtain a second or third VA loan but only after your first one has been paid in full.
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Requirements for a VA loan
However, just like any other type of mobile home loan, the home needs to meet certain requirements:
- It must be affixed to a permanent foundation. This can be a slab, basement, runner, or any other type as long as it’s permanently poured.
- The home must be classified (and taxed) as real property. This can be done by removing the axle and wheels and permanently affixing it the property. You can then register it as real estate with the local authorities.
- It must meet the VA MPR (minimum property requirements). These usually have to do with the quality of the living standards provided by the property.
- It must meet zoning requirements for the area where it is located in terms of wind/weather zones, city zoning, etc.
- And, generally, mobile homes must always conform to the HUD Code.
Of course, you will also need to qualify as a veteran yourself to receive a VA loan. This is usually determined by your Certificate of Eligibility that you can apply for using your discharge papers (DD214). There will also be the usual requirements that lenders place on their loanees, such as a good credit score, income, etc. You can find an in-depth guide to VA loans for manufactured homes here.
Under some conditions, Servicemembers, National Guards, and Reserves can also apply for status as a veteran.
More veteran financing
- Native American Direct Loan (NADL) Program: This program aims to specifically help Native American Veterans obtain loans for homes on Native American Land or within Native American trusts. Your tribe will have to take part in the application process.
- Interest Rate Reduction Refinance Loan (IRRRL): This is a way of refinancing your existing VA loan to reduce the interest rate and the monthly payments you have to make.
- Purchase Loan/Cash-Out Refinance: This option allows you to get an immediate lump sum of cash from the line of equity within your home if there is something that you immediately need a large amount of cash for.
- Adapted Housing Grants: These grants help you to buy housing that caters for any disability or special needs you might have. The options are either a Special Housing Adaptation (SHA) grant to make adaptations to your home or a Specially Adapted Housing (SAH) grant which helps you purchase a home with adaptations already made.
Other mobile home financing options
If for whatever reason, you’re not eligible for a VA loan, there are still a number of other financing options you can consider to make purchasing a mobile home more affordable:
- FHA Loan: This loan is very similar to a VA loan except that it’s backed by the Federal Housing Administration and not by the Department of Veteran Affairs. It typically has the same benefits as a VA loan and will be slightly easier to obtain.
- Chattel Mortgage: A chattel mortgage is like a loan on an item considered private property, like a car. As such, the terms are generally not as good but they are much easier to apply for.
- Conventional Mortgage: If you convert your mobile home into real estate, you might be able to secure a conventional loan from a lender although it might be on less agreeable terms than for a stick-built home.
Step by step how to apply for a VA loan
- Obtain your documents – You will need a Certificate of Eligibility that you can apply for at the eBenefits website. You should also obtain the necessary financial documents such as proof of income, bank statements, etc
- Find a lender that offers VA loans – Veteran United Home Loans, Bank of America, and Fannie Mae are just some lenders that offer VA loans. Make sure they offer VA loans for manufactured homes too.
- Get pre-approved – It’s always a good idea to get pre-approved. Pre-approval can speed up your actual application process later on. You’ll also know what type of loan you’re eligible for and how much you can borrow.
- Apply – It can be a long process to apply for a VA loan. However, once you’ve chosen a lender, they will help you with almost everything along the way. Some lenders can even help you apply for your CoE if you haven’t done so yet.
What if I can’t afford my own home?
If your current situation dictates that you cannot afford to buy a home, even with generous financing terms, then the good news is that there are other avenues open to you. There are plenty of charitable/NGO as well as governmental programs available to veterans in need of assistance. As it happens, many of these programs make use of mobile homes.
That’s no coincidence. As we explained earlier, mobile homes are unique. They offer the opportunity to live the American dream with a decently-sized home, a yard, some privacy, and a high standard of living at a price that seems like a bargain. By being cost-effective, they also enable these organizations to provide more housing for more veterans with the funding available.
One example is Veterans Affordable Housing Program which was founded by Garry Edmundson. Gary has been working in the manufactured home industry for a long time and saw the housing’s potential to help veterans. Housing 4 Our Vets is another organization that doesn’t depend wholly on manufactured housing but makes use of it for their Veteran Housing program. BestGuide also has a list of retirement communities where you will find some manufactured communities for vets.
Why consider a veteran community?
First, veteran communities offer services that come in handy for down-on-their-luck vets. Second, they also cater to the daily difficulties veterans are likely to face. Most mobile home parks and the homes themselves cater to disabilities. For those in wheelchairs, accessibility features could include handicap ramps, grab bars, specialized kitchens and bathrooms, and wider doorways, etc.
To help get veterans back on their feet, veteran communities usually offer:
- Career counseling and training
- Therapy and re-integration counseling
- A close proximity to military hospitals, bases, and other centers for veterans
- Community-sponsored events in honor of veterans
- Informational seminars and workshops for veterans
- Recreational amenities and activities such as fishing, swimming, sports, etc.
- Food distribution programs
- Veteran outreach programs
- Other events to build a sense of community and normality
There are also more specialized veteran communities. These might cater to severely disabled vets, vets that require hospice care, or any other form of intensive care. These parks are rarer but can be found if you are in need of any of those services. If nothing else, a veteran community is often nearby such facilities or will be able to provide contact details for them.
If you go through one of the programs above, they will help find a way to accommodate your financial situation. Some even offer accommodation for free for a limited time. This might exist while you go through a program or until you have the ability to secure your own housing and be self-sufficient. If not completely free, they offer extremely favorable rental or financing terms and will help to arrange financing where needed.
Needless to say that space, privacy, and respectable living conditions offered by manufactured housing and parks do a great deal on their own. Without them, the only affordable way to provide a similar service to veterans would be in cramped apartments located within the hustle and bustle of the city.
Find housing to meet your needs
So, whether you are a veteran looking to live out the rest of your life in peace and calm or you have fallen on hard times and just need a leg up to start the process of getting back on your feet, you haven’t been forgotten. There are plenty of opportunities for veterans to maintain a quality of life that’s more than dignified if you know what opportunities are available and where to look.
We would recommend mobile homes as a fantastic way to live large on a small budget for anyone but they seem to be especially suited for veterans and their needs.