FHA Proposal: More Manufactured Home Loans
Under a proposed rule change, manufactured home loans could operate similarly to all other home loans, providing ownership is titled as personal property.
Washington – The Federal Housing Administration (FHA) proposed a rule in the Federal Register that will increase and index loan limits under its Title 1 Manufactured Home Loan Program. The program ensures loans are used to finance manufactured homes that are titled as personal property.
FHA proposes a “data-driven methodology to calculate loan limits for the program on an annual basis.” It’s currently seeking public comment. The change was first proposed in the Biden Administration’s May 2022 Housing Supply Action Plan. Manufactured housing is considered one of the tools that can alleviate the U.S. shortage of affordable housing.
“Adjusting loan limits to current market conditions will make Title 1 a much more useful source of affordable loan financing for manufactured homes,” says Federal Housing Commissioner Julia Gordon. “This proposal is the next step in FHA’s ongoing work to support manufactured housing as an affordable and attractive option in a challenging housing market.”
Title 1 Manufactured Home Loan Program loan limits haven’t been updated since the Housing and Economic Recovery Act of 2008.
According to FHA’s plan, it will use indexes to annually calculate and adjust loan limits using sale prices, similar to the way conforming loan limits for existing home mortgages rise every year. In the manufactured home version, these limits would include separate indexes for single-section manufactured homes and multi-section manufactured homes.
Type of loans under the Title 1 Manufactured Home Loan Program
- Manufactured Home Loans are used for the purchase or refinance of a manufactured home only.
- Manufactured Home Lot Loans are used for the purchase or refinance of the land where the home is to be installed.
- Manufactured Home and Lot Combination Loans are used for the purchase or refinance of both the home and the land on which the home will be installed.
Source: Florida Realtors