Manufactured Housing Sector Analysis – Winston Rowe And Associates
Modern manufactured homes have vastly improved from the trailers of the 1960s and early 1970s. Significant advancements in construction materials and assembly technology.
By: Winston Rowe and Associates
Although concerns about low commissions and the added complexities of underwriting manufactured housing may have merit, originators should consider manufactured housing as an emerging financing opportunity, especially for those willing to view it through a different lens.
A manufactured home is built in a factory and constructed to comply, at a minimum, with the Manufactured Home Construction and Safety Standards (the Department of Housing and Urban Development, or HUD, Code) enacted in 1976. All factory-built homes constructed after June 15, 1976, must comply with the HUD Code or local building codes.
A manufactured home will be identified by HUD-certification labels and a data plate. A mobile home, on the other hand, lacks such certification and is generally a factory-built home constructed prior to June 15, 1976.
Manufactured housing leverages the advantages and efficiencies gained from producing in a controlled environment. Those advantages include the following:
Reduced construction cost, including assembly-line efficiencies, automation as well as centralized labor, materials and equipment.
Dependable construction timing, including predictable scheduling, no weather delays and ease of inspection.
Availability of continuous assembly, including multiple-shift manufacturing.
Reduction of risks from weather, including damage to construction materials from outside exposure and weather stoppages.
To leverage manufactured housing as an opportunity for expanded housing availability and affordability, the mortgage industry should continue its focus on prudent and sustainable lending practices. At the same time, it should examine whether antiquated negative biases towards manufactured housing result in credit policies and practices that neglect this valuable component of our housing market.
Published by Winston Rowe and Associates. A national commercial real estate consulting firm. They can be contacted at http://www.winstonrowe.com