This is a repost about the Manufactured Home Industry that should give AR RE Professionals and home buyers some keen insight about affordable housing options. Be you a young couple looking for your first home investment or a Baby Boomer looking to downsize to a more modest and affordable lifestyle this should be something you may want to consider.
Getting the Facts: A Closer Look at Manufactured Housing and I'M HOME
Learning more about modern manufactured housing leads to an expanded view of homeownership – the American dream. I’M HOME seeks to help make the dream of sustainable homeownership a reality for all Americans. Click here to download the Manufactured Housing Fact Sheet seen below or click here to download the Top 10 Truths About Manufactured Housing.
Even in the face of the recent housing crisis, responsible homeownership with the proper financing can provide economic security, stability and a financial legacy for future generations. For many American families, their home is their most important financial asset; and for low-income families, homeownership provides a chance to climb out of poverty.
Home equity is a major source of personal wealth in the United States. It comprises roughly one-third (31.8%) of net worth for American households. Home equity plays an even more important role for low- and middle-income families, accounting for approximately half of the net worth of families in the bottom 60% of the income distribution in 2007.
The U.S. government recognizes homeownership as a public good, providing $137.6 billion in homeownership subsidies in 2009 . The mortgage interest tax deduction makes up the lion’s share of the subsidies at $86.4 billion in 2009 and an estimated $90.8 billion in 2010, although it benefits mostly upper- and middle-income homeowners.
Manufactured housing is a significant source of affordable homeownership that should be leveraged and more proactively protected. It opens the door to homeownership for families who, in many of the nation's housing markets, cannot afford to buy a site-built home. More than 17 million Americans live in manufactured housing.
Owners of manufactured homes are disproportionately low-income: in 2009, the median annual household income for those living in manufactured housing was $30,000, versus a national median of $49,777. Seventy three percent of manufactured home households earn less than $50,000.
In the late 1990s, manufactured housing represented 66% of the new affordable housing produced in the United States, and it remains the largest source of unsubsidized affordable housing in the country. Today, there is still continued demand for manufactured homes as an affordable housing option; manufactured home communities demonstrated stable occupancy rates between 2008 and 2009, hovering around 90%.
Since 1989, manufactured housing has accounted for 21% of all new single-family homes sold. In 2009, manufactured housing accounted for 43% of all new homes sold under $150,000 and 23% of all new homes sold under $200,000. As of 2009, the average cost per square foot for a new manufactured home was $41 compared to a cost of $84 for a new site-built home.
Manufactured homes are frequently misrepresented, stigmatized and overlooked as a source of affordable housing due to outdated stereotypes of “trailers” and “mobile homes,” yet manufactured housing that is well built and maintained can be attractive, more energy efficient than some site-built homes, grow in value and open the door to homeownership for millions of families.
By owning the land beneath their homes, manufactured homeowners increase the likelihood of price appreciation. In 2009, about 74% of new manufactured homes were placed on private property, while the remaining 26% were sited in land-lease communities. Overall, however, an estimated 2.9 million manufactured homes – or 43% of all manufactured homes in the United States – are located in land-lease communities. In these “parks,” new ownership structures like resident-owned cooperatives and community land trusts offer homeowners enhanced stability and security.
Although most "mobile" homes are never moved and new manufactured home placements are increasingly titled as real estate rather than personal property, we estimate that nearly two-thirds of them – most of which are located in land-lease communities – are still titled like automobiles rather than as real estate. Titling manufactured homes as personal property increases homeowners' difficulty in obtaining mortgage financing. With personal loans instead of mortgages, these owners lose out on many of the consumer protections afforded to buyers of site-built homes.
The life expectancy of modern manufactured housing is equivalent to comparable site-built housing. Properly-installed manufactured housing under HUD’s new construction code is also as safe and storm resistant as any other new home.
CFED, a national nonprofit organization, is unlocking this potential through an initiative called I’M HOME, or Innovations in Manufactured Homes. I’M HOME supports programs across the country that are opening the door to homeownership for low- and moderate-income families and helping them build assets through manufactured homes.
Nonprofit housing developers across the nation are putting high-quality manufactured homes on the ground and providing low-income families with the homebuyer counseling and fair financing they need to become homeowners. Next Step, an I’M HOME national partner, is building a national distribution system to deliver high-quality, energy-efficient, factory-built housing at scale to nonprofit housing developers nationwide.
With the help of ROC USA®, its Certified Technical Assistance Providers and community development financial institutions, homeowners in manufactured housing communities are organizing cooperatives to gain long-term control of the land beneath their homes. ROC USA® and its network members have helped convert 35 communities including 2,186 homes into resident-ownership. In New Hampshire, where the ROC USA® model was pioneered, resident owned cooperatives already account for almost 30% of the total manufactured housing community market, and similar efforts are afoot in other states including Minnesota, Delaware, Oregon and New York.