House hunting? Dreaming of home ownership? Freddie Mac is one of the two mortgage giants that under their Duty to Serve (DTS) program have created the step by step outline that follows below. That ‘road map’ to home ownership will be followed by additional information linked insights, commentary and an analysis in brief. As a brief background, Fannie Mae and Freddie Mac are two Government Sponsored Enterprises (GSEs or Enterprises) that are currently under the Federal Housing Finance Agency (FHFA) conservatorship following the 2008 housing/finance crisis. When Fannie (Federal National Mortgage Association or FNMA) and Freddie (Federal Home Loan Mortgage Corporation, or FHLMC) emerge from conservatorship, they will be still be under the FHFA’s regulation. Per the FHFA, “Fannie Mae and Freddie Mac buy mortgages from lenders and either hold these mortgages in their portfolios or package the loans into mortgage-backed securities…” So, you access these firms through housing lenders that do business with them.
First, per Freddie Mac’s ‘road map’ or milestones for home ownership.
Borrower Journey Map
Achieve the American Dream with Manufactured Housing
The demand for quality, affordable housing has never been greater – manufactured homes are a viable option to help fill that need.
Here are seven steps to financing, building and owning a manufactured home.
Step 1) Spend time researching the following online
Prospective buyers that need additional assistance before starting the home shopping journey, can find housing counseling services and homebuyer education specific to manufactured housing with Freddie Mac and Next Step’s SmartMH Program.
Step 2) Visit a manufactured home retailer
Check out the variety of available amenities and select the home model that’s right for you and receive a cost estimate. Hundreds of floorplans and designs are available.
Step 3) Submit an application to a lender
Discuss financing, get approved and order a home. You can select a single close construction conversion loan or a two-close construction conversion loan. Once financing is confirmed, you can order the home and construction begins.
Step 4) American dream-making factory
Manufacturer builds the house offsite in climate-controlled factory.
Step 5) Site purchase and preparation
As home is being built, you oversee site purchase and preparation, including pouring the foundation footers and running utilities. When complete, the home is shipped to the retailer for delivery.
Step 6) Delivery, construction and installation
Home is delivered to site and placed on the foundation. The different home sections are joined together, the utilities connected and the finishing touches are applied.
Step 7) Inspection and certificate of occupancy
There’s a final inspection by a city or county inspector to ensure that the home is complete and meets all plans, specifications and local code. Once approved, you receive a certificate of occupancy.
Congratulations! You’re a Homeowner. ##
Additional Information with More MHLivingNews Facts, Analysis and Commentary in Brief
The roadmap above is frankly not quite how this publication would advise a home seeker, especially those that want or require financing, to go about the process. The above may be the way that numbers of manufactured home sellers would like to see someone considering a manufactured home go about it. But it is a bit different than what the real estate or conventional housing world suggests.
For example. Many realtors ask their clients this simple question early on. ‘Have you been pre-qualified for financing yet?’ That makes sense regardless if someone is buying a new manufactured home or a new conventional house. It also makes sense when you are considering buying an existing home.
The road map above also doesn’t mention any of the nuances of shopping for a manufactured home. For instance:
- Will the home be located on privately owned land or do you plan to have the home placed in a land-lease manufactured home community (MHC)?
- If you are going into a land-lease, what safeguards does your state and/or that property owner provide you with to secure your rights?
- MHLivingNews has long advocated that someone do their homework online before stepping into the virtual world.
3a) Manufactured homes are routinely a good investment (see the report linked below). But they must be cared for just as any other dwelling. Expect to budget for maintenance and repairs once your new home warranty expires. That is simply part of home ownership.
3b) Know who you are considering doing business with. Unfortunately, just as there are car dealers, apartments, or conventional builders that have a less than great reputation, something similar occurs in manufactured housing. Learn how to spot the good guys and gals (so called ‘white hat’ businesses) from the problematic ones (so called ‘black hat’ or predatory business). Invest the time to watch the videos and read the reports below. Both videos combined are less than an hour of viewing, but it may save you months and years of head aches and heartaches. Put differently, adding in some reading time, that is an hour or two you may well be very glad you invested.
At the time that this report is being written, several of the larger firms in our industry, in the land lease communities side and in the production/sales side are firms that have developed a reputation that is less than grand. Going with the bigger name brand may not yield the happiest outcome. See what others have said in the reports linked below.
- The Freddie Mac ‘road map’ also fails to mention that with manufactured homes, there are broadly speaking two different types of financing available.
4a) The one is traditional mortgage financing or a ‘land-home package.’
4b) The other is a personal property, home only, or ‘chattel’ loan.
4c) Generally speaking, mortgage rates are lower than personal property loan rates for a range of reasons. That said, mortgages often have added costs and fees that may be lower on a personal property loan. MHLivingNews advises that you carefully weigh the options to see what is best for you.
5) In the current market environment, there are also numbers of cash buyers. These are people who have sold a house, some investments, or simply have ample savings to make a purchase.
Inflation has risen sharply since the Biden Administration has taken office; that’s not political, that’s simply a fact. Prices on manufactured homes have also risen in recent years as a result. So, when looking at older articles and reports on MHLivingNews, keep in mind that generally speaking, the percentage of savings over a conventional ‘site built’ house is the same. But the actual dollar cost has almost certainly risen.
6) Before drawing to a closing point, NextStep – mentioned by Freddie Mac – is financially associated with Clayton Homes. Caveat emptor is the old Latin maxim that advises the ‘Buyer to beware.’
DOJ-CFPB-Record Racial Discrimination-Redlining Case Settled by Warren Buffett-Led Berkshire Hathaway Owned Lender – Clayton Homes and Their Affiliated Lending Named by Seattle Times – Conventional and Manufactured Housing Claims
7) So as not to close on a negative note, the rich and famous, millionaires and billionaires, are among those who own a manufactured home. If it is good enough for them, it is obviously plenty good for people like you and me too.
This writer isn’t wealthy but has owned and lived in several manufactured homes over the years and has owned conventional housing too. If you shop wisely, you will find that you cook, clean, eat, live and love the same in a manufactured home as you would in a conventional house that costs far more.
‘Half Priced New Homes’ — Tampa Free Press-MHLivingNews Reveals Federally Certified, 3rd Party Inspected New Affordable Homes, Facts, Video, Analysis Solutions to Festering Affordable Housing Crisis Problems
Summing Up and Editorial Conclusion – Some Guideposts for Buying Your Manufactured Home
- Get prequalified. It will help you to shop for a home you can afford.
- Do your homework on your location options. You can do that before or after you start working with a seller (which may be in a land-lease community (sometimes errantly called a mobile home park) or on private land.
- Plan for the time needed to buy a new home that may have to be ordered. Even a home in stock may require weeks or months before it can be installed, depending on your location.
- Once you sort out the white hats and black hats in your area, shop the firms (street retailers, developers, or community-based sellers) that you feel confident will treat you with honesty and respect.
- Select a home that fits your budget, needs, and confirm the financing details.
- Order a home after a formal agreement on price and terms is struck.
- Make sure all of your site needs (water/well, sewer/septic, cable-internet, phones/cell, electric/gas, driveway, outbuildings, etc. are ready to advance for once your home is installed). Make sure you inspect your home after it is installed and have any service issues dealt with before closing, if possible.
- After you close on your contract/financing, get your new home keys and prepare for living better because your new home costs so much less than other forms of permanent housing.
Other points could be mentioned, like zoning/placement issues. So, the list above is a guide, and not exhaustive. That said, if you keep those points in mind, and create your own checklist, you will find that you may well have less stress before, during, and after the home buying process.
That’s almost enough for this column. Freddie Mac recently reported that most home seekers are ready to consider a manufactured home. That’s good news. The terminology issues may not go away any time soon. But get and stay engaged as a home seeker and homeowner. Get and stay engaged on the politics of homeownership, the economy, and our American Republic. You and your family may be much happier if you take these practical steps. God bless America, the American Dream, you and yours. ##
That’s a wrap on this installment of “News through the lens of manufactured homes and factory-built housing” © where “We Provide, You Decide.” © ## (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHLivingNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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