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As a result of this feedback, Freddie Mac plans on
doing the following in connection with manufactured
housing titled as real property:
■ ■ Work with lenders to increase Freddie Mac’s purchases of loans in this important market;
■ ■ Increase access to education and resources for
■ ■ Identify best practices and provide technical
assistance to market participants;
■ ■ Develop additional product features to meet
the market’s needs; and
■ ■ Increase purchases of loans secured by manufactured homes titled as real property.
For manufactured housing titled as personal property, Freddie Mac plans to work with market participants to:
■ ■ Promote greater understanding of the market by
conducting research and publishing the results;
■ ■ Initiate a chattel pilot offering; and
■ ■Develop homebuyer education to support
Freddie Mac formed the Manufactured Housing
Initiative Taskforce last year and invited a diverse
group of participants, including the Manufactured
Housing Institute, to work with the GSE. Freddie Mac
is increasing its understanding of this market as the
GSE explores ways to expand lender participation and
improve targeted offerings.
Freddie Mac also partnered with Next Step, a nonprofit housing intermediary, to roll out a consumer
education pilot in Kentucky for buyers of manufactured
homes titled as real property. In addition, Freddie Mac
is actively seeking new lenders interested in making
real property loans for energy-efficient manufactured
homes in connection with Next Step.
Rural areas encompass over 90 percent of America.
Duty to Serve encourages Freddie Mac to focus on
“high needs” rural regions, which it identifies as Middle
Appalachia, the Lower Mississippi Delta, the colonias
(parts of Arizona, California, New Mexico and Texas
along the U.S.-Mexico border) and rural tracts located
in counties with persistent poverty. It also encourages
housing support for high-needs rural populations,
specifically Native Americans and agricultural workers.
Although they’re socially, economically and geo-
graphically diverse, these areas face many common
challenges. During information-gathering sessions,
Freddie Mac officials learned of the multifaceted scope
of these challenges, which affect virtually all resi-
dents of these regions. Moreover, these issues extend
beyond housing affordability to encompass persistent
poverty, declining employment opportunities and lim-
ited access to financial services, among other factors.
In light of this information, Freddie Mac proposes
undertaking the following activities in rural areas:
■ ■ Increase financing for homebuyers;
■ ■ Expand research to better understand the rural
market and enrich the national conversation by
sharing information about the housing needs of
■ ■ Review loan offerings and underwriting parameters to address consumer needs; and
■ ■ Increase efforts to provide comprehensive
homebuyer education and technical training to
Freddie Mac’s efforts to preserve affordable single-family options will focus on two fronts: energy-efficient
home improvements and shared-equity programs.
Heating and cooling costs are the largest utility expenses for most U.S. homes, according to the Department of Energy, accounting for more than half of the
energy used in a typical home. While there are several
new financing options for energy-efficient improvements on residential properties, this market remains
Freddie Mac’s outreach efforts determined that the
most significant challenge is the lack of standardization among financing products, which makes it difficult for lenders and investors to support this segment
in a scalable way. It’s also difficult to assess both the
risk and the impact of energy-efficient improvements
on property values.
That’s why Freddie Mac plans to study the effects
of energy-efficient features on single-family property
values and loan performance. These two key factors
should help inform the GSE’s product design and
underwriting policy decisions.
Although shared-equity programs have achieved lim-
ited scale so far, research shows that, when properly
constructed, they can be an effective way to provide
income-eligible families with sustainable homeown-
ership opportunities. This, in turn, enables them to
build wealth while ensuring that home prices remain
affordable to subsequent buyers. To address the lim-
ited scale, Freddie Mac proposes building both the
capabilities and infrastructure necessary to facilitate
As with energy-efficiency financing programs, it
seems that existing shared-equity programs also lack
standardization. Organizations develop highly customized programs based on their unique geographic
needs, existing partnerships, available budgets and
funding mechanisms. This siloed development process generates a relatively small number of loans, both
individually and in aggregate.
Freddie Mac believes a more standardized program
will achieve broader benefits. In addition, shared-equity homeownership programs are not widely
understood, causing lenders to shy away from financing them due to their nontraditional structures.
Therefore, Freddie Mac proposes the following steps
to preserve affordable housing:
■ ■ Identify the current market infrastructure and
develop financing standards;
■ ■ Provide data and underwriting guidance that
can be leveraged by other market participants;
■ ■ Enhance consumer awareness about financing
options and boost lender awareness about Freddie
Mac’s product capabilities;
■ ■ Minimize operational complexity and incorporate automation, where feasible; and
■ ■ Leverage pilots to test new product features and
The gaps in affordable housing across the country
threaten to overwhelm individuals, families and communities. Freddie Mac is looking to deploy innovative,
creative solutions, but can’t do it alone. Freddie Mac
looks forward to working with a wide range of market participants, including mortgage originators, small
financial institutions, appraisers, nonprofits, housing-finance agencies, title companies and nonprofit organizations to be sure the GSE approaches these markets
in ways that are creative, practical and efficient.
Ultimately, Freddie Mac believes it can bring liquidity, stability and affordability to these underserved,
but deserving, markets. The goal is clear: Freddie Mac
wants to help more American families with their housing needs by developing effective solutions to some of
society’s most persistent housing problems. ■
Danny Gardner is vice president of single-family affordable lending and access to
credit at Freddie Mac. He has nearly 25 years of management experience in the mortgage industry, with an emphasis on creating first-time homeownership opportunities.
From 2009 to 2013, Gardner was CEO of the National Stabilization Trust, a nonprofit
organization that helps reclaim neighborhoods devastated by the financial crisis.
Follow Gardner at @Danny_R_Gardner.
“The gaps in affordable housing across the
country threaten to overwhelm individuals,
families and communities.”