Manufactured Homes Get Improved Access to Financing

A relatively new plan of the Biden administration should improve financing for manufactured homes though an update in Title I of the Fair Housing Act.

On the last day of February, the White House released a document on boosting housing supply and lowering costs. One part was about manufactured homes, the “largest form of unsubsidized affordable housing in the country” and a type used by more than 22 million Americans.

Addressing greater availability of manufactured homes, HUD issued a “Notice of Funding Opportunity (NOFO) which appropriates $225 million in competitive grant funding for the preservation and revitalization of manufactured housing and eligible manufactured housing communities.”

Of the total, $200 million is set aside for Preservation and Reinvestment Initiative for Community Enhancement (PRICE) Main. Of that, $10 million is for Indian tribes or Tribally Designated Housing Entities and Tribal organizations. Another $25 million is reserved for a pilot program to “assist in the redevelopment of manufactured housing communities as replacement housing that is affordable.”

Overall, the funding is to “support low- and moderate-income homeowners with manufactured housing units and manufactured housing communities with critical investments such as repairs, infrastructure improvements, upgrades to increase resilience, services like eviction prevention and housing counseling, and planning activities such as those needed to transition to resident-managed communities.”

PRICE Replacement “will support low- and moderate-income homeowners with manufactured housing units and manufactured housing communities with critical investments such as repairs, infrastructure improvements, upgrades to increase resilience, services like eviction prevention and housing counseling, and planning activities such as those needed to transition to resident-managed communities.”

In addition, the Federal Housing Authority published a new rule that, as the White House explained, increased “loan limits for the Title I Manufactured Housing program, which insures loans to finance the purchase or refinancing of manufactured homes titled as personal property. Doing so will allow FHA to better serve low- and moderate-income and first-time buyers of manufactured housing whose financing needs have not been well-served by the private market.” HUD’s Title I program has had low loan limits, reducing the efficacy of what had been “an important source of financing for manufactured homes.” The new rule raises limits to match market prices and allows HUD to increase the limits in the future. In support of this, Ginnie Mae “revised eligibility requirements for Issuers of its Manufactured Housing Mortgage-Backed Securities program.”

FHA published a mortgage letter to allow cooperatives and “mission-oriented borrowers” to use FHA 223(f) multifamily loans to acquire and refinance communities rather than having investors from buying a community and pushing rents up and existing residents out.

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