Financing for Manufactured Homes?

Fannie-Freddie Look to Provide Financing for Manufactured Homes

One of the challenges of Manufactured Homes, as a business, is the issue of financing.

Dodd-Frank (2010) set out rules to make “home financing safer and more accessible to borrowers”.

“Safer” became so much over caution that a LOT of potential home owners couldn’t, and still can’t, get loans.

There are one off local lenders and 3 nationwide companies who finance manufactured homes.

WHY? Or a better question, why not?

Manufactured Homes, many times, do NOT come with the land. They are in a park with rented or leased lot underneath it.

This is personal property of “chattel”. Chattel loans are higher risk so most banks just won’t lend on them.

So most of the sales have to be CASH! These are a couple deals that have been done.

Cashier’s Check from a bank is better, of course.

Investors who fix and sell manufactured homes can ‘carry the loan’, if they choose.

As long as they abide by the Dodd-Frank rules and regs.

Not like these guys!

Things ‘may’ get easier as this article shows. Here are some changes that may be coming…

Fannie-Freddie are proposing to help ‘underserved markets’.

The article below says Fannie-Freddie may buy ‘350 to 425 chattel loans’ a year to start. Although, that won’t help the thousands of potential loans that are needed, it’s certainly a step in the right direction.

Bloomberg Article

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