Fannie Mae MH Advantage Program Leading the Way in Providing Access to Quality Affordable Housing Across America
As the standards for design, construction, and installation of manufactured homes evolved, so have the construction materials and methods. These have improved the interior and exterior appearance of a new generation of manufactured homes, breaking barriers to market acceptance in certain market segments. Changes in technology and manufacturing processes have also made manufactured homes more energy efficient and environmentally friendly. Furthermore, modern multi-section manufactured homes provide increased living space and a footprint and proportions similar to site-built homes.
The features of today’s manufactured homes appeal to a broad range of homebuyers, which supports a more diverse buyer demographic. The appeal of modern designs and materials combined with various financing options have opened new markets to manufactured housing.
In legislation passed by Congress several years ago, GSEs (Government Sponsored Enterprises)* were mandated by the Duty To Serve (DTS) HUD Code manufactured housing that would place manufactured housing on an equal playing field with site-built homes.
*(Note: A government-sponsored enterprise is a quasi-government established entity to enhance the flow of credit to specific sectors of the American economy. Neither Fannie Mae nor Freddie Mac, also a GSE, lend money to the public directly; instead, they guarantee third-party loans and purchase loans in the secondary market, ensuring liquidity. Both are privately held public financial corporations).
In 2017-18 Fannie Mae engaged with manufactured home producers to develop the MH Advantage program to offer a new affordable housing option that would place manufactured homes on an equal playing field with site-built homes. The MH Advantage financing program hopefully is a step towards fulfilling that heretofore seemingly aspirational mandate.
What is MH Advantage?
MH Advantage is a mortgage option from Fannie Mae that offers affordable, low-down payment financing for manufactured homes that blend seamlessly into neighborhoods. MH Advantage eligible homes are designed with higher pitched rooflines, larger eaves, and lower profile foundations not traditionally found in standard manufactured homes. Additional features include attractive durable siding materials, roof dormers, covered porches, garages, and/or carports. Interior finishes are similar to those seen in new site-built homes, including kitchen cabinets with fronts of solid wood or veneered wood, drywall rather than vinyl panels, and higher-end materials for counters, sinks, and tubs.
MH Advantage financing expands access to homeownership. It offers conventional financing terms traditionally reserved for site-built homes, including down payments as low as 3% and mortgage insurance coverage similar to site-built homes. Interest rates are comparable to those for site-built home
Because MH Advantage homes must be titled as real property and are factory-built manufactured homes, they remain subject to HUD Manufactured Housing requirements and must be permanently affixed to the land.
MH Advantage homes have a sticker placed near the HUD Data Plate at the factory. The sticker is placed on the home by the manufacturer, indicating that the home meets the specific construction criteria for MH Advantage. The HUD plate and sticker are usually placed in an area where they are not likely to be removed. The retail sales agreement should also indicate that the home is qualified for MH Advantage financing.
