VA requirements

VA Loan Reader Questions: Buying Land

August 21, 2014

VA Loan Reader Questions: Buying Land

061A reader asks, “If I’m presently buying a mobile home, can I use a VA loan to purchase the land ? Could I have the mobile home placed on the property (to VA specs) with intent to live in the mobile home? The property is rural and consist of 32.25 acres and is ready for my mobile home, with the exception of the foundation. Water, sewer, and electric already there.”

VA loan rules have the following to say about buying land with a VA guaranteed loan–and the acceptable purposes of the loan–in VA Pamphlet 26-7:

“To purchase or construct a residence, including a condominium unit to be owned and occupied by the veteran as a home:

  • The loan may include simultaneous purchase of the land on which the residence is situated or will be situated,
  • Loans may also be guaranteed for the construction of a residence on land already owned by the veteran (a portion of the loan may be used to refinance a purchase money mortgage or sales contract for the purchase of the land, subject to reasonable value requirements), and
  • The residential property may not consist of more than four family units and one business unit except in the case of certain joint loans.”

That information is found in Chapter Three. Later on in Chapter 7, VA loan rules specifically address the acceptable purposes for purchasing a manufactured home or mobile home using a VA loan. Those purposes include:

  • To purchase a manufactured home to be affixed to a lot already owned by the veteran.
  • To purchase a manufactured home and a lot to which it will be affixed.
  • To refinance an existing loan on a manufactured home and purchase the lot to which the home will be affixed.
  • An IRRRL to refinance an existing VA loan on a permanently affixed manufactured home and lot.

Chapter Seven does not include the purchase of land alone with a VA loan–the acceptable purposes of VA home loans for mobile homes include the ability to use the VA loan to buy the home and the land together,  or the home itself, but not the land all by itself.

Borrowers who need to know more about this rule should contact the VA directly at 1-800 827-1000 for more details. Borrowers should know that not all participating VA lenders will agree to offer a VA loan on manufactured homes. You many need to shop around for a lender willing to offer such a loan in your housing market.

Do you have questions about VA home loans? Ask us in the comments section.

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