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Michigan Community Reimagined

By
Patrick Revere
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summerhill village manufactured home community mt pleasant mi four leaf properties
Summerhill Village in Mt. Pleasant, Mich.

Summerhill Village Community in Mt. Pleasant, Mich., has been redeveloped and reintroduced to the area with the grand opening of a new community clubhouse and amenities center.

The community is owned by Four Leaf Properties, which since 2019 has been dedicated to the redevelopment, which included new homes, roads, and vital infrastructure. The vision for Summerhill is built around a high-quality, affordable lifestyle experience. With dozens of new residents and 100+ five-star reviews, the community is already a top choice for young families, singles and downsizers.

“The new clubhouse and recreational center is the crown jewel of FLP Life, our Four Leaf Properties resident lifestyle experience,” said Michael Callaghan, managing partner at Four Leaf Properties. “Great communities are built around great residents and those relationships grow through shared experiences and fun. We’ve invested and now Summerhill Village is a brand-new community like no other in the area. It’s with great pride that we open these facilities and continue offering new homes.”

Callaghan said the community’s first two phases have sold out, and the team currently is purchasing homes for the third phase.

The focal point of the reopening is a newly constructed 3,500-square-foot clubhouse built for community member events and activities that are free for Summerhill residents. Residents also can host private events at the facility at no charge.

Mt. Pleasant area charities and businesses may also choose to host events that are meaningful to residents, such as an adopt-a-pet event or health and fitness sessions.

Clubhouse and Amenity Center Details:

  • Beautiful gathering space with vaulted ceiling and skylights for parties and events
  • Flex space for classes (yoga, fitness, art, other)
  • Full kitchen
  • Coffee bar
  • Event lawn and patio area with professional landscaping
  • New playground
  • Outdoor seating and fire pit
  • Dog park

Four Leaf has been an owner, operator, and third-party manager of manufactured home communities since 2009.

Summerhill Village is tucked away and surrounded by trees. It has a country feel but is close to many metro conveniences, minutes from Soaring Eagle Casino and Resort, Central Michigan University, Mid-Michigan College, Pleasant Hills Golf Club, and Indian Hills shopping center. The cities of Alma, Saginaw, Midland, and Grand Rapids are short commutes from Summerhill.

Energy Department Delays New Manufactured Housing Standards

By
Patrick Revere
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DOE energy rules department of energy manufactured housing
The James E Forrestal Building, Washington, D.C. offices for the U.S. Department of Energy.

The U.S. Department of Energy (DOE) has said it will delay the date of compliance for new manufactured home energy standards by 60 days after final standards are determined.

Previously, DOE had a May 31 deadline for enforcing the new standards.

The Manufactured Housing Institute moved its members to petition DOE for relief on the pending standards.

The DOE stated it gave substantial weight to comment letters from MHI, and home builders Cavco, and Skyline Champion, as well as numerous state and regional manufactured housing associations including Alabama, Arizona, Florida, Indiana, Michigan, Minnesota, Mississippi, Nevada, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Virginia, Washington (NHA), Western Manufactured Housing Communities Association (CA), and Wisconsin). MHI said more than 500 campaign form letters were sent to the DOE at the institute’s urging.

Most organizations that sent communications to the energy department conveyed that the new standards would be unworkable and that the changes would create a price increase in home construction that runs counter to the industry’s offering as the largest form of unsubsidized affordable housing in the U.S.

MHI said in its statement on news of the 60-day delay that work remains to be done, and that it expects the DOE to complete its process for single-section homes in the fourth quarter of 2023 at the earliest. The compliance date will be extended to July 1, 2025 for all other homes, it said.

“We must ensure that HUD is the sole authority over manufactured housing construction to ensure an issue with conflicting standards from different agencies never happens again,’ MHI stated in its letter to members.

In mid-May, Rep. David Kustoff, a Republican from Tennessee, and Rep. Terri Sewell, a Democrat from Alabama, introduced H.R. 3327, the Manufactured Housing Affordability and Energy Efficiency Act of 2023. The bipartisan legislation clarifies and reaffirms the longstanding role of HUD as the sole regulator of federal manufactured housing construction standards.

Congress must hear from all sectors of the manufactured housing industry about the urgent need to change the statute, MHI stated. The action by the DOE affirms the importance of HUD’s role as the sole regulator for manufactured housing. Participate in MHI’s call to action and check back with MHInsider to keep up on the latest news from Washington.

MHInsider is the leader in manufactured housing news and a product of MHVillage, the leading marketplace for manufactured homes.

Sam Zell, Visionary Real Estate Entrepreneur, Dies at 81

By
Patrick Revere
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sam zell els obit cre investor mogul speaks mhi congress 2006
Sam Zell, the late founder and chairman of ELS, speaks at the MHI Congress and Expo in 2006. Image by Lisa Stewart Photography.

Sam Zell, the renowned real estate magnate whose business acumen and pioneering spirit reshaped the landscape of the industry, passed away at the age of 81.

With an indomitable entrepreneurial spirit, Mr. Zell became a titan in the world of real estate, leaving an indelible print on the market and forever altering the dynamics of the sector.

He was born on Sept. 28, 1941, in Chicago, Ill. At a young age he exhibited a tenacious spirit and keen business acumen that set him apart from his peers. After graduating from the University of Michigan and later earning a law degree, Mr. Zell embarked on a remarkable journey that would define his legacy.

There was a breakthrough in the 1970s when Mr. Zell pioneered the concept of real estate investment trusts (REITs). Recognizing the potential for unlocking substantial value in underperforming properties, he founded Equity Group Investments, his investment firm, and spearheaded a wave of transformative acquisitions.

Mr. Zell founded Equity LifeStyle Properties, ELS, in 1984 and has been the chairman since 1995. His life story was detailed in his book “Am I Being Too Subtle”. In the book, he describes his introduction to manufactured housing and his pride in the accomplishments of the company.

“Sam leaves the real estate industry and the business community mourning the loss of a distinctive and generous mentor and an unparalleled leader who generously offered time and attention to develop those around him,” ELS President and CEO Marguerite Nader stated in a prepared company release. “He established an entrepreneurial culture focused on excellence, value creation, skilled and empowered teams and, most importantly, doing the right thing. He was a visionary who trusted his own sensibilities. Family was the cornerstone of Sam’s life. He will be missed as a husband, father, brother and grandfather.”

Mr. Zell’s ability to identify undervalued assets and implement innovative strategies catapulted him to the forefront of the commercial real estate sector.

Throughout his illustrious career, Mr. Zell’s influence extended far beyond the boundaries of real estate. With shrewd investments and bold decision-making, he amassed a vast portfolio spanning various sectors, from energy to logistics, cementing his reputation as a savvy businessman. He exhibited a knack for anticipating market trends and seizing opportunities.

Never one to shy away from risk, Mr. Zell’s move to acquire the Tribune Company made global headlines. Although the venture faced significant challenges, his unwavering resolve and tireless pursuit of success remained his most defining characteristic.

Beyond his professional achievements, Mr. Zell will be remembered for his charismatic personality and unwavering dedication to philanthropy. His philanthropic endeavors were as diverse as his business ventures, supporting causes including education, the arts, and health care. A passionate advocate for entrepreneurialism and fostering innovation, Mr. Zell established scholarships and mentorship programs to empower aspiring young minds.

Through the Zell Family Foundation, he led the sponsorship of several leading entrepreneurship programs, including programs at the University of Michigan’s Ross School of Business, Northwestern University’s Kellogg School of Management, Reichman University in Israel and the University of Pennsylvania’s Wharton School.

Mr. Zell’s direct nature, sense of humor, and pragmatism fueled his business approach and solidified his reputation as an iconic entrepreneur. His legacy will be the transformative power of strategic vision, determination, and a relentless pursuit of excellence.

Thomas Heneghan, former ELS CEO, has been serving as vice chairman and has been named to fill Mr. Zell’s role as chairman.

“Sam was uniquely comfortable being himself, even if it meant forging his own path,” Heneghan stated. “He was an incredible role model and made those around him better for the experience. His legacy speaks for itself and will echo well into the future.”

Donations in Mr. Zell’s name can be made to the Zell Entrepreneurship Program at the University of Michigan or the Zell Family Foundation.

MHInsider is the leader in manufactured housing news and is a product of MHVillage, the top marketplace for manufactured homes.

New Research Shows Manufactured Home Owners Are Very Satisfied

By
Dr. Lesli Gooch
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MHI consumer research manufactured home owners survey satisfaction
The top five features that attract potential buyers to manufactured homes were affordability, energy efficiency, additional space, stand-alone homes, and outdoor space.

Affordability Key Reason to Consider Manufactured Housing

New MHI Leadership Financing for Manufactured Housing
MHI CEO Dr. Lesli Gooch

The Manufactured Housing Institute’s new consumer survey shows satisfaction among manufactured home owners is trending upward, as is an interest in manufactured housing from younger demographics and those considering a home purchase in the next 12 months. The research details the manufactured home features that respondents find important, among them quality, affordability, amenities, and stand-alone homes that offer outdoor access. Overall, industry innovation is being noted and recognized and presents an opportunity to continue to manufacture quality homes that are clearly in demand.

Trifecta Research Group’s Senior Vice President of Client Solutions Linda MacKenzie thought 2018’s MHI survey response with a 78 percent satisfaction rate reported by manufactured home residents who bought new homes would be tough to top.

Updated 2023 data revealed that 85 percent of manufactured homeowners who purchased a new home reported that they are “extremely” or “very” satisfied with their home, a 7-point increase from 2018. A strong majority of manufactured homeowners (72 percent) said that they are likely to recommend manufactured homes to others.

Today’s manufactured home residents are younger, more educated, and more likely to include children.

At recent MHI meetings in Houston and Las Vegas, MacKenzie provided attendees with an overview of the consumer survey research findings. This research revisited MHI’s consumer research from 2018, and expanded upon the original study to include not only those who live in manufactured homes and communities, but also those consumers considering purchasing a manufactured home.

Key findings from the presentation include:

  • Manufactured home residents have very positive impressions of their experiences. Overall, 81 percent of manufactured homeowners report a “very positive” or “positive” overall feeling about their home.
  • For residents of land-lease communities, 72 percent of those in 55+ communities are extremely/very satisfied with their community; for all-age communities, satisfaction is 56 percent.
  • 82 percent of residents living in a 55+ community are extremely/very likely to recommend living in a manufactured home; and 69 percent of residents in all-age communities are likely to recommend living in a manufactured home.

The demographics of manufactured home residents shifted slightly from the 2018 survey. Today’s manufactured home residents are younger, more educated, and more likely to include children.

People living in manufactured homes are not only very satisfied with their homes, 72 percent of those surveyed said they were likely or extremely likely to recommend manufactured home living to others.

Residents in Today’s Communities

The amenities in today’s land-lease communities drove the residents’ overall community satisfaction rate of 59 percent. Pools, parks and playgrounds are the most common community amenities. In response to the growing appeal of community living to families with children, some communities offer additional amenities focused on these youngest residents, including play centers and after school programming.

Although the cost of living in a land-lease community has increased since 2018, 53 percent of residents said the increase was similar than comparable options in their area. More land-lease communities now include utilities such as water/sewage (58 percent), garbage (46 percent) and electricity (34 percent).

The Considerers

The survey also included people planning to buy a home in the next 12 months who were open to considering buying manufactured homes. These “considerers” were somewhat younger, more likely to be single and had more modest household incomes than current manufactured home residents.

They reported currently living in stand-alone homes and apartment or condos in multi-unit buildings. They said they felt positive or very positive (82 percent) about living in a manufactured home. The top factors they mentioned that drove their consideration were affordability and the ability to own their own home. Four in 10 said that manufactured homes have newer features than other types of homes they can afford to buy.

The top five features that attracted considerers to manufactured housing were affordability (70 percent), energy efficiency (53 percent), additional space (49 percent), stand-alone homes (46 percent), and outdoor space (45 percent).

The Vital Need for Chattel Lending

By
Contributed Content
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Personal property loans chattel lending manufactured homes ray leech

Personal Property Loans Are Increasingly Viable, Yet No More Attainable

ray leech DTS duty to serve plans home finance fannie freddie

By Raymond Leech

As the spring selling season hits its high point the housing market continues to face challenges. Higher interest rates are slowing sales, which is the intent, of course. However, the continued lack of affordable housing amid talk of a recession may turn away buyers to a degree that our current housing infrastructure may barely be able to handle.

Still, the manufactured housing industry may be a bright spot in the market.

Affordable housing is a critical issue because the country is millions of units short of demand. This being the case, there is growing consensus that business may expand compared to site-built homes.

Currently, the percentage of manufactured homes to site-built housing is about 11 percent. But there is some thought that percentage could increase this year, one driver being that the interest rates for chattel lending — a personal property loan often used for manufactured homes — is within two points of conventional mortgage rates, making the factory-built homes more competitive in the marketplace.  In past years, the spread has been double that, or more.

Regarding the supply of manufactured homes, there is also good news. Industry experts say that the previous backlog has been drastically reduced in nearly every market. HUD Code homes can be purchased and delivered in a few months.

Barriers To More Business

Hurdles remain when it comes to expanding growth for manufactured home units.

Tim Williams, the CEO of 21st Mortgage, said the biggest barrier of all to more manufactured home business is zoning issues. He noted that in Knoxville, Tenn., the home to his firm and Clayton Homes, local zoning laws prevent a manufactured housing unit from being set in the city. But, as Tim notes, it is a complicated issue.

But suppose someone had their home on a three-acre property and wanted to place a manufactured home on the property for their elderly parents to reside in. This scenario raises issues in the eyes of a lender. First, the home would be considered an investment property, and it is not attached to the real estate. To finance this unit requires a personal property or chattel loan. There are some lenders that may approve this transaction, but not many.  And right now, there is no secondary market for chattel loans.

Status of Chattel Financing

There may be changes to the chattel loan situation within a few years. Freddie Mac is exploring purchasing chattel loans as part of the Duty To Serve goals, updated last year. In the plan, Freddie Mac committed to purchasing from 1,500 to 2,500 chattel loans in 2024. They plan to complete a feasibility assessment of the requirements and processes needed to support chattel loan purchase, including underwriting, pricing, consumer protection, valuation and risk management. The big challenges they noted are a lack of lender standardization, no standard underwriting practices, and no consistent approach to assessing property values.

Accessory Dwelling Units and MH

In some areas of the country, especially California where there is a huge shortage of affordable housing, some jurisdictions are permitting accessory dwelling units or ADUs on a property. These are small independent living spaces that can be part of the home structure, for example, a mother-in-law suite over a garage, or independent of the main structure, such a small cottage on the property.  Since these are attached to the property, they can be financed through a cash out refinance with funds used to build the unit and tying it to the owner-occupied property.

The good news for MH is that Freddie Mac will purchase a mortgage secured by a 1-, 2- or 3-unit property that has a manufactured home ADU that meets the Guide requirements for both the manufactured home and the ADU.  So, in some areas of the country, there may be an opportunity for MH business in these situations.

As noted, 2023 could be a turbulent year in the housing industry. But there are hopeful signs that MH will continue to grow and make progress in addressing the affordable housing crisis in our country.

MHInsider is the leader in manufactured housing news and is a product of MHVillage, the largest marketplace for manufactured homes.

MHVillage Launches Appointment Scheduling Feature for Manufactured Housing

By
Patrick Revere
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manufactured mobile home sales appointment scheduler mhvillage tech
The new appointment scheduler for home sales is available for use now on MHVillage, the leading place to buy, rent, or sell mobile and manufactured homes.

MHVillage today launched its all-new appointment scheduling feature for manufactured home sellers, community owners, and service providers, enabling buyers to request appointments directly with sellers. 

This new feature is available beginning today on all home listings, community profiles, and service listing pages. 

“We’re constantly looking for new ways to innovate MHVillage and deliver new, exclusive experiences for our customers,” MHVillage Co-President and Chief Business Development Officer Darren Krolewski said. “This new tool will not only give buyers a new way to engage with the seller directly, but gives sellers the power to engage with high-conversion leads and ultimately close more deals.”

Once a buyer has requested an appointment using the new tool, the seller can message the buyer directly to confirm the appointment or propose an alternate time. Sellers can access their leads from this feature through their MHVillage Account Dashboard. 

This new tool also gives sellers the power to set their own schedule to more efficiently manage time, with options available to black out or expand availability during certain times of the day or week.

MHVillage first announced the feature at MHI’s Congress and Expo on April 19 along with a live demonstration for attendees. With the introduction of this new feature, MHVillage is the first and only website exclusively for buying and selling manufactured homes that offers an appointment schedule feature.

“This is something that we’ve been working on for months,” MHVillage Vice President of Customer Experience Dawn Highhouse said. “Giving buyers a brand new way to request an appointment to tour a home is just another way for us to give them even more tools to explore manufactured homes in 2023 and beyond.”


Visit MHVillage to see the new feature in action.

MHInsider is the leader in manufactured housing news and is a product of MHVillage, the premier marketplace for manufactured homes.

Clayton to Build All Residential Manufactured Homes to DOE Zero Energy Ready Home™ Specs

By
Patrick Revere
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Clayton Homes Sustainable Factory DOE Zero Energy Ready homes ceiling insulation
At the 2023 Berkshire Hathaway Shareholders Meeting, Clayton is showcasing a home built to the DOE Zero Energy Ready Home specifications.

Clayton, the largest builder in the manufactured housing industry, is moving toward constructing all new residential manufactured homes to meet the Department of Energy’s Zero Energy Ready Home specifications by Jan. 1.

These solar-ready homes, available to order in July 2023, will include enhanced energy efficiency features that significantly reduce energy costs for homeowners. Leadership at Clayton also said the effort furthers the company’s commitment to broader sustainability goals.

“We are driven to make energy efficient homes an attainable option for home buyers across the country,” Clayton CEO Kevin Clayton said. “Energy efficiency is crucial for lowering monthly utility costs and maintaining long-term affordability.”

DOE Zero Energy Ready Homes are built inside a DOE-certified building facility. They are designed with energy-efficient features that can offset up to 100 percent of the home’s energy use when combined with a renewable energy system, such as solar panels. Every DOE Zero Energy Ready Home must meet rigorous efficiency requirements, making it less costly for homeowners if they choose to add solar.

All Clayton DOE Zero Energy Ready Homes will be equipped with enhanced energy-efficient features including:

  • Rheem ® hybrid heat pump water heater
  • Low-E windows with argon gas
  • SmartComfort ® by Carrier high-efficiency heat pump or gas furnace
  • ENERGY STAR ® certified appliances
  • LED lighting throughout
  • An ecobee ® smart thermostat,
  • and additional insulation.

To deliver additional value to the consumer, Clayton is reinvesting the credits received for building the certified homes to offset the cost of materials, the company stated.

Clayton plans to have 39 manufactured home building facilities throughout the U.S. DOE certified and building homes to DOE Zero Energy Ready Home specifications.

The milestone toward net zero energy is the latest in Clayton’s sustainability efforts.

In 2014, Clayton began working toward ISO® 14001:2015, the gold standard of environmental management systems, across all of its home building and supply facilities. Clayton said the program has resulted in a significant reduction of waste in operations through improved resource management and landfill diversion efforts. Last year alone, Clayton diverted more than 100 million pounds of waste from landfills through recycling efforts at their home building and supply facilities.

Clayton’s national sustainability efforts also include reducing emissions through practices such as fleet modernization and increased investment in solar power at its home office and building facilities near Knoxville. In addition, Clayton, in partnership with the Arbor Day Foundation ®, is committed to planting 4.47 million native trees by 2025 to help restore vital forest ecosystems across the country.

The company was founded in 1956 and today is one of the largest builders in the country, offering manufactured homes — including CrossMod ® homes, — modular homes, apartments, site-built homes, tiny homes, college dormitories, and military barracks.

MHInsider is the leader in manufactured housing news and is a product of MHVillage, the largest marketplace to buy, sell, or rent a mobile or manufactured home.

All Eyes on the Federal Reserve Amid Bank Failures, Inflation

By
Patrick Revere
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federal reserve board hike interest rates again
Fed Chairman Jerome Powell takes questions from the media following committee meetings and his press statement.

The Federal Reserve meeting for concludes May 3 with another rate hike, up 0.25 points, as many analysts and market watchers anticipated.

The central banks are keeping an eye on inflation, which has come down from a peak of 9 percent to about 4 percent. Still, there is concern about a recession.

Fed Chairman Jerome Powell said in his post-meeting press conference that the financial sector is “broadly improved” from early March, and that “It will take time for monetary restraint to be realized.”

“We at the Fed will do everything we can to achieve our workforce and monetary goals,” he said.

The Fed’s goal in raising rates is to pinch spending, slow the infusion of cash in the economy, and create what they term a “soft landing” with inflation down to an ideal 2 percent, avoiding recession. Some analysts had anticipated a stay in interest rates, which tops 5 percent with the latest move, given the recent collapse of three major lending institutions.

Silicon Valley Bank was rescued from failure by the FDIC on March 10, and New York regulators stepped in on Signature Bank two days later. The most recent failure, of First Republic Bank in late April, resulted in its sale to JP Morgan Chase.

“Our government invited us and others to step up, and we did,” JPMorgan Chase CEO Jamie Dimon said in a statement. “This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise.”

More regional bank stocks took a hit in early week trading, including PacWest Bancorp and Western Alliance Bancorp. Both institutions were halted for brief times amid volatile conditions, but have rebounded well in anticipation of the Fed’s move.

The FOMC in a statement following the meeting, noted “In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.”

The impact of increased borrowing costs is becoming evident. In March, the unemployment rate in the United States was 3.5 percent. However, new data released on May 2 shows that job openings that month fell to their lowest level since May 2021, and layoffs rose to the highest level since December 2020 by nearly 250,000 to reach 1.8 million.

Add to that the ongoing debt ceiling negotiations between the White House, Congress, and policymakers, which surely is a matter on the minds of the central banks. Powell said there was discussion about the debt ceiling during FOCM meetings, with the realization that the Fed runs independently of administration and lawmakers and has no impact on any outcome on the Capitol.

First Trust Advisors Chief Economist Brian Wesbury said, in part, in a newsletter to subscribers “We think inflation will remain more elevated than the Fed projects and that the Fed will likely raise rates at least one more time this cycle. In addition, we believe the process for starting rate cuts is further off than the futures market suggests. Chairman Powell himself, at the post-meeting press conference, poured cold water on the prospects of rate cuts, assuming the economy develops as the Fed expects.”

MHInsider is the leader in manufactured housing news and is a product of MHVillage, the top marketplace for mobile and manufactured homes.

JLT Market Reports for Florida Manufactured Home Communities Available Now

By
Patrick Revere
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encore resort els mhc kissimmee fla market reports jlt tropical palms
Tropical Palms, a Kissimmee, Fla., manufactured home community under the Encore brand from ELS.

Datacomp has published the May 2023 JLT Market Reports for the state of Florida, the largest market area for manufactured homes in the United States. JLT Market Reports provide detailed research and information on communities in 187 major housing markets nationwide. These include the latest pricing trends and statistics, marketing programs, and a variety of other useful management insights.

Datacomp publishes the JLT Market Reports and is the nation’s #1 provider of market data for the manufactured housing industry. JLT Market Reports are recognized as the industry standard for manufactured home community market analysis.

May 2023 manufactured housing market data published in JLT Market Reports for Florida includes information on 779 “All ages” and “55+” manufactured home communities.

Altogether, the reports on Florida manufactured home communities include data representations for 209,607 homesites.

More About JLT Market Reports

Each JLT manufactured home community report from Datacomp has detailed information about investment-grade communities in the major markets. The detailed information includes:

  • Number of homesites
  • Occupancy rates
  • Average community rents, and increases
  • Community amenities
  • Vacant lots
  • Repossessed and inventoried homes, and much more

JLT Market Reports also include management insights on communities by the number of homesites, occupancy rate, home types, and other important detail. Established reports show trends in each market with a comparison of May 2023 reports to May 2022, as well as a historical recap of community information from 1996 to the present date in most markets.

The May 2023 JLT Market Reports for Florida manufactured home communities are available for purchase and immediate download online at the Datacomp JLT Market Report website, or they may be ordered by phone in electronic or printed editions at (800) 588-5426.

Each fully updated report for mobile home communities is a comprehensive look at investment-grade properties within a market, enabling owners and managers, lenders, appraisers, brokers, and other organizations to effectively benchmark those communities and make informed business decisions.

FHA Asks Public for Input on Proposed ADU Changes

By
Patrick Revere
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adu input fha manufactured housing washington dc ibs vegas 23
Attendees at the International Builder's Show in January 2023 tour an ADU on display in the outdoor village at the Las Vegas Convention Center.

The Federal Housing Administration has released a draft update of guidelines for insuring mortgages on single-family homes with accessory dwelling units.

The FHA is asking for feedback on proposed changes.

The proposal aims to provide greater flexibility in calculating market rent and incorporating ADU rental income into qualification for FHA-insured mortgage financing. Finalizing these updates would enable more borrowers, including those seeking 203(k) renovation loans, to qualify for FHA financing for ADU properties. The proposal aligns with the Biden-Harris Administration’s Housing Supply Action Plan to address housing shortages and increase affordability.

“FHA is at the forefront of the Administration’s efforts to increase housing supply and affordability. With housing supply constraints and ADUs gaining popularity nationwide, an updated policy has the potential to expand opportunities for low- and moderate-income homeowners to benefit from the wealth-building potential of ADUs while supporting the affordable housing needs of their communities,” Julia Gordon, Federal Housing Commissioner said.

ADUs are small units of housing constructed inside, attached to, or on the same property as a primary residence. While FHA programs currently allow for the purchase, rehabilitation, or refinance of properties that include ADUs, rental income from ADUs cannot be included in the borrower’s qualifying income. FHA is accepting feedback on the full set of proposals contained in a draft Mortgagee Letter until April 27, 2023, on its Single Family Housing Drafting Table web page.

MHInsider is the leader in manufactured housing news and is a product of MHVillage, the largest marketplace for manufactured housing.

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