Two Good Reasons to Buy a Manufactured Home
by N.H. Community Loan Fund
on August 27, 2024
People looking for affordable housing, and more importantly, wanting to secure their housing by becoming homeowners, can be reluctant to buy manufactured homes. We wondered if this was connected to the reduction of manufactured homes being made. It turns out that the Urban Institute has some answers.
The Urban Institute’s authors confirmed that manufactured housing is far more affordable (35 to 47 percent cheaper per square foot than new or existing site-built housing)., Tthe number of new manufactured homes being shipped has plummeted, from 242,000 per year between 1977 and 1993 to just 92,500 units in 2017.
The Urban Institute very clearly lays out the dramatic differences in the cost of a manufactured vs site-built homes. As you can see from the graph, an average new site-built home is more than 3.5X more costly than an average manufactured home. And the cost per square foot of a manufactured home is nearly half that of a site-built one.
If manufactured home are so much more affordable, why aren’t more people buying them?
The authors cited three primary reasons for the reduced number of homes being made, and therefore, available to be sold:
Let’s look at how we’re addressing two of the three barriers the Urban Institute describes in order to help potential borrowers choose to buy a manufactured home.
We see growing demand for manufactured homes as rental costs and site-built home prices soar out of reach for low- and moderate-income people. For these homebuyers, the lack of financing is a huge barrier. Most traditional lenders don’t finance manufactured homes, and the few that do won’t include the costs of installing new homes.
We’re solving both problems in New Hampshire with Welcome Home Loans — fair, fixed-rate, low-down-payment, 30-year mortgage loans that cover a manufactured home’s purchase, site work, and installation.
We recently helped a woman refinance a manufactured home she’d bought by charging $80,000 on four credit cards. “I didn’t think there were any mortgage loans available for mobile homes,” she said. “I tried banks, brokers, everyone. All I wanted was a loan.” Paying off the credit cards and using a small amount of cash back to better insulate her home is saving her $287 a month.
For lower-income homebuyers, we also offer Your Turn downpayment assistance for new manufactured homes.
If part of the value problem for manufactured homes in parks is that their communities can be shut down at any time, cooperative ownership is part of the solution. Since our ROC-NH program began helping homeowners in manufactured-home parks purchase and manage their communities as cooperative corporations, we’ve seen a major shift in the value of manufactured homes in N.H.
A study of assessments and sale prices in one N.H. community over an 11-year period showed that homeowners in resident-owned communities (ROCs) enjoyed higher average home sales prices and faster home sales than their counterparts in investor-owned communities. This has happened partly because the land under their homes is secure and because their buyers have access to fixed-rate home financing. They also payid lower average lot rents (the monthly fee for using the land under their homes), another value consideration.
With increased mortgage financing available through our Welcome Home Loans and improved home values created by converting manufactured-home parks into ROCs, we’re providing potential homeowners with two good reasons to buy a manufactured home.
Combined with the built-in affordability of manufactured homes, now is a great time to take a serious look at becoming a homeowner, securing your housing, and getting involved in a community of neighbors working together to help each other succeed.
Learn more about our Welcome Home Loans and Your Turn downpayment assistance on our website.
Our Mortgage Loan Originators will take the time to understand your personal situation. You can contact them by email or call 603-224-6669 and select option 1.
Our Mortgage Loan Originators will take the time to understand your personal situation. You can contact them by email or call 603-224-6669 and select option 1.
Ron Thompson, NMLS #225348
Heather Ralphs, NMLS #2567112