Freddie Mac – MFH Financing

Freddie Mac speeds rollout of manufactured-home financing

May 2, 2019  16:10 ET

Scotsman Guide
With housing inventory still lagging, Freddie Mac has announced that its CHOICEHome financing program for manufactured houses is now available to eligible lenders across the country.

The program offers conventional financing for certain factory-built homes, provided they meet standards including permanent foundations and roof pitch. If eligible, loans for these homes will be underwritten in the same manner as those for site-built, single-family homes, with appraisers able to use site-built homes as comparable properties for valuation purposes.

With manufactured housing sometimes available at prices up to 50 percent less per square foot than site-built homes, they can offer significant incentives for homebuyers in markets bereft of affordable-housing options. Originally, CHOICEHome was slated as a limited two-year pilot program. Instead, the dearth of entry-level supply has spurred Freddie Mac to accelerate into a wider rollout.

“The current housing-supply shortage makes it difficult for people to find a home in many markets,” said Danny Gardner, senior vice president of affordable lending and access to credit at Freddie Mac.

“However, Freddie Mac operates in all housing markets at all times working with lenders big and small. More than 22 million families currently live in manufactured housing nationwide, and that number is expected to grow. CHOICEHome will help increase borrower access to quality, yet affordable homes in markets that have traditionally been underserved.”

When CHOICEHome was first implemented in late 2018, Mike Dawson, Freddie’s vice president of single-family affordable lending strategy and policy, touted manufactured homes as a good option for first-time buyers, millennials and empty-nesters looking to downsize.

As with the pilot program, manufacturers must follow code guidelines for construction and siting set forth by the U.S. Department of Housing and Urban Development, and lenders offering financing under CHOICEHome will be required to follow local regulations for manufactured housing titled as real property.

The CHOICEHome initiative is part of Freddie Mac’s broader Duty to Serve plan, which concentrates on supporting underserved markets by financing affordable rural, manufactured and alternative options for buyers. Of late, Freddie has been focused on due diligence in the manufactured-home sphere, partnering with the Appraisal Institute last month for a new valuation course to help appraisers gain the latest skills for assessing manufactured housing.

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