Funding Manufactured Homes to Boost Housing Supply in Rural America
June 30, 2022
USDA Rural Development’s Single Family Housing Guaranteed Loan Program provides options for lenders to help homebuyers finance homes in rural America. This includes manufactured homes, which can help boost housing supply in rural America and bring home ownership within reach of millions.
Through the Combined Construction to Permanent Construction Loan Program (PDF, 158 KB), the USDA and its lending partners are ensuring that millions of people’s dreams of home ownership come true by requiring no advance payment.
Under this program, the USDA guarantees 100% of the appraised value of the house and land. The program also helps lenders finance land costs, closing costs, site development, installation and home setup costs. It also allows lenders to obtain collateral on loan notes in advance, creating more flexibility for both lender and borrower.
For example, USDA lending partner Metroplex Mortgage Services Inc. works with the agency to ensure that people in rural Florida, Texas, Tennessee and Alabama have a home. self.
Metroplex Mortgage Services Inc. President Sean Stephens said the company recently helped a single mother purchase a new manufactured home through the Combined Construction-to-Construction Loan Program. She was able to qualify because of the no down payment requirement and the flexibility of the program.
Guild Mortgage, based in San Diego, Calif., is financing four manufactured homes through the Single Family Housing Secured Loan Program to help residents of the Paradise community affected by the wildfires gain access to affordable housing. Houses are a type of construction known as CrossMod. These types of homes combine the characteristics of site-built homes with innovative and efficient factory construction methods and result in a product that resembles a traditional stick-built home.
Checklist for lenders
If you’re a lender interested in financing new manufactured home construction through the USDA’s Combined Construction-to-Construction Loan Program, here are some tips to keep in mind. In order to receive USDA rural development funding, the unit must be new and:
- Transported directly from the manufacturer to the site where it will be financed.
- Have an area of at least 400 square feet.
- Installed on a permanent foundation constructed per FHA guidelines.
- Comply with the Federal Construction and Safety Standard for Manufactured Homes.
- Certified by its manufacturer that the thermal requirements have been met.
For more information, visit Secured Loan Program for Single Family Homes | Rural Development (usda.gov).