A New Path for Self-Help Housing
How Mountain Projects is Pioneering Modular Construction in the USDA 523 Program
For years, Mountain Projects, a Community Action Agency in western North Carolina, has helped families build their homes through the USDA Section 523 Mutual Self-Help Housing Program. The model is familiar to many in rural housing; families come together, working side-by-side to construct each other’s homes, reducing costs and creating a deep sense of ownership.
But even the strongest models evolve. The rising cost of materials, labor shortages, and extended construction timelines have placed new pressures on self-help housing organizations nationwide. Mountain Projects saw an opportunity to modernize the process without changing its core mission.
That opportunity came in the form of modular construction.
In November 2023, Mountain Projects became the first self-help housing grantee in the country to successfully integrate modular homes into the USDA Section 523 program. The first three homes were delivered, set on their foundations, and turned over to participating families to complete their sweat equity work—painting walls, installing flooring, setting cabinets, and making the house their own. Three more are on the way.
This shift was years in the making. And it may be just the beginning.
A Training, a Factory Visit, and a Realization
By 2022, Mountain Projects had been thinking about modular construction for some time. They had already worked with Cardinal Homes, a modular home manufacturer in Virginia, on USDA Section 502 direct-financed homes. But bringing modular into the self-help model required deeper consideration: Would it meet USDA requirements? Could families still contribute meaningful labor? Would it actually save time and money?
In October 2022, staff from Mountain Projects attended a Housing Assistance Council (HAC) training on Smart Building Techniques. One of the stops was at Cardinal Homes, where the group observed the manufacturing of modular homes in a controlled environment, which allows for faster turnaround and fewer weather delays, with a quality comparable to traditional stick-built homes.
Attendees of HAC’s Peer Exchange in Richmond, VA tour the Cardinal Homes facility in October, 2022
The visit sparked conversations—not just among housing practitioners but also with Cardinal Homes’ leadership. Could modular self-help housing be a viable path forward? Was there an untapped business opportunity for manufacturers willing to adapt their process?
For Mountain Projects, the visit reinforced what they had already been considering. For Cardinal Homes, it opened the door to a new market. For HAC, it set the stage for a partnership that would help navigate the approvals needed to make it happen.
Making Modular Work for Self-Help Housing
The USDA Section 523 program is based on the idea that families can reduce the cost of homeownership by putting in their own labor. In the traditional model, that means participating in almost every step of construction—from framing and roofing to drywall and final finishes.
Modular construction streamlines home building by assembling the core structure in a factory setting and delivering it partially complete to the site. Families engage in crucial steps both before and after the home arrives. Initially, they prepare the site and lay the foundation, ensuring everything is ready for the arrival of the modular sections. Once the home is set, they participate in the final stages of construction, which include:
- Painting the interior and exterior
- Installing flooring and trim
- Hanging cabinets
- Installing fixtures
Mountain Projects, HAC, and USDA worked together to ensure that families would still meet program requirements while benefiting from the efficiency of modular housing. The approval process required flexibility, problem-solving, and coordination across local, state, and national USDA offices.
By late 2023, approvals were in place, and Mountain Projects was ready to launch the country’s first modular self-help housing initiative.
Construction Costs vs. Appraised Value
Mountain Projects estimates that the average total construction cost for the first three units was $104,990 each, while their average appraisal value stands at $339,000, demonstrating the affordability and value gained through smart building and value engineering techniques. We will update this story with additional data as it becomes available.
Challenges, Successes, and a Model for the Future
Like any innovation, the process was not without hurdles.
The first three homes were scheduled for placement earlier in the year, but the siting process was delayed by flooding from Hurricane Helene. When the first units were finally delivered in November, HAC staff were on-site to document the lessons learned. Despite the delay, the homes were quickly placed, and families immediately began their finishing work.
Now, with three homes completed and three more on the way, the project is proving its worth. Construction timelines have been cut nearly in half. Families are moving in sooner. The model is working.
This project raises important questions about the future for other self-help housing grantees. Could modular construction make self-help housing more accessible for communities facing skilled labor shortages? Could it be a solution for disaster recovery housing, where speed is essential? Should USDA create clearer guidelines to streamline approvals for modular self-help projects?
Mountain Projects’ success shows that modular homes can work within the self-help model, but it is not a one-size-fits-all solution. Some grantees may find that upfront costs and financing structures make it challenging, while others may have site constraints that limit modular placement. But in the right circumstances, modular self-help housing could become a key strategy for expanding affordable homeownership in rural America.
A Team Effort
This success was not achieved in isolation but through Mountain Projects’ strong leadership and coordination, supported by a coalition of partners, each contributing their specialized expertise:
- Mountain Projects: Guided the overall direction. They served as the developer, coordinating the project from start to finish, facilitating bridge financing, and covering costs from initial unit orders to installation until the 502 mortgage repaid the bridge loan.
- Cardinal Homes: Adapted their manufacturing processes to align with the specific needs of self-help housing.
- USDA Rural Development (local, state, and national offices): Ensured compliance with all regulatory standards, facilitating approvals necessary for progress.
- Housing Assistance Council: Provided crucial technical assistance and guidance to support the project’s framework and ensure its success.
- Florida Nonprofit Housing (Technical Management & Assistance): Provided technical assistance on the Mutual Self-Help Housing program.
Each of these organizations played a pivotal role in demonstrating that modular self-help housing is not only feasible but also a forward-thinking solution, paving the way for future initiatives. Their collaborative efforts showcase the power of partnership in bringing innovative housing solutions to life.
What’s Next?
Mountain Projects will complete three more modular homes by summer 2025, further refining the model and evaluating the impact. Other self-help housing grantees will be watching closely to see how this approach could fit within their own communities.
For modular home manufacturers, this project highlights a new potential market in the self-help housing space. For USDA, it’s an opportunity to consider policy adjustments that make modular self-help housing more accessible.
And for families, it’s a faster path to homeownership—one that still requires their hard work and commitment, but gets them into their homes sooner and at a lower cost.
This is just the beginning.
Housing Assistance Council
Rory Doyle
