Affordable housing is an issue from coast-to-coast, border to border – and in islands like the state of Hawaii too. There are efforts under way to bring more modern manufactured homes to Hawaii, because their affordable housing crisis is so acute.
But as often happens, improper terminology and inaccurate information has crept into their discussion. That matters in all 50 states, and could matter in places such as Puerto Rico too.
That terminology matters, because as Steve Duke from the Louisiana Manufactured Housing Association (LMHA) has said, the terminology identifies what construction standard a particular kind of home is built.
As the graphic below indicates, a trailer house is not a mobile home, and a mobile home is not a manufactured home.
The terminology is not a matter of taste or opinion.
Harvard published some research that identified a brief definition for each kind of factory produced home. They should NOT be used interchangeably, in spite of what media or others in or out of the manufactured housing industry might say or do.
As manufactured home advocate, the Rev. Donald Tye, Jr. – who himself owns a pre-HUD Code factory built home – has said, it’s as wrong to use the n-word to describe a black man, as it is to use the t-word to describe a manufactured home.
The National Fire Protection Association (NFPA) sees it similarly.
Why the Terminology Matters – Lending, Zoning, Legal, Safety, and Valuations
As MHLivingNews recently reported, manufactured homes are safer in a windstorm than the mobile homes of yesteryear. The same is true about fire safety; manufactured homes are safer by design, and rival or may exceed the safety found in conventional housing.
That’s not opinion or hype, those are facts demonstrated by third party research (see related resources, further below).
So first, for safety reasons as the linked articles reflect, the correct terminology is important, even vital.
While financing and valuations aren’t life and death, they are important.
Just as tiny houses are hard to finance – in part because they are often built to no particular building code – those factory-built homes built over 4 decades ago that did not meet certain standard can be harder to finance.
On June 15, 1976, the first manufactured homes were produced. There have been no mobile homes built in the U.S. since that date, well over 40 years.
So, if you have a manufactured home, and you’re telling a potential lender that it’s a ‘mobile home’ or a ‘trailer house,’ you may be told you can’t get a loan, when you can on a manufactured home.
The Urban Institute did a recent report on manufactured homes. While their report has miscues, it does make a point that many find surprising. Namely, that manufactured homes can appreciate.
That fact has been confirmed by studies done by the Department of Housing and Urban Development (HUD). See a university level, third party report, linked here.
MHLivingNews has noted that this can be true for homes sited on privately owned land, but also for homes placed in a land-lease community. See the Kim Capen report and video, linked further below.
“Manufactured housing, just like site-built homes, can both appreciate and depreciate. There are many factors such as location, market conditions, mobility, the condition of the home, etc., that affects the home’s value,” Credit Human regional manager Barry Noffsinger told MHProNews.
The availability of financing, as well as the practical application of the law of supply and demand are factors that Noffsinger and others have noted. The 2008 housing crisis proved that all housing rises or falls in value, based in part by how much lending is available, plus supply and demand.
Noffsinger is a long-time manufactured home industry lender, and he sees the data.
Mark Weiss, JD, President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) commented last year on a specific case where manufactured homes on a land-lease were going up in value.
“On one hand, the story shows just what manufactured housing can accomplish — ie., provide, safe and attractive homeownership at an inherently affordable price that is within the reach of the vast majority of Americans — even in an otherwise high-cost housing market like New York City,” said Mark Weiss, President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) to MHProNews (note: the story he was commenting on is linked below).
“On the other hand,” said Weiss, “imagine how much more the industry could do for American families if the placement of manufactured homes was not artificially and needlessly restricted by baseless, outdated and discriminatory government restrictions like the one noted — a phenomenon that is replicated in other jurisdictions around the country to the detriment of millions of Americans in need of affordable housing.”
While mobile homes are more difficult to finance, manufactured homes have a wide array of financing options. They can include FHA, VA, USDA (Rural Development), conventional, Fannie Mae, and Freddie Mac lending. There are also specialized lenders that serve manufactured homes on leased or owned property.
There are conditions to meet with each of these loan types, as with any kind of housing lending.
What Terminology Do You Say When Describing Factory Built Homes of Various Types?
A practical problem exists for some writers or researchers who are reporting on factory built homes that include both mobile and manufactured homes. What blanket terminology might be used if you are describing both distinctive types of housing?
The RV MH Hall of Fame provided a simple solution. Mobile Homes are abbreviated as (MH) and so too are Manufactured Homes (MH).
Another option is to call them ‘factory-built homes.’ Others refer to them as prefab homes.
Don’t Call Me Late For Supper…
Back in the days of the civil rights movement, millions of Americans learned more respectful terminology to describe people from various racial or ethnic groups.
Today’s civil rights issue for people from all ethnic groups often revolves around affordable housing. It’s correct – even noble – to use the proper term for each kind of home.
Millionaires are finding manufactured homes to be an appealing option. Why not more in middle America?
There are manufactured homes that are entry level – ‘shade and shelter,’ and manufactured homes that are residential in style. Both kinds of homes are built to meet the HUD Code construction, safety, and energy efficiency standards.
Both entry level and residential style HUD Code homes have an array of financing options available. While not all banks lend on manufactured homes, a number do. Credit unions are often more apt to finance manufactured homes today, as the video below reminds viewers.
As a home owner, lender, reporter, home seeker – anyone and everyone – should strive to learn the proper terminology about manufactured homes.
The National Association of Realtors (NAR) are among those who have supported a greater use of manufactured housing, because conventional builders can’t keep up, and can’t hit the price points that a manufactured home can achieve.
To wrap up this column, its worth noting that manufactured homes are seen by Florida Atlantic University researcher Professor Ken Johnson, as an important option to consider for its ability to facilitate wealth building.
As more Americans develop a proper understanding and respect for modern manufactured homes, and embrace the terminology, research suggests that America will become a wealthier nation. Some related links are found below. ##
Related Reports and Resources:
(Third party images and content are provided under fair use guidelines.)
Submitted by Soheyla Kovach to MHLivingNews.com.
Soheyla is a co-founder and managing member of LifeStyle Factory Homes, LLC, parent company to MHLivingNews and MHProNews.com.