New, Long-Term Affordable Mortgages Available for Mobile Home Park Residents

The nation’s top rural housing official joined U.S. Sen. Patrick Leahy Tuesday to announce the availability of United States Department of Agriculture mortgages for Vermonters who want to purchase a Vermont-made, energy-efficient modular home. The mortgage is the first of its kind for residents of mobile home parks, where home buyers face high interest rates and short loan terms.

“Often, the most accessible affordable housing option for a rural family is a manufactured home,” said USDA Rural Housing Service Administrator Tony Hernandez. “However, limited financing options, aging manufactured housing stock, and heating costs can make owning a manufactured home challenging. This demonstration program will prove that today’s new energy efficient manufactured and modular homes are a lower risk for lenders, a safe and affordable option for rural families, and are better for the environment.”

“Living in an energy efficient home or one with healthy air quality should not primarily be an affordability issue,” said Leahy.  “That is why I am proud to stand with Administrator Hernandez, our housing and energy leaders, and philanthropic partners to announce a new financing opportunity for Vermont’s mobile home owners.  The USDA Energy Efficient Manufactured Home Pilot Program is one way in which our state can help support middle-class homeowners who still need relief, and working families who dream of affording and owning their own homes.”

During a news conference at the Shelburnewood Mobile Home Park Tuesday, Rural Housing Service Administrator Tony Hernandez and Leahy toured an energy-efficient modular home eligible for the new loan program. The home, manufactured by Vermod of Wilder, Vermont, is owned by Cathedral Square Corporation, a non-profit organization dedicated to creating housing and communities for seniors and people with disabilities. The organization is using the home as a model and plans to sell it to an eligible borrower next year.

The Net Zero Energy Capable Vermod, made in Wilder, Vermont, is a high-performance modular home and was designed as part of the Manufactured Housing Innovation Project (MHIP), a collaboration between the Vermont Housing and Conservation Board, Efficiency Vermont, the University of Vermont, and the High Meadows Fund. The organizations aimed to design a more resilient manufactured home that could withstand severe weather events such as Tropical Storm Irene (2011).  More than 15 percent of the homes damaged during Irene were manufactured homes, despite the fact that they make up only 7 percent of Vermont’s housing stock.

Under the USDA Energy Efficiency Manufactured Home Pilot Program, a low income home-buyer interested in purchasing a high-performance modular home, like the one on display in Shelburne, and placing it in a mobile home park would be eligible for a 30-year mortgage at a 3.25 percent rate.  Very low income home buyers may be eligible for an interest subsidy down to 1 percent.

The monthly mortgage payment on such a home (after the owner applies for and receives incentives from Efficiency Vermont and a deferred payment loan from the Champlain Housing Trust) could be as low as $387 a month for low-income qualifying home buyers. 

According to Efficiency Vermont, that monthly payment would be only slightly more than many manufactured home owners currently pay each month for heat and electricity. Efficiency Vermont estimates that an owner of a manufactured home made prior to 1976, when new construction and safety standards were put in place, pays approximately $3,800 a year for heat and electricity.   Efficiency Vermont estimates that a high-performance modular home, like the Vermod equipped with solar panels, would cost a homeowner approximately $180 a year for heat and electricity. 

The Net Zero Energy Capable Vermod currently sells for about $131,000, which includes the cost of the home, site work, foundation, set up costs and all appliances. Efficiency Vermont’s incentives and Champlain Housing Trust’s deferred loan can reduce the total USDA mortgage of the Net Zero Energy Capable Vermod to as low as $89,000. 

USDA, through its RD mission area, administers and manages housing, business and community infrastructure programs through a national network of state and local offices. Rural Development has an active portfolio of more than $210 billion in loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural areas.

For more information on Rural Development or to inquire about the Energy Efficient Manufactured Home Pilot Program, visit rd.usda.gov/vt or call (802) 828-6000.