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

With a continued rise in housing costs over the last few years, affordability is a key concern for potential homebuyers. Policymakers and individuals alike have been searching for solutions to alleviate the barriers to homeownership.

For years, USDA Rural Development (RD) loans have been a vital tool for homebuyers by offering affordable financing and favorable terms. However, one major restriction has existed—until now.

On January 3, 2025, the U.S. Department of Agriculture (USDA) announced a significant policy update that expands financing options to include certain existing manufactured homes. This update, which took effect on May 5, 2025, aims to make homeownership more accessible by broadening eligibility requirements and reducing regulatory burdens.

What’s Changing?

Under the previous guidelines, USDA (RD) loans primarily financed only new, never titled manufactured homes purchased from an approved dealer. These homes were required to have permanent foundations, and borrowers were not allowed to install them independently.

Existing manufactured homes were generally ineligible, unless they were already financed with a USDA loan and the buyer was assuming the loan. With the new rule, certain existing manufactured homes may now qualify for USDA financing, provided they meet the following criteria:

HUD Compliance – The home must have been built under the Federal Manufactured Home Construction and Safety Standards (FMHCSS) and display a HUD certification label and HUD Data Plate.

Permanent Foundation – The home must be installed on a permanent foundation that meets both HUD installation standards and the manufacturer’s requirements.

No Prior Moves – The home must not have been previously installed on a different site. Any factory-built structure that has been relocated is ineligible.

Limited Alterations – The structure should remain in its original factory-built condition, with exceptions for approved additions like porches or decks.

Construction Date – The home must have been built on or after a date specified by USDA.

Why This Matters for Homebuyers

For many homebuyers, affordability and financing options can be major obstacles to achieving homeownership.

Manufactured homes often provide a cost-effective alternative to site-built homes. According to a 2023 report from the Manufactured Housing Institute, the average cost per square foot to construct a traditionally built home was $166, compared to just $87 per square foot for a manufactured home.

Additionally, a key component of the USDA update is increased flexibility for financing energy-efficient manufactured and modular homes located in non-profit land lease communities.

By incorporating these changes, the USDA is reinforcing its commitment to supporting sustainable homeownership in rural communities while maintaining standards for safety, quality, and long-term housing stability.

Broadening the scope of homes that qualify for RD loans gives more families and individuals the opportunity to purchase affordable housing without unnecessary restrictions.

A Step Forward for Rural Homebuyers

If you’re considering buying a manufactured home in a USDA (RD) eligible area, these policy changes could work in your favor. For the most up-to-date details on eligibility and how this change could impact your home financing options, contact a MiMutual Mortgage Loan Officer today!