Mobile Home Financing

All posts tagged Mobile Home Financing

Image result for designer kitchen

According to the latest manufactured housing trends, design and function are still at the top of the list.

Architectural style, color schemes, floor plans and attractive appliance packages remain as top priorities for most mobile home and manufactured housing buyers. With the typical smaller footprint of mobile homes, the design function and layouts can be a little more challenging than a larger home.

Even though some of the mobile homes have smaller square footage, manufacturers are dedicating more time and effort to providing better storage solutions and better ergonomics in the space that is provided. The extra space can be seen in things like built-in medicine cabinets, added pantry spaces and capitalizing on the little extra nooks for better use.

Naturally there remains pricing pressure on all fronts. With new regulations, comes additional costs. Some regulations can be beneficial such as having adequate cross bracing in a structure, while a number of diminutions improvements are adding substantial cost to home owners. We all hear about the need to support affordable housing, but very few seem to be asking why individuals cant pick out there own light bulbs or water fixtures anymore.

After all, most homes are connected to a electric and water meter. If the electric bill gets a little to expensive, individuals sooner or later will figure out that they can just shut the switch off and/or put in higher or lower wattage bulbs in “their” home to meet their individual tasks and needs.

So while the trends are changing, being able to select a home with the fixtures and functions you desire may be a thing of the past. And this lack of free market freedom is driving up the cost of all housing, from Mobile Homes to Multi-Million dollar mansions.

 

by Joe Light   –   05/07/2017

Fannie Mae and Freddie Mac may soon begin to provide financing for buyers of manufactured and mobile homes, according to draft plans released on Monday.

The move is part of an effort by the mortgage-finance giants to ease burdens on low-income borrowers, many of whom turn to factory-built housing as a inexpensive alternative to traditional residences. At the same time, it could also bring criticism from people concerned about the riskiness of lending for the mobile homes , which often sit on leased land and can depreciate quickly in value.

The proposals were outlined by Fannie and Freddie as part of broader plans to address affordable housing challenges. The U.S.-controlled companies need to get sign-off for the pilot programs from their regulator, the Federal Housing Finance Agency.

Industry Advocacy

Mobile home builders and some affordable-housing advocates have long called on Fannie and Freddie to support the industry, arguing that such residences are a primary way some low-income borrowers get into the real estate market. According to the U.S. Census, about 12.3 million Americans owned a manufactured home in 2015, while another 5.4 million rented one.

Buyers of manufactured / mobile homes typically are ineligible for standard mortgages because they don’t own the land where the home sits. Instead, they have to get a personal property or “chattel” loan that carries a higher interest rate and lasts 10 to 20 years, rather than the 30 years of a typical fixed-rate mortgage.

Fannie and Freddie already finance some loans for homes on land owned by the borrower and, through their multifamily businesses, to owners of entire mobile home communities on which owners rent land.

The mobile home industry crashed in the late 1990s and early 2000s, sending some lenders into bankruptcy.

Mike Dawson, a Freddie single-family vice president, said that lending and manufacturing practices are much different than they were at the time of that collapse.

‘Sustainable Lens’

“We want to look at it from a long-term sustainable lens,” Dawson said. “If we participate, we want to make sure that there are responsible lending guidelines associated with it.”

Some of the biggest lenders for mobile-home purchases lately have been the manufacturers themselves. Among them are subsidiaries of Berkshire Hathaway Inc.’s Clayton Homes, though they’ve come under criticism in the last couple years for allegedly discriminatory lending practices. The company disputes the claims.

Jeffery Hayward, Fannie’s head of multifamily, said the company through its pilot hopes to collect more data on how chattel loans perform to ensure that they don’t put taxpayers at risk.

“Rural and manufactured housing are inextricably linked,” Hayward said. “The most affordable housing you can find is often a manufactured house and/or mobile home in a rural area.”

Like Freddie’s Dawson, Hayward said the quality of manufactured / mobile homes has improved in the last couple decades, making them better collateral.

Fannie said it could begin by purchasing 350 to 425 chattel loans per year, which could amount to $20 million to $25 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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