New Financing Options = More New Manufactured Home Owners?

Over the past few months, new financing options for manufactured housing have been cropping up left and right, providing potential buyers with a significant number of fresh options for making their prefab home-ownership dreams a reality. But why now? In a recent article, the National Mortgage News cites a nationwide lack of entry-level, affordable housing, the overwhelming rise in quality of manufactured housing and manufactured housing-focused funding initiatives from Fanny Mae and Freddie Mac as key to the recent uptick.

“Manufactured homes have grown to the point where they now account for almost 10 percent of U.S. housing starts, and they represent an even larger share of existing inventory in some states. In addition, their numbers can multiply rapidly because producing and installing manufactured homes is less labor-intensive and faster-paced than site-built new homes,” the article explains. “That’s attractive to mortgage lenders…seeking new sources of purchase originations to make up for the significant decline in refinance lending volume over the past year.”

new financing options

If you’re curious about what the two newest lending options entail, below is a bite-sized synopsis of each.

Freddie Mac:
In addition to launching a new “green” mortgage (which we covered in our news roundup a couple of weeks ago), Freddie Mac also has expanded its “sweat equity” loan program to allow home repairs to cover not just a part but the entirety of a down payment. “In rural America, many creditworthy families with low-to-moderate incomes face significant barriers to homeownership, especially obtaining the down payment,” Freddie Mac told HousingWire. “This offering will help them use their own construction skills to make up that difference, increasing the pool of mortgage-ready consumers.”

Fannie Mae: The new program from Fannie Mae, MH Advantage, aims to get rid of a longtime premium placed on manufactured housing in the home in question has certain features that are comparable to site-built homes, like a pitched roof and energy efficient options. (Freddie Mac is looking into a similar program.)

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