Inside Fannie Mae’s Manufactured Housing Initiatives
Guest:
Zach Ragland
Episode 35 | The Construction Lending Podcast
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Gain insights from Fannie Mae’s Affordable Lending Manager, Zach Ragland, on the MH Advantage program and the potential of manufactured housing to meet affordable housing needs. Discover the efficiencies of off-site construction, learn how Fannie Mae is addressing zoning and titling issues, and explore the opportunity to expand your portfolio by financing manufactured homes. This episode will equip you with the knowledge to identify market opportunities and re-evaluate lending policies to provide more affordable solutions to potential homebuyers.
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Questions Answered
- What is MH Advantage and how does it differentiate from traditional stick-built homes?
- What are common misconceptions about manufactured housing, and what are ways to address them?
- What zoning challenges impede the growth of manufactured housing, and what are some potential solutions?
- How could legislative changes benefit the expansion of manufactured housing?
- How does Fannie Mae support lenders and developers in identifying market fit for manufactured housing? What resources are available for this purpose?
Episode Recap
How Fannie Mae’s Manufactured Housing Efforts are Tackling Affordable Housing Challenges
The U.S. housing market faces a severe affordability crisis, demanding innovative solutions. On this episode of The Construction Lending Podcast, Zach Ragland, Affordable Lending Manager at Fannie Mae, talks about how manufactured housing is being used to address this challenge. Ragland discussed programs like MH Advantage and the integration of manufactured homes into community land trusts (CLTs), offering insights into how these initiatives can reshape housing.
Understanding Manufactured Housing
Manufactured homes are built in factories and transported to their final location. This off-site construction offers several advantages, including faster construction times, cost savings for developers and buyers, and the ability to create quality, attainable housing. Fannie Mae sees manufactured housing as crucial for addressing affordability, particularly for underserved communities. Ragland emphasized the speed and quality of manufactured homes, highlighting the controlled factory environment and rigorous quality checks.
MH Advantage
MH Advantage is a Fannie Mae program designed for high-quality manufactured homes that resemble traditional houses. It allows these homes to be appraised and compared to site-built homes, simplifying financing. While launched in 2018, MH Advantage is gaining traction as awareness increases. Ragland shared examples of successful MH Advantage communities, like Kilpatrick Woods in Maryland, demonstrating how these homes can seamlessly integrate into neighborhoods and challenge outdated stigmas.
Overcoming Challenges with Zoning and Regulations
Zoning laws pose a significant obstacle to broader adoption of manufactured housing. Many areas have restrictive zoning that excludes these homes. Ragland stressed the need to update these laws and encourage municipalities to embrace modern manufactured housing. He also highlighted legislative wins, such as recent zoning changes in Maryland that allow manufactured homes in single-family zones.
Preserving Affordability
Community Land Trusts (CLTs) are non-profits that own land and sell homes on it to income-eligible buyers, ensuring long-term affordability. Fannie Mae now includes manufactured homes in CLTs. Ragland cited examples from Detroit where CLTs are using manufactured homes to create stable, affordable communities, challenging negative perceptions. Integrating manufactured housing into CLTs helps ensure long-term affordability by keeping land costs under control.
Raising Awareness and Changing Perceptions
Increased awareness is key to overcoming barriers to manufactured housing. Ragland urged stakeholders to engage with developers and tour these homes to dispel myths. Today’s manufactured homes are modern, high-quality, and very different from older “mobile homes.” He encouraged lenders, developers, and community leaders to revisit their policies and consider manufactured housing’s potential, referencing Fannie Mae’s website as a valuable resource.
The Future of Manufactured Housing
Scaling up production is essential to increasing the impact of manufactured homes. Ragland noted that while current production is good, it needs to increase. He emphasized the role of technology and innovation in improving quality and efficiency. Manufacturers are ready to increase production to meet growing demand.
The Bottom Line
Ragland highlighted the transformative potential of manufactured housing. Through programs like MH Advantage and initiatives with CLTs, Fannie Mae is working toward more accessible and affordable housing. Overcoming zoning restrictions and raising awareness are key challenges, but the opportunities are significant. The call to action is clear: stakeholders need to engage with these solutions, revisit policies, and proactively create more inclusive and affordable housing. By embracing off-site construction and addressing barriers, manufactured housing can play a central role in solving the housing affordability crisis.
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