Freddie Mac will finance loans for manufactured homes

Government-backed mortgage servicing organization Freddie Mac says it will begin financing loans for manufactured housing, in an attempt to make those homes more affordable to buyers.

Freddie Mac said in a statement that the idea is to run a two year pilot program called CHOICEHome, which will provide financing in the form of a traditional mortgage to manufactured homes with certain features. These will include permanent and pitched roofs, and also energy-saving features such as such as Energy Star Qualified Low-E windows, programmable thermostats, and minimum insulation values.

The manufactured homes, which are those buildings that are pre-assembled in factories before being assembled on site, will need to meet Freddie Mac’s specifications before qualifying for eligibility in the program. Those that do will receive a CHOICEHome certification as well as CHOICEHome financing.

Freddie Mac also said its HomeOne and Home Possible loan programs will now be applied to manufactured homes. Appraisers will also be able to use site-built homes as a comparable valuation.

“Today’s manufactured homes can deliver outstanding quality at prices that are up to 50 percent less per square foot than conventional site-built homes,” Freddie Mac said in a statement. “These savings can enable more Americans to own their own home, even in the face of an ever-widening housing affordability gap.”

Freddie Mac said that currently, over 22 million American families reside in manufactured homes. However, Mike Dawson, vice president of single-family affordable lending strategy and policy at Freddie Mac, said he expects that number to grow.

“There’s an opportunity for factory-built homes to address the housing supply shortage and quality housing overall,” Dawson said. “This new generation of manufactured housing might just be the best option for first-time home buyers, millennials, and empty-nesters looking to downsize.”