She writes, “The Dodd-Frank Act is preventing everyday Americans from accessing the financing they need to purchase quality manufactured homes they can afford in the communities where they live and work. This is occurring because many lenders had to stop making manufactured home loans when the Dodd-Frank Act classified the loans as ‘high-cost.’ Ironically, the loans receive this negative classification because they are small loans, reflecting the fact that manufactured homes are less expensive and more affordable.”
While Dodd-Frank understands the need for different rates and cost thresholds for smaller loans, oddly enough, manufactured home (MH) loans are categorized as high-risk loans.
Additionally, manufactured home retailers are classified as loan originators for simply assisting home buyers find potential lenders—something realtors and homebuilders do routinely— which would require licensing and other fees, additionally raising the cost of what is supposed to be affordable housing. There are few MH lenders as it is, which forestalls potential MH homebuyers, steering them to more expensive housing options. “In the midst of a national affordable housing crisis, it is unconscionable that federal rules are limiting access to credit for affordable, quality housing,” says Dr. Gooch.
Noting that one in every seven homes in rural America is a manufactured home, and other forms of inexpensive housing are rare, Dr. Gooch documents stories of individuals who nominally qualify for a loan, but are denied MH loans because of misguided federal regulatory policies. Neither a new program, nor more funding, nor housing assistance is needed to solve the problem. H. R. 650, the Preserving Access to Manufactured Housing Act would restore availability of MH financing and protect against predatory lending. This bill passed the House, and the companion bill, S. 682, awaits passage in the Senate.
MHProNews understands adjustments to significant legislation are not terribly unusual. If H. R. 650/S.682 become law, the economy will receive a substantial shot-in-the-arm from manufactured home buyers and home builders.
Dr. Gooch concludes, “After five years of the Dodd-Frank Act, it is important to remain mindful that there are families being denied their American dream because of an unintended consequence. With a simple adjustment, financing for the largest form of unsubsidized, affordable housing in the country will be restored.” ##
(Photo credit: Manufactured Housing Institute–MH under construction.
