Do USDA Loans Cover Manufactured Homes?

USDA Rural Development loans offer a pathway to homeownership for individuals and families in eligible rural areas, particularly those with low to moderate incomes. These programs are designed to foster homeownership and community development in less densely populated regions. USDA loans can be utilized for manufactured homes, provided specific conditions are met.

Manufactured Home Requirements for USDA Loans

Manufactured homes must satisfy several criteria to be eligible for USDA loan financing. The home must be permanently affixed to a foundation, which includes permanent perimeter enclosures extending below the frost line and constructed of materials specified by the International Residential Code (IRC). This ensures the home is considered real estate, not personal property, which is essential for mortgage eligibility. The home’s towing hitch and running gear must be removed.

Compliance with the Federal Manufactured Home Construction and Safety Standards (FMHCSS), also known as the HUD Code, is a strict requirement. Evidence of this compliance is shown by a red certification label affixed to the exterior of each transportable section of the home, which must remain visible after installation. The home should be new stock, meaning it was built within the last 12 months and has never been installed or occupied at another site. Some recent updates allow for existing manufactured homes, provided they meet specific criteria, including a manufacture date within 20 years of the loan closing date.

The physical dimensions of the manufactured home also factor into eligibility. Single-wide homes must be at least 12 feet wide, while double-wide homes need to be at least 20 feet wide. All manufactured homes must have a minimum interior living space of 400 square feet. The home must be classified and taxed as real estate by the local jurisdiction. A warranty from the dealer is also required for the home.

Borrower and Property Eligibility for USDA Loans

Eligibility for a USDA loan encompasses both the borrower’s financial standing and the property’s location. Applicants must be U.S. citizens or permanent residents. The property must serve as the borrower’s primary residence, and borrowers need to move into the home within 60 days of closing and occupy it for at least 12 months.

Income limits are a significant factor for USDA loan eligibility, as the program targets low- and moderate-income households. Household income cannot exceed 115% of the median income for the specific area. For 2025, standard income limits are $119,850 for 1-4 member households and $158,250 for 5-8 member households, though these limits vary by location and household size. Lenders evaluate a borrower’s stable and dependable income and their ability to repay the mortgage.

Creditworthiness is another aspect lenders assess, though the USDA does not impose a minimum credit score. Most USDA-approved lenders look for a credit score of at least 640 for automatic approval through the Guaranteed Underwriting System (GUS). Manual underwriting may allow for lower scores, sometimes as low as 580, if other strong financial factors are present. The property’s location is paramount, as it must be in a USDA-designated eligible rural area. The USDA provides online mapping tools to determine if a specific address qualifies.

The USDA Loan Application Process

The process for obtaining a USDA loan for a manufactured home begins with finding a USDA-approved lender, as not all mortgage providers offer these specific loans. These lenders are equipped to guide applicants through the program’s unique requirements.

Borrowers often undergo a pre-qualification or pre-approval process. Prequalification offers an informal estimate of potential loan amounts based on self-reported financial information. Pre-approval is a more comprehensive assessment where the lender verifies financial details, including income, assets, and credit, providing a more reliable indication of eligibility. This step requires submitting documents such as pay stubs, W-2s, tax returns, and bank statements.

Once pre-approved, borrowers can search for a manufactured home and land that align with USDA eligibility criteria. After a property is identified and an offer accepted, the formal loan application is submitted with all required documentation.

The lender then initiates the underwriting process, which involves a thorough review of the borrower’s financial situation and the property’s characteristics to ensure compliance with USDA guidelines. This includes an appraisal by a USDA-approved appraiser to verify the home’s value and condition. Underwriting can take between 30 to 60 days, sometimes longer if manual underwriting is required. Upon final approval from both the lender and the state’s USDA office, the loan proceeds to closing, where all final documents are signed and funds are disbursed.