MH Advantage Loans Offer Home Buyers a New Affordable Manufactured Housing Option
In 2017-18 Fannie Mae engaged with manufactured home producers to develop MH Advantage to offer a new affordable housing option. MH Advantage manufactured homes are built to meet specific construction, architectural, and energy efficiency specifications, and include features such as garages, carports, and dormers, giving an appearance that is more similar to traditional site-built homes.
Borrowers obtaining financing on a manufactured home that complies with MH Advantage eligibility requirements may benefit from financing flexibilities not available under standard manufactured housing guidelines, including higher LTV (loan-to-value), owner-occupied primary residences only, standard mortgage insurance coverage requirements, and reduced loan-level price adjustments. Because MH Advantage homes must be titled as real property and are factory-built manufactured homes, they remain subject to HUD Manufactured Housing requirements and must be permanently affixed to the land.
MH Advantage homes have a sticker placed near the HUD DATA Plate at the factory. This sticker is placed on the home by the manufacturer indicating that the home meets the specific construction criteria for MH Advantage. The HUD Plate and sticker are usually placed in an area where they are unlikely to be removed. The sales agreement should also indicate that the home is qualified for MH Advantage financing.
MH Advantage loans are conventional mortgage loans made by conventional lenders in conformance with term and condition guidelines required by Fannie Mae, a Government Sponsored Enterprise (GSE). A government-sponsored enterprise is a quasi-government entity established to enhance the flow of credit to specific sectors of the American economy. Neither Fannie Mae or Freddie Mac, also a GSE, lend money to the public directly; instead, they guarantee third-party loans and purchase loans in the secondary market, ensuring liquidity. Both are privately held public financial corporations. Both Fannie Mae and Freddie Mac were introduced to improve the flow of credit in the housing market, while also reducing the cost of that credit.
In legislation passed by Congress several years ago, GSEs were mandated by the Duty To Serve (DTS) HUD Code manufactured home financing, that would place manufactured housing on the same playing field with site-built loans. The MH Advantage financing program hopefully is a step towards fulfilling that heretofore seemingly aspirational mandate.
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