Update on USDA Loans for Manufactured Homes

Big News for Homebuyers in Michigan

One of Michigan’s most accessible home loan programs just became even more inclusive. As of May 5, 2025, the USDA Rural Development (RD) mortgage program has expanded its guidelines to allow financing for more types of manufactured homes — including pre-existing ones.

This update means more Michiganders can take advantage of zero down payment options and affordable interest rates, now with even more housing options to choose from.

 

What Is a USDA Loan?

The USDA Loan Program, backed by the U.S. Department of Agriculture, was created to make homeownership more achievable in rural and some suburban areas. It’s especially beneficial for first-time buyers or those with low to moderate income thanks to features like:

• Zero down payment
• Competitive interest rates
• Low mortgage insurance

Despite the name, “rural” includes a surprising number of areas—over 94% of Michigan qualifies under the USDA’s definition. So don’t assume this loan isn’t an option for your ideal location!

 

Key USDA Loan Requirements

To qualify for a USDA Rural Development Loan, you must meet a few basic guidelines:

Income Eligibility
Your total household income must be at or below 115% of your area’s median income. Limits vary by location and household size.

Property Location
The home must be located in a USDA-eligible area. You can check your desired address on the USDA’s eligibility map or work with a Treadstone Loan Officer for guidance.

Property Condition
The home must be considered safe, sound, and sanitary. Minor repairs may be included in the loan, but homes with major structural issues typically won’t qualify — unless using a USDA Renovation Loan.

 

What’s New: USDA Expands Access to Manufactured Homes

Previously, USDA Loans only applied to brand-new manufactured homes. That’s no longer the case. As of May 5, 2025, the USDA now allows buyers to use RD Loans on existing manufactured homes — as long as they meet updated safety and construction standards. This change opens up more affordable paths to homeownership for individuals and families across Michigan.

What Manufactured Homes Qualify?
To be eligible for a USDA Loan, a manufactured home have to been ruled safe and stable, which means they must meet the following criteria:

• Built after June 15, 1976
• Manufactured date within 20 years from date of the loan closing
• Meets HUD safety standards
• Installed on a permanent foundation
• Has not been moved from another site
• All HUD tags are indicated
• Floor area must be greater than 400 square feet

 

Why Manufactured Homes Are a Great Option in Michigan

Manufactured homes offer incredible value — often costing significantly less than site-built homes — while still providing modern comfort and durability. In Michigan, where land is more affordable and many communities qualify under USDA’s map, this combination of low cost and zero down payment creates an ideal opportunity.

Modular vs. Manufactured Homes
While modular homes and manufactured homes are very similar, they do have some key differences. In short, all modular homes are manufactured homes, but not all manufactured homes are modular. Modular homes are built in sections in a factory and assembled on a permanent foundation at the building site. They must follow local building codes, just like traditional homes.

Manufactured homes are built entirely in a factory and then transported to the site. They follow federal HUD guidelines rather than local building codes. Both options offer safe, comfortable living, but manufactured homes often cost less (although technology advances may be changing this). Understanding the differences can help you choose the best home for your needs and budget.

 

How to Buy a Manufactured Home with a USDA Loan

Here’s what the process looks like:

1. Pre-Qualification
Determine your budget and confirm you meet basic income and location requirements.

2. Find a Home & Schedule an Inspection
USDA requires homes to be livable. If minor repairs are needed, they can often be included in your loan.

3. Underwriting & Closing
Work with your Treadstone Loan Officer to complete the final steps—just like a traditional mortgage.

How Treadstone Can Help
At Treadstone, we’re proud to be a USDA-approved lender with a dedicated team who understands the details of RD Loans and manufactured housing. We combine personal service with expert knowledge to make your home buying journey easier — whether it’s your first home or your fifth.

 

FAQ’s

What’s the difference between manufactured, modular, and mobile homes?
Manufactured homes are built entirely in a factory and then transported to the site. They follow federal HUD guidelines rather than local building codes. On the other hand, modular homes are built in sections in a factory and assembled on a permanent foundation at the building site. They must follow local building codes, just like traditional homes. Mobile homes technically refer to any factory-built home that was made prior to June 15, 1976. That might sound very specific, but that’s when HUD code was first established, so the safety regulations majorly shifted.

Are USDA Loans hard to get?
Not at all, especially if you meet income and location guidelines. Working with an experienced lender like Treadstone makes the process even smoother.

Is it harder to get a mortgage on a manufactured home?
Not necessarily. As long as the home meets USDA standards, the process is similar to any other mortgage — though it’s important to verify condition and compliance early.

What credit score do you need to finance a manufactured home?
To buy a manufactured home in the state of Michigan, you must have a 580 credit score. However, if you’re looking to use a Rural Development Loan on a manufactured home, you need a credit score of least 620.

Are you ready to explore affordable homeownership? A USDA Loan combined with a manufactured home could be your key to buying a home in Michigan! Connect with a Mortgage Pro at Treadstone today to find out if you qualify.