Residential Magazine

The Future of Manufactured Housing is Here

Prefabricated homes can boost inventory with high-quality, customizable options

By Laura Brandao

It’s no secret that affordable homes are getting harder to find. Often, buyers must make compromises to stay on budget, such as opting for smaller, older homes with high upkeep costs. But there’s a type of home that offers affordability as well as beauty, energy efficiency and modernity.

Thankfully, these homes are not elusive. Manufactured homes are found all over the country and at every price point. In April 2021, Forbes Advisor reported that manufactured homes were priced 10% to 35% less per square foot than traditional homes. And according to Freddie Mac, the average price of a new manufactured home in August 2021 was $80,000, compared to $390,000 for site-built homes.

Across the country, manufactured homes are growing in popularity as a desirable choice for today’s savvy consumer.

Not to be confused by mobile homes in trailer parks, you will find these single-family gems in rural, suburban and urban neighborhoods — often in homeowners associations. They’re customizable, comfortable and often feature cutting-edge designs built with high-end materials. Thanks to rigorous building standards from the U.S. Department of Housing and Urban Development (HUD), they’re just as safe as site-built homes and appreciate in value in a similar way.
These homes can be built wherever a legal lot of land is purchased for residential use and can be hooked up to utilities and taxed as real property. And since this new generation of manufactured homes is increasingly being classified as real property, a wide variety of conventional and government-backed financing options are available to borrowers.

Building requirements

Manufactured homes have been around since the 1870s. In 1974, Congress passed the National Manufactured Housing Construction and Safety Standards Act, assuring that all homes were built to tough national standards. In 1976, HUD released its construction and safety standards for manufactured homes. And in 1980, in an effort to get away from the mobile-home moniker, Congress approved the renaming of this style of home to “manufactured home.”
Manufactured homes are permanently fixed to their foundations and can’t be moved, unlike mobile homes, which sit on wheels and are not permanently fixed. Across the country, manufactured homes are growing in popularity as a desirable choice for today’s savvy consumer.
Manufactured homes are built in a climate- controlled environment, which negates the need to protect the vulnerable site-built home from the elements. The strict safety standards in place provide today’s consumer with the confidence that they are investing in a safe type of dwelling.
All manufactured homes built today must be at least 320 square feet in size with a minimum ceiling height of seven feet, but most are a minimum of 400 square feet due to lending requirements from Fannie Mae and Freddie Mac. That’s just a starting point: According to the Manufactured Housing Institute, the average size of a manufactured home built in 2021 was 1,497 square feet.
Compliance with current building codes is not taken lightly. Many of these state-of-the-art homes now come with guarantees of craftsmanship and materials used. Quality materials and workmanship, affordable pricing and government-insured loans are the catalysts for the integration of manufactured homes into communities across America.

Bountiful benefits

Besides beauty, safety and quality, manufactured homes offer homebuyers a plethora of other benefits. People are becoming more aware of their carbon footprint and doing as much as they can to reduce it.
Because manufactured homes are built in a factory setting, the waste of construction materials is greatly reduced. Waste is costly — and these expenses are pushed onto the consumer. Less waste equals less cost burden on the manufacturer’s suggested retail price for these homes.
Many materials used in today’s construction industry are recycled or sustainable, and builders of manufactured homes now use many of these resources. And because builders buy bulk materials for multiple homes at a time, deliveries are limited and decrease the builder’s carbon footprint.
Once a consumer moves into one of today’s manufactured homes, it’s a relief for them to know that the operating costs will be significantly improved due to the caulking and insulation upgrades that manufacturers have put into standard practice. This is due to new U.S. Department of Energy insulation and energy-efficiency standards that builders of manufactured homes must meet.

Choices galore

If you are looking for a deal to make dreams come true — and your borrower is so short on time that they needed to move in yesterday — you should know that manufactured homes are eligible for renovation mortgage programs. A less-than-ideal home with potential, coupled with a great lender, can put a borrower into their perfect home faster than starting with a lot of land and a purchase agreement in hand.
Renovation is the ultimate green lifestyle. No bulldozer is needed — just a creative eye, an experienced contractor and an educated originator who can confidently advise along the way.
For a borrower who wants a new home on their own land, manufactured-home builders offer a wide selection of styles, amenities and materials. For those seeking custom homes without exorbitant costs, manufactured homes are a great fit. The options available are exactly what today’s homeowner craves.
Does size matter to your borrower? This home style has that covered: single-wide, double-wide and triple-wide sizes are available. What about amenities? These homes often have decks, fireplaces, walk-in closets, chef-grade kitchens with stainless steel appliances and more. Do they want to use high-end materials? Manufactured homes can include granite, tile or high-end wood for floors, countertops and more.
Beautiful interiors are available in every style: farmhouse, contemporary, traditional and more. Customize the exterior and add landscaping, and some of these homes are indistinguishable from their stick-built cousins.

Financing options

Manufactured-home financing is available to qualified borrowers who are seeking government-backed or conventional mortgages. Financing is available for purchases or refinances of new or existing manufactured homes. Both fixed-rate and adjustable-rate options exist for these homes.
The government-sponsored enterprises (GSEs) see the value that this style of home provides to today’s consumers and the communities they live in. Programs within each agency are similar, with only slight variations between them.
Fannie Mae offers conventional mortgages through the MH Advantage program and Freddie Mac does so through its CHOICEHome program. Construction-to-permanent financing also is available via the GSEs.
Government-backed loans are available through many Federal Housing Administration, U.S. Department of Veterans Affairs and U.S. Department of Agriculture purchase and refinance programs, including renovation and construction-to-permanent options. Some lenders also are open to chattel loans for manufactured homes that do not qualify as real property.

Boosting inventory

Manufactured homes are one of the best solutions for addressing the inventory shortage facing today’s homebuyer. These homes are affordable and luxury options are available at higher price points, meaning they can be built in any market.
These homes have shorter construction timelines than traditional site-built homes. Time is money and manufactured homes can be built in weeks instead of months.
Lack of inventory in today’s market has put a big dent in making homeownership a reality for so many first-time buyers. Not wanting to disappoint these eager consumers, many lenders have worked to solve this dilemma by learning more about manufactured-home financing opportunities.
Doing so also has expanded their book of business and market share with little effort. Agency programs were there all along; lenders just needed to turn the page to the next chapter and get started.
If and when the inventory shortage ends, will the demand for manufactured homes go away? Not likely. Who doesn’t dream of a high-quality, custom-designed home at a price they can afford?
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Manufactured homes keep evolving and getting better. By the nature of how they’re built, they can quickly implement new technologies, appliances, building materials, safety features and design aesthetics. The manufactured home is truly the unicorn of today’s available housing options. ●


  • Laura Brandao

    Laura Brandao is chief growth officer and a partner at mortgage lender EPM, where she oversees operations and business development. She also serves as the CEO of Lighthouse Lending Capital, a new division of EPM that specializes in unique loan programs and private lending. She serves with several organizations dedicated to lifting others, including as chair of the visionary program for the National Association of Minority Mortgage Bankers of America (NAMMBA) and on the Mortgage Bankers Association of New Jersey’s women's committee.

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