A Home You Can’t Mortgage? No Longer. Victory for Manufactured Housing

More than seventeen million Americans live in 6.9 million manufactured homes.  The vast majority of these homeowners are low and very low income (median income was $34,700 in 2008).  For […]

More than seventeen million Americans live in 6.9 million manufactured homes.  The vast majority of these homeowners are low and very low income (median income was $34,700 in 2008).  For most of these homeowners, the only type of financing they can access are “chattel” or personal property loans (i.e. auto loans), largely because they don't own the land under their homes. Chattel loans have higher interest rates and shorter terms than mortgages, constricting income for these unsubsidized homeowners, and making it harder for them to sell as well. But finally that can change.

In July 2012 the Uniform Law Commission passed the Uniform Manufactured Housing Act, which recommends to all states to classify manufactured housing as either real property (eligible for a mortgage) or personal property (eligible for a chattel loan), with the choice left to the homebuyer, even if the home is on leased land.  “Classification of manufactured homes as real property should allow qualified buyers to obtain financing on more favorable terms. Retailers would be required to notify buyers of the classification option at the time of sale,” says the ULC.

The chattel loan industry was not pleased and worked hard against this effort, but many affordable housing finance advocates supported it, including Corporation for Enterprise Development (CFED); Manufactured Home Owners Association of America (MHOAA); National Consumer Law Center (NCLC);  Self-Help Credit Union; Fair Mortgage Center (FMC) and others.

Next steps will be to identify and work with state legislatures to enact the Uniform Law and work with lenders to offer more affordable real  estate (mortgage) loans to qualified homebuyers. Advocates are working to organize which states should be supported to consider the ULC Titling Law option. Working with lenders that are willing to provide both MH home purchase finance options will help define which states go first.

[Editor's Note: The world of manufactured housing is rapidly changing thanks to the efforts of organizations like  ROC USA, NextStep, CFED, and MHOAA. More on this in an upcoming issue of Shelterforce.]

Related Articles

  • A mural on a rough whitewashed wall. Painted in dripping capitals is "Follow your dreams," and over it is a red stenciled "Cancelled" banner. To the right is an image of a man holding a pail and paintbrush. He's wearing a cloth cap and has two rolls of paper under his arm.

    Keeping Wealth in the Family

    December 15, 2023

    The role of 'heirs property' in eroding Black families' wealth

  • An aerial view of a large, four-story, U-shaped housing development, still being built, and surrounded by settled neighborhoods on the three sides that are visible. The roof is white and the various sections of the exterior walls are blue, tan, brick, or white. The ground around the structure is still raw dirt, with several trucks and machines in view.

    Can Residents Get More Out of Tax Credit Housing?

    November 21, 2023

    Arrangements in which LIHTC tenants share in the development’s financial benefits, or become partial or full owners, are rare—but some properties have pulled them off. This scan of several examples shows the possibilities—and the conditions needed for them to succeed.

  • An across-the-street view of a large domed building with broad steps leading up to the pillared front. Two people on the sidewalk are taking a photo, and two others are strolling by. The sky is a deep autumnal blue and the trees lining the plaza are in bright fall reds and oranges.

    West Virginia Tackles Vacancy With Tax Reform

    September 22, 2023

    In 2018, Shelterforce wrote about the Center for Community Progress's recommendations for tax reform in West Virginia to address vacancy. Guided by CCP's suggestions, the state auditor’s office has recently passed two laws to change its tax sales process and keep properties in use.