Fannie Mae, Lenders Join To Revive Mobile Home Industry
02/11/2004
WASHINGTON -- Fannie Mae, the nation's largest source of financing for home mortgages, today joined with nine lenders to work toward transforming the manufactured housing market, including providing purchasers of manufactured homes nationwide access to affordable 30-year mortgage financing with down payments as low as five percent.
The new effort seeks to restore credibility to the mobile home industry, which has suffered from a high default rate, and sometimes unsavory sales and lending practices to “high risk” borrowers who are historically senior citizens and low income families.
The low-cost financing will be available through a network of lenders that have demonstrated the high levels of expertise necessary to understand the property, titling, appraisal, and servicing issues associated with manufactured homes. They include: AgFirst Farm Credit Bank; Flagstar Bank; GMAC Manufactured Housing; Huntington Mortgage Group; Origen Financial; RBC Mortgage; 21st Mortgage; Vanderbilt Mortgage; and Washington Mutual.
Fannie Mae will work with these experienced lender partners to learn more about the best practice measures they've developed, including measures that help ensure that consumers purchasing a manufactured home do not pay more for the house than it is worth. Ultimately, Fannie Mae will incorporate these industry best practices into its guidelines for all lenders.
"As part of our Expanding the American Dream Commitment initiative, Fannie Mae will work with its lender partners and other industry participants to transform the manufactured housing market," Raines added. "The lenders joining with us today have developed processes and procedures that help lessen the risks associated with lending on mortgages secured by manufactured homes, and employ best practices to ensure that consumers purchasing a manufactured home will have a successful experience."
Fannie Mae also pledged to work with its lender partners over the next year to develop a pilot effort to save consumers at least 10 percent of the cost of buying and financing a manufactured home.
"Manufactured housing is an important affordable housing option for many Americans, particularly low-income and elderly citizens," said Rep. Barney Frank (D-MA). "I'm pleased that Fannie Mae and these lenders have reinstituted their commitment to provide a five percent down payment option for 30-year manufactured housing mortgages. At a time when a number of institutions are backing away from these types of loans, it shows the critical role that the GSEs play in the nation's affordable housing sector and the importance of maintaining that role."
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