Putting the brakes on manufactured home sales
Friday, September 12th 2003, 12:00 am
By: News On 6
Manufactured housing gives people a cheaper option for owning their own home, but that option is getting harder to come by.
Fannie Mae, the national mortgage group that was created by Congress, now has stricter rules on lending money. As News on 6 business reporter Steve Berg tells us, it's putting the brakes on mobile homes.
Mobile home dealers are seeing fewer â€˜soldâ€™ signs. "Our land home count is basically dropped in half." Donnie Knight with Serenity Homes hasn't had much peace since Fannie Mae changed its rules back in August. In the past, many people qualified for a loan through Fannie Mae with no money down. But now, they require 10% down and a fee of .5% of the loan amount.
Local lender Gary Clark says that's shut the door on many homebuyers. The typical loan is about $85,000 so to fall within the guidelines of Fannie Mae; you're looking at an $8,500 down payment. "$8,000 would be a lot to anybody but these are typically first-time homebuyers in the low to mid income range and sometimes a couple of kids to boot."
And it doesn't stop there. There are closing costs and pre-paids that have to be paid as well. Fannie Mae changed the rules because it says people were defaulting on manufactured home loans more often than on conventional loans.
But Clark doesn't buy it. "I have not seen those statistics, and I'm not sure those statistics are accurate." Clark says he hasn't had any more problems with his clients than any other first-time buyer. Regardless he says, why wreck the industry. "The manufactured home isn't the one that's defaulting. It's the customer, so why penalize the manufactured home and the dealership?"
In case you're wondering, Clark and Knight say conventional banks usually won't give a mortgage for a mobile home. They say that leaves the FHA as the only other major lending source, and if they change their rules like Fannie Mae, it could doom the business. "It's not only affecting us, it's affecting every dealer in Tulsa, and nationwide I'm sure."
The government says there are about 7 million manufactured homes in the US, most in the rural south.