Jennifer Hopkins

Lack of financing is major hurdle for manufactured-home buyers

By Jennifer Hopkins

Imagine buying a home with cash, or financing it with short-term personal loans or credit cards. That's what many buyers of manufactured homes are up against.

A just-released report from the federal Consumer Financial Protection Bureau is a good reality check on the benefits and challenges that manufactured-home owners experience.

The report covers one of the biggest hurdles for people buying a manufactured home—the lack of purchase financing. Manufactured homes (sometimes called mobile homes) account for 6% of all occupied housing, yet receive only 2.5% of all home purchase loans.

Leafy street in manufactured-home communityIn 2012, when we studied manufactured-home finance options in Rochester, N.H., we found that only the New Hampshire Community Loan Fund and one other lender offered financing. This led to lower prices for many home sellers, because their buyers couldn't get financing. Imagine if site-built homes had to be purchased with cash, or financed only with short-term personal loans or credit cards!

Welcome Home Loans are meant to help fill that gap. They're real mortgage loans for manufactured homes located in New Hampshire, when the homeowner owns the land or when the house is located in one of the state's resident-owned communities.

We make these loans because manufactured homes are such an important part of the affordable housing picture in rural N.H. The 36,000 manufactured homes in N.H. comprise 6% of the state's residential real estate market. More than half of all N.H. homes sold for less than $100,000 are manufactured homes, a proportion that grows as site-built home prices rise.

The CFPB report underscores "the importance of the manufactured housing sector as a source of affordable housing for some consumers, including those outside of metropolitan areas, older households, and lower-income households." We see the exact same trend.

Kudos to the CFPB for such a thorough review of today's landscape of manufactured housing and manufactured-home finance. We know that manufactured-home loans can perform as well or better than conventional site-built home loans.

My hope is that this report spurs conversations that lead to more real mortgage financing options for manufactured-home owners and buyers.

Jennifer Hopkins is the Single-Family Housing Program Manager at the Community Loan Fund.

NMLS #395262. Licensed by the New Hampshire Banking Department.