Bringing conventional mortgages to manufactured homes
Since 1984, the New Hampshire Community Loan Fund has provided financing, training and technical assistance to help homeowners in manufactured housing (sometimes called “mobile home”) parks purchase and manage their communities as cooperative corporations.
Resident ownership made thousands of homes more stable, secure, and valuable. But manufactured houses were still financed in ways that denied these homeowners some important financial benefits.
So in 2002 we set out to prove that mortgage loans to these homeowners were also safe and secure. We were the first lender in the country to offer fair, fixed-rate purchase and refinance loans to families in co-ops.
Homeownership is one of the more important ways that families with low and moderate incomes in the United States build wealth. Two factors blocked that path for owners of manufactured homes.
The first was that although the homes had evolved over time – from travel trailer to mobile home to houses constructed to federal Housing and Urban Development (HUD) building codes – they were still financed as if they were cars. Most homebuyers were offered only personal property loans, at rates 3 to 5 percentage points higher than traditional mortgage loans. This financing not only limited their ability to afford a home, it made the home harder to sell.
Another factor: When a house is located in a park that can be closed at any time, its value may never rise. The instability discouraged most lenders from offering home equity loans for these houses. When a home isn’t maintained or repaired, it becomes even less valuable.
Resident-ownership solved the second problem, and our home loans are solving the first.
The strong demand for and strong repayment record of our home loans attracted other lenders to manufactured housing and made more financing available. In pre-approved resident-owned communities, Merrimack County Savings Bank and St. Mary’s Bank are offering traditional mortgage loans with even-longer terms and lower fixed interest rates.
In 2012 we launched Welcome Home Loans, extending the home loans we'd been offering in cooperatives to people whose homes were secure because they owned their own land.
The Community Loan Fund's innovation in creating these loans was recognized in 2009 by the Opportunity Finance Network, which honored us with the NEXT Award for Opportunity Finance, the most prestigious honor in the field of community development finance.