The U.S. Department of Housing and Urban Development has announced that it is accepting public feedback on potentially reducing manufactured housing regulations in order to help alleviate nationwide housing shortages. HUD will be accepting comments through Feb. 26.
For many, the term manufactured home brings to mind small structures on wheels. However, this is no longer the case. Modern manufactured homes are built on metal frames and many are permanently fixed to the land beneath.
Today, HUD regulates the construction of manufactured homes. In addition to being regulated for safety and environmental friendliness, these homes now come in a variety of styles and floorplans.
As the housing market continues to experience a severe shortage and standard home builders struggle to meet the demand, it begs the question of whether a faster housing solution might be the answer.
Linda Cook of ERA Steve Cook and Co. Realtors said manufactured homes are already relatively easy to get in the Grayson County area.
“The only thing I have problems with are single-wides,” Cook said. “They will loan on the other ones. The single-wides are kind of tough. The lenders won’t lend money on them.”
Cook is referring to the different delineations of manufactured homes. Generally based on size and type of construction, manufactured homes are often referred to as single-wide or double-wide. Local lenders are sometimes willing to finance double-wide homes who meet certain standards but not single-wide homes.
Cook went on to explain the reason manufactured homes are a good solution is down to cost.
“They are more affordable,” Cook said. “I think they’re great for a first time homebuyer. That way, they don’t have to spend all of their money on a home right away.”
Lori Walker with Re/Max Performance Group agreed it is not as hard as people may think to get a loan on a mobile home when using a local lender.
“My opinion is that it’s not the loan that keeps people from getting a mobile home,” Walker said. “I think what’s harder is there are zoning restrictions. There are deed restrictions that are in towns. Land will be zoned to have no mobile homes.”
This is why manufactured homes are usually found in rural areas. Within city limits, there are often restrictions that prohibit that type of construction. However, Walker cautioned even in rural areas, land may have restrictions within the deed that prohibits them as well.
As previously reported, local lender Michelle Castle, of Guild Mortgage in Sherman cautioned buyers when deciding to make a purchase on a pre-existing manufactured home to do their homework.
“Make sure your manufactured home qualifies for a loan; the home has to be on the original site for FHA and conventional loans,” Castle said. “If it’s not, then you can go VA. They are all fixed-rate financing in these situations.”
The idea is for the mobile home to be “converted to Real Estate” from its beginning label as “personal property,” according to Castle. Her firm — and others making manufactured home loans — has to verify this status with the state of Texas’ Department of Housing and Community Affairs.
“Basically, the wheels have to be removed; and the tongues and axles have to be taken off,” Castle said. “The underpinning has to be done; it has to be tied down and the foundation has to be secure. If not, it’s personal property and we can’t loan against that.”
Once that process is done, the owner must convert the title to real estate through a title company. This must be presented to the loan company at mortgage application.
“Once all this is done, we can do the loan,” Castle said. “The process is much the same as a traditional home. You do have to have a credit score of 620 at least, but it’s a great way to get a lot of home for a low amount of money.”
Local manufactured home dealers agreed; and that the industry is moving onto more solid footing.
“We are meeting more and more building criteria to match with site built homes,” Eric Benge, sales manager at Clayton Homes in Denison, said. “We are using site building material and construction techniques now; so, it is different than before. We are taking the ‘trailer house’ aspect out of it altogether.”
These new concepts are being done in part to streamline the process for manufactured homebuyers with lending institutions. Benge said that some lending institutions are accepting 30 year terms now.
“We are meeting their criteria; and it gives them less of a risk,” Benge said. “We are able to do all sorts of loans: VA, FHA and conventional. It shows that our investment will last.”
Dwayne Wilder, an independent contributor to the Herald Democrat, contributed to this story.