For many homebuyers, purchasing a manufactured home is an affordable way to achieve homeownership. However, financing options can sometimes be limited for these types of homes. One potential solution is a USDA loan, which offers zero down payment financing for eligible properties and borrowers. In 2025, you are still allowed to buy a manufactured home with a USDA loan. There are specific USDA requirements and limitations with manufactured home loans. Let’s consider the eligibility criteria, benefits, and application process for using a USDA loan to purchase a manufactured home.

Understanding USDA Loans and Manufactured Home

The United States Department of Agriculture offers the USDA loan program is designed to help low-to-moderate-income homebuyers purchase homes in rural and suburban areas. USDA loans are backed by the government, which allows lenders to offer more favorable loan terms, such as low-interest rates and zero down payments.

Types of USDA Loans

There are two main types of USDA loans that can be used to buy a manufactured home:

  1. USDA Guaranteed Loan:
    • Available through approved lenders.
    • Designed for moderate-income borrowers.
    • Offers zero down payment and lower interest rates.
  2. USDA Direct Loan:
    • Issued directly by the USDA.
    • Targets low-income borrowers.
    • Offers subsidized interest rates for qualified applicants.

Both loan types can be used to purchase a manufactured home if it meets USDA eligibility requirements.

Eligibility Requirements for Buying a Manufactured Home with a USDA Loan

While USDA loans can be used to purchase a manufactured home, certain property and borrower requirements must be met.

1. Property Requirements

For a manufactured home to qualify for USDA financing, it must:

  • Be new and never previously occupied (existing manufactured homes are typically not eligible).
  • Be permanently affixed to a foundation that meets HUD guidelines.
  • Be at least 400 square feet for a single-wide home or 600 square feet for a multi-section home.
  • Be located in an eligible rural or suburban area as determined by the USDA.
  • Meet all HUD Manufactured Home Construction and Safety Standards.

2. Land and Site Requirements

  • The land must be included in the purchase; USDA loans cannot finance just the home.
  • The home must be installed on a permanent foundation that complies with local zoning and building codes.
  • The site must have adequate road access and utilities.

3. Borrower Requirements

To qualify for a USDA loan for a manufactured home, borrowers must:

  • Meet income limits, which vary by location and household size.
  • Have a credit score of at least 640 (some lenders may accept lower scores with compensating factors).
  • Demonstrate stable income and employment.
  • Use the home as their primary residence.
  • Have a debt-to-income (DTI) ratio of 41% or lower (some exceptions apply).

Benefits of Buying a Manufactured Home with a USDA Loan

1. No Down Payment Required

One of the biggest advantages of using a USDA loan is that it requires no down payment, making homeownership more accessible. Learn more about no money down home loans.

2. Competitive Interest Rates

Because USDA loans are government-backed, they typically offer lower interest rates than conventional loans, helping borrowers save money over time.

3. No Private Mortgage Insurance (PMI)

Unlike FHA and conventional loans, USDA loans do not require PMI, reducing monthly mortgage costs.

4. Affordable Loan Terms

USDA offer fixed-rate mortgages with terms of 30 years, providing predictable monthly payments.

5. Flexible Credit Requirements

While a credit score of 640+ is preferred, some lenders may approve lower scores with compensating factors such as low debt-to-income ratios or strong savings history.

Steps to Buy a Manufactured Home with a USDA Loan

Step 1: Check Eligibility

  • Use the USDA’s online eligibility map to determine if the home’s location qualifies.
  • Check your income against USDA loan limits for your area.

Step 2: Find a USDA-Approved Lender

  • Work with a lender experienced in USDA manufactured home financing.
  • Get pre-approved to understand your loan eligibility and budget.

Step 3: Select a USDA-Eligible Manufactured Home

  • Ensure the home is new, HUD-approved, and meets size/foundation requirements.
  • Confirm that the seller is approved to sell USDA-eligible homes.

Step 4: Secure the Loan and Finalize the Purchase

  • Submit required documentation (income verification, credit history, debt details).
  • Work with your lender to schedule a home appraisal and inspection.
  • Close on the loan and move into your new manufactured home!

Potential Challenges and Considerations

1. Limited Availability of Pre-Owned Homes

Most USDA loans do not allow financing for used or relocated manufactured homes, making it harder to find eligible properties.

2. Higher Loan Requirements for Older Homes

If financing is allowed for an existing manufactured home, it must be less than 10 years old and meet strict structural and safety requirements.

3. Foundation and Installation Requirements

USDA loans require permanent foundations, which may increase upfront installation costs.

Can you buy a second home with a USDA loan?

No, you cannot buy a second home with a USDA loan, as these loans are specifically designed for primary residences only. The U.S. Department of Agriculture (USDA) loan program aims to help low-to-moderate-income borrowers purchase homes in rural and eligible suburban areas. To qualify, the home must be your primary residence, and you cannot own another adequate home nearby. If you need financing for a second home, you may need to explore conventional loans, VA loans (if eligible), or investment property loans. Always check USDA guidelines and lender policies before applying.

Alternative Financing Options

If you do not qualify for a USDA loan or need financing for a pre-owned manufactured home, consider the following options:

  1. FHA Manufactured Home Loans – Requires 3.5% down, but more flexible on home age.
  2. VA Loans – If you are a veteran, VA loans may finance a manufactured home with no down payment.
  3. Chattel Loans – Specialized loans for manufactured homes on leased land.
  4. Personal Loans – For buyers who need financing but do not qualify for traditional mortgages.

Yes, you can buy a manufactured home with a USDA loan, but the home must be new, permanently affixed, and located in an eligible rural area. With zero down payment, lower interest rates, and flexible credit requirements, USDA loans provide an excellent financing option for low-to-moderate-income homebuyers.

However, potential borrowers should ensure they meet USDA loan requirements and work with a qualified lender to navigate the process smoothly. If a USDA loan isn’t an option, FHA, VA, and alternative financing programs may be worth considering.

By understanding USDA loan benefits and eligibility criteria, prospective homeowners can take advantage of this affordable path to homeownership and secure a quality manufactured home with little to no upfront costs.

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