HUD’s Push to Strengthen Manufactured Housing

In a time when housing supply and affordability issues continue to run rampant in the market, the U.S. Department of Housing & Urban Development (HUD), through the Federal Housing Administration (FHA), has announced the launch of its new Manufactured Home Community loan product, which will provide an FHA-insured financing option for the purchase, refinance, and revitalization of manufactured home communities.

HUD’s action will help entities preserve, stabilize, and revitalize manufactured housing as a vital sources of affordable housing.

“With this product, HUD aims to support resident-owned communities and other mission-focused owners who are committed to high-quality, affordable manufactured housing that is not at risk of exorbitant land rent increases that jeopardize the stability of their homes and futures,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon.

HUD estimates that more than 5,000 individuals and families, based on average community size, could benefit from the program within the next five years. This Manufactured Home Communities program leverages FHA’s Multifamily 223(f) program, which will now provide permanent mortgage financing for manufactured home communities that may have previously been ineligible, and for previously ineligible manufactured home cooperative borrowers to be eligible to acquire and obtain financing for existing communities.

“Today’s announcement is an important first step for a program that we hope will provide a meaningful path to both affordable manufactured home community creation and preservation,” said Deputy Assistant Secretary for Multifamily Housing Programs Ethan Handelman. “As we progress with the program implementation, we will continue to assess both its scope and entity eligibility.”

Enriching affordable housing options

“Manufactured home communities offer a stable and affordable housing option for many families. Today, HUD is providing new resources for preserving and revitalizing these communities by providing FHA-insured financing to mission-focused groups to buy or refinance and revitalize manufactured homes,” said HUD Acting Secretary Adrianne Todman. “This is just one of many ways HUD is empowering residents, industry leaders, and governments to expand access to innovative, affordable housing solutions, particularly in rural communities.”

Through the FHA’s latest Mortgagee Letter, mission-focused entities such as resident-owned manufactured home communities, cooperatives, non-profit entities and consortia, state and local governments, community development financing institutions, and Indian Tribes, will be eligible to use this program to finance the acquisition of or to improve existing communities, including making updates to common area resources and helping to maintain rent affordability. The new Manufactured Home Community loan product provides an alternative to purchase of these communities by private equity funds and similar financial interests, whose track record reportedly includes unaffordable rent increases, failure to invest in community infrastructure, and regulations that don’t respect the community’s culture.

Easing roadblocks for buyers

In late March, the FHA announced new loan limits for its Title I Manufactured Home Loan Program, using new methodologies for calculating and updating the program’s limits. The update marked the first update to the Title I program loan limits since 2008, further supporting the Biden Administration’s efforts to increase the supply and use of manufactured homes as a source of affordable housing.

HUD’s Manufactured Home Community loan product also complements the Department’s recently announced PRICE program, which offers competitive grant opportunities for investments in affordable manufactured home communities.

In its continued quest for equitable housing for all, HUD also recently awarded nearly $4 million to 11 grantees to support research that will fill crucial knowledge gaps and help build the evidence base to accelerate the adoption of innovative and effective practices and policies to increase the production and supply of quality, affordable housing. This includes exploring office-to-residential conversions, to help communities meet their housing needs.

The Offsite Construction and Land Use Reform Notice of Funding Opportunity (NOFO) awarded a total of $3 million to 10 institutions to conduct research to assess the potential for off-site construction methods and zoning and land use reforms to increase the supply of quality affordable housing and reduce housing expenses for low- and moderate-income owners and renters.

The Office to Residential Conversions Notice of Funding Opportunity (NOFO) awarded a total of $858,261.91 to study recent efforts to convert downtown office buildings to properties with residential units since the start of the COVID-19 pandemic.

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Eric C. Peck

Eric C. Peck has 25-plus years’ experience covering the mortgage industry, most recently serving as Editor-in-Chief for National Mortgage Professional Magazine. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books, and has served as Copy Editor for
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