FAQ: Manufactured Housing
Manufactured housing (MH) is an increasingly important segment of affordable housing and an exciting homeownership opportunity for borrowers who might think they’re unable to purchase a home. Fannie Mae is active in MH, purchasing eligible MH loans and providing new financing options through MH Advantage. We’ve compiled some of our most common questions below.
FAQs updated January 3, 2022
What items are allowed to be included in the sales price for a manufactured home?
The sales price may include the price of the manufactured home unit and any bona fide and documented costs for transportation, site preparation, and dwelling installation at the site. The purchase of any personal property (non-realty) items may not be included.
Does Fannie Mae require all MH loans to be secured by a single lien on the land and manufactured home together?
No. Although we prefer that the MH loan be a single real estate transaction because that is more familiar to lenders and provides less opportunity for error (particularly in the event of foreclosure), we do not believe that the single real estate lien is the only way to protect our interests. For loans secured by MH properties in states that do not legally recognize single liens for land and a manufactured home, we accept loans documented by a lien on the land evidenced by a mortgage or deed of trust and by a real estate lien on the manufactured home evidenced on the certificate of title (or other document).
What is MH Advantage and how is it different from Fannie Mae standard manufactured housing guidelines?
MH Advantage properties are built to meet specific construction, architectural, and energy efficiency specifications. Borrowers obtaining financing on a home that complies with the MH Advantage eligibility requirements may benefit from financing flexibilities not available under standard manufactured housing guidelines.
Flexibilities include higher loan to value limits (for owner occupied primary residences only), standard mortgage insurance coverage requirements, and reduced loan level price adjustments. Since MH Advantage homes must be titled as real property and are factory-built manufactured homes, they remain subject to the HUD Manufactured Housing requirements and must be permanently affixed to the land.
MH Advantage homes include features such as garages, carports, and dormers, giving an appearance that is more similar to traditional site-built homes.
May borrowers count trade-in equity toward the down payment requirement?
Yes, trade equity from the borrower’s existing manufactured home may be used to help meet the down payment requirement.
If the borrower has owned the home being traded for more than one year preceding the date of the mortgage application, the maximum equity contribution from the traded manufactured home is 90 percent of the retail value for the traded manufactured home, based on the N.A.D.A. Manufactured Housing Appraisal Guide®, less the sum of any outstanding indebtedness on the home and any costs associated with the removal of the home.
If the borrower has owned the home being traded for less than one year preceding the date of the mortgage application, the maximum equity contribution from the traded manufactured home is the lower of 90 percent of the retail value for the traded manufactured home, based on the N.A.D.A. Manufactured Housing Appraisal Guide, or the lowest price at which the home was sold during that 12-month period less the sum of any outstanding indebtedness on the home and any costs associated with the removal of the home.
Fannie Mae requires a lien search in the appropriate real property and personal property records to verify ownership and determine whether there are any existing liens on the manufactured home and lot (or liens if the home and lot were encumbered by separate liens) for the trade-in manufactured home. The seller of the new manufactured home must provide proof of title transfer and satisfaction of any existing liens for which the borrower had been liable on the traded manufactured home.
Can borrowers refinance MH Advantage loans and still access the MH Advantage flexibilities?
Yes, the MH Advantage flexibilities are available for refinances as well as for purchase transactions.
To qualify for MH Advantage financing, the lender will need to validate eligibility by photographic evidence of the presence of the MH Advantage sticker, and driveway and sidewalk, as part of the appraisal. As long as the home retains the MH Advantage sticker and site features, borrowers and future owners may benefit from the flexible financing.