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The SFH section 502 Direct and section 504 Programs are implemented under 7 CFR 3550 and the SFH Guaranteed Loan Program is implemented under 7 CFR 3555. Both programs are authorized, by sections 502 and 504 of the Housing Act of 1949, as amended, (42 U.S.C. 1472 and 1474).

The section 502 Direct Loan Program is implemented under 7 CFR 3550 and authorized by section 502 of the Housing Act of 1949, as amended, (42 U.S.C. 1472 and 1474). The purpose of the program is to assist low- and very low-income applicants who currently do not own adequate housing and cannot obtain other credit, the opportunity to acquire, build, rehabilitate, improve, or relocate dwellings in rural areas.

The section 504 Loan and Grant Program is implemented under 7 CFR 3550 and is authorized by section 504 of the Housing Act of 1949, as amended, (42 U.S.C. 1472 and 1474). This program offers loans to very low-income homeowners who cannot obtain other credit to repair or rehabilitate their properties. The section 504 program also offers grants to homeowners aged 62 or older who cannot obtain a loan to correct health and safety hazards or to make the unit accessible to household members with disabilities.

The section 502 Guaranteed Loan Program is implemented under 7 CFR 3555 and is authorized by section 502 of the Housing Act of 1949, as amended, (42 U.S.C. 1472 and 1474). The purpose of the program is to assist low- and moderate-income applicants the opportunity to acquire, build, rehabilitate, improve, or relocate dwellings in rural areas.

Consideration for expansion of manufactured housing options is being reviewed due to recent White House initiatives to deploy new financing mechanisms to build and preserve more housing where housing gaps exist. There is special emphasis on supporting production and availability of manufactured housing through improved loan rates and terms making this type of home ownership more attainable and affordable. RHS is proposing to reduce the regulatory burdens in 7 CFR parts 3550 and 3555 specifically related to manufactured housing requirements, enhance program delivery and customer service, promote consistency between the direct and guaranteed SFH loan programs where feasible, and reflect current housing market conditions and mortgage loan practices. A manufactured home is defined as a structure that is transportable in one or more sections on a permanent chassis, constructed for permanent occupancy, and placed on a permanent foundation.

RHS will continue to require all new and existing manufactured homes to be constructed and placed on a permanent foundation in accordance with the Federal Manufactured Home Construction and Safety Standards (FMHCSS), established by HUD and found in 24 CFR part 3280.

These changes supports new financing mechanisms to build and preserve more housing where housing gaps exist. The proposed updates are expected to include clarifying language addressing the following issues: (1) the ability for borrowers under the direct and guaranteed loan programs to purchase existing manufactured homes constructed in conformance with standards and on or after a specified date; (2) the Agency’s consideration of a land-lease with an unexpired term that is at least two years longer than the mortgage term for new energy efficient manufactured and modular home financing in land-lease communities operating on a nonprofit basis; and (3) the need for Agency approval of manufactured housing dealers.

These revisions are expected to allow the Agency to responsibly and effectively utilize funds appropriated by Congress through allowing borrowers more purchase options within a competitive market and thereby increasing the likelihood of finding adequate housing which increases program impact.