Manufactured housing: a treatment for lack of affordable housing?
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Earlier this month the Commentary noted nimble lenders are looking at other products to help support their mortgage manufacturing factories. “Rob, would you happen to have a suggestion as to where I can find information as to the number of HUD loans done on manufactured housing last year, or by month?” Yes, as margins and volumes come down, nimble lenders are looking at products that they haven’t offered previously. For Title I activity queries take a look at these monthly production reports from HUD. For example, Table 3 tracks Title I activity.
And then, “Manufactured houses hit their numerical peak in the late 1990s, with 390,000 shipments in January of 1999. Things bottomed out in December of 2010 with 40,000 shipments in December of 2010. Two months ago, in September, there were 104,000 manufactured homes shipped. These houses, not necessarily the single-wide or double-wide variety which are the butt of underwriting jokes, are constructed efficiently in a factory and then trucked out to the actual location, and are seen as a potential solution to the growing housing affordability crisis. Excluding the cost of land, the average site-built home cost $308,597 in 2020, compared to $87,000 for manufactured.”
The information prompted John M. to send, “Nice to see the inquiry on manufactured housing, and mentioning Title 1. The challenge with this market is that the HUD numbers do not represent the true activity in the space. Non land owned “chattel lending” makes up a large portion of the MH units and is still considered personal property lending in most states. There is only a small subset of lenders that offer these products and these lenders do a very good job for their borrowers. Having attended numerous MH tradeshows these homes are truly amazing!
“MH Housing is a great opportunity for lenders to consider and can expand the type of products that they offer but it is an education process to move into the non-land owned arena. There is discussion that HUD and the GSE’s will open these types of loans to their qualifications in the future. Here is a great resource on the MH industry.”