Four Things to Know About Manufactured Housing

Four Things to Know About Manufactured Housing

Posted on August 3, 2016

Individuals and their families should consider Manufactured Housing as an affordable housing option. Today’s Manufactured Housing can offer benefits to buyers including higher quality, lower cost, improved energy efficiency, and the ability to finance on owned or leased land.

Price savings

At a time when rising home prices and rental rates are stretching many housing budgets, in some markets Manufactured Housing can provide an affordable option. The average sales price of a new 1,400 square foot manufactured home is $68,000, plus land or lot rental costs, significantly less than many site built alternatives. Manufactured Housing represents 12 percent of housing for people living at 50 percent or less of the poverty level.

Lower energy costs

With such a large number of very low income people living in manufactured homes, it’s critical that any home under consideration have an Energy Star rating for energy efficiency, or better. Lowering the energy operating costs of the home can be a significant percentage of the overall shelter costs.  NeighborWorks recommends wherever possible that a Next Step Network member, like Self-Help Enterprises, be consulted for product recommendations.

Location on leased or owned land

Additionally, Manufactured Housing offers flexibility in how the home is placed on land – whether on a lot that is either owned or financed with the home or in a community where the land is leased or rented separately from the home. When choosing a Manufactured Housing Community (aka mobile home park), look for opportunities to purchase either in a resident owned community (see http://www.rocusa.org/) or a nonprofit owned community. Both models are consumer friendly alternatives to privately owned communities with absentee owners.

Financing

Historically, financing Manufactured Housing has meant paying a higher rate of interest over a shorter term, known as chattel finance, where the price of the loan is based upon the home losing value over time (like a car). The higher quality Manufactured Housing coming out of factories today is opening a broader range of financing options, including an increasing percentage of Real Estate financing. In rural areas, USDA Rural Development’s 502 Direct loan program makes home ownership, including Manufactured Housing, affordable for both low and very low income buyers. NeighborWorks recommends that homebuyer education specific to the purchase of Manufactured Housing be part of every consumer’s selection process. New financing options are appearing all the time. Consumers who pursue ownership of a manufactured home should shop around for the best lending option, one that offers the lowest interest rate possible and provides the most long-term security.

Self-Help Enterprises knows that housing and financial choices can be confusing and expensive. Our goal is to help people save time and money as they make the right housing decision for their family. Manufactured Housing is a growing part of today’s affordable housing market. Trained staff who offer one-on-one counseling can reduce anxiety and extra costs while helping consumers make informed decisions. For more information about Manufactured Housing or homeownership counseling, please call Self-Help Enterprises at (559) 651-1000.