Despite Reforms, Barriers Still Make It Difficult for Americans to Finance a Manufactured Home

Manufactured homes are an underutilized source of unsubsidized affordable housing. As the U.S. grapples with a housing shortage and high single-family home prices, manufactured housing could provide millions of Americans an opportunity to own their own homes. However, research shows that it is often more difficult to obtain financing for a manufactured home than for a traditional single-family home. Some lenders won’t loan money for the purchase of a manufactured home. As a result, borrowers often turn to riskier alternatives or simply can’t purchase a home. To address these challenges, in 2024 the Federal Housing Administration (FHA) and the Government National Mortgage Association (Ginnie Mae) made several key reforms to update and streamline regulations governing manufactured housing loans. But many burdensome rules, policies, and procedures still deter lenders from offering such loans.

To gain a deeper understanding of the remaining barriers and reforms that are needed, The Pew Charitable Trusts commissioned FinRegLab, a nonprofit research center that focuses on the financial sector, to conduct interviews with key stakeholders and experts in manufactured home financing. 

FinRegLab’s report recommends that the FHA align its Title I Manufactured Home Loan Program with its Title II policies governing traditional single-family home loans. Doing so, FinRegLab concluded, would reduce costs and administrative burdens for lenders and improve access to credit for homebuyers. One crucial improvement would be to allow automated underwriting by lenders to process and evaluate loan applications for the acquisition of a manufactured home, much as lenders do with traditional mortgage loans. This advancement would both increase efficiency and reduce the risk of human error. Streamlining regulations could also help increase the number of lenders that make manufactured home loans, increasing competition and the availability of loans to credit-ready buyers.

The Pew Charitable Trusts provided funding for this project, but Pew is not responsible for errors in this paper and does not necessarily endorse its findings or conclusions.