In August of 2003 and January of 2004, FannieMae and FreddieMac changed the rules for loans on manufactured homes.
Up to that time, manufactured homes could be financed with Zero down payment and loose income verification guidelines. (Does this sound like some of the problems that led to the current crisis?)
When the guidlines changed, manufactured homes were required to have at least 5% down payment from the borrower. All income had to be verified using standard procedures. Most singlewide units were also disallowed.
These are very similar to the restrictions now being placed on loans for regular, site-built homes because of the highly publicized problems with the qualify of loans written during the last couple of years. The only difference is that these policy changes have been in affect for years if the property is a manufactured home.
Manufactured homes are an important part of the affordable housing stock in Arizona and many other states. Where the median price for site-built homes is around $250,000, manufactured homes enjoy an average price in the range of $85,000 to $160,000. That is a HUGE difference in affordability.
According to HUD, more than 344,000 Arizona families live in manufactured homes. Because of the policy changes made more than 4 years ago, the loans for these homes remain readily available. In other words, "No Meltdown Here!".
Real estate agents that are hurting for business should be learning about how to list and sell these homes. All the $400,000 listings in the world don't do any good if no one can qualify for a loan. Manufactured homes have earned consideration due to their affordability and the ready availability of mortgages for them.
Jon Laird is co-owner of Sterling Mortgage Corporation, one of Arizona's oldest licensed mortgage brokerage firms. Sterling Mortgage Corporation has specialized in manufactured home loans for more than 23 years. Jon has more than 32 years experience in home lending and is a state certified continuing education instructor for manufactured home financing classes for real estate agents renewing their licenses. Read more about Jon and Sterling at: http://www.sterlingmortgageloans.com
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