Affordable community

Vacant ROC lots present a statewide housing opportunity

Too often, affordable-housing discussions in New Hampshire leave out the most affordable housing option: Manufactured homes.

Manufactured homes are one-story houses built in factories to federal building code and trucked to house lots for installation. They’re incredibly affordable, regardless of whether you compare their cost to conventional houses or to rent a similarly sized apartment.

The median sales price of a conventional home in N.H. passed $400,000 earlier this year. The cost of a brand-new manufactured home is usually less than $100,000.

Former renters who buy a manufactured home save, on average, about $500 a month. “You’re saving about $6,000 a year by owning your own home. That’s real money in your pocket every month,” says Jennifer Hopkins, our Vice President of Lending.

Plus, buyers of new manufactured homes can select features like open-concept floor plans, energy-efficient appliances, granite countertops, spa-like bathrooms, flooring choices, even dog-washing stations.

Jen helped design homes for one of our projects and says she loves watching people’s reactions when they first tour a manufactured home.

“The most common thing I hear is: ‘I didn’t think it was going to be this nice!’ When people see the quality, see the energy features, see the kitchen design … you can pick your colors, pick your carpet, pick the front porch that is big enough to have your cup of coffee in the morning. It feels like home.”

If the home is in a resident-owned community (ROC), the advantages also include the stability of cooperative land ownership—your community won’t be sold to a predatory owner—plus house lots that are smaller and easier to care for and a voice in how the cooperative is managed and maintained.

The advantages of putting new homes on empty lots in ROCs ripple out from the homeowners. ROC’s budgets improve when more homeowners pay monthly lot rent (the fee for using the house lot). Neighborhoods with new homes are more appealing for potential residents. And community life is enhanced when potential new volunteers and leaders move in. The town or city where the ROC is located collects more real estate tax revenue without providing significantly more services.

Permanently affordable homes

Sarah Wrightsman, Executive Director of the Workforce Housing Coalition of the Greater Seacoast, says resident-owned communities are an important part of N.H.’s housing picture.

“These communities contribute both to the overall diversity and affordability of our housing,” she says. “They are permanently affordable opportunities for homeownership, adding to an incredibly limited supply of housing—especially affordable housing—in N.H.”

She points out that essential members of our workforce and our communities make their homes in ROCs. They’re people who work in our schools, hospitals and other health care settings, grocery stores and restaurants, farms, and municipal services.

“(Manufactured homes) are a really common choice for people who are buying their first home or retirees buying their last home,” Jen says. “Also, the percentage of people with disabilities is much higher than in the general population. We think that some of that is because manufactured homes are easy to take care of, one-floor living, low taxes, very easy to connect a ramp to, and affordable for the long term.”

Still, nearly 275 lots in N.H.’s ROCs remain vacant, and more are added each year as parks convert to ROCs.

“Taking advantage of these opportunities (to place homes) in existing manufactured-housing neighborhoods, and especially ROCs, is part of what we need to do to solve the state’s housing crisis,” Sarah says.

“Manufactured homes in resident-owned communities are an excellent option for N.H. homebuyers,” noted Ignatius MacLellan, Managing Director of New Hampshire Housing’s Homeownership Division. “Because the market is so competitive, many low- and middle-income people are struggling to find a home to buy. The Community Loan Fund’s efforts to add new homes within existing resident-owned communities is an important initiative.”

To help address N.H.’s lack of affordable housing, the Community Loan Fund offers fixed-rate mortgage financing to people buying manufactured homes in ROCs (or on land they own). Through a partnership with New Hampshire Housing, we can provide up to $20,000 in down payment and closing cost assistance to help buyers with low incomes afford new, energy-efficient homes in ROCs. Our Welcome Home Loan staff guide homebuyers through the process of selecting and placing a home.

We’re also working intensively to help the leaders in the state’s 140 (and counting) ROCs fill their empty lots and replace abandoned and dilapidated homes with new ones. We’ve provided:

• in-person training,
• a new training video series,
• a database tracking vacant lots in N.H.’s cooperatives.

Also, through New Hampshire Housing, we’re offering lines of credit to cover ROCs’ upfront costs of placing homes.

ROC strategies

ROC leaders in N.H. are trying a variety of strategies to put homes on their empty lots.

Sharon Harper has been secretary of Tanglewood Cooperative in Keene since 2018, when its residents decided to try to buy their park. When it became a ROC the following year, the 328-home community had nine homes for sale and 28 empty lots, depriving it of a staggering $244,200 annually.

With significant help from a Realtor who lives in Tanglewood, Sharon says the nine empty homes were sold within weeks of the co-op buying the park. The vacant lots have been a tougher sell, at least partly because the community was built before the state began requiring cement pads under the homes.

“Because we’re a new co-op and we don’t have a lot of money (the co-op’s board) decided to offer six months of free rent to help offset the cost of a pad,” Sharon says. “We have the customer pay for the pad, and the six months free rent doesn’t start until the day they move in.”

Many co-ops have found that the absence of a pad complicates the buying process for customers. Tanglewood has benefited from an arrangement with Fineline Homes in Hinsdale, which offers homebuyers in the co-op the option of rolling the pad’s cost into the sales price and treating it as part of the installation.

Because the co-op has filled five lots, it has been able to budget an extra $50,000 this year to cut down trees, “which is something everybody in the park has been complaining about since I can remember,” Sharon says.

For the past year, Mascoma Valley Cooperative has used a different strategy to fill its lots. Treasurer Darrel Brock says the co-op couldn’t find a home retailer to work with and even offered a free year’s lot rent, with no success.

So, on the advice of its ROC-NH technical advisor and the help of a revolving line of credit (RLOC) offered by the Community Loan Fund, Mascoma Valley worked with Ironwood Construction to place a home on the site. It sold through a local Realtor, and the co-op recouped all its costs. A second buyer worked directly with Ironwood to place a home, with the co-op waiving rent for a year and covering the site preparation costs.

As of late September, Mascoma Valley was waiting for the delivery of a third house (the pandemic has disrupted house production and the supply and prices of building materials). That will leave three lots to fill.

Getting to full occupancy is essential because the co-op, which converted to resident-ownership four years ago, is facing some big projects—replacing a water line and two leach fields—which will cost a minimum quarter-million dollars.

“We’re looking to get full revenue just to help fund these projects,” Darrel says.

Soda Brook Cooperative in Northfield took a third route—one that might interest employers—to place a home on a lot that had sat vacant for 10 years.

Soda Brook used our RLOC to buy and place a home, then sold it to a military veteran who was an Easter Seals client. Easter Seals donated to the Community Loan Fund the funds to make a 0% loan to the homeowner, and the deal was closed so quickly that the co-op never even made a payment on the RLOC.

The Community Loan Fund will continue to explore and invest in new products and strategies to strengthen ROCs and extend affordable manufactured-home ownership to more people across N.H. during the next year and beyond.

This article was published in the New Hampshire Community Loan Fund’s 2021 annual report.