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Are Manufactured Homes the Answer to the Housing Shortage?

Posted by GO Mortgage Team on 1/16/20 1:35 PM
GO Mortgage Team

The normal housing market requires 6-7 months of inventory. Currently, the market has approximately 3.9 months of inventory. From low mortgage rates to insufficient construction of new houses, there are several reasons for the high demand and low supply.


According to John Walsh, an Urban Institute (UI) analyst, a central problem with 21st Century homebuilding is that it still employs 20th Century processes. These methods, that entail building largely on-site, make construction less efficient, exacerbate labor and weather issues, and are costlier than building off-site.


Off-site construction or manufactured homes could be the answer to the housing shortage. The quality of manufactured homes has improved substantially in recent years and has many of the same amenities as site-built homes.


However, there are three main barriers to off-site construction:


Up Front Costs - Significant capital is needed to build and equip the production facilities and these investments become less profitable in the later stages of the business cycles.


Consumer Preferences - Buyers continue to show a strong preference for homes built on-site, especially as compared to manufactured houses.


Restrictive Zoning and Expensive Financing - Financing for nontraditional homes is a barrier to the growth in off-site building as well as local zoning rules that often explicitly ban manufactured homes.


Fannie Mae’s MH Advantage program is helping to address the financing with innovative and affordable loans specifically designed for manufactured homes.  MH Advantage® is a special mortgage loan for manufactured homes that have features typical of site-built single-family homes. 


Interested in learning more about financing for manufactured homes, speak with a home loan advisor at GO Mortgage.


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Topics: mortgage loans, single close construction loan, manufactured homes, off-site construction

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