Despite news reports that Fannie Mae and Freddie Mac will start pilot programs for chattel manufactured home loans, don’t look for a big move by them any time soon in this arena.
That slowness is unfortunate because manufactured homes could be a key component to solving the problem of affordable housing in this country. Creating a secondary market for these loans would make it possible for more lenders to provide them. And a large number of people could potentially benefit. The GSEs re-entering the space, also gives the this loan type more credibility as a secondary market investment product.
According to the latest figures published by the U.S. Census Bureau, 18 million Americans live in a manufactured home. Sales had been in a steady decline from the highs of around 370,000 in 1998. The lowest years on record with the U.S. Department of Housing and Urban Development were 2009-2010 with around 50,000 annual sales. There were approximately 93,000 units sold in 2017. Approximately 80 percent of new manufactured homes sold are titled as “chattel,” which means an item of property other than real estate. About 35 percent of those are placed in manufactured home communities and 65 percent are placed on privately owned land. The average sales price in December 2017 was $53,400 for a single-wide unit and $92,800 for a multi-sectional.
The two government-sponsored enterprises are mandated by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008, to provide mortgage financing for residential properties that serve low- to moderate-income families. This is a market that some credit unions and CUSOs are very familiar and have been serving since their inception. $2.9 billion Credit Human Federal Credit Union, San Antonio, is one of the top chattel lenders in the country.
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