The new super energy-efficient manufactured homes being designed to withstand Vermont’s severe winters, previously reported at the link here, have a higher price tag than other manufactured homes. Some think there may be problems in obtaining financing for these new 21st century factory-crafted homes.
Ethan de Seife, writing in Seven Days, tells MHProNews that they see a very common set of perceptions. Namely, that when purchasing a manufactured or modular home, buyers need a mortgage lender who believes the home will retain its value and perhaps even appreciate. That particularly applies when purchasing a new and innovative home that carries a much higher price tag, as does the Vermond.
Ethan De Seife says that Jeff Smith “is the director of credit administration in the South Burlington headquarters of North Country Federal Credit Union.” Smith oversees a 100-manufactured-home loan portfolio that amounts to nearly $6 million. Smith says that many financial institutions are “gun shy” about financing manufactured homes. The reason, he claims, is that lenders see them as a “depreciating asset.” As a result, when a bank or credit union does finance a manufactured home, they may ask for a larger down payment or a shorter repayment term.
Peter Schneider, a senior consultant with the Vermont Energy Investment Corporation/Efficiency Vermont, was more optimistic. The Vermod home is a smart housing option, claims Schneider, not just for owners of older pre-HUD Code mobile homes who want an upgrade, but also for first-time home buyers and for retirees looking to downsize.
Sarah Woodward, director of the manufactured home program at the Champlain Valley Office of Economic Opportunity (CVOEO), thinks that pre-HUD Code mobile home owners and other potential super-energy saving manufactured-home buyers need to embrace a “paradigm shift.” That shift would be to view the homes not as depreciating assets, but as durable, permanent residences that can yield long-term returns. Woodward feels that such a mind-set shift may be a high a hurdle, at least for now.
All of the people working on the MHIP Project admit that the term “mobile home” is a serious misnomer. These certainly are homes as confirmed by figures from the Champlain Valley Office of Economic Opportunity (CVOEO) which reveals that tens of thousands of Vermonters reside full-time in these small, low-cost structures. But mobile they are not. Though technically moved on a frame and chasis, the great majority of these homes remain where they are first sited. CBS News reported last year more than 90% of manufactured homes are never moved once installed on the original home buyer’s site.
What the Seven Days report reveals on MH lending is a common media misconception. MH professionals need to know that manufactured homes can qualify for FHA Title II, VA and USDA financing. Also, manufactured housing can appreciate or depreciate for essentially the same reasons that conventional homes do. These would include the home’s location, the availability of financing, local economic conditions, supply and demand, etc.. A classic example of manufactured homes appreciating – even in a land-lease community – includes Saddlebrook Farms, near Chicago, Illinois.
So. the 21st century super-energy saving manufactured homes will need financing and a good marketing message. Here is where John Evan’s article on the MH industry’s need for an image/PR campaign comes into play. The right image plus the proper financing options will yield 21st century results. ##
(Editor’s Note: to see four different potential MH image campaigns being discussed, please see this link here.)
(Photo Credit: Vermod Homes)
Article Submitted by Sandra Lane to – Daily Business News- MHProNews.
