Mortgage lenders who have traditionally been reluctant to go too low in the range of house prices are increasingly interested in manufactured homes as high unemployment, inventory shortages, rising prices and higher rates make traditional houses less accessible to a growing number of borrowers.
From slightly upscale structures that rival homes built on-site to the smaller, one-section prefabricated house, mortgages for these types of homes have become more attractive to lenders who use them to reach more buyers and compensate. decrease in refinancing.
“They [lenders] offer both [higher- and lower-end manufactured homes], but when COVID hit, the demand for traditional singlewides and doublewides really increased, ”said David Battany, executive vice president of capital markets at Guild Mortgage, noting that lending becomes more and more important as lenders are becoming more dependent on purchasing volume. “We are great believers [in the idea that] Manufactured homes are a big part of the solution to the lack of supply.
While relatively few traditional mortgage lenders finance prefabricated housing, some interest has grown in recent years as government-funded companies have increased the attractiveness of financing in the market, in part through a legislative mandate called Duty to Serve, which requires Fannie Mae and Freddie Mac to support a secondary market for housing mortgages for very low, low and moderate income families in manufactured housing, preservation of affordable housing, and rural housing.
“There is a Shortage of 2.5 million housing units, and it’s only growing, ”said Mike Dawson, vice president of strategy and policy for affordable loans for single families at Freddie Mac. “Manufactured homes could be part of the solution to this. “
The increased involvement of GSEs, in combination with government programs called Title I and Title II, the former of which allows flexibility to lend on land and / or the MH unit alone, has helped fuel growth in the niche, according to American Financial Resources. , a lender specializing in the product.
“At AFR, we have seen an increase of more than 10% in the volume of loans specifically for manufactured homes, year over year, over the past two years,” said President Laura Brandao in a report. -mail.
GSEs are also reporting gains in manufactured home loan volumes.
“From the start of Duty to Serve in 2018 until the end of last year, we’ve seen a 27% increase in the number of single-family home customers who have made a pre-fab loan,” said Patrick McCarthy , vice president of Fannie Mae, in an email.