Ginnie Mae, in coordination with the Federal Housing Administration (FHA), has published a Request for Input (RFI) [1] on enhancements to the Title I Manufactured Home Loan Program [2]. The RFI follows publication earlier this year of the Biden-Harris “Housing Supply Action Plan [3]” and the U.S. Department of Housing & Urban Development’s (HUD) FY 2022-2026 Strategic Plan [4], each of which identifies manufactured housing as an important means of increasing the supply of affordable housing.
Following the FHA’s modernization of the Title I Manufactured Home Loan Program in 2009, Ginnie Mae reintroduced its Manufactured Housing Program, thus allowing loans under the revised program to be securitized.
The Biden Administration’s Housing Supply Action Plan outlined five major areas to address the nation’s housing inventory crisis by:
- Rewarding jurisdictions that have reformed zoning and land-use policies with higher scores in certain federal grant processes, for the first time at scale.
- Deploying new financing mechanisms to build and preserve more housing where financing gaps currently exist: manufactured housing (including with chattel loans that the majority of manufactured housing purchasers rely on), accessory dwelling units (ADUs), two- to four-unit properties, and smaller multifamily buildings.
- Expanding and improving existing forms of federal financing, including for affordable multifamily development and preservation. This includes making Construction to Permanent loans more widely available by exploring the feasibility of Fannie Mae purchase of these loans; promoting the use of state, local, and Tribal government COVID-19 recovery funds to expand affordable housing supply; and announcing reforms to the Low Income Housing Tax Credit (LIHTC), which provides credits to private investors developing affordable rental housing, and the HOME Investment Partnerships Program (HOME), which provides grants to states and localities that communities use to fund a wide range of housing activities.
- Ensuring that more government-owned supply of homes and other housing goes to owners who will live in them–or non-profits who will rehab them–not large institutional investors.
- Working with the private sector to address supply chain challenges and improve building techniques to finish construction in 2022 on the most new homes in any year since 2006.
Ginnie Mae’s RFI seeks input on how both the FHA Title I manufactured housing program and the Ginnie Mae securitization program that supports it can be made more competitive, and references specific program features such as loan limits or lender eligibility requirements. It also seeks commentary on how proposed changes would improve the financing market for manufactured housing.
In particular, Ginnie Mae is asking respondents to answer the following:
Regarding the current state of the marketplace
- What information can you provide about current manufactured housing financing options and structures? What are the factors that drive the status quo?
- Describe the optimum role for government programs in the financing of manufactured housing sales.
Regarding FHA Title I
- What features of the current Title I manufactured housing program have made it uncompetitive in today’s market?
- If FHA were to modify the current loan limit(s) for manufactured housing, what would be the desirable new loan limit(s), and why?
- What additional changes to program requirements (such as loan features, underwriting standards, or processes) are desirable?
- How would the financing market improve if the proposed changes were implemented?
Regarding Ginnie Mae’s Manufactured Housing Program
- What features of the current Ginnie Mae Manufactured Housing Program have made it uncompetitive in today's market?
- If Ginnie Mae were to modify the current issuer eligibility requirements, what set of requirements would expand the universe of lenders without presenting undue risk? What additional changes to program requirements (such as pooling requirements) are desirable?
- How would the financing market change if the proposed program changes were implemented?
"Enhancing the ability of consumers to efficiently and affordably access financing for manufactured homes is critical to increasing production of this important asset class and boosting housing supply,” said Ginnie Mae EVP and COO Sam Valverde [5].