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Freddie Pilots Financing for Manufactured Homes

Freddie Mac has begun a two-year manufactured housing pilot designed to increase the number of affordable homes and provide lenders with innovative financing options.

“Currently there are more than 22 million families living in factory-built housing, and with that number expected to grow, there’s an opportunity for factory-built homes to address the housing supply shortage and quality housing overall,” Mike Dawson, vice president of Single-Family Affordable Lending Strategy and Policy at Freddie Mac. “This new generation of manufactured housing might just be the best option for first-time homebuyers, Millennials, and empty-nesters looking to downsize.”

These financial alternatives were designed to be similar to conventional lending alternatives. Manufactured homes can deliver outstanding quality at prices that are up to 50 percent less per square foot than conventional site-built homes. These savings can enable more Americans to own their own home, even in the face of an ever-widening housing affordability gap.

“Finding a home is more difficult than ever because of the ongoing housing supply shortage in many parts of the country, especially when looking for a home at a lower price point,” said Dawson.

These homes have features such as permanent foundations and pitched roofs. Many of these homes also come with energy-saving features like Energy Star Qualified Low-E windows, programmable thermostats and minimum insulation values.

Freddie Mac will treat loans secured by factory-built home loans the same as those secured by single-family site-built homes. If a factory-built home meets certain specifications will be eligible for traditional financing. Appraisers will be able to use site-built housing as a comparable for valuation.

Manufacturers and lenders must follow HUD-code guidelines for the home construction and siting of the home to ensure eligibility Freddie’s guidelines; lenders must follow local and state guidelines for manufactured housing titled as real property.

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