Government-backed mortgage giant Freddie Mac recently announced that it will begin purchasing loans made to owners of manufactured housing communities and securitizing them for sale to investors. According to the Wall Street Journal, Fannie Mae has had a similar program in place for more than a decade and purchased more than $1 billion of these loans last year.
In a press release announcing the new program, David Brickman, executive vice president of Freddie Mac's multifamily lending group, framed it as part of the company's broader mission to support affordable housing development. Brickman also indicated that banks and other financial institutions are offering more financing options for developers who specialize in manufactured housing communities, which has been a trend for several years, according to the Journal.
Increased availability of financing for this type of development may lead to greater consumer interest in purchasing manufactured homes. Jason Boehlert, senior vice president of government affairs at the Manufactured Housing Institute (MHI), called Freddie Mac's announcement "a step in the right direction" and said his organization would continue to advocate for greater support of this segment of the residential property market.
CEO of online marketplace says demand is rising
There has been an uptick in demand for manufactured homes recently, according to MHVillage, a popular website for consumers interested in buying, selling or renting these residences. The company recently announced that it exceeded 1 million unique visitors for the first time during March, reaching more than one out of every 250 adults in the United States. CEO Dan Rinzema said that he sees this as "a significant milestone not only for MHVillage, but also for the entire manufactured housing industry."
"Our continued growth in website traffic reflects the steadily increasing demand for the value and amenities offered by the manufactured housing lifestyle," Rinzema explained.
This may be true, but much of the interest shown by consumers may be for used homes or rental opportunities. As this blog has noted in the past, the average age of manufactured homes has been rising as sales of new models have declined. This is creating complications for both homeowners and insurance carriers, as older units face a greater risk of damage due to inclement weather.
It is vital for insurers to be able to accurately calculate replacement costs for manufactured homes, because they comprise more than 6 percent of the U.S. residential property sector. According to the MHI, there are about 8.5 million manufactured homes in the country, with about 20 million Americans living in them.