Bill Packer is executive vice president and chief information
officer at American Financial Resources Inc. (AFR), one of
the leading FHA 203(k) lenders for sponsored originations
in the country and an innovator in the construction and
renovation-lending area. AFR utilizes the latest technology
and delivers educational resources to mortgage brokers,
loan originators and their customers. Learn more at
afrcorp.com. Reach Packer at email@example.com.
With an insufficient inventory of tra- ditional stick-built homes available and as the resale market for these single-family houses continues to
be robust, the nation could be poised to experience a
dramatic increase in manufactured housing. Some may
recall the 1970s stigma of low-quality mobile homes
and worry an onslaught of such homes could create
more problems than it solves.
Today’s manufactured housing, however, is a far cry
from the tin-can trailer parks of yesteryear. Creative
and innovative companies are building manufactured
housing that rivals and, in some cases, exceeds the
quality of more traditional homes.
Manufactured homes increasingly are making
use of high-end finish-outs and spacious floorplans.
Often, manufacturers are able to achieve factory-level
economies of scale that also are kinder to the environment than the stick-built counterparts.
Fortunately, homebuyers and originators are seeing
an increase in financing options for this type of housing, as well. There are unique loan programs especially
suited for the purchase of a manufactured home.
Acute housing shortage
After a decade-long recovery from the subprime lending debacle, the housing market is seeing more home
sales and a very low foreclosure rate. But now, there are
not enough homes for sale. The inventory of homes for
sale last year was so low that it was one of the tightest
markets ever and, so far in 2018, it is even tighter.
Strictly focusing on single-family home listings, this
is the lowest inventory since data tracking began in
the early 1980s. Real estate market reports claim there
are almost 10 percent fewer homes on the market to
choose from than a year ago, and up to 40 percent
fewer in housing markets where home values are
But why? Builders are struggling with high and rising land, lumber and labor costs. That’s a formula for
a supply shortage — both because of labor-availability
issues and the lack of companies who are able to
build affordable entry-level homes.
This acute housing-inventory shortage has fired
up home prices. The median home price has risen by
40 percent in the past five years and is still rising. With
the shortage of affordable single-family homes in the
U.S., manufactured housing is becoming an increasingly popular alternative.
Manufactured homes are built offsite and transpor-
ted to the lot in one or more sections. So, you get more
think Mercedes-Benz — and, with the advancements
in robotics, fewer skilled workers are required in the
building process. The final delivery and assembly of
the homes, however, supports the local economy by
requiring skilled labor from local artisans and trades-
man like plumbers, electricians and landscapers. It’s
the best of both worlds, arguably.
There are few scenarios where a manufactured
home shouldn’t be considered as a primary option.
Land is a finite resource, and some potential buyers
spend years searching for a buildable lot in the right
area with the features they desire. That might mean
proximity to a specific school or workplace, a walkable
neighborhood or stunning view.
What if the ideal lot comes on the market but building a dream home is out of reach financially? Some
homeowners will stretch their budget to purchase
the lot, making mortgage payments on both their
primary residence and the new lot. By purchasing a
less costly manufactured home to live in on the new
lot, costs are kept in check and the homeowners
get to live in the dream location much sooner than
A manufactured home also could provide a viable
way to have a home away from home at a favorite
vacation destination. An affordable place of your own
at the beach, the lake, the mountains, or just closer to
family you wish you could spend more time with. Many
vacation hotspots have popular communities, and the
properties often require less maintenance than stick-
built homes, so homeowners can simply enjoy their
time while there.
Boom Could Be Coming
Originators should become familiar with financing options for these homes
By Bill Packer
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