What to Know About USDA Loans for Manufactured Housing
For home buyers seeking affordable housing options, manufactured homes can be an excellent choice. Many people wonder whether USDA loans can be used to finance manufactured housing—and the good news is that they can! However, USDA loans have specific guidelines that must be met. This article will walk you through everything you need to know about USDA loans for manufactured homes, including eligibility, requirements, and benefits.
Can You Use a USDA Loan for Manufactured Housing?
Yes, USDA loans can be used to finance manufactured homes, but there are specific conditions that must be met. The USDA’s Single-Family Housing Guaranteed Loan Program allows financing for new and existing manufactured homes as long as they meet program requirements.
Eligibility Requirements for USDA Loans on Manufactured Homes
To qualify for a USDA loan on a manufactured home, both the home and borrower must meet eligibility criteria:
1. Property Requirements
- New Manufactured Homes: Must be purchased from an approved dealer or contractor.
- Existing Manufactured Homes: Must already be financed with a USDA loan or be part of an approved development.
- Permanent Foundation: The home must be placed on a permanent foundation that meets HUD guidelines.
- Built After June 15, 1976: Homes built before this date do not qualify.
- Size and Structure: Must be at least 400 square feet and classified as real estate (not personal property).
2. Borrower Requirements
- Credit Score: A minimum credit score of 580-640 is recommended, though some lenders may accept lower scores with compensating factors.
- Income Limits: Household income cannot exceed 115% of the median income for the area.
- Primary Residence: The home must be used as the borrower’s primary residence—investment properties are not eligible.
Loan Terms and Financing Options
USDA loans offer competitive terms for manufactured homes, making them an attractive financing option:
- 100% Financing: No down payment required.
- Fixed Interest Rates: Low, stable interest rates.
- 30-Year Loan Term: Maximum loan term of 30 years.
- Low Mortgage Insurance: More affordable than conventional PMI.
Benefits of USDA Loans for Manufactured Homes
- No Down Payment: Ideal for buyers with limited savings.
- Affordable Financing: Lower interest rates than conventional loans.
- Flexible Credit Requirements: More lenient than traditional mortgage options.
- Inclusive for Rural Homebuyers: Designed to help buyers in rural and suburban areas.
How to Apply for a USDA Loan for a Manufactured Home
If you’re interested in using a USDA loan to purchase a manufactured home, follow these steps:
- Check Eligibility: Use the USDA property and income eligibility tools online.
- Find a USDA-Approved Lender: Not all lenders offer financing for manufactured homes, so choose one that specializes in USDA loans.
- Select an Eligible Home: If you buy new, ensure it’s from an approved dealer. If buying used, verify it meets USDA requirements.
- Submit Your Loan Application: Work with your lender to gather necessary documents and complete the application process.
- Close on Your Home: Once approved, finalize the loan and move into your new manufactured home!
Final Thoughts
USDA loans make homeownership accessible for those purchasing manufactured housing, offering 100% financing, low interest rates, and flexible credit guidelines. If you’re considering a manufactured home and want to explore USDA financing options, visit USDALoansCarolina.com today to get started!