Julie Eades

National study: Manufactured-home mortgages are excellent loans

By Julie Eades

Manufactured homes are real homes that deserve real mortgages, and their owners are responsible borrowers—maybe even more responsible than most.


Ziggy and Pat Zeveckas in their kitchen

Ziggy and Pat Zeveckas in their manufactured home in Hudson.

It isn't often that a nonprofit from little New Hampshire gets to speak into a big megaphone. But in 2009 the New Hampshire Community Loan Fund received a national honor, the NEXT Award for Opportunity Finance, for being the first organization in the U.S. to make real mortgage loans for manufactured homes (sometimes called mobile homes) located in cooperatives.

You might be surprised to learn that manufactured homes are usually financed like cars, with personal property loans at rates 3 to 5 percentage points higher than traditional mortgage loans.

This financing is patently unfair, because not only do these short-term, higher-cost loans limit the affordability of these homes, lack of access to mortgages make them harder to resell.

We had seen the positive effects of offering fixed-rate, real mortgage loans for manufactured homes: Families became more financially stable and their homes gained value. So I used our NEXT acceptance speech to urge a roomful of community-lending peers from across the country to make loans like this in their states, too.

Acting on my request was heard as an act of faith, or wishfulness. Lenders regard owners of manufactured homes as riskier borrowers than other homeowners. Our peers weren't convinced that our low loss record (1.6 percent excellent loan performance by any standard) could be replicated outside of N.H.

This week the I'M HOME Loan Data Collection Project released its first report, which analyzed data from 23 organizations (including us) that originate or purchase manufactured-housing loans. It found that these are good loans, as good as mortgage loans for site-built homes.

It also found that lenders like us, who accept low down payments, make decisions based on an applicant's total financial picture (not just their credit scores), and who work with borrower through difficulties, were almost as successful as those with the most-stringent standards.

The national report validates our experience in New Hampshire. Our Welcome Home Loans for manufactured homes in resident-owned communities proved so successful over a decade that last year we started offering them to homeowners on their own land, who weren't getting fair financing either.

And we're still urging lenders to recognize that manufactured homes are real homes that deserve real mortgages, and that their owners are responsible borrowers. Maybe even more responsible than most.

Juliana Eades is President of the New Hampshire Community Loan Fund.