When most people think of homeownership, they envision a site-built house. But thanks to advances in construction methods and financing options, factory-built homes—often called manufactured or modular homes—are increasingly viable, high-quality, and affordable options for homebuyers.
One of the most exciting developments supporting this shift is the increase in finance options for these homes. One such option is Fannie Mae’s MH Advantage® Mortgage. This program makes it easier for potential homeowners to purchase a modern, energy-efficient factory-built home that looks and feels like a site-built residence. Let’s explore what the MH Advantage program is and how it can make factory-built homes more attainable.
What Is Fannie Mae’s MH Advantage Program?
MH Advantage is a specialized mortgage program designed specifically for factory-built homes that meet certain standards set by Fannie Mae. These homes have features typically found in site-built homes, including higher-pitched roofs, attached garages, and upgraded exteriors and interiors. The program offers a competitive mortgage option, which is available for both new and existing homes that qualify.
Key Highlights of MH Advantage:
- Low Down Payment Requirements: Similar to conventional loans, down payments can be as low as 3%.
- Affordable Financing Terms: MH Advantage loans come with competitive interest rates that often match those of site-built homes.
- Fixed-Rate Financing: MH Advantage loans are offered as 15- and 30-year fixed-rate mortgages, providing predictable monthly payments for homeowners.
- Options for New & Existing Homes: Buyers can finance both newly manufactured homes that meet MH Advantage requirements and existing homes that have previously qualified.
Loan products like Fannie Mae’s MH Advantage® open new pathways to homeownership for those priced out of today’s site-built market. It provides the opportunity to own quality, affordable homes that build equity and stability over time.
Stacey Epperson
Next Step President & CEO
What Makes an MH Advantage Home Different?
Factory-built homes that qualify for MH Advantage go through rigorous quality control and must meet specific physical features, ensuring they resemble site-built homes in appearance and construction standards. These homes:
- Have Permanent Foundations: They are anchored on a permanent foundation, which enhances stability and durability, similar to site-built homes.
- Meet HUD Code & Additional Specifications: These homes adhere to HUD Code standards for construction and durability, along with specific MH Advantage® requirements like energy-efficient windows, pitched roofs, and attached garages or carports.
- Offer Traditional Curb Appeal: With higher-pitched roofs, porches, and other design elements, these homes visually align with traditional neighborhood aesthetics, blending seamlessly into a variety of settings.
Benefits of MH Advantage for Homebuyers
MH Advantage includes several features that make it appealing to potential homebuyers:
- Lower Upfront Costs: With down payments as low as 3%, MH Advantage enables buyers to become homeowners without a large upfront investment, like other conventional mortgages.
- Potential for Property Appreciation: By aligning with design and construction features of site-built homes, MH Advantage homes may experience more traditional patterns of appreciation, helping build equity.
- Reduced Mortgage Insurance Requirements: For buyers able to provide a down payment of 20% or more, mortgage insurance may not be required, reducing monthly costs.
Why MH Advantage Matters for Affordable Housing Professionals
For those working in affordable housing, Fannie Mae’s MH Advantage program is a vital tool to offer clients. It bridges the affordability gap by enabling access to quality housing options that maintain aesthetic appeal, durability, and financing comparable to site-built homes.
Here’s why affordable housing professionals should consider MH Advantage:
- Increased inventory of Affordable Homes: Factory-built homes qualifying for MH Advantage can help ease housing shortages in regions where housing costs are prohibitively high.
- Support for Sustainable Housing Solutions: These homes, with their energy-efficient designs and streamlined manufacturing processes, align with green building goals and lower homeowners’ long-term costs.
- Expanding Financing Opportunities: With financing that aligns with conventional mortgages, affordable housing advocates can promote these options to homebuyers who might not have considered factory-built homes previously.
Getting Started with MH Advantage
With MH Advantage, factory-built homes have come a long way from the perceptions of the past. They represent a modern, accessible, and cost-effective pathway to homeownership, opening new doors for both potential homebuyers and affordable housing professionals eager to expand their offerings.
For more information, consider contacting a mortgage lender or housing counselor who can guide you through the MH Advantage application and help you determine if a factory-built home is the right fit for you. Find a HUD-certified counselor here. View mortgage lenders with experience in financing factory-built homes here.