MHProNews has learned that theMHARR Board officials and staff met on December 14, 2011 with Government National Mortgage Association (GNMA) President Theodore W. Tozer to discuss the securitization requirements that have limited FHA (Federal Housing Administration) Title I manufactured housing loans. Currently, GNMA requires a minimum net worth of $10 million for loan issuers and a 10 percent reserve of loans issued (the “10-10 rule”) for FHA Title I loans. Securitization for site-built homes only requires originators to have a net worth of $2.5 million. GNMA officials acknowledged the 10-10 criteria is based on 20-30 year-old data and they are willing to reconsider in order to encourage more lenders to enter the Title I market. MHARR also stressed that in a 2010 meeting, GNMA had asked industry finance companies and the Manufactured Housing Institute (MHI) for information to allow more lenders to obtain GNMA securitization but received no response. Noting that current manufactured home loans perform at least as well as site-built loans, MHARR strongly urges interested finance companies to take advantage of this window of opportunity and provide GNMA with information justifying a lower net worth requirement.
(Graphic credit: MHARR)