Building your dream home is a possibility with a VA loan. Modular home buyers are given the option to choose the VA Loan once they are eligible to the program.
This no-down payment program allows qualified borrowers to use their VA entitlement to obtain a mortgage for new construction. The issue is that it can be challenging for VA borrowers to locate a lender willing to issue a construction loan. The VA doesn’t actually make home loans; rather, it basically insures them. It’s up to individual VA-approved lenders to determine what kind of loans they’ll issue.
There’s a level of risk in new construction that many are shying away from in the wake of the housing market collapse.
What’s increasingly common is that veterans need to secure a construction loan from a builder or a local lending institution. As the modular home building process wraps up, qualified borrowers can then refinance that short-term construction loan into a permanent VA mortgage.