Fannie Mae and Freddie Mac Roll out the Carpet for Manufactured Homes
Can prefab homes change the housing market?
Fannie Mae and Freddie Mac seem to think so.
These sponsored government enterprises support the bulk of U.S. mortgages, and they want to make it easier to buy a manufactured home.
Manufactured homes (Prefab = Prefabricated home) are constructed off site in a factory before they’re shipped for on-site installation. Loans for manufactured home buyers usually come with higher rates than a traditional mortgage, simply due to the lenders’ perception of higher risks with this sector of housing.
But Fannie Mae and Freddie Mac are looking to change that.
While Fannie Mae introduced a program a year ago, Freddie Mac just jumped on board this spring with their own program. Both programs will view high-end manufactured homes the same as on-site homes when it comes to financing. The hope is to help more Americans become homeowners.
These programs have requirements that eligible manufactured homes have to meet, such as having pitched roofs that make them look similar to site-built homes. Currently, about 7.2% of homes in the U.S. are manufactured homes with an average cost of $72,000.
But, will consumers catch on? Home buyers Judy and James Kyer of Knoxville, Tenn., were the first buyers to close with the program to purchase a three-bedroom Clayton home for $195,900. Kyer explained, “The Clayton home used to be so trailer-looking. That’s why we were surprised when we found out what kind of home it was. It didn’t have that look anymore.”