By Nena Dial
In an effort to increase the availability of financing for affordable homes, we recently announced that Freddie Mac has joined Fannie Mae to issue a unified set of eligibility requirements for conventional mortgages secured by modern, factory-built homes. Millions of families are homeowners because of manufactured housing, and Freddie Mac is committed to providing innovative and flexible financing solutions to support this market.
This recent move reflects an ongoing commitment to addressing the nation’s housing affordability crisis and follows Freddie Mac’s expansion of CHOICEHome® mortgages last summer to include modern single-section factory-built homes. Manufactured homes have historically been one of the most cost-effective pathways to homeownership, particularly for first-time buyers and those in rural communities.
We aim to foster greater confidence in the quality of manufactured housing through education and standardization intended to help streamline the lending process and reduce confusion for homebuilders, developers, lenders, and borrowers.
This education includes bolstering widespread recognition that CHOICEHome mortgages are appraised using similar methods as site-built homes. CHOICEHome brings conventional loan financing to modern factory-built homes that exceed federal standards called for by the U.S. Department of Housing and Urban Development.
Freddie Mac’s CHOICEHome and Fannie Mae’s MH Advantage® will now align on home specifications and features to be eligible, an important step in the evolution of manufactured housing financing within the conventional mortgage market. As lender participation and investor interest grow, a more consistent Government Sponsored Enterprise (GSE) framework helps support efficient execution and broader adoption of modern factory-built manufactured homes.
The collaboration among the GSEs and our regulator seeks to open doors for more families to achieve the American Dream. Freddie Mac and Fannie Mae play a critical role in the U.S. housing finance system, and by streamlining the process for lenders and investors through aligned home specification eligibility requirements, we can encourage broader acceptance of factory-built homes as a mainstream housing option.
Freddie Mac’s CHOICEHome mortgage offering includes both multi-section and single-section factory-built homes that meet the aligned specifications with a 3 percent down payment option for qualified borrowers. Taken together, these updates underscore a simple message for lenders and builders: Freddie Mac’s offerings are available for manufactured homes.
Freddie Mac ensures that CHOICEHome-financed manufactured homes meet specific construction standards, which include features such as permanent foundations, energy-efficient designs, pitched roofs, attached garages, and enhanced durability and comfort of the home. These features also make for easier integration with existing rural and urban neighborhoods that include site-built homes.
We are pleased to expand our CHOICEHome mortgage offering to reach and educate more homebuyers on the benefits of manufactured homes. Following research showing decades of decline in starter home construction, factory-built homes can help address both supply and affordability issues for not only the first-time homebuyer, but also downsizing households, retirees, workforce housing, and more.
Modern factory-built homes combine the advantages of factory- and site-built construction to offer a housing option that is typically more affordable than traditional site-built construction. These homes have the potential to provide housing at less than half the price of traditional site-built construction. The additional supply will be pivotal for young families, downsizing households, and other buyers looking for affordable homeownership options. Freddie Mac research shows that roughly 20 percent of Gen Z and Millennial potential homebuyers are very likely to consider buying a manufactured home.
The mean price of the newly accepted single-section home is around $200,000, including land in most markets, while the traditional single-family site-built home can, on average, exceed $500,000. For industry professionals, these pricing dynamics underscore the importance of manufactured housing as a solution for families seeking attainable homeownership.
Renewed interest in manufactured housing is growing as communities seek scalable ways to expand attainable homeownership and relieve housing supply constraints across a broad range of buyers. Factory-built homes are engineered to meet rigorous standards, and advances in design, materials, weather resiliency, and energy efficiency have made them increasingly attractive to buyers seeking quality and value. As land and construction costs continue to rise, manufactured homes offer a practical alternative without sacrificing comfort or durability.
As the manufactured home industry evolves, Freddie Mac will continue to collaborate with builders, developers, lenders, and local housing intermediaries to ensure that financing options keep pace with innovations in home design and construction. The goal is not only to expand access to affordable housing but also to foster thriving communities where manufactured homes are valued as a vital part of the housing landscape.
Nena Dial is a senior director of single-family affordable lending at Freddie Mac. She leads the strategic planning and execution necessary to achieve Freddie Mac’s housing goals and Duty to Serve plan objectives.
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