In an effort to combat a shrinking affordable housing stock, Fannie Mae’s Duty to Serve initiative is developing solutions including manufactured housing, affordable housing preservation, and rural housing. According to Fannie Mae, the initiative is looking at new ways to consider Manufactured Housing Communities (MHCs), as a reliable source of affordable housing for homeowners and renters in suburban and rural locations across the country.
According to Jose Villareal, Manager, Multifamily MHC Housing Development at Fannie Mae, the Duty to Serve plan includes new strategies to support non-traditional owners of MHCs.
Residents of MHCs make up 80% of Area Median Income (AMI) or less, and with land values rising in many suburban areas, MHCs have begun to consider selling. The problem is, when sold, these MHCs are often converted into traditional apartments, reducing the number of affordable housing options.
“The problem worsens in rural areas where MHCs are older and in need of upgrades – reinvestment in the properties that owners are often reluctant to finance,” said Villareal in a statement.
“Non-traditional and non-profit ownership structures are a useful option, which allows non-profits to purchase and preserve MHCs and with a stronger incentive to complete necessary repairs in rural communities,” Villareal added.
Additionally, Fannie Mae is testing a product enhancement specifically for resident-owned communities, as well as non-profit communities. Part of Fannie Mae’s product enhancements include guaranty fee discount of 7.5 basis points and a servicing fee discount of 7.5 basis points for non-profit owners, including up to $10,000 in reimbursement for third-party reports such as appraisals and environmental assessments.
Resident-owned communities, Fannie Mae notes, provide stability other other options cannot, as homeowners have more of an opportunity to better manage and control MHC costs.
“Fannie Mae has been a leading source of liquidity for manufactured housing transactions since 2000,” Villareal said. “As part of our Duty to Serve plan, we are continuing to develop new strategies to support manufactured housing communities and the people who live there.”