USDA loans can offer many benefits for those who use them. With no down payment requirements, low interest rates and less strict income requirements than most loan products, they open the door to homeownership for many Americans who previously had no other options.
USDA loans can even be used on manufactured and modular housing.
Manufactured (mobile) homes are single- or multi-width units that are constructed offsite and transported to the property, then attached to a permanent foundation.
Modular homes are pre-fabricated houses comprised of multiple modules that are typically shipped to the home site in pieces and assembled there by professionals.
The ability to use USDA loans for modular housing and manufactured properties further expands home buying opportunities for lower-income Americans, ensuring they have access – and a way to finance – affordable, safe and high-quality housing.
USDA Manufactured Home Property Eligibility Requirements
USDA defines a “manufactured home” as any dwelling unit constructed partially off-site and then transported to a site to be completed and attached to a permanent foundation.
- NEW: Purchase of an eligible new unit, transportation and set-up costs, and purchase of an eligible site if not already owned by the applicant. Manufactured units must be less than 12 months old and never occupied and will include the site. The date of the purchase agreement must be within one year of the manufactured date displayed on the plat attached to the unit. The following criteria outlines an eligible unit for guarantee with the SFHGLP:
- To be an eligible unit, the new unit must have a floor area of not less than 400 square feet.
- The unit must be built in compliance with the Federal Manufactured Home Construction and Safety Standards (FMHCSS) that were established June 15, 1976.
- The unit must be placed on a permanent foundation built to FHA guidelines in effect at the time of certification. Guidelines are presently published in the “Permanent Foundation Guide for Manufactured Housing” (HUD-4930.3G) which is found at https://www.hud.gov/program_offices/administration/hudclips/guidebooks/4930.3G.
- Certification the foundation design meets HUD Handbook 4930.3, “Permanent Foundations Guide for Manufactured Housing (PFGMH).” The foundation certification must be from a licensed professional engineer, or registered architect, who is licensed/registered in the state where the manufactured home is located and must attest to current guidelines of the PFGMH. The certification must be site specific and contain the engineers or registered architect’s signature, seal and/or state license/certification number.
- The manufactured home must be classified and taxed as real estate. Lenders are responsible for ensuring the title has been purged and the manufactured home has been officially converted from chattel to real property, as state law allows.
- The mortgage must cover both the unit and its site.
EXISTING: Purchase of a unit on hand that has not been installed, or occupied at any other site or location. Manufactured units may be moved only from the manufacturers or dealer’s lot to the site on which the unit will be guaranteed. This type of unit is eligible as long as the purchase agreement is dated within 12 months of the date the unit was manufactured. The date of manufacture is available on the factory installed plate on the unit. Manufactured home units with a manufacture date exceeding 12 months of the purchase agreement contract will be ineligible for a guaranteed loan.
- Additional Loan Processing Procedures for Existing Properties Involving a Manufactured Home The UW must document the following relative to an existing manufactured unit:
- The unit is presently financed with a Section 502 direct or guaranteed loan, is being sold from Agency inventory, or is being sold from the Lender’s inventory after being acquired through a loan guaranteed by the Agency.
- The unit must be installed on its initial installation site on a permanent foundation complying with the manufacturer’s guidelines and the guidelines published in the PFGMH. The PFGMH guide can be ordered by calling (800) 245-2691 or from the web at https://www.huduser.gov/portal/publications/destech/permfound.html.
The Agency will not guarantee an existing manufactured home, which has had additions or structural modifications made to the original home.
The finished grade level beneath the manufactured home shall be at or above the 100- year base flood elevation.
Whether manufactured homes are considered personal or real property may vary state-to-state. When the loan closes, the unit and site must be taxed as real estate by the jurisdiction in which it is located, if such taxation is permitted under applicable law. If applicable state law so permits, any certificate of title to the manufactured home must be surrendered to the appropriate state government authority. If the certificate of title cannot be surrendered, the lender must indicate its lien on the certificate.
Fidelity Home Group has experienced mortgage experts who are experts in the field of USDA Manufactured and Modular Construction Loans. We offer top tier technology, competitive interest rates, and a commitment to help you achieve your dream of homeownership. We can be contacted several ways to help answer any questions you may have:
Call us at toll free at 888 259 2257
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Text us at 407 955 4575
