Pew Suggests Ways to Improve the Manufactured Housing Market

On July 16, Pew filed a letter with the Federal Housing Finance Agency (FHFA) that highlighted opportunities to improve the availability and safety of financing for the purchase of manufactured housing in response to the agency’s 2022-24 “Duty to Serve” plans for Fannie Mae and Freddie Mac. The Duty to Serve statute requires Fannie Mae and Freddie Mac to expand liquidity for manufactured, rural, and affordable housing markets.

About 22 million Americans live in manufactured homes, commonly referred to as mobile homes—a key source of housing for low- and moderate-income families—but buyers of these homes face obstacles obtaining safe, affordable financing. For instance, the practice of automatically titling manufactured housing as personal instead of real property forces many buyers to use personal property loans, also known as “chattel” loans. In 2019, these loans carried a median interest rate of 8.6% compared with 4.9% for mortgages, a difference of $37,000 in interest on a 20-year, $70,000 loan.

Pew suggested that more could be done to examine and draw attention to how existing state laws preclude buyers of manufactured homes from accessing mortgages, and to improve the market for personal property loans. The letter encouraged the FHFA to work with Fannie Mae and Freddie Mac to pilot a secondary market for personal property loans to increase lender competition, lower borrower costs, and improve outcomes, all of which would be significant steps toward fulfilling the Duty to Serve mandate. Pew also urged the FHFA to focus on engaging stakeholders in its efforts and on improving lending for certain manufactured home communities, such as those on tribal lands, and for residents who want to purchase the land beneath their homes.