**§36.4204 Loan purposes, maximum loan amounts and terms.**

\(a\) A manufactured home loan may be guaranteed if the loan is for one
of the following purposes:

\(1\) To purchase a lot on which to place a manufactured home already
owned by the veteran;

\(2\) To purchase a single-wide manufactured home;

\(3\) To purchase a single-wide manufactured home and a lot on which to
place such home;

\(4\) To purchase a double-wide manufactured home;

\(5\) To purchase a double-wide manufactured home and lot on which to
place such home;

\(6\) To refinance an existing loan, including a previously refinanced
purchase money loan, that was made for the purchase of and is secured by
a manufactured home and to purchase a lot on which the manufactured home
is or will be placed; or

\(7\) To refinance in accordance with §36.4223 an existing manufactured
home loan guaranteed, insured or made under paragraphs (a)(1) through
(6) of this section, provided the amount of the loan to refinance does
not exceed an amount equal to 95 percent of the reasonable value of the
manufactured home securing the loan, as determined by the Secretary.
(Authority: 38 U.S.C. 3712(a)(1))

\(b\) In the case of a loan to purchase a new manufactured home unit
only, the loan amount shall not exceed the lesser of an amount equal to
95 percent of the purchase price of the property securing the loan or
the amount computed in paragraph (c), of this section, provided the
total loan amount does not exceed 145 percent of the manufacturer's
invoice.

\(c\) For all manufactured home loans, the maximum loan amount is as
follows:

\(1\) In the case of a loan to purchase a new manufactured home unit
only, the loan amount is to be computed as the sum of:

\(i\) One hundred twenty-five (125) percent of the figure produced by
this computation:

Subtract from the manufacturer's invoice cost the manufacturer's invoice
cost of any components (furnishings, accessories, equipment) removed
from the unit by the dealer. To the remainder add the dealer's cost for
any components added by such dealer. The sum so obtained shall be the
figure to be multiplied by the specified percentage; and

\(ii\) One hundred (100) percent of the actual amount of fees and
charges permitted in §36.4232.

\(2\) A loan to purchase a lot upon which a manufactured home owned by
the veteran will be placed is limited to the reasonable value of a
developed lot or the reasonable value plus such amount determined by the
Secretary to be appropriate to cover the cost of necessary site
preparation for an undeveloped lot.

\(3\) The maximum loan amount for a used manufactured home may not
exceed the reasonable value as established by the Secretary, plus:

\(i\) Actual fees or charges for required recordation of documents;

\(ii\) The amount of any documentary stamp taxes levied on the
transactions;

\(iii\) The amount of State and local taxes levied on the transactions;
and

\(iv\) The premium for customary physical damage insurance and vendor's
single interest coverage on the manufactured home for an initial policy
term not to exceed one year.

\(4\) In the case of an interest rate reduction refinancing loan (38
U.S.C. 3712(a)(1)(F)) the maximum loan may not exceed the sum of:

\(i\) The balance of the VA loan being refinanced;

\(ii\) Closing costs as authorized by §36.4232 or §36.4254, as
appropriate; and

\(iii\) Allowable discounts, provided that:

\(A\) The loan application is submitted to the Secretary for prior
approval;

\(B\) The amount of discount is disclosed to the Secretary and the
veteran prior to the issuance of the certificate of commitment by the
Secretary. This certificate of commitment shall specify the discount to
be paid by the veteran, and this discount may not be increased once the
commitment has been issued without the approval of the Secretary;

\(C\) The discount has been determined by the Secretary to be reasonable
in amount; and

\(5\) For a loan to refinance a purchase money lien on a manufactured
home and to purchase a lot (38 U.S.C. 3712(a)(1)(G)) on which the
manufactured home is or will be placed:

\(i\) The loan must be secured by the same manufactured home which must
be owned and occupied by the veteran as the veteran's home; and

\(ii\) The amount of the loan may not exceed an amount equal to the sum
of:

\(A\) The purchase price of the lot, not to exceed the reasonable value
thereof, as authorized by §36.4252;

\(B\) The amount determined by the Secretary to be appropriate to cover
the cost of necessary preparation of the lot;

\(C\) The balance of the loan being refinanced; and

\(D\) Closing costs, as authorized by §36.4232 or §36.4254, as
appropriate, and a reasonable discount with respect to that portion of
the loan used to refinance the existing purchase money lien.

\(iii\) Allowable discounts may be charged to the veteran on the portion
of the loan used to refinance the existing purchase money lien provided:

\(A\) The loan application is submitted to the Secretary for prior
approval;

\(B\) The amount of discount to be paid on the unit portion of the loan
is disclosed to the Secretary and the veteran prior to the issuance of
the certificate of commitment by the Secretary. The certificate of
commitment shall specify the discount to be paid by the veteran on the
unit portion of the loan, and this discount may not be increased once
the commitment has been issued without the approval of the Secretary;
and

\(C\) The discount on the unit portion of the loan has been determined
by the Secretary to be reasonable in amount.

\(6\) All powers of the Secretary under paragraphs (c)(4) and (5) of
this section, except the authority to revise the discount after the
commitment is issued, are hereby delegated to those officials designated
by §36.4221(b). The power of the Secretary to approve an increase in the
discount on the unit portion of the loan after the commitment is issued
is delegated to those officials designated by §36.4220(a).

\(d\) A loan for any of the purposes described in paragraphs (a)(1)
through (6) of this section may include an amount determined by the
Secretary to be appropriate to cover the cost of necessary preparation
of a lot already owned or to be acquired by the veteran, including the
costs of installing utility connections and sanitary facilities, of
paving, and of constructing a suitable pad for the manufactured home.

\(e\) The maximum permissible loan terms shall not exceed:

\(1\) 20 years and 32 days in the case of a loan to purchase a
single-wide manufactured home or a single-wide manufactured home and
lot;

\(2\) 15 years and 32 days in the case of a loan to purchase a lot on
which to place a manufactured home already owned by the veteran;

\(3\) 23 years and 32 days in the case of a loan to purchase a
double-wide manufactured home, or 25 years and 32 days in the case of a
loan to purchase a double-wide manufactured home and lot; or

\(4\) In the case of a used manufactured home the maximum term set forth
in paragraph (c)(1) or (3) of this section or the remaining physical
life expectancy of the unit as established by the Secretary, whichever
is less. (Authority: 38 U.S.C. 3712(a)(1) and (2), d)(1), (e)(4)(B))

\(f\) An itemized list of all items included in the manufactured home
loan as enumerated in §36.4232 shall be provided to both the purchaser
and the Secretary. At the time of loan origination an independent fee
inspection shall be conducted to assure that all items included in the
loan amount are accounted for and in place. A similar inspection will be
conducted in the event of repossession immediately prior to
repossession. The costs of the fee inspections may be included in the
loan amount or the claim amount and charged to the borrower pursuant to
the provisions of §36.4232 (a) and (b). (Information collection
requirements contained in §36.4204(f) were approved by the Office of
Management and Budget under OMB control number 2900-0516)

\(g\) The cost of the transaction which cannot be paid from the proceeds
of the loan must be paid by the veteran in cash from the veteran's own
resources. Except for interest rate reduction refinancing loans pursuant
to paragraph (a)(7) of this section or loans to refinance a manufactured
home and to buy a lot pursuant to paragraph (a)(8) of this section,
closing costs and prepaid items incident to the real estate portion of
any manufactured home loan must be paid in cash and may not be included
in the loan amount. (Authority: 38 U.S.C. 3712(a)(4), (a)(5), (g))

\[48 FR 40227, Sept. 6, 1983, as amended at 54 FR 34988, Aug. 23, 1989;
58 FR 37858, July 14, 1993\]

**Supplement *Highlights* reference**: 5(2b)