Manufactured Housing: The Low Inventory Solution?

Down Payment Resource (DPR), an Atlanta-based database for homebuyer programs, has released its Q4 2020 Homeownership Program Index (HPI), which finds that the number of total programs is 2,305 nationwide, and 81.4% of these programs currently have funds available for eligible homebuyers. One change of significance noted by DPR in Q4 was a 3% rise in the number of programs that allow for manufactured housing. As low inventory and price increases continue to restrict the options of many first-time homebuyers, manufactured homes may be an affordable option.

DPR communicates with 1,129 program administrators to track and update the country’s homeownership programs, including down payment and closing cost programs, Mortgage Credit Certificates (MCCs), affordable first mortgages, and more.

That upward trend in eligibility for manufactured homes may signal relief for an already hamstrung market low in inventory. The Manufactured Housing Institute reports that 22 million people are currently living in manufactured homes, representing 10% of all new single-family home starts in 2020. In terms of square footage, the average manufactured home came in at $55 per square foot versus $114 per square foot for site-built homes.

Fannie Mae and Freddie Mac are lending a hand in the manufactured housing sector through their Duty to Serve plans, which facilitate a secondary market for mortgages on housing for very low-, low-, and moderate-income families in three underserved markets: manufactured housing, affordable housing preservation, and rural housing.

And while obstacles remain in the path of first-time homebuyers, such as being outbid, a recent study by Clever Real Estate found that while the millennial market, for example, is to buy, they still cannot afford the general 20% down payment required. According to DPR’s Homeownership Program Index, nearly 26% of all homeownership programs in its database allow for manufactured housing, up 3% since last reported.

The HPI also found a decline in the number of down payment assistance programs that may have been temporarily suspended due to the pandemic. Currently, 1.6% of programs are temporarily suspended, a 0.4% decrease from the previous HPI.

Click here for more on DPR's HPI report.