Fannie Mae’s Multifamily Market Commentary in August provides a picture of the comparative affordability of rents in manufactured homes over multifamily housing (apartments) and the current state of the manufactured housing market.
In most manufactured housing communities (MHCs), residents own their homes but rent the site on which the homes sit from the MHC owner. A number of residents, however, rent the homes as well. The report notes that on average manufactured housing rentals are considerably less expensive than apartments. Over the past decade, the average MHC rent nationwide was half that of an apartment. In major metro areas, MHC rents can still be considerably cheaper. In Los Angeles, for example, the average MHC rent was 61% of the average estimated rent for apartments.
The author reports little new construction of MHCs in recent decades. Fewer than 10 MHC properties are under construction, and 68% of the current stock was built before 1980. MHCs have, however, received significant investor interest in recent years. Transactions involving MHC properties were approximately $9.3 billion in 2018 and have been steadily climbing since 2014.
Finally, the commentary describes how Fannie Mae uses its loans to encourage the adoption of tenant protections in MHCs. Fannie Mae provides loans to those who own MHC properties and associated common amenities and infrastructure while leasing individual pad sites to the owners of manufactured homes. Fannie Mae offers pricing discounts on these loans for MHC borrowers who adopt Tenant Site Lease Protections in their communities. Some of these protections extend standard tenant protections to residents who own their manufactured homes but rent pad sites. For example, they require one-year renewable site leases and 30-day written notices of rent increases. Other protections address vulnerabilities particular to those who rent pad sites. For example, they protect the right of manufactured home owners to sell their homes without moving them out of the MHC.
The full report can be read at: https://bit.ly/2VHJtTM