Will Your Manufactured Home Foundation Qualify for FHA, VA and Conventional Financing?

So you’ve discovered some issues with your manufactured home’s foundation. You need repairs but you don’t know where to get a loan. Good news! Foundation repairs are considered by almost all loan providers to be absolutely essential to maintaining and improving home value, so there are many options for obtaining low-income home repair loans.

When considering a repair loan it’s important to note that permitted and city-approved repairs can increase the value of your home, many times more than the cost of the repairs. A repaired foundation may allow you to get better appraisals and do a cash-out refinance. That’s why many consider home repair loans a no-brainer.

FHA Loan

FHA Title 1 loans are a lesser-known HUD (Department of Housing and Urban Development) financing tool for home improvements and repairs. If you are buying a property you can add a Title 1 loan to the mortgage as part of the purchase price to fix the home. You can also get FHA loans for homes you’ve already purchased. Here are some of the qualifications and requirements for an FHA loan:

• Title 1 loans must be used for repairs such as foundation repairs on properties that have been occupied for at least 90 days.

• Unsecured loans of up to $7,500 are available for manufactured homes that are not real property.

• Qualified real property manufactured homes can obtain loans of up to $7,500 unsecured and $25,000 secured.

• Loans have a minimum term of 6 months up to a maximum of 12 years for manufactured homes

FHA loans can be a great option for manufactured homeowners to pay for necessary foundation repairs and improve the value of their home at the same time.

VA Loans

VA renovation loans are available to VA-loan-eligible persons for use in home repairs to make the home meet minimum VA-loan requirements. Eligible improvements include:

• Roof repairs

• Floor repairs

• Electrical and plumbing repairs

• HVAC repairs

• Foundation repairs

• Paint to replace lead paint

• Energy-efficiency repairs

VA renovation loans have the following requirements:

• The loan must be a VA purchase or VA Cash-out Refinance to be eligible to fund repairs.

• The home must meet minimum property requirements as outlined by the VA post-renovation.

• You must use a registered VA builder or contractor for repairs

• The lender is responsible for evaluating, and managing the repair project to ensure project completion and appropriate fund usage

• Rehabilitation loans used in conjunction with a home purchase must use the lessor of the acquisition cost or the as-completed value

*Note that lenders may charge a 2% construction fee. You can check your eligibility for a VA refinance or purchase loan here – https://www.militaryvaloan.com/va-qualify?h1=#loan-purpose

Conventional Financing

Conventional loans can be the most difficult to obtain, but there are still plenty of options for manufactured homeowners or purchasers. Here is a list of requirements and general info.

• Conventional loans can offer limited cash-out refinances of up to $2,000.

• You can refinance up to 95% of the home’s value with a conventional mortgage.

• You need a credit score of at least 640 to refinance.

• Must include private mortgage insurance (PMI) in the loan if you have less than 20% equity.

• You can refinance for up to 30 years.

• Your manufactured home must be on a permanent foundation and be at least 600 sqft.

Summary

If you are considering a loan for your foundation repair needs we recommend seeking out an FHA/HUD loan or VA loan if at all possible, but conventional loans can also be effective in funding the renovation through a cash-out refinance.