The U.S. Department of Agriculture (“USDA” or “Agency”) has issued a proposed rule expanding eligibility for Manufactured Housing properties and is currently seeking comments on the proposed changes of the Single Family Housing Guaranteed Loan Program Technical Handbook (“HB-1-3555”). The agency has been operating a pilot program under similar rules to those proposed, which has been successful in increasing homeownership.
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.
The notable proposed changes are indicated below:
Adds eligibility for financing the purchase of existing manufactured homes, which meet certain criteria. The homes must have been constructed after 2006, must not have been previously installed on a different home site, or had any structural alterations since construction in the factory, except for porches, decks or other structures which were built to engineered designs or were approved and inspected by local code officials.
- Updates current regulation language of the ownership requirement. This update applies to energy efficient manufactured and modular home financing located in land lease communities operating on a non-profit basis, including tribal lands. Currently, the agency requires the unexpired term to be at least 150% of the term of the loan. Ex. If the loan term is 30 years, the lease must not expire for at least 45 years. In the current pilot for the proposed rule, the agency will accept leases with an unexpired term that continues for at least two years beyond the term of the promissory note. Ex. If the loan term is 30 years, the lease must not expire for at least 32 years.
- Removes administrative requirements for review and approval of applications from manufactured housing dealers. The agency will no longer update or maintain a list of approved dealer-contractors. The dealer will still be required to provide all site services and agree to construction and development requirements in 7 CFR 3550.73(d) and standards set forth in the FMHCSS.
DocMagic will continue to provide USDA updates as they become available. If you have additional questions about this topic, please contact DocMagic’s Compliance Department.
