Pew Applauds Washington State Legislature, Governor for Expanding Access to Mortgages for Owners of Manufactured Homes

WASHINGTON—The Pew Charitable Trusts today commended Governor Bob Ferguson (D) of Washington State for signing into law a bipartisan bill unanimously passed by the state Legislature that allows manufactured home owners and buyers in resident-owned communities (ROCs)—in which the land is owned as a cooperative—to own their homes as real estate rather than as personal property. The law means that these owners and buyers will be able to seek traditional mortgages and thus avoid risky financing.

Pew’s research has found that although manufactured homes can be owned as real estate, outdated policies in many states mean that only a quarter of borrowers have their manufactured homes titled this way. Financing for buyers whose homes are owned instead as personal property is challenging; 28% of these buyers turn to risky, expensive contract financing, a private arrangement between buyer and seller. This arrangement leaves borrowers without legal ownership of the property until the final payment and at risk of eviction or financial losses. The other 72% of buyers whose manufactured homes are classified as personal property use home-only (also known as “personal property” or “chattel”) loans, like those used for cars. These home-only personal property loans have higher interest rates and shorter repayment terms than mortgages, which make the homes less affordable.

With the passage and signing of H.B. 1191, Washington becomes one of only a handful of states to allow manufactured homes in ROCs to be titled as real estate and thus allow more buyers to access mortgages.

Rachel Siegel, a senior officer with Pew’s housing policy initiative, issued the following statement emphasizing the broader impact of this law:

“Washington state has taken a step in the right direction by allowing more manufactured home buyers to access mortgages. Because of H.B. 1191, Washington State will help these buyers avoid risky financing deals by titling their homes as real estate—and, because mortgages have lower monthly costs than other loans, more families will have the opportunity to be homeowners.

“Modern manufactured homes are similar in quality to more traditional single-family homes, yet can cost up to two-thirds less. These homes can help ease the nation’s housing shortage, but they remain most affordable if buyers can access mortgages—as more buyers will be able to do in Washington state once the law goes into effect in October of this year.”

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Founded in 1948, The Pew Charitable Trusts uses data to make a difference. Pew addresses the challenges of a changing world by illuminating issues, creating common ground, and advancing ambitious projects that lead to tangible progress.