USDA Expands Financing for Manufactured Homes: What You Need to Know

The USDA is making it easier for homebuyers to finance manufactured homes by expanding its manufactured housing provisions nationwide starting March 4, 2025. This update means more affordable homeownership options for moderate- to low-income buyers, especially in rural areas. Here’s everything you need to know about this change and how it could help you achieve homeownership without breaking the bank. What is a Manufactured Home? A manufactured home is a factory-built home that meets the U.S. Department of Housing and Urban Development (HUD) construction standards. Unlike mobile homes built before 1976, manufactured homes are permanently attached to a foundation and must meet modern safety and energy efficiency regulations. They’re a great option for buyers looking for an affordable, high-quality home in rural and suburban areas. What is a USDA Loan? A USDA loan is a government-backed mortgage designed to help homebuyers in eligible rural and suburban areas purchase homes with 0% down payment. These loans are part of the U.S. Department of Agriculture’s mission to promote homeownership in communities where conventional financing options may be limited. What Are The New USDA Manufactured Home Guidelines? Previously, USDA loans had strict limitations on financing manufactured homes. The new expansion introduces the following key changes: Existing manufactured homes are now eligible if they meet certain safety and quality standards. Single-wide and double-wide manufactured homes are now approved nationwide. Financing is now available for energy-efficient manufactured homes in nonprofit land-lease communities and on Tribal lands. Homes must meet updated eligibility criteria, including being built after January 1, 2006, and being permanently placed on an approved foundation. The dealer approval process has been simplified, making it easier to buy a home from a USDA-approved seller. How to Qualify For a USDA Home Loan To qualify for a USDA loan on a manufactured home, buyers must meet these requirements: Minimum credit score of 580 Primary residence only (no second homes or investment properties) Property must meet USDA eligibility criteria, including foundation and age requirements Income limits apply based on location and household size Homes must not have been previously installed in another location How It Benefits Homebuyers The USDA Manufactured Home Program Expansion makes homeownership more accessible by increasing affordable housing options. Here’s why this change is a big deal for buyers: More choices: You can now finance existing manufactured homes instead of just new ones. Affordable payments: With 0% down and low mortgage insurance, monthly payments remain budget-friendly. Low Private Mortgage Insurance (PMI): The 0.35% PMI keeps your monthly payment low. Increased flexibility: Buyers can purchase in land-lease communities, Tribal lands, and more rural areas. Faster approval process: A streamlined dealer approval process speeds up home financing. This expansion is a major step forward that’s making homeownership more accessible for families who might not qualify for conventional mortgages. If you’re interested in exploring your eligibility and homebuying opportunities in your area, fill out this form or get connected with a UMortgage Loan Originator near you!

Plenty of homeowners find themselves waiting for mortgage rates to drop before hitting the housing market. While there’s much more that goes into homeownership preparedness than a low mortgage rate, there are multiple ways to lower your rate without having to rely on market movements. Between temporary and permanent rate buydowns, you can lower your monthly mortgage payment by lowering your interest rate either temporarily or permanently. Although they sound similar, there are plenty of differences between the two types of rate buydowns and several factors that might make one better for specific homebuyers than another. Below, we’ll outline the benefits and major differences between rate buydowns to help you understand what might be best for your unique circumstances. Permanent Rate Buydowns Permanent rate buydowns are a strategy where homebuyers pay additional upfront fees (commonly referred to as points) to their lender in exchange for a reduced interest rate over the entire term of the loan. Unlike temporary rate buydowns, which only offer reduced rates for a set period, typically at the beginning of the loan, permanent buydowns provide lasting savings by prepaying a portion of the interest upfront. This investment offers stability and predictability, as borrowers can budget for lower monthly payments over the entire loan term, particularly advantageous in a rising interest rate environment. Determining whether a permanent mortgage rate buydown is right for you depends on various factors including your financial situation, short and long-term future plans, and market conditions. Homebuyers prioritizing long-term savings and stability, especially if they plan to stay in their home for an extended period, may find permanent buydowns appealing. However, it's essential to weigh the upfront cost against potential long-term savings. Temporary Rate Buydowns Temporary rate buydowns allow homebuyers to secure a reduced interest rate for a specified period at the beginning of the loan term. Unlike permanent rate buydowns, temporary buydowns provide short-term relief by lowering initial monthly payments. While temporary rate buydowns provide immediate relief with reduced initial payments, they return to the original rate after the specified period. Because of this, the interest rate reduction can be particularly beneficial for borrowers with budget constraints, those expecting their income to increase in the future, or those who plan to refinance after a short period. Temporary rate buydowns can be paid by buyers, but there are certain situations where homebuyers can use seller concessions or specific offers from builders to earn reduced mortgage payments for the first year or first couple years of their loan. Rate buydowns are a great option for homebuyers looking to reduce their monthly mortgage payment for either a temporary or permanent period. While the two sound similar, they have different costs associated and aren’t always the best option for every buyer. If you have any questions about what kind of rate buydown might be right for you, feel free to reach out for a free consultation!