Academic journal article ABA Banking Journal

Bank Partnership Spurs Resident-Owned Manufactured Housing

Academic journal article ABA Banking Journal

Bank Partnership Spurs Resident-Owned Manufactured Housing

Article excerpt

WITH MORE THAN 50,000 manufactured housing communities in the United States--roughly six percent of the overall housing market--borrowers are drawn to manufactured homes, as they often cost significantly less than new site-built housing. As such, manufactured housing remains a critical source of affordable housing for many consumers--particularly the elderly, low- to moderate-income families and those living in rural communities. Some innovative lenders and their community partners are scaling a resident-ownership model where homeowners in MHCs can become community owners of the land on which their homes resides.

Manufactured housing is often confused with mobile homes or trailers, but is a actually a specific type of housing built according to the U.S. Department of Housing and Urban Development's standards. MHCs are built in a factory before being transported to a plot of land the homeowner buys (most commonly), or they may be placed on rented land. These MHCs often require homeowners or renters pay additional fees for shared services and amenities. A manufactured home's appreciation generally comes from the land value, and not the structure itself. Thus, having ownership or control of the land is the key ingredient to the homeowner's financial security.

Manufactured housing greatly expanded in the 1990s before contracting in the early 2000s as consumers began defaulting on their loans. Today, MHC development remains depressed due to a limited secondary market, as well as local zoning ordinances and land commanding higher prices for single-family subdivisions and other commercial development. Those seeking to maintain this affordable housing stock must compete with private purchasers on both purchase price and timely execution.

The $2.2 billion-asset National Cooperative Bank in Hillsboro, Ohio, has forged a national financing program with ROC USA Capital, a U.S. Treasury-certified Community Development Financial Institution, and MetLife to finance resident-owned manufactured home communities, also known as ROCs, to scale to benefit low- and moderate-income communities nationwide. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.