What Can Manufactured Housing Do for the Affordable Home Shortage?

October 21, 2019
Breckenridge_manufactured_home_by_Clayton_Homes
Photo Courtesy of Clayton Homes

Ridaa Murad, founder of Breakform, a company that owns more than 20 communities with manufactured housing, writes in Forbes that such developments provide opportunity for investors looking for steady, asset-backed cash flows and yields generated from rental income.

Building homes in a factory setting can afford investors an opportunity to arbitrage the differences between housing made by people in stick-built situations or through manufactured automation.

In the past, a hurdle to putting buyers in manufactured homes was financing. Many lenders required larger down payments and charged higher rates and fees for nontraditional properties. That is changing, with Fannie Mae reducing the down payment requirement to 3%, along with lower fees for manufactured home mortgages. This alone is going to make these homes an option for people who otherwise wouldn’t have qualified with the previous higher rates and down payment requirements.

More financing options should ideally result in more manufactured home communities being constructed, presenting more opportunities for investors. But before this can be fully realized, local communities will need to adjust zoning laws to encourage and allow for new communities to be developed.

To read more about the traits investors should look for in communities and in markets …

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