Can I Build A Modular Home Using the VA Loan?
Soldiers and their family are among the recipients of the modular home industry. They are the ones who first sought for a home that’s easy, affordable, faster to construct. Today they are confused whether, the US Department of Veterans Affairs is offering a mortgage or loan if they just wanted to build and own a modular home. To answer the query, start by discuss what is a modular home and a VA loan.
A modular home, also known as the prefab home, is a dwelling produced from setting up separate modules or boxes, which are created in a controlled and protected environment. The construction process of a prefabricated house is faster than the conventional house because there is a simultaneous work on- site and off- site. This means that when the modules are built inside the factory, preparation in the site like pouring of the foundation is done as well. When the modules are 70 to 80 percent completed, they are transported through a truck to the site. They are then assembled, and glued securely by the modular home team. Home finishes such as carpets, paints and other are also installed. Because of the demand for high quality, the government has set the national, state and local building codes.
Modular Home for Veterans
When you are a soldier or a family of a soldier, you may have encountered the Veterans Affairs (VA) Loan. It is a type of mortgage granted only for retired soldiers and families of soldiers who are currently practicing in the field. VA loan is not only intended to finance a traditional home construction. It can also cover the modular home.
As mentioned, VA loan can help build a modular home. However, you may need to understand some guidelines how a VA loan assists in modular construction.
Guidelines of VA Loan for Modular Home
In order to obtain a VA loan, a home buyer must first obtain the VA Form 26-1880. This will be used to Request for Determination of Eligibility and Available Loan Guaranty Entitlement. It is also handed to the lender that you have a right to build a modular through the VA Loan. Be guided that the Department of Veteran Affairs fails to provide the money for the construction, it is the lender. Lenders are companies or institutions or banks who offer modular home financing. Just check with the Veteran Affairs office who is these lenders. Sometimes general contractors and home dealers can suggest a trustworthy leader.
After you have applied for the Determination of Eligibility and Available Loan Guaranty Entitlement, it is now time to choose which modular home style or floor plan you want. Be careful in selecting the floor plan. Always keep in mind the number of rooms, bathrooms and other important areas. Cost estimate of the floor plan you have chosen will be given by the home builder and the lender, so it is advisable to be within the vicinity when it happens.
Before the VA Loan Entitlement is approved, you have to present the chosen floor plan to the lender. Typically, there is no waiting time for the VA loan because it sees modular homes as conventional homes. Then, hiring a general contractor now is. He works with his team to complete the construction process and produce a high quality modular home.
Disbursement schedule should be made between the home buyer and the general contractor to help the lender in evaluating whether each phase of the building process is done in compliance with the building codes. If the lender’s representative sees that everything meet the standards, he will issue a check as payment for land clearing, building or foundation, and the overall costs of the construction. The lender pays the general contractor every after each phase.
Moreover the lender who grants a VA Loan for prefab or modular homes can make some adjustments to the underwriting and closing of the loan. And also remember that mobile homes or those types considered to be manufactured will have a difficult time to have a successful VA loan though they are guarantees to be eligible.
Guidelines in acquiring a VA loan are also a mirror to the standard process on how to use the VA loan entitlement for building a modular home. But if this happens to your first time building a modular home, your home builder may be able to help you further with referrals to general contractors familiar with the modular home financing.
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