Top National News
More ‘Promise Zones’ Coming Soon
HUD and the Agriculture Department have announced plans to designate another eight “promise zones” in U.S. urban, rural, and tribal communities. The goal is to foster economic opportunity and employment gains in poverty-stricken areas through grants and tax incentives to promote jobs, education, and housing in targeted communities. President Obama pledged last year to designate 20 such promise zones. There are currently only five.
From “More ‘Promise Zones’ Coming Soon”
San Antonio Express-News (Texas) (09/19/14) Hagen, Lisa
Homebuilders Grow Bullish
The National Association of Home Builders/Wells Fargo builder sentiment index shows that industry confidence in the market for new, single-family houses has soared in September to the highest level in almost nine years. The more positive outlook reflects growing optimism that sales will gain steam over the next six months, which could stimulate growth in residential construction. The index climbed four points this month to 59, its fourth consecutive monthly increase and the highest reading since 61 in November 2005. Any reading above 50 indicates that more builders view sales conditions as favorable rather than unfavorable. The current optimism is in spite of a steady slowdown in new-home sales this summer. Sales dipped from a seasonally adjusted annual rate of 454,000 in May to a rate of 412,000 in July. At the same time, though, the volume is ahead of the 2013 pace.
From “Homebuilders Grow Bullish”
Associated Press (09/18/14) Veiga, Alex
What HUD Secretary Julian Castro Says Needs to be Done to Boost Homeownership, and Cut Down on Rental Costs
New HUD Secretary Julian Castro has cited increased homeownership for all Americans — including those with damaged credit — as one of his main priorities. “It’s time to remove the stigma associated with promoting homeownership,” he declared in his first public policy speech, Sept. 16 at the Bipartisan Policy Center’s housing summit in Washington. Castro also noted that lenders have been reluctant to widen access to credit since the mortgage crisis. “The truth is that the dream of homeownership is out of reach for too many Americans,” he said, and pledged to work to preserve existing affordable housing. He also said he would strive to alleviate the affordability crunch in the rental sector. Castro additionally used his speech to show support for stalled legislation from Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho) that would overhaul the nation’s housing-finance system. The bill would dedicate billions of dollars every year to producing affordable housing, according to Castro.
From “What HUD Secretary Julian Castro Says Needs to be Done to Boost Homeownership, and Cut Down on Rental Costs”
Washington Post (09/16/14) ElBoghdady, Dina
Here’s Why Multifamily Growth Rules Housing
Freddie Mac’s latest forecast shows that the country’s multifamily housing sector is staging a strong rebound as single-family home building struggles to gain traction. Construction of buildings with at least five apartments hit the highest monthly construction pace since early 2006, according to the report. Additionally, all of the growth in net household formation over the last 12 months has come from renters. Researchers say the trend is also evident in the latest HUD and Census Bureau statistics. Almost all of the recent increase in housing permits was due to multifamily unit construction, which soared 24 percent to 382,000. Freddie Mac chief economist Frank Nothaft observes, “The apartment market has been vibrant, reflecting the desire of many Millennials to live in an urban setting and retain locational flexibility.” Freddie Mac further notes that the decline in owner-occupancy has been mostly focused among younger households, with the homeownership rate of those 35 years and younger falling from 43.6 percent to 35.9 percent during the last 10 years. Nothaft concludes, “Unfortunately, if Millennials are looking to live in the larger cities, that’s where rents are rising the fastest, especially in the West or Northeast regions of the United States, places like Los Angeles and New York City. In the South region, areas like Miami and the Washington-Baltimore metro have seen real rents exceed the U.S. average.” In the Midwest, only metro Chicago has topped the national average.
From “Freddie Mac: Here’s Why Multifamily Growth Rules Housing”
Housing Wire (09/15/14) Swanson, Brena
Industry News
Capital Square Acquires 1,000+ Midwest Units
An affiliate of Glen Allen, Va.-based Capital Square Realty Advisors is the new owner of three Midwest manufactured housing communities. The acquisition of Timberbrook in Bristol, Ind.; Byrne Hill in Toledo, Ohio; and Woodlake-Sommerdale in Yoder, Ind., includes 1,141 rentable lots in all. “Manufactured housing communities are an attractive investment opportunity, with increasing demand a tight market given barriers to new construction across much of the U.S.,” noted Capital Square CEO Louis Rogers. “There are a number of Americans that are either searching for a manufactured vacation home, or are seeking a new housing opportunity as traditional homeownership becomes economically unfeasible for a growing percentage of the population. Today, manufactured housing offers an affordable and high quality alternative.” The company’s vice president of acquisitions, Yogi Singh, disclosed that the portfolio was purchased in an “off-market deal with a publicly traded REIT” and hinted that similar deals could be in the pipeline.
From “Capital Square Acquires 1,000+ Midwest Units”
GlobeSt.com (09/03/14) Rogal, Brian J.
Prototype Super-Efficient Manufactured Home Built in Bothell
In Bothell, Wash., Puget Sound Energy, Habitat for Humanity Seattle-King-County, and Bonneville Power Administration (BPA) have built a high-performance manufactured home. One of four prototypes in Washington State and Oregon, it features energy-saving technology including a ductless heat pump, heat pump water heater, efficient lighting, triple-glazed windows, and foam sheathing for exterior walls. “Manufactured homes built to this new high-performance spec have durability and performance features that could change opinions about factory-built homes and be an integral part of our super-efficient 21st century utility system,” said Christopher Dymond of Northwest Energy Efficiency Alliance (NEEA). BPA, NEEA, regional electric utilities, and other partners are working with a number of Northwest-based manufacturers to demonstrate the advantages of high-performance factory-built homes. Compared to traditional manufactured homes, those constructed to advanced-performance specifications can save as much as 50 percent on heating and cooling expenses. “Beyond more affordable electric bills for the homeowner, the goal is to establish a new minimum building standard for manufactured homes,” said Bob Stolarski of Puget Sound Energy. “Which means buyers will get a higher quality, more comfortable and more energy efficient home.” There are roughly 500,000 manufactured homes in the Northwest. However, because many were made before current construction standards were implemented, having a more energy-efficient option could help area utilities meet upcoming energy conservation targets.
From “Prototype Super-Efficient Manufactured Home Built in Bothell”
Bothell Reporter (09/05/14) Kehoe, Sarah
W&D Originates First Freddie Mac Manufactured Housing Loan
Freddie Mac’s new manufactured housing finance program, just announced in the second quarter, has already pushed through its first loan. Walker & Dunlop originated the $10.5 million loan for Longhaven Estates, a manufactured housing community in Phoenix. The financing was put together on behalf of Oak Brook, Ill.-based Cobblestone Real Estate LLC and Toronto-based Tricon Capital Group. “The fact that Freddie Mac’s very first MHC loan was underwritten, rate-locked and funded within the same time-frame [less than 45 days] of a typical multifamily loan displays Freddie Mac’s commitment to this program,” said W&D senior vice president Will Baker, who headed the team that structured the loan. Freddie Mac multifamily executive John Cannon, meanwhile, said the mortgage financier is targeting manufactured homes because they represent a key solution for affordable housing.
From “W&D Originates First Freddie Mac Manufactured Housing Loan”
GlobeSt.com (08/28/14) Morphy, Erika
Crye Purchases Leahy’s, Says Manufactured Housing in Demand
Real estate mogul Harold Crye, who helped to establish the largest property brokerage in Tennessee, has snapped up the Leahy’s manufactured home community in Memphis. He paid $290,000 for the 80 lots on 12 acres, a solid investment considering what he says is strong demand for affordable manufactured housing. While local homes and apartments are renting for more than $1,000 per month typically, Crye reports that it costs only about $600 a month to rent a home at Leahy’s and about half of that to rent a pad if a tenant has his or her own home. The Crye-Leike Realtors co-founder plans to make improvements to the property.
From “Crye Purchases Leahy’s, Says Manufactured Housing in Demand”
Memphis Commercial Appeal (09/05/14) Bailey Jr., Thomas
Contracts: Origen Financial Inc.
Southfield, Mich.-based Origen Financial Inc. has announced that it will dissolve and liquidate after selling its assets. The real estate investment trust, which manages interests in securitized loan portfolios backed by manufactured housing, has already found a buyer for its assets. An affiliate of GoldenTree Asset Management LP in New York City will pay $47 million.
From “Contracts: Origen Financial Inc.”
Crain’s Detroit Business (09/21/14)
Centerline Capital Group Officially Renamed Hunt Mortgage Group
As part of its acquisition by Hunt Companies Inc. last year, Centerline Capital Group — which offers real estate mortgage services for affordable and conventional multifamily housing — has changed its moniker to Hunt Mortgage Group. Hunt provides financing for manufactured housing, student housing, co-ops, and affordable rental homes. “The acquisition of Centerline was extremely beneficial to Hunt as it enabled us to add a national mortgage-banking platform and significantly expand our affordable housing asset management business at the same time,” said Hunt Cos. Chairman and CEO Woody Hunt.
From “Centerline Capital Group Officially Renamed Hunt Mortgage Group”
New York Real Estate Journal (09/23/14)
