Top National News
Apartments as Percent of Housing Starts Reaches 40-Year High
The latest Haver Analytics study shows that the share of housing starts consisting of five-or-more unit buildings topped 39 percent last month — the highest since February 1974. Researchers say part of the gain in April was because of weather, as multi-unit starts increased in both the Midwest and Northeast. Many economists, though, recognize something more fundamental going on beyond a catch-up in demand. Steve Blitz, chief economist at ITG Investment Research, remarks, “There are any number of factors behind this move to closer quarters: Baby Boomers tired of paying for lawn care; the demand for shorter commutes; and young people with credit good enough to pay high rent, but not quite so good to afford a down payment and qualify for a mortgage.” Ted Wieseman of Morgan Stanley concurs. He expects tight mortgage credit availability will drive “a historically disproportionate share” of new household formations into rental housing and support multifamily starts continuing to be a “well above historically average” share of housing starts.
From “Apartments as Percent of Housing Starts Reaches 40-Year High”
MarketWatch (05/16/14)
Fannie Mae and HUD Expand Their Energy Efficient Multifamily Loan Program
HUD, the FHA, and Fannie Mae have announced their support to expand Green Preservation Plus — which aims to preserve quality affordable multifamily housing via the reform of energy and water projects that make them more efficient. Owners and/or buyers of affordable multifamily housing properties can use Green Preservation Plus to buy or refinance existing Fannie Mae loans to improve the water and energy efficiency of each property. The loans distributed through this program not only provide additional loan proceeds through lower debt service and higher loan-to-value ratios but also can significantly reduce the costs of amenities at a multifamily property. Additionally, in order to fund the improvements, as much as 5 percent of the loan amount can be combined to the mortgage. Hilary Provinse, vice president for multifamily customer engagement, remarks, “We’re pleased to see initial industry interest in our green financing options and to make the benefits available to a broader group of property owners and [residents].”
From “Fannie Mae and HUD Expand Their Energy Efficient Multifamily Loan Program”
LoanSafe.org (05/12/2014) Bedard, Moe
Industry News
Mobile Homes: More Than Just a Box on Wheels
MHI provided material for this CBS Sunday Morning report on affordable, quality homes and great communities. Click here to view the video.
From “Mobile Homes: More Than Just a Box on Wheels”
CBSNews.com (05/18/14)
Is This Flexible-Space Home What 92 Million Millennials Want?
Hamstrung by not enough income and too much debt, Americans aged 19 to 33 years old have become skittish about homeownership in the wake of the housing crisis. However, manufactured/modular builder Clayton Homes believes it has developed just the product to win back this age group — the backbone of the market, whose participation is critical for housing recovery. And while young, first-time buyers usually purchase resale homes, Clayton says its factory-built Gen Now Concept House is sure to attract members of this demographic. Not only is it loaded with amenities designed to appeal to Millennials/Gen Y home buyers — such as open kitchens, energy-efficient and smart home features, plenty of closets and storage, and flexible space — it can be had for just $80,000 plus the cost of the land.
From “Is This Flexible-Space Home What 92 Million Millennials Want?”
Yahoo! Homes (05/06/14) Glink, Ilyce R.
Champion Celebrates New Branding of Lindsay Facility
As part of its new “Manufactured Beautifully” trademark identity, Champion Home Builders will sell its product across 10 different brands, including Redman Homes. The refreshed branding and logo aim to convey the message that all Champion projects embrace the Michigan-based firm’s commitment to detail, precision, flexibility, efficiency, value, choice, and quality. “It doesn’t matter if it is an affordable singlewide, a luxury modular or a hotel,” explains Ken Hodson, who runs Champion’s facility in Lindsay, Calif., which will begin selling homes under the Redman brand. “Because of our craftmanship, the tools and processes in our manufacturing center, and the great designs — we build beautiful homes and commercial structures.”
From “Champion Celebrates New Branding of Lindsay Facility”
Porterville Recorder (CA) (05/09/14)
Freddie Mac Packaging Loans for Manufactured Home Communities
Freddie Mac is now financing developers of manufactured home communities. On April 30th, it kicked off a program to purchase loans made to owners of manufactured housing communities and then pool them into securities to be sold to investors. David Brickman, an executive vice president in the company’s multifamily lending group, explains that the loans are primarily backed by rents paid by the people who occupy the manufactured homes that sit on the property. He says Freddie sees an opportunity to increase its role in the affordable housing market at a time when it is doing less funding for other types of multifamily housing, chiefly apartment communities. Freddie Mac’s participation in the manufactured housing niche is “a step in the right direction,” remarks Jason Boehlert, senior vice president of government affairs at the Manufactured Housing Institute, which also is campaigning for greater access to funding for manufactured home buyers. Meanwhile, banks and other lenders, including Deutsche Bank and Barclays, also are stepping up their financing of manufactured housing developers. According to Trepp LLC, the share of U.S. commercial-backed mortgage securities underpinned by manufactured-home loans is up from zero in 2009 to 4 percent this year.
From “Freddie Mac Packaging Loans for Manufactured Home Communities”
Wall Street Journal (05/01/14) P. C4 Yoon, Al
New Breed of Buyer for Manufactured Homes
Manufactured homes, a popular choice for new entrants to the ownership market, are beginning to see a shift in their core customer. According to the California Manufactured Housing Institute, 70 percent of sales there involve buyers who are not in the market for starter homes and who increasingly are paying in cash. More and more customers are looking to the manufactured niche for vacation or second homes; or they are hoping to downsize from an existing residence or find the perfect home to retire and age in place. “They are prepared to pay cash for a new down-sized home and retirement freedom from mortgage payments,” according to association president Jess Maxcy. Indicators of the trend toward a higher-end customer include a 6 percent jump in the price of a manufactured, dual-section home. The average, minus the cost of the land, approached $100,000 in March 2013, compared to $94,070 a year earlier. In addition, shipments of new homes for the first two months of this year are 24 percent greater than for January and February of 2013; and the number of dealers is increasing. Although the industry has “been building homes that are indistinguishable from site-built houses for years,” Maxcy says producers are really catering to the mid-range buyer population now, with granite counters, skylights, walk-in closets, fireplaces, and more.
From “New Breed of Buyer for Manufactured Homes”
Riverside Press-Enterprise (CA) (05/10/14) Gruszecki, Debra
Bluffton Considers New Plan to Offer Homes, Assistance to Residents
Affordable housing officials in Bluffton, SC, are considering a proposal that would help local residents move from older manufactured homes to brand-new modular homes. The units, with 24 designs ranging from a 600 square foot home with one bedroom to a 2,000 square foot home with four bedrooms, would be put together in a factory by Nationwide Homes to be shipped in whole or in sections to be assembled on site. “They’re beautiful homes, and the price point is attractive,” according to Fred Hamilton, a member of the town council who also chairs the affordable housing committee. The “Essex” design model, for example, offers three bedrooms and two bathrooms for a base price of just $57,000. The proposal stipulates that qualified buyers pay at least 60 percent of the cost — with the rest covered by financial aid through grants that Bluffton will pursue — and raze their old home upon completion of their new modular home.
From “Bluffton Considers New Plan to Offer Homes, Assistance to Residents”
Island Packet Online (05/06/14) McNab, Matt
SearchCore’s Wisdom Homes of America, Inc. Opens 3rd Manufactured Home Retail Center
Wisdom Homes of America, a unit of SearchCore Inc., reports the opening of a third manufactured home retail center in Texas. The company is the new owner of Heritage Mobile Homes in Jacksboro — which opens up the western, central, and eastern sectors of the state to Wisdom, an owner and operator of manufactured home retail centers. Jacksboro also is in close proximity to markets where growth is taking off due to developments in the energy industry.
From “SearchCore’s Wisdom Homes of America, Inc. Opens 3rd Manufactured Home Retail Center”
MarketWatch (05/13/14)
Building the World’s Tallest Modular Apartment Tower
Crews are working on what eventually will be the tallest modular apartment building in the world, with the first 32-story tower at the Atlantic Yards site in New York on track for completion by yearend. FCS Modular — a joint venture between Forest City Ratner and Swedish construction giant Skanska — is building the apartment units in a warehouse at the Brooklyn Navy Yard and transporting them to Atlantic Yards to be snapped into position. The entire process, from factory to installation, currently takes about 20 days but is likely to accelerate as the crews become more experienced. Besides the fast turnaround time, FCS says it will save as much as 20 percent in building costs now and as much as 30 percent down the road because of its factory-oriented construction approach. The project has captured the interest of a multifamily industry eager to build more quickly and spend less money doing so. “If this modular approach to constructing new housing — including affordable housing — on this scale proves successful,” suggests multifamily finance executive Todd Trehubenko of Boston’s Walker & Dunlop, “then Atlantic Yards can serve as a true model for affordable housing development throughout the country.”
From “Building the World’s Tallest Modular Apartment Tower”
Forbes (04/16/14) Carlyle, Erin
