Fannie Mae and Freddie Mac to Purchase Manufactured Housing Loans
It may not happen tomorrow, but the Federal Housing Finance Agency finally put the needs of the American people first, persuading Fannie Mae and Freddie Mac to step up and finally begin purchasing loans for manufactured housing, according to the National Mortgage News.
“The agency finalized its rule to mandate a “duty to serve” for the government-sponsored enterprises (GSE) that includes incentives to enter that market, creating a pilot program under which they receive credit for purchasing manufactured homes secured by real estate.”
Welcoming the long-awaited modification with open arms, the chairman of the financial services division of the Manufactured Housing Institute, Richard Ernst noted:
“Anything the agencies can do toward the purchase of manufactured housing loans, including chattel loans, will do a great deal to help solve that crisis.”
Frustrated the FHFA were dragging their feet on such a critical topic, the Manufactured Housing Institute views the pilot program as a great jumping off point.
“We recognize that the GSEs need time to work through risk and operational issues,” said Lesli Gooch, the Manufactured Housing Institute’s senior vice president for government affairs. The rule “accomplishes the goal of encouraging the GSEs into the chattel lending market and allows for the development of a full and robust secondary market for chattel loans in the near future.”
Chattel Loans
Cognizant of the fact that chattel loans account for almost 70% of all manufactured home purchases in today’s market, many in the manufactured housing community were ecstatic. Applauding the final ruling, the community gives credit to the GSE for their research and development efforts on chattel lending for manufactured housing loans that are not titled as real estate loans.
Blanket Loans
Also on tap for some much-needed help, the ‘Final Rule’ allows the GSE to buy mortgages secured by manufactured housing communities – a.k.a. “blanket loans.” Until this much-needed change, the GSEs have generally focused on only financing high-end manufactured housing communities that cater to retired persons.
No longer restricted to only “high-end manufactured housing communities,” the GSE will be encouraged to provide loans for residents those within mission-driven communities or that are owned by organizations such as nonprofits and public housing authorities.
Doug Ryan, executive director of the Center for Economic Development, believes Fannie and Freddie will be able to purchase blanket loans sooner than chattel loans. “Blanket loans could take off faster,” Ryan said in an interview. “This would help residents buy their properties and preserve affordable housing.”
Giving the government-sponsored enterprises some much-needed credit for their support of affordable housing, Fannie and Freddie will receive credit for supporting housing in high-needs rural regions.
According to the “duty to serve” rule, Fannie and Freddie are strongly encouraged to invest in low-income housing tax credits again, something they’ve been reticent to do since being placed in conservatorship nine years ago.
