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Answers (11)
- Hamp Yonce, "Zilluminati"
- Contributions:3463
Start working on plan B. The VA construction loan guarantee is a remnant of the post WWII building boom. No one has done it in decades. They sure aren't going to start in the post housing apocalypse days of 2012.
The only way your scenario will work is if the modular home builder assumes the risk of buying the property, tearing down the house, that probably shouldn't be torn down, building the Mod on the property, and then selling it to you, with your VA loan. That's not going to happen. Sorry. Can't tell you what you want to hear.
The only way your scenario will work is if the modular home builder assumes the risk of buying the property, tearing down the house, that probably shouldn't be torn down, building the Mod on the property, and then selling it to you, with your VA loan. That's not going to happen. Sorry. Can't tell you what you want to hear.
- WhitneyMcMannis
- Contributions:5
While we do own land, we do not want to build the modular on it. If we have to go through the expense of tearing up the slab, and putting in a new basement or frost wall then we thought we might as well buy a new peice of land and use our current home as a rental.
We had planned on getting a modular in the spring, and putting it on land we currently own, however, a peice of foreclosed property is available at a great price a few miles down the road from our current house, which is located between both of our jobs. The house currently on the property needs about 50K in renovations, as part of the roof was under built and it was not winterized early enough so many of the pipes broke. The property does qualify for a 203K, we have already looked into that, but beside the already mentioned repairs, it also needs alot of cosmetic, and floor plan work. Some very strange layout decisions were made with the property, 2 foot wide stair case, open to below area over the front door that cuts the master bedroom in half... to name some of the issues. Basically a whole renovation of the structure and floorplan for both floors. We feel that we would get more for our money by just tearing it down and replacing it.
The property has a new 32x80 barn, pond, inground pool, and garage with a finished room above it that would still be perfectly useable. So our thought is to tear down the house and put the modular on it that we had already picked out. The exsisting well, septic, and power would be ablke to be utilized as they are all sized correctly.
We found out at the last minute that while the bank we were talking to does do VA constructtion loans, they do not do land purchases. Basically I can only use them if I put the modular on the property I already own.
Now it is a matter of finding a lender that does VA construction loans, and land/home purchases or a modular builder that does land/home packages and is willing to purchase the piece of land we want. We already have a customized floor plan, and it would not be that difficult to adapt it to another modular.
As it is the christmas week and are heading out on vacation it won't be until next week we find anything out.
- David Wagner, "Construction Lender"
- Contributions:3
There is financing available using an FHA loan for modular, manufactured and site-built homes. VA does have a construction loan program in the regulations, however, I don't know of any lenders doing them (my firm is working on this currently but there is no ETA on when it will be available).
If you are going to leave the slab in place, you could actually use an FHA 203(k) renovation loan in most cases.
I have a couple of questions: a) are you buying this home or do you already own the home? b) if you are buying it, do you have funds available for the 3.5% down payment? you may be able to negotiate the seller paying some closing costs and prepaids. c) where is the home?
Let me know if I can be of further service.
David Wagner
NMLS# 129994
Branch Manager
Acceptance Capital Mortgage Corporation
If you are going to leave the slab in place, you could actually use an FHA 203(k) renovation loan in most cases.
I have a couple of questions: a) are you buying this home or do you already own the home? b) if you are buying it, do you have funds available for the 3.5% down payment? you may be able to negotiate the seller paying some closing costs and prepaids. c) where is the home?
Let me know if I can be of further service.
David Wagner
NMLS# 129994
Branch Manager
Acceptance Capital Mortgage Corporation
- Hamp Yonce, "Zilluminati"
- Contributions:3463
Whitney,
Do you have to do it on the lot that already has a house on it? Are there no other lots to use? That is a major issue, no matter how you slice it. Seems avoidable to me.
Again, VA doesn't loan money. They guarantee loans that Lenders make. Just because VA says X doesn't mean a Lender, or all Lenders, will agree. If Maine is a place where Modular, and Manufactured Home, financing is readily accessible that's a plus. SC is the opposite, the access is limited by Lenders due to higher than normal rates of default on the housing type.
I helped build the first Modular home in York County, in the late 70's, so I am very familiar with, and am a huge proponent of, the product. I have built dozens of them. I'm just trying to point out that the whole scenario of your idea, is not a simple way to do it. In fact, it is as hard as you could make it.
BTW, I have a sister named Whitney.
Do you have to do it on the lot that already has a house on it? Are there no other lots to use? That is a major issue, no matter how you slice it. Seems avoidable to me.
Again, VA doesn't loan money. They guarantee loans that Lenders make. Just because VA says X doesn't mean a Lender, or all Lenders, will agree. If Maine is a place where Modular, and Manufactured Home, financing is readily accessible that's a plus. SC is the opposite, the access is limited by Lenders due to higher than normal rates of default on the housing type.
I helped build the first Modular home in York County, in the late 70's, so I am very familiar with, and am a huge proponent of, the product. I have built dozens of them. I'm just trying to point out that the whole scenario of your idea, is not a simple way to do it. In fact, it is as hard as you could make it.
BTW, I have a sister named Whitney.
- WhitneyMcMannis
- Contributions:5
According to the VA, any modular home is considered as a Conventional house for VA loan purposes, the issue has been finding a lender that does Va construction loans, and allows for land purchase, as most want me to already own the land. One of the lender did recommend a modular home company that does land/home packages. I am currently checking with our current builder to see if they do, I hope so we have already customized a modular and gotten a price quote for it and I do not really want to repeat the process again.
- Sarah Pearce, "SarahPearceRE"
- Contributions:9
Deborah and Hance, Here in Maine a modular is the same as a stick built. I got "regular" VA financing for my modular, people do it all the time. There are credit unions that will help find financing, even loan no PMI to doublewides. Whitney, you might approach a modular company that buys land packages and see if they will put one in for you hooked up to the services for the house and then you can demo the house later.
- Andrew Adams, "203K Specialist"
- Contributions:9349
VA Allows new construction however finding a lender that will offer interim financing during constrcution will be a challenge. Add to that the way modular companies require the funds to be disbursed. Usually upfront to put the home in production and the balance curb side funded (before the home comes off the trucks). You are looking for a needle in a very big haystack!
Finding a lender that will allow a tear down under the 203K program will be a struggle as well. The program used to allow you to tear down as long as you used 1 wall of the original foundation for the new construction. I would have to double check but I seem to recall reading a change that you needed to use 100% of the original foundation. Not impossible but certainly a challenge.
Most Modular home construction I have seen is done with Construction to perm financing. The challenge will be your down payment or skin in the game.
Finding a lender that will allow a tear down under the 203K program will be a struggle as well. The program used to allow you to tear down as long as you used 1 wall of the original foundation for the new construction. I would have to double check but I seem to recall reading a change that you needed to use 100% of the original foundation. Not impossible but certainly a challenge.
Most Modular home construction I have seen is done with Construction to perm financing. The challenge will be your down payment or skin in the game.
- Deborah Garvin, "loanmonarch"
- Contributions:438
It was understood that the house is a modular, not a manufactured. I still think your source for the home may have better financing options for you. Best to you.
- WhitneyMcMannis
- Contributions:5
Just to be clear, I am talking about a modular home not a mobile home, like a single or double wide.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
I don't think so. It is hard enough to get an existing modular home financed.
A builder would have to cover all the cost of acquisition, tear-down, and new construction (setting and finishing modular), and then let you buy it from them, with a VA loan. That may not work in certain states, not because VA doesn't allow it, but because the Lender's will not do it, regardless.
A builder would have to cover all the cost of acquisition, tear-down, and new construction (setting and finishing modular), and then let you buy it from them, with a VA loan. That may not work in certain states, not because VA doesn't allow it, but because the Lender's will not do it, regardless.
- Deborah Garvin, "loanmonarch"
- Contributions:438
I know of no way this can be accomplished with a VA loan. But, hey, there may be a VA guru who can find a way (I sincerely doubt it). What you are suggesting would work great for an FHA 203K loan...but you need 3.5% down payment...And, modular financing is likely to give you issues.
Are you buying the modular from a dealer? They may well be the best source for your financing options.
Are you buying the modular from a dealer? They may well be the best source for your financing options.
Using a VA Loan to buy a home, tear itdown, and replace it with a modular home.
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