HUD Launches Office Dedicated to Manufactured Housing
Written By: Joel Palmer, Op-Ed Writer
One of the priorities of the Joe Biden Administration since taking office in 2021 has been expanding homeownership opportunities, especially to those who historically struggle to obtain mortgage financing.
A major part of this initiative has been an emphasis on increasing the supply of and making it easier to obtain financing for manufactured housing.
The latest effort was announced last week, as the U.S. Department of Housing and Urban Development launched a new, independent Office of Manufactured Housing Programs. This is now a standalone office within HUD after being previously organized under the Office of Risk Management and Regulatory Affairs.
“This organizational change represents a recognition of the critically important role that manufactured housing plays in our country’s housing market,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “Thanks to the work executed by our Office of Manufactured Housing Programs over the last two years, we have made significant progress to support the availability of modern and affordable manufactured homes.”
HUD noted that the office accomplished a number of goals in the last two years, including:
Supporting the continued production of manufactured homes despite COVID-19 supply chain challenges by issuing the first-ever industry-wide Alternative Construction Letters to alleviate COVID-19 supply chain challenges.
Implementing the first major changes in almost a decade to the Manufactured Home Construction and Safety Standards, commonly referred to as the HUD Code, which became effective in July 2021. The new code added provisions to the HUD Code such as attached garages and carports, zero-lot-line townhome-style housing, and requirements for carbon monoxide alarms.
Initiating the largest set of proposed changes to the HUD Code in over two decades, including allowing materials that facilitate modern design approaches and improve quality; allowing certain ridge roof designs; adding provisions for multifamily manufactured homes of up to three units; updating requirements for open floor plans, truss designs, and specifications for attics; and accessibility improvements; and others.
In addition, FHA published revised policies in November 2021 under its Single-Family Title I Manufactured Home Loan Program to make the program easier for lenders to use and understand. The new policies also expanded eligibility requirements for loan financing.
Fannie Mae and Freddie Mac made manufactured housing a key component of their Duty to Serve plans released last year.
Fannie Mae’s DTS plan included a goal of acquiring 28,800 purchase money mortgage (PMM) loans over three years in the manufactured housing market. Last year, Fannie updated the eligibility criteria to permit one- to four-unit properties (including manufactured homes) up to standard LTV, CLTV and HCLTV ratios and up to the standard maximum allowable debt-to-income ratio of 50 percent.
Freddie Mac’s DTS plan established an overall single-family loan purchase target in manufactured housing of 17,100 to 19,600 over three years, compared with 14,625 over the previous three years. Freddie also committed to purchasing 1,500 to 2,500 loans for manufactured housing not titled as real property.
Last fall, Freddie Mac added manufactured housing to its HFA Advantage mortgage.
Many of these initiatives were announced following a May 2021 report by the Consumer Finance Protection Bureau, showing the difficulty in securing financing for these types of properties.
According to the Manufactured Housing Institute, there are just over 21 million Americans living in about 8 million manufactured homes. Owners have a median annual income of $35,000. Manufactured homes accounted for 11 percent of new homes built in 2022, with the average sale price, not including land, of $127,250.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
