Fannie Mae has re-launched its MH Advantage program. The program is designed to provide increased financing options for manufactured housing and close the gap between affordable housing and the traditional site-built residences.
Homes that are eligible for the new MH Advantage program include the following features:
- Roof treatments distinct from traditional manufactured homes, including eaves and higher pitch rooflines
- Lower profile foundations, carports, garages, porches, and/or dormers
- Interiors that feature drywall and kitchens and bathrooms with upgraded cabinets
- Exteriors that feature durable siding materials
- MH Advantage-eligible homes can become a seamless part of any single-family neighborhood
MH Advantage homes must be titled as real property and are factory-built manufactured homes that remain subject to the HUD Manufactured Housing requirements and must be permanently affixed to the land.
This is a new mortgage option that offers affordable conventional financing when a new home is purchased through a retailer and is financed through a lender who is a Fannie Mae partner.
The need for more affordable housing and greater access to financing for affordable housing is the primary driver for the change. Entry level site-built homes have “become scarcer, smaller, older, and are more likely in need of major renovations,” according to a statement by Fannie Mae.
Home prices nationwide are increasing at a rapid pace, and attention toward modern, high-quality manufactured homes is a viable solution.
Changes Offered by MH Advantage
With the new financing option, prospective homebuyers get the design features they want at a price they can afford. Loans through the program are more attainable and flexible, opening the door to home ownership for millions of Americans.
MH Advantage Features Include:
- Higher loan-to-value (LTV) ratios, up to 97%.
- Waived 0.50% Loan Level Price Adjustment
- Able to be combined with HomeReady, HFA Preferred, and other Fannie Mae mortgages
Appraisal and Underwriting Changes
MH Advantage provides underwriting and origination changes that streamline processes and creates a more straightforward transaction. This allows retailers to manage their MH portfolios with improved flexibility.
A manufacturer sticker helps appraisers identify an MH Advantage home, and provides use of MH appraisal guidelines and a Desktop Underwriter (DU) underwriting process similar to features found in standard MH loans.
Standard MH Program
Standard MH, which includes single- and double-wide homes that are ineligible for MH Advantage, offers an even more affordable alternative to site-built homes. This provides relief for millions of American households, especially in high-cost and rural areas.
Fannie Mae purchases mortgages secured by manufactured housing titled as real estate via approved lender partners using standard MH underwriting guidelines.
Guild Mortgage Jumps into MH Advantage Program
Guild Mortgage within days of Fannie Mae’s launch of the program announced its intent to provide 30-year loans for manufactured homes via the new program.
Borrowers qualify for a rate as low as 3 percent with a down payment.
“There is an increased interest in manufactured housing throughout the U.S. because of current housing shortages, both in the resale of existing homes, and future inventory based on forecasts of new housing starts,”Guild Mortgage President and CEO Mary Ann McGarry said. “Guild has been one of the top originators of loans for manufactured homes for some time and we are pleased to offer this new MH Advantage program with Fannie Mae. It comes at a critical time when many potential homebuyers are priced out of the market. This gives them a high-quality option with low down payment and a lower interest rate.”