Can a USDA manufactured home loan help you purchase an existing or new manufactured home?

Can a USDA manufactured home loan help you purchase an existing or new manufactured home?

Last week, we discussed the four steps needed to qualify for a manufactured home construction loan. Today, we are going to discuss in further detail how it is possible to qualify for both existing and new construction manufactured homes with a no down payment USDA loan.

As always, if you have not yet done so, make sure to download our “USDA New Construction Guide.” This educational resource will walk you through the USDA new construction process and the USDA new construction loan requirements and it is designed for homebuyers, builders, and Realtors alike. You can also take advantage of our Second Chance Service which is a great way to get access to an expert second opinion. This can be especially helpful for those recent loan denials or if you just need guidance on how to make the most out of your home loan qualification.

The USDA Handbook:

 The USDA handbook defines a manufactured home as follows:

“Manufactured homes are single-or multi-width units constructed partially off-site and transported to a site to be completed and anchored to a permanent foundation. Manufactured homes are structures built to the Federal Manufactured Home Construction and Safety Standards (FMHCSS) and are different from a modular home.”

USDA Loans for Existing Manufactured Homes

Generally speaking, USDA loans for existing manufactured homes are extremely limited since the guidelines state that a “purchase of an existing manufactured home is not permitted unless it is a purchase of an existing Rural Development Section 502 direct loan or guarantee” which means in order to purchase an existing manufactured home that is not part of any pilot program, it must already be secured by either a USDA guaranteed or Direct loan, which can be similar to finding a needle in a haystack!

**However, there is an exception to this general rule under the USDA Existing Manufactured Home Pilot Program. This USDA existing manufactured home program provides an exception for select states, including Texas and Tennessee, for those units constructed on or after January 1, 2006. There are additional criteria that applies to this program, so please my team at Metroplex to help with your manufactured housing questions.

USDA Loans for New Construction Manufactured Homes

With that being said, USDA loans allow for the purchase of an “eligible new unit, transportation, and set-up costs” under the USDA Single-Close Construction to Permanent Loan subject to the following criteria:

• “Purchase of an eligible new unit, transportation and set-up costs, and purchase of an eligible site if not already owned by the applicant” provided the manufactured home has not been “installed or occupied at any other site or location.”
  • Must be a new unit in stock that has never 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 financed.
    • Manufactured home units with a manufacture date exceeding 12 months of the purchase agreement contract are ineligible
• Must have a floor area of not less than 400 square feet.
• 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: http://www.huduser.org/portal/publications/destech/permfound.html.
• Meet or exceed the Federal Manufactured Home Construction and Safety Standard (FMHCSS) Uo Value Zone for the geographic area the unit will be placed. The Uo Value Zone will be indicated on the Comfort Heating and Cooling Certificate. Builder must certify thermal requirements at time of purchase have been met.

In summary, I realize we covered a lot today and although we went through some of the key program basics, because additional property conditions will be required when you purchase a manufactured home with a no down payment USDA construction loan, please call my team to discuss further.

As a USDA and VA Approved Lender in Florida, Tennessee, Alabama, and Texas, let our experience and expertise go to work for you

Just call, email, or text to discuss your scenario and let us show you the “Metroplex” difference!

Toll Free: (800) 806-9836 X 280

Call/Text: (863) 451-3032
SeanS@MPLX.org

Don’t forget to download our USDA Blueprint for Success with this link.