Low-income families sometimes have difficulties securing financing for a home, which is why USDA financing began. This lucrative financing program is flexible in its guidelines and allows different types of income that standard mortgage programs would not allow. In addition, the USDA allows financing for manufactured homes. That being said, you need to understand the USDA manufactured home requirements before you sign up for financing.
What the USDA Cares About
You probably know by now that USDA loans are reserved for rural homes or those areas that the USDA deems rural. The areas that they include might or might not be rural in your mind, but if the population is less than 20,000 and the area is outside of the city limits, they might get included. That being said, when it comes to the USDA manufactured home requirements, there are a few more stipulations you must follow:
- The specific safety standards set by HUD must be met. These standards are the Federal Manufactured Home Construction and Safety Standards. The standards focus on the design of the home along with its construction. It is easy to spot manufactured homes that meet this approval, because they are awarded a red plate to signify the safety standards.
- The size of the home depending on its type. There are two types of manufactured homes – single wide and double wide. Single wide homes must be at least 12 feet wide and double wide homes must be at least 20 feet wide. Both homes must have at least 400 square feet of living area to qualify as well.
- The site you will place the home on also plays a role in the financing. You must own the site, which can be included in the USDA financing. In addition, the site must be permanent. The size of the site does not matter as much, but it cannot be large enough to be subdivided.
- The home must have adequate street access with properly paved streets.
- The home must have proper running water and wastewater systems.
- The home must be brand new from an approved dealer – most pre-owned manufactured homes are not allowed.
The USDA Manufactured Home Requirements
The USDA Manufactured Home Requirements might seem strict, but they are that way in order to protect you, the borrower, as well as the lender. Manufactured homes are often considered too risky for other lenders, but because the USDA program helps low-income families secure safe housing, they include manufactured homes as well.
The only time that pre-owned manufactured homes can be financed with USDA financing is when there is already existing USDA financing on the home. In this case, the lender has final discretion determining if the home is eligible for USDA financing or not.
What is a Low-Income Family?
The USDA loans are strictly reserved for low income families. How do you know if you meet those guidelines? You can use the USDA website to determine your eligibility. You can use this map to determine your eligibility. Simply click on your state and then look for the column for your county and your family size. This will help you determine the maximum amount of income allowed for your area. If you fall within the guidelines and you meet the USDA Manufactured Home Requirements, you could be on your way to owning a manufactured home in a rural area.
Before you secure USDA financing for your manufactured home, make sure you work with a lender that has knowledge not only of USDA loans, but of manufactured housing as well. The USDA has the final say whether or not a loan gets approved. Once the complete underwriting package is put together, it gets sent off to the USDA. The field office then reviews the file to determine if it is eligible. If the lender does not understand manufactured housing and the requirements that the USDA has for them, you might have trouble getting your loan closed.
Shop around and find the USDA lender that has a solid understanding of the USDA Manufactured Home Requirements to determine the right choice for you and your home ownership to ensure a smooth process.