Fannie Mae and Freddie Mac are starting to finance manufactured home purchases, with the hope that their involvement will turn the market into one that operates like a conventional mortgage market, the Wall Street Journal reports.
This story by Liz Kiesche appeared in Seeking Alpha.
Fannie Mae started a program about a year ago that would treat some high-end manufactured homes the same as properties built on-site, and Freddie launched a similar program this spring.
But the going’s been slow.
Loans for manufactured homes, which cost about $72,000 on average, often have higher interest rates than traditional mortgages because of the perception of higher risk.
Manufactured homes are often sold by local retailers, who also assemble them on-site. They’re usually financed by local banks, credit unions, and specialized lenders. The fragmented network has led to confusion about the Fannie and Freddie programs, according to interviews with a dozen dealers, lenders and manufacturers.
Berkshire Hathaway’s Clayton Homes sells about 42 percent of the manufactured homes in the U.S. and provides financing on about 21 percent of them.