MANUFACTURED HOMES AND KENTUCKY USDA LOANS FOR RURAL HOUSING REQUIREMENTS
Purchase of an eligible new unit, transportation and set-up costs, and purchase of
an eligible site if not already owned by the applicant. Manufactured units must be
less than 12 months old and never occupied and will include the site. The date of
the purchase agreement must be within one year of the manufactured date
displayed on the plat attached to the unit. The following criteria outlines an
eligible unit for guarantee with the SFHGLP:
To be an eligible unit, the new unit must have a floor area of not less
than 400 square feet.
The unit must meet the Federal Manufactured Home Construction and
Safety Standards (FMHCSS).
The unit must be placed on a permanent foundation built to FHA
guidelines in effect at the time of certification. Guidelines are
presently published in the “Permanent Foundation Guide for
Manufactured Housing” (HUD-4930.3G) which is found at
http://www.huduser.org/portal/publications/destech/permfound.html.
Certification the foundation design meets HUD Handbook 4930.3,
“Permanent Foundations Guide for Manufactured Housing
(PFGMH).” The foundation certification must be from a licensed
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professional engineer, or registered architect, who is
licensed/registered in the state where the manufactured home is
located and must attest to current guidelines of the PFGMH. The
certification must be site specific and contain the engineers or
registered architect’s signature, seal and/or state license/certification
number.
The manufactured home must be classified and taxed as real estate.
Lenders are responsible for ensuring the title has been purged and the
manufactured home has been officially converted from chattel to real
property, as state law allows.
The mortgage must cover both the unit and its site.
Purchase of a unit on hand that has not been installed, or occupied at any other
site or location. Manufactured units may be moved only from the manufacturers
or dealer’s lot to the site on which the unit will be guaranteed. This type of unit is
eligible as long as the purchase agreement is dated within 12 months of the date
the unit was manufactured. The date of manufacture is available on the factory
installed plate on the unit. Manufactured home units with a manufacture date
exceeding 12 months of the purchase agreement contract will be ineligible for a
guaranteed loan.
The Agency will not guarantee the purchase of an existing manufactured home
that has been moved from another site.
Alteration or remodeling of the unit when the initial loan is made (i.e. garages).
All alternations and modifications must meet FMHCSS.
13.7 LOAN RESTRICTIONS
The Agency will not guarantee loans to finance the following:
The purchase of a site without also financing a new unit;
A unit that does not meet FMHCSS;
Repairs not associated with a transfer, Real Estate Owned (REO) sale, or unit that
is already financed with a Section 502 loan; or
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Furniture, including movable articles of personal property such as drapes, beds,
bedding, chairs, sofas, divans, lamps, tables, televisions, radios, stereo sets, and
other similar items of personal property. Furniture does not include wall-to-wall
carpeting, refrigerators, ovens, ranges, washing machines, clothes dryers, heating
or cooling equipment, or other similar equipment.
13.8 ADDITIONAL LOAN PROCESSING PROCEDURES FOR PROPOSED
CONSTRUCTION INVOLVING A NEW MANUFACTURED HOME
For the purpose of underwriting and for payment of the guarantee fee, a newly
constructed manufactured home is considered a purchase loan transaction and is subject
to the fee further outlined in Chapter 6 of this Handbook.
In addition to the documents required for a guaranteed loan, the lender must obtain
the following prior to loan approval. The documentation will be retained in the lender’s
permanent loan file. Lenders may utilize Attachment 13-A as an option in support of
applicable documentation.
An itemized cost breakdown of the total package, including the base unit, eligible
options, site development, installation, set-up, lot costs, and any credit for wheels
and axles.
A statement signed by the dealer indicating that any cash payment or rebate as a
result of the purchase will be deducted from the price of the unit and not paid to
the applicant.
A statement signed by the dealer that the proposed cost is the full price of the unit
and if furniture is being purchased by the applicant with personal funds, that a
lien will not be filed against the security property.
The label number of the unit shown on the FMHCSS data plate on the exterior of
each section.
A signed statement by the dealer confirming thermal requirements in effect at the
time of purchase are met.
Site Requirements:
Located in rural area.
Contiguous to public street.
Streets to be paved or all-weather surface.
Site must not be large enough to subdivide.
Value of site must not exceed 30% of the as-improved market value of the property.
Finish grade beneath the home or the habitable floor, whichever is lower, must be above the 100 year flood plain.
Site must have adequate water and wastewater disposal systems.
Loan Purposes:
Purchase of an eligible site, if not already owned by the applicant.
Purchase of an eligible New manufactured unit, including transportation & set-up costs.
Reasonable site development work, i.e., foundation, driveway, walks, well, septic system, utility connections, etc.
Purchase of the unit and all development work must be done under a single contract.
Rural Development PA (5/08) (1)
Rural Development - Manufactured Housing Fact Sheet
Loan Limitations:
Existing units can not be purchased, only New manufactured units.
Sites can not be purchased without also financing the unit.
Units that do not meet FMHCSS and the Agency’s Thermal Performance Standards can not be financed.
Loan funds can not be used to finance furniture, including movable items of personal property, i.e., drapes, beds,
bedding, chairs, sofas, divans, lamps, tables, televisions, radios, stereo sets, etc.
Amortization period - 30 years.
Dealer-Contractor Participation in the Program:
A Dealer-Contractor may apply to participate by submitting Form RD 1944-5, "Manufactured Housing Dealer Contractor Application", to the Loan Originator in the Rural Development Area Office, along with a current financial statement prepared by a Public Accountant and certified by the Dealer-Contractor. A Dealer-Contractor must be able to provide the full service of sales, service, erection, and warranty of manufactured units and developing sites for them. To qualify to participate, a Dealer-Contractor must be:
1. financially responsible,
2. qualified and equipped to set up the unit on a site-built permanent foundation and develop the site,
3. willing to provide a Warranty acceptable to the Agency.
The Warranty must identify the unit(s) by serial number(s). The Dealer-Contractor must certify that the manufactured home/property substantially complies with the plans and specifications and that the
manufactured home sustained no hidden damage during transportation, and if manufactured in separate sections, that the sections were properly joined and sealed according to the manufacturer's specifications.
The Dealer-Contractor will also furnish the applicant with a copy of all Manufacturer's Warranties.
The attached "Dealer-Contractor Application - Processing Checklist" can be used to assemble information to be submitted to the local Rural Development Office for program participation.
To Qualify, the Rural Housing Applicant Must: Be income eligible, credit worthy and be in need of adequate housing. The applicant should refer to the Section 502 Housing Fact Sheet (available in any Rural Development Office) for specific eligibility requirements. The attached "Manufactured Housing 'Supplemental' Loan Application Checklist" itemizes some specific documents needed for a Manufactured Housing Loan Application.
GUS approval required. No manual underwrites allowed. 640 Credit score no bankruptice last 3 years or foreclosure last 3 years.
• Second review/signature of the property appraisal is required by USDA
• Refinances and purchase loans. If a purchase must be brand new and from an approved USDA lender dealer
• Manufactured home must be existing construction (permanently affixed to the
foundation and titled as real estate).
• 2-4 unit properties located in a PUD are not allowed.
• No non-occupying co-borrower allowed
• No paying off debt to qualify allowed
• No Mortgage Interest Differential payment income allowed
• Singlewide manufactured homes are not eligible
• Manufactured Housing Condo units eligible
• Manufactured Housing PUD units eligible
• In general, max two acres allowed, but up to five acres allowed only if appraisal
reflects no more than 40% land value
• Must meet all USDA agency requirements
• The following eligibility requirements must be met for all manufactured homes:
• Site development work must conform to standards imposed by the state and
local government.
• The manufactured home must have been built and installed in compliance with
the Federal Manufactured Home Construction and Safety Standards that HUD
established June 15, 1976 and additional requirements that appear in HUD
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Guidelines Subject to Change
regulations at 24 C.F.R. Part 3280 as evidenced by the presence of both a HUD
Data Plate and the HUD Certification Label (Tag). Manufactured homes built
prior to June 15, 1976 are ineligible.
• If the original or alternative documentation cannot be obtained for both the
Data Plate/Compliance Certificate and HUD Certification Label (tag), the loan
is not eligible.
• If the HUD tag is missing, a recent "HUD Certification Verification" letter
issued by the Institute for Building Technology and Safety (IBTS) or a copy of
the Data Plate from the In-Plant Primary Inspection Agency (IPI) or
manufacturer must be in the loan file.
• Additional property eligibility requirements for manufactured homes:
• The manufactured home must be secured by both the manufactured home and
the land and both must be classified as real property under applicable state law
and subject to taxation as real estate.
• The manufactured home must be attached to a permanent foundation system in
accordance with the manufacturer's requirements for anchoring, support,
stability, and maintenance. The foundation must be appropriate for the soil
conditions for the site and must meet local and state codes.
• The manufactured home must be attached to a permanent foundation system in
accordance with the manufacturer's requirements for support, stability, and
maintenance. The foundation must be appropriate for the soil conditions for the
site and must meet local and state codes.
• If the manufactured home was installed prior to October 20, 2008, the anchoring
system must comply with the manufacturer's design or a design by a licensed
(registered) professional engineer, otherwise, the anchoring system must comply
with HUD Codes.
• The manufactured home must be built on and remain on a permanent chassis
with the towing hitch, wheels and axles removed.
• Must be a 1-unit dwelling.
• Incomplete items, such as a partially completed addition or renovation, or
defects or needed repairs that affect safety, are not eligible until the work is paid
for and complete. Exceptions may be made for minor items that do not affect the
ability to obtain an occupancy permit – such as landscaping, a driveway, walkway
etc.
• The finished grade level beneath the manufactured home is at or above the 100-
year base flood elevation.
Manufactured Home Ineligible Property Types
• A manufactured home that is not titled as real estate.
• A manufactured home that was installed or occupied previously at any other site or
location. The home may only have moved from the manufacturer's or dealer's lot to
the current site of the home.
• Manufactured home is not classified and titled as real property at time of
application.
August 16, 2023
USDA Proposed Rule - Manufactured Housing Provisions
On August 16, 2023, a Proposed Rule was published in the Federal Register seeking comments on proposed changes to Handbook 1-3550 and Handbook 1-3555 that would make existing manufactured homes, which meet specific criteria, eligible for financing.
Used manufactured homes and mobile homes used Kentucky USDA loan may be possible in near future for the Kentucky USDA Rural Housing Loan Program.
In addition, the proposal reduces regulatory burdens related to manufactured housing requirements and provides flexibilities for energy efficient manufactured and modular homes located in land lease communities operating on a non-profit basis.
Comments on the proposed rule must be received on or before October 16, 2023. Comments are invited through the Federal eRulemaking Portal at www.regulations.gov.
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
Text/call 502-905-3708
kentuckyloan@gmail.com
