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If you’re looking for a home, you already know that it’s rough out there. With a low supply of homes for sale across the country, prices have skyrocketed, pricing many prospective homebuyers out of the market.
In many of the nation’s hotspots, multiple buyers are competing for each home. Prospective buyers are making all-cash offers, writing personal letters to convince homeowners to choose them, and paying significantly more than asking price.
Home prices have been on the rise for the past few decades, according to research conducted by Fannie Mae®, while the inventory of available houses has been steadily decreasing. In fact, according to Fannie Mae®, the average price of a home has risen by almost 47% since 2012, and 76% since 2008. Wages, meanwhile, have gone up 17%.
If you’re worried about being frozen out of the housing market, there’s some good news − there are alternatives to traditional housing. While structures like earth berms, tiny homes, shipping container houses and RVs tend to get more attention, manufactured homes are the unsung heroes of the housing market right now.
What is a manufactured home?
Manufactured homes are built to standards set by the U.S. Department of Housing and Urban Development (HUD), constructed with quality materials, and typically meet or exceed the specifications of site-built homes. There are multiple categories of manufactured housing including traditional manufactured homes, and CrossMod™ homes.
Site-built homes describe homes that are built on location, while off site–built homes are built somewhere else. Manufactured homes are built off-site inside home building facilities, and then completed on your land. Homes built off-site have a number of benefits, including:
- Built more efficiently for reduced cost
- Built more sustainably with less waste
- Inspected by HUD at select points during the build process
Perks of manufactured homes
Manufactured homes built today are stylish and can feature an array of upgrades. Whether you want high-end cabinetry, a standing tub, hardwood flooring or drywall, these upgrades are typically available. A manufactured home can look just like a contemporary site-built home.
Because of innovative building practices, these features can come at a more affordable price point. In many circumstances, manufactured homes can appreciate in value like traditional housing when affixed to land as real property, and manufactured homes can be more energy efficient than a typical site-built home.
The average price of a new manufactured home can vary. The average size is 1,184 sq. ft., which is smaller than most site-built homes sold this year.
That’s not a bad thing. Most new site-built housing built today is on average 2,322 sq. ft. and finding something smaller and more affordable is a challenge. For first-time homebuyers or for those wanting to downsize, manufactured housing could be a better fit for your lifestyle.
If you’re looking for a large home with a smaller price tag, multi-section manufactured homes are available for those looking for lots of square footage. The price can still be significantly less than a site-built home.
Manufactured homes hold value
Manufactured homes attached to a permanent foundation appreciate at an average rate of 3.4%, while traditional homes appreciate at an average rate of 3.8%. So, while manufactured homes may not appreciate at the exact same rate, they’re pretty close! That’s a common misconception most people are not aware of. But as with any home, you’ll need to maintain your manufactured home and property to retain long-term value.
ENERGY STAR® certified manufactured homes are built with energy efficiency in mind, which means lower energy bills and less of a negative impact on the environment.
If you own land and are looking for an alternative to a brand new site-built home, a manufactured home may be a great fit for you.
But what if you don’t have land?
Financing tips for manufactured housing
The conundrum many potential homeowners face when considering manufactured housing is finding land. If you own land, no matter how big or small, the process can be a lot easier, especially with Vanderbilt Mortgage. That’s true whether the land is in your name, or if it will be gifted to you at closing. Depending on eligibility, you can even use your land in lieu of a cash down payment.
Vanderbilt Mortgage’s Express Portal makes the loan process easy by keeping all documents online. It tracks where you are in the process and keeps communication flowing smoothly between you and your loan processing team. When it comes to financing your manufactured home, here are just some of the loan options that are usually available in the marketplace:
- Fannie Mae’s® MH Advantage® loan offers low down payment options for CrossMod homes, which are a new class of manufactured homes that can appraise like site-built housing and have conventional financing programs.
- A simple land-home loan through Vanderbilt Mortgage allows you to bundle a manufactured home with land, while a construction-to-perm loan will work for you if you’re getting a new manufactured home from the factory.
- You can even work with lenders who are approved to offer government programs like VA and FHA to purchase a manufactured home at lower interest rates.
Buying a manufactured home without accompanying land can be a little more complicated. Typically, without a permanent foundation, a manufactured home is considered chattel, which just means it’s personal property, not real estate. Loans for chattel typically have a lower lending limit than a mortgage, and interest rates can be higher. If you don’t want to own land, you can always lease land to put your manufactured home on.
Manufactured homes are a more sustainable alternative to traditional housing and a smart, fast solution to owning a home. With comparable features to traditional homes and a similar appreciation rate, it just might be the solution the current housing market needs.
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All loans are subject to credit approval.
Vanderbilt Mortgage, and its dba Silverton Mortgage, is authorized to originate FHA and VA loans, but it is not an agent of, or affiliated with, the U.S. Government. Availability for manufactured housing may vary. Contact for details.
Vanderbilt Mortgage and Finance, Inc., and its dba Silverton Mortgage, 500 Alcoa Trail, Maryville, TN 37804, 865-380-3000, NMLS #1561, (http://www.nmlsconsumeraccess.org/), AZ Lic. #BK-0902616, Loans made or arranged pursuant to a California Financing Law License and Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, GA Residential Mortgage (Lic. #6911), MT Lic. #1561, Licensed by the N.J. Department of Banking and Insurance, Licensed by PA Dept. of Banking, Rhode Island Licensed Lender.
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