Factory-built housing has long been a key source of affordable homeownership, particularly for low- and moderate-income families. However, a recent issue brief from The Pew Charitable Trusts highlights a concerning trend: 1 in 5 manufactured home borrowers rely on risky contract financing, often due to limited access to traditional mortgage options. These financing methods—such as rent-to-own agreements, chattel loans, and land contracts—frequently lack consumer protections, leading to higher costs and increased risk of home loss. At Next Step, we work to ensure that factory-built homes are a sustainable path to homeownership by expanding access to better financing options. Thanks to advancements in factory construction and home design, today’s manufactured homes can qualify for affordable, conventional mortgage products through lenders like Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA)—offering buyers lower interest rates, longer loan terms, and stronger consumer protections. The Link Between Financing and Homeownership Success Pew’s research shows that many manufactured home buyers turn to alternative financing because they are unaware of or unable to access traditional mortgages. This limited awareness leads to costly outcomes: borrowers who use contract financing often face higher fees, lack of equity-building opportunities, and even eviction risks. Expanding the use of mortgage-backed loans for factory-built homes is critical to ensuring that homeownership remains an asset-building opportunity rather than a financial burden. Fortunately, progress has been made in recent years. Programs like Freddie Mac’s CHOICEHome and Fannie Mae’s MH Advantage® provide site-built comparable financing options for qualifying factory-built homes. These loan products allow borrowers to access fixed-rate, 30-year mortgages with competitive interest rates, giving them the same financial stability as traditional home buyers. However, the reach of these programs remains limited due to a lack of public awareness and lender participation. Many buyers and even housing professionals are unfamiliar with these improved financing solutions, leading to continued reliance on riskier options. Expanding Awareness & Access to Better Financing To reduce the use of risky contract financing and expand access to mortgage-backed loans, affordable housing professionals, policymakers, and industry leaders can take the following steps:

1. Educate Homebuyers and Housing Professionals: Increased outreach efforts can help factory-built homebuyers understand their financing options. Nonprofits, lenders, and government agencies should work together to promote mortgage-backed loans tailored for factory-built homes.
2. Expand Lender Participation: While Fannie Mae, Freddie Mac, and FHA provide financing options, many lenders remain hesitant to originate these loans. Encouraging more lenders to participate in manufactured home mortgage programs is essential to scaling access.
3. Strengthen State and Federal Policy Support: Policymakers can help by expanding consumer protections for manufactured home buyers and increasing funding for down payment assistance programs that support the purchase of factory-built homes.
4. Support Zoning and Regulatory Changes: Local governments should update zoning laws to recognize modern factory-built homes as permanent, high-quality housing eligible for traditional mortgage financing.

By promoting these solutions, we can help more families achieve stable, affordable homeownership through safe and sustainable financing options. Next Step is committed to ensuring that factory-built homes remain an affordable and equitable path to homeownership. Together, we can drive awareness and policy changes that support better financing for manufactured home buyers. Interested in learning more?Explore how factory-built homes are transforming homeownership opportunities and how Next Step is leading the way in promoting sustainable housing solutions. Visit our website to find out more!

As the nation grapples with an affordable housing crisis and increasing climate-related disasters, factory-built homes must be at the forefront of policy discussions and community development efforts. A recent Urban Institute report on climate-resilient factroy-built housing highlights the unique benefits and challenges of factory-built homes, making a compelling case for their inclusion in affordable housing solutions that prioritize long-term sustainability and resilience. Key findings from the report include: Factory-Built Housing is a Vital Yet Overlooked Component of Affordable and Climate-Resilient Housing

• Factory-built homes provide housing for approximately 18 million Americans, yet they remain largely invisible in federal and local housing policy discussions.
• The HUD code ensures quality and durability, allowing these homes to be built more efficiently and cost-effectively than traditional site-built housing.
• Despite their affordability and efficiency, restrictive zoning laws and outdated perceptions continue to limit the expansion of factory-built housing in many communities.
• Climate resilience must be an integral part of the discussion, ensuring that factory-built homes can withstand extreme weather events and contribute to sustainable development.

Factory-Built Homes Can Be a Key Solution to the Housing Supply and Climate Resilience Crisis

• • Factory-built homes are significantly more affordable than site-built homes, often costing between 35% to 73% less per square foot.
  • The streamlined production process dramatically reduces construction time—on average, 31.5 days for a factory-built home versus 321 days for a site-built home.
  • New federal regulations now allow the production of factory-built duplexes, triplexes, and quadplexes, making these homes viable for urban infill projects.
  • Climate-conscious design, including energy-efficient materials and construction techniques, can ensure that factory-built homes contribute to the creation of resilient communities prepared for future climate challenges.

Climate Resilience Must Be a Priority for Factory-Built Housing

• • Factory-built housing is often placed in areas vulnerable to climate hazards such as hurricanes, floods, and wildfires.
  • Older, pre-1976 mobile homes are particularly susceptible to damage due to outdated construction standards.
  • There is an urgent need for investments in retrofitting and upgrading existing factory-built homes to improve resilience.
  • Future development must incorporate strategies to mitigate climate risks, such as elevated foundations, reinforced structures, and improved insulation.

Federal and Local Policies Must Support Factory-Built Housing Integration for Climate-Resilient Development

• • Policymakers should remove regulatory barriers, such as zoning restrictions that relegate factory-built homes to less desirable locations.
  • Federal agencies should invest in research and data collection to better understand the role of factory-built homes in climate resilience.
  • Cross-agency collaboration, including FEMA, HUD, and the USDA, could drive policies that incorporate factory-built homes into disaster recovery and mitigation strategies.
  • Incentives should be provided for sustainable infrastructure and energy-efficient designs to ensure the long-term viability of factory-built housing in the face of climate change.

Why Factory-Built Homes Must Be Included in Climate-Resilient Community Development Plans

Next Step has long advocated for the inclusion of factory-built housing in affordable housing strategies. The report underscores the need for local governments, developers, and housing advocates to embrace factory-built homes as a scalable, cost-effective solution to the housing crisis. By integrating these homes into community development plans, we can:

• Expand access to high-quality, affordable homeownership.
• Reduce construction costs and development timelines.
• Improve housing resilience against climate disasters and extreme weather conditions.
• Promote equitable housing opportunities in urban and rural communities alike.
• Support sustainability efforts by reducing the environmental footprint of new housing construction.

Moving Forward: A Call to Action for Climate-Resilient Communities

Factory-built housing has the potential to reshape the affordable housing landscape while strengthening climate resilience. However, this requires commitment from policymakers, developers, and advocates to support its growth. We urge local governments to modernize zoning laws, financial institutions to expand financing options, and community leaders to recognize the essential role of factory-built homes in creating sustainable, climate-resilient neighborhoods. At Next Step, we remain committed to advancing the conversation on factory-built housing and working with partners to drive meaningful policy changes. The time to act is now—let’s ensure that factory-built homes are a central part of the solution to our nation’s housing, climate, and community resilience challenges.

In our webinar “Housing + Community Development with Factory-Built Homes,” Next Step and Habitat for Humanity La Crosse delve into the evolving landscape of factory-built homes and their potential to address current housing challenges. Topics discussed include:

• Modern Design & Customization: Significant advancements in the design and customization of factory-built homes offer a variety of floor plans and high-quality finishes. This allows homeowners to personalize their living spaces to match their preferences and needs.
• Affordability & Investment Potential: These homes often have a lower price point than site-built houses, making homeownership more accessible. Additionally, they have shown potential for appreciation.
• Safety & Durability: Factory-built homes are constructed following stringent federal and regional standards, ensuring they can withstand various environmental challenges, including severe weather conditions.
• Energy Efficiency: Many factory-built homes are ENERGY STAR® certified, which indicates that they are designed to be more energy-efficient. This can lead to potential savings on utility bills for homeowners.
• Financing Options: Potential buyers can explore conventional mortgages, FHA-insured loans, and specialized financing from Freddie Mac and Fannie Mae. These options provide better terms than chattel loans, making the purchasing process more straightforward and accessible.

In conclusion, the webinar hopes to encourage more people to consider factory-built housing as a modern, affordable and customizable solution to the current housing shortage. By dispelling outdated myths and highlighting the numerous benefits, Next Step and other affordable housing advocates hope to position factory-built homes as a compelling option for today’s homebuyers. For more information on factory-built housing and homeownership opportunities, contact us here.

Manufactured homes are durable, customizable, and, most importantly, budget-friendly. They are more affordable than site-built homes, can save owners up to 30% on monthly utility bills, and have the potential to appreciate, making them an excellent wealth-building opportunity. While these benefits are compelling, it’s essential to understand the unique process and timeline involved in purchasing a manufactured home. Taking the time for this crucial step puts the buyer in an ideal position as they enter the purchasing journey. To help with this, Next Step created the following step-by-step timeline for purchasing a manufactured home, covering topics from budgeting and customization to moving in. Click the button below to download the timeline infographic or read our more detailed timeline guide here.

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Who Should Enroll: Residential appraisers and reviewers who are currently working in the secondary market lending space: appraisals for loans that are ultimately purchased by Freddie Mac, FHA, VA, USDA, or Fannie Mae. This Appraisal Institute course, developed in collaboration with Freddie Mac, provides an in-depth look into preparing appraisals for traditional manufactured homes plus insight into CHOICEHome^SM—the new type of high-quality manufactured homes that are built to HUD code but developed with site-built features. You’ll learn how to meet the specific requirements of Freddie Mac, the FHA, VA, USDA and Fannie Mae using a new, ground-breaking tool—the Manufactured Home Quality Rating Worksheet – which is consistent with the Marshall & Swift®—CoreLogic Residential Cost Handbook and the Uniform Appraisal Dataset (UAD).

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