HUD launches manufactured home community loan program

The U.S. Department of Housing and Urban Development (HUD) this week announced the launch of a new program designed to allow for the purchase, refinance or renovation of manufactured housing under a loan program sponsored by the Federal Housing Administration (FHA).

The Manufactured Home Community loan product will “will help entities to preserve, stabilize, and revitalize these vital sources of affordable housing,” the department explained. The program was announced by HUD acting secretary Adrianne Todman during a kickoff event for HUD’s Innovative Housing Showcase, which takes place June 7-9 on the National Mall in Washington, D.C.

“Manufactured home communities offer a stable and affordable housing option for many families,” Todman said in a statement. “Today, HUD is providing new resources for preserving and revitalizing these communities by providing FHA-insured financing to mission-focused groups to buy or refinance and revitalize manufactured homes.

“This is just one of many ways HUD is empowering residents, industry leaders, and governments to expand access to innovative, affordable housing solutions, particularly in rural communities.”

As localities across the country continue to wrestle with pricing and inventory challenges, manufactured housing is seen as a potential solution to both problems. But some manufactured housing communities have also been threatened by outside forces that purchase them and raise prices beyond the residents’ affordability ranges, such as one such instance documented by an NPR affiliate in the Seattle area.

Through the FHA-sponsored program, however, residents of such communities will have a potential tool to help finance the acquisition of their communities, according to HUD.

Certain “mission-focused entities,” including resident-owned manufactured home communities, cooperatives, nonprofit entities, state and local governments, and Indian tribes “will be eligible to use this program to finance the acquisition of or to improve existing communities, including making updates to common area resources and helping to maintain rent affordability.”

This program aims to provide “an alternative to purchase of these communities by private equity funds and similar financial investors, whose track record reportedly includes unaffordable rent increases, failure to invest in community infrastructure, and regulations that don’t respect the community’s culture,” HUD stated.

HUD estimates that there could be about 5,000 individual and family beneficiaries of this program over the next five years based on the average community size. The new program will leverage FHA’s existing 223(f) program for multifamily homes, “which will now provide permanent mortgage financing for manufactured home communities that may have previously been ineligible, and for previously ineligible manufactured home cooperative borrowers to be eligible to acquire and obtain financing for existing communities.”

The program complements another recent manufactured housing initiative from the department. The Preservation and Reinvestment Initiative for Community Enhancement (PRICE) program offers grants to “support the preservation and revitalization of manufactured housing communities,” HUD explained.

PRICE grants can be used for “the replacement of dilapidated homes, assistance for homeowners such as repairs and accessibility modifications, mitigation and resilience upgrades, improvement of infrastructure such as stormwater systems or utilities, housing services including eviction prevention, and planning activities,” according to an announcement earlier this year by the White House.