UMH Properties, Inc., and its lender Wells Fargo have closed on a deal that represents a groundbreaking approach to affordable housing finance through Fannie Mae.
The public equity real estate investment trust that owns and operates a portfolio of 123 affordable manufactured home communities with about 23,200 developed homesites, leases homesites to owners of manufactured homes and, owns homes that are rented out at affordable rates and terms.
UMH Properties acquires communities with a significant vacancy, upgrades the communities and implements a rental program.
Historically, these communities did not qualify because of the lower occupancy rates and the high percentage of rental units. This expanded access to financing from Fannie Mae will allow UMH to expand its footprint and further the effort to provide affordable housing.
“The larger concentration of rental homes provides the owner with the flexibility to make the best decision for individual sites, choosing between land leases to new homebuyers and rentals of units it owns,” UMH Properties President Sam Landy said. “This innovative loan product will allow us to pass these savings on to our customers.”
UMH Properties Business Model
- Find and complete acquisitions, with financial and physical inspections to improve community operations and benefit the residents
- Make property improvements and institute better management
- Create more efficiencies in rent collection and resident communication
- Sell or rent homes in the communities
Landy said the Fannie Mae funding allows UMH to provide the rental market a $750 per month, three-bedroom, two-bath, manufactured home on a 5,000 square-foot lot. For homebuyers, siting their own manufactured home through UMH Sales and Finance, Inc. at a rate as low as 5.99%.
“This type of pricing is only possible due to Fannie Mae’s acceptance of rental homes in manufactured housing communities,” Landy said.