Borrowers will have more affordable home choices under an expansion of Freddie Mac’s CHOICEHome program, the government-sponsored enterprise announced Wednesday.
Effective immediately, Freddie Mac will include modern single-section factory-built homes in the properties eligible for financing through CHOICEHome, a financing program launched in 2018. Previously, only multi-section factory-built homes were included in the Freddie Mac mortgage product designed to expand lending options for affordable housing.
“Under President Trump, U.S. Federal Housing is committed to delivering affordable homeownership and finding ways to grow our nation’s housing supply,” Freddie Mac Chairman Bill Pulte said in a press release, using an alternate name for the Federal Housing Finance Agency that he also heads and which oversees Freddie Mac under a federal conservatorship arrangement.
Pulte added: “Modern single-section factory-built homes can offer high-quality alternatives at a lower price point. Freddie Mac’s expansion of the CHOICEHome program helps make more homes accessible to more Americans through the conventional mortgage market.”
Also known as a single-wide home, a single-section home has a floor plan designed as one long section instead of multiple sections that are joined together. It is generally a more affordable housing option than either a multi-section modular design or a traditional site-built house.
The existing CHOICEHome offerings for multi-section factory-built homes included a 3% downpayment option. Now, that same option is available for single-wide manufactured homes that meet Freddie Mac’s construction standards.
Sonu Mittal, Freddie Mac’s executive vice president and head of single-family acquisitions, said the CHOICEHome expansion will “play an important role in creating and promoting affordable housing in markets that need additional supply to help first-time homebuyers.”
“Lenders can leverage our existing CHOICEHome mortgage offerings to finance these homes,” Mittal added, “and we are ready to purchase these loans now.”
Freddie, like sister company Fannie Mae, plays a vital role in providing liquidity to lenders by buying mortgages that meet its underwriting criteria and packaging them as mortgage-backed securities that are sold on the secondary market.
According to the press release, the mean price of a single-section home is around $200,000, including land, while a traditional single-family site-built home typically exceeds $500,000.
