Can a buyer purchase a Modular Home using a USDA Rural Development Home Loan?
Absolutely! We routinely lend USDA guaranteed home loans to build modular homes throughout NC, SC, and VA. Modular Homes are sectional, prefabricated houses that consist of two or more sections which are typically manufactured in a controlled, high tech facility and are delivered to their site of intended use. Today’s modular homes offer quality at price points for all types of borrowers spanning from small starter homes to large luxury homes. Modular Homes are built to the same codes as on-site, stick built homes while manufactured homes (double or triplewides) are built to HUD codes.
Advantages of Building a Modular Home:
- Built in a controlled environment – free of damaging elements
- Energy efficient options – Keeping low energy bills in mind
- Often lower price per square foot compared to stick built
- Can be completed quickly – Completed homes from 60 – 120 days
- Flexible & Easy to alter floor plans – Change room sizes, room layout, and more
Using USDA 100% Financing to Build a Modular Home:
USDA is a great lending option for building a new custom modular home on your own land or even if you are purchasing land at the same time. Using a USDA Home Loan can be a great way to finance up to 100% of the contract price, closing costs, and purchasing or paying off land. Whether you own land already, want to purchase land at the same time as building, or you are receiving land gifted from a family member, USDA can offer so many advantages for homebuyers. Often prospective buyers have the misunderstanding that a higher interest rate comes with building a modular home but that is NOT TRUE. A modular home USDA rate with us is no different than the rate on an on-site, stick built home. USDA does have restrictions for property location but much of NC, SC, and SC are eligible (see if your area is eligible). It also has household income limits but they are quite liberal.
Why Use USDA Financing for Building a Modular Home?
- 100% financing up to the purchase price or as completed appraised value
- Lower payment when compared to FHA
- 30 year fixed rates to provide a payment you can count on
- Builder can pay most or all of the borrower’s closing costs
- Flexible on credit allowing as low as 640 credit scores
- Land can be recently gifted by a family member
Most of NC, SC, and Virginia are Eligible for USDA Financing!
Only the small areas shaded in orange are not eligible for USDA Financing
Other Ways to Build / Purchase a Modular Using Your Land
- VA Home Loan – VA is a 100% financing loan available for Active Military & Service members
- FHA Financing – FHA allows equity in the land owned to be used as down payment
- Conventional – Fannie Mae and Freddie Mac Conventional loans are great when you have enough equity
- MCC Tax Credit – Up to $2000 per year tax credit for qualifying buyers