Freddie Mac pilots conventional financing for manufactured housing

by Francis Monfort03 Dec 2018

Freddie Mac has announced a two-year pilot for its CHOICEHome conventional financing offering for manufactured housing.

Part of Freddie Mac’s Duty to Serve plan, the offering aims to help increase the availability of the quality affordable homes while providing lenders with innovative financing options.

Freddie Mac said quality manufactured homes are available at prices that are up to 50% less per square foot than conventional site-built homes. Additionally, the homes have features such as permanent foundations and pitched roofs, and many come with energy-saving features.

Under the CHOICEHome offering, Freddie Mac will treat the loans similarly at those secured by single-family site-built homes. If a factory-built home meets certain specifications, it will be granted a CHOICEHome certification and will be eligible for CHOICEHome financing. This includes many Freddie Mac conventional loan products, including HomeOne and Home Possible mortgages. Appraisers will be able to use site-built housing as a comparable for valuation.

“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 Mike Dawson, vice president of single-family affordable lending strategy and policy at Freddie Mac. “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. This new generation of manufactured housing might just be the best option for first-time homebuyers, millennials, and empty-nesters looking to downsize.”

Freddie Mac said the CHOICEHome offering requires manufacturers and lenders to follow HUD-code guidelines for construction and siting to meet eligibility. Additionally, lenders must follow local and state guidelines for manufactured housing titled as real property.

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