There’s a home affordability crisis across parts of the United States, leaving many potential buyers feeling locked out of the market with little chance of owning a home. But there is a solution for homebuyers, and a way for lenders to help and increase their business.
Manufactured housing has emerged as a practical and affordable option for homebuyers, which has created a timely opportunity for lenders.
Today’s manufactured homes aren’t like the mobile homes of decades past. They’re high-quality, energy-efficient residences that look and feel like traditional site-built homes but sell at a lower cost. Features like front porches, garages, pitched roofs and open floor plans have helped manufactured homes shed outdated stigmas.
And thanks to loan programs from the government-sponsored enterprises (GSEs) and an expanded program from the United States Department of Agriculture (USDA), originators have many options for good loan programs to offer clients.
New lending frontier
This past spring, USDA rolled out a manufactured home lending program nationwide after first testing a pilot in more than a third of all states.
On top of this, the two GSE programs, Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome, make conventional manufactured home loans broadly available to borrowers.
While these programs differ in their details, they offer loans at competitive interest rates with low downpayment options. It should be noted, however, that all the programs have some restrictions.
To qualify for these programs, the factory-built homes must meet construction and safety standards established by the U.S. Department of Housing and Urban Development (HUD). These homes typically must have many of the features of a site-built home, such as a pitched roof, a permanent foundation or a garage.
To qualify for the USDA program, for example, the homes must have been built on or after Jan. 1, 2006, be a minimum of 400 sq. ft., have no unauthorized structural alteration, be professionally inspected, and meet several other conditions.
Learning the ropes
Lenders will need to learn the nuances of the programs. Manufactured home loans require unique documentation, most notably, the 1004C appraisal form. It can be more challenging to find a manufactured home of comparable value depending on the market, making the underwriting and appraisal process somewhat more difficult.
Additionally, if the HUD tags or data plates are missing (a common occurrence with older units), lenders must obtain verification from the Institute for Building Technology and Safety (IBTS), the only recognized source for this documentation.
Last fall, HUD also updated its construction and safety standards for manufactured homes. Although the changes were originally scheduled for March 2025, the effective date was later postponed until this fall to give manufacturers and stakeholders more time to comply.
That said, adding manufactured home lending is not overly burdensome. With a consistent internal process and an experienced correspondent partner, lenders can navigate the documentation and appraisal needs smoothly, opening the door to meaningful volume in a niche many competitors avoid.
Positioning as specialist
Few lenders or loan officers offer manufactured home loans, creating an opening for those who master the niche. Experts in manufactured home lending often become sought out by builders, real estate agents and borrowers who need help from a person willing to serve a market that others ignore.
As refinance activity continues to recede and lenders shift toward purchase-centric models, products like manufactured housing have become increasingly important. They allow correspondent lenders to serve borrowers who might not qualify for or afford a traditional home, while building trust with partners who need solutions in tough markets.
Manufactured home loans can be another niche that lenders can pair with others specialty loan types, such as one-time-close construction loans and renovation lending–products that give borrowers flexibility.
By positioning yourself as a specialist in these programs, you’re not just adding volume. You’re elevating your profile among real estate professionals, builders and buyers alike.
Manufactured housing may never be the flashiest product in your product lineup, but it might be one of the smartest right now. The market is underserved. The demand is real. And the programs are better than ever.
