USDA Rural Development

[hillcountrybuyer]

Has anyone built a manufactured or modular house using a USDA Section 502 loan? We were told that even modular houses would recieve 360 mo. financing rather than their usual 396 mo. financing given to site-built homes, thus also decreasing the total amount of the loan.

The reasons they gave were that modular/manufactured housing doesn't hold up well and that they don't hold their value well (the manager of the office stated that modular homes depreciate like cars). To my knowledge, both of these assumptions are false where modular homes are concerned. I've seen the appraisal histories of a few examples in my county, as well as videos and documentation of modular construction.... I haven't seen any proof that a modular on a slab foundation won't hold up as well as stick-built homes.

Anyway, I'm looking at Patriot Homes in particular... even with a reduced loan amount I'm finding that I get more house by going modular. I've read mostly good things about Patriot Homes thus far. What's the general consensus around here on Patriot Homes vs. say Palm Harbor's Designer series or Oak Creek Homes... with particular regard to quality and value?

Thanks for any helpful comments or advice!

[rmurray]

Well a certain USDA office manager knows not what he/she speaks...You have seen the proof in your area..In most cases manufactured and modular are far stronger than any stick built. Imagine what most of them would look like if they were moved down the interstate for hundreds of miles at 70 mph..Why would you worry about the extra 36 months of mortgage? The payment difference would be insignificant..When I sold mods we were never able to finalize any USDA mortgages. In my area land prices are high enough to push the cost higher than the maximum allowable loan amount. You are right you will get far more home for your money from a factory crafted home..

Find a dealer/builder in your area skilled with mortgages..Usually the dealers of the top quality homes like you mentioned will be VERY skilled in available local mortgages..I know in my state there is a home ownership initiative by the government.. The GA DREAM program will contribute up to $20,000 toward the purchase of a home..Modular included.All with rates of 5.875% as of last Friday. Some cities and counties also have available programs..

Use the search function button above to search these forums for the 3 brands you mentioned..Just be sure to search "all dates" to searche all conversations for the last number of years..All three of these brands have been discussed here in the past..

Good Luck and GO FOR IT

[hillcountrybuyer]

Thanks for your input, rmurray. I spoke with a dealer today and we crunched some numbers. Land isn't very expensive where I am. So, we'll probably be able to squeeze it all into our USDA loan amount. I'm hoping there aren't any other roadblocks besides that. However, both dealers seemed very down on the prospect of working with a USDA mortgage.

[rmurray]

Dealers can make NO mopney with this program plus USDA is government..Be ready for huge amounts of paperwork and long delays..You should check with your local UDSA's avaiable budget to be sure they will have the money when you need it...They have only a fixed amount of total mortgage money for the year..If they run out they will HAVE to delay you until the next budget year which starts OCT 1st..Good Luck

[rmurray]

From your id I am guessing you are in SC.."hillcountry" is a common term for large parts of the state. Your state also has a gfood program for home ownership. They do help with downs and closing costs..They have extanded locks for construction loans..The programs differ in the different counties...You can find them here;

http://www.sha.state.sc.us/index.asp?n=727&p=2&s=770

Just remeber..First time buyer just means you have not owned in 3 years....

[hillcountrybuyer]

Why don't dealers make money because of it being a USDA loan?

Actually, I'm in central TX. I have begun researching other loans... TX has a comparable program funded by the state. Although, my loan amount through USDA is near their max for my county, so I'll probably stick with them if I can work out a good deal.

[rmurray]

He will make a profit on the home..but cannot sell and finance insurance for you and make a commission..Also they do NOT allow kick backs for raising the rate a little bit as most other lenders will pay the dealer...These two items can be thousnds of dollars.

I guess Texas has some hills too..Sorry about moving you across the country...

GO FOR IT before the rates rise any more..

[bayou316]

First of all yes. We are currently buying a Platinum (Oak Creek) modular home.

We are using the Rural Development Loan program. For those of you who do not know about it; please check into it. You will be surprised.

My banker was shocked when I mentioned modular home to him. After reading and studying, he was totally convinced that these homes are the way to go.

Probably the only thing you may run into is the notion of "off-frame" versus "on-frame" modular homes.

However, financing for 30 year (360 months) is available. No PMI. No down payment and low interest rates.

You also can combine acreage or a lot to your home purchase and have them as one loan.

Great program.

My home will be appraised using the spec sheet and the actual drawings provided by the builders engineering department.

It will appraise as a normal "stick-built" home.

You may be ready for some funny stares, a bunch of "What's, and your kidding me's. But always remember that you can not find a builder of stick-built homes to offer you a seven year warranty bumper to bumper so to speak.