A new program from the Federal National Mortgage Association provides looser financing requirements for higher quality manufactured housing.
Fannie Mae has introduced MH Advantage. The initiative promotes manufactured housing designed to meet specific construction, architectural design and energy efficiency standards.
According to the Washington-based secondary mortgage lender, MH Advantage standards are more consistent with site-built homes than traditional manufactured housing.
The program was discussed Tuesday in Selling Guide Announcement SEL-2018-05.
Fannie explained that MH Advantage homes have specific architectural and aesthetic features like distinctive roof treatments, lower profile foundation and garages or carports as well as porches and dormers. Also among the physical characteristics of the homes are durable siding materials and energy-efficient standards.
Manufacturers that meet the standards can attach an “MH Advantage Sticker” to the home near the HUD Data Plate.
Loans secured by homes designated as MH Advantage can include more flexible requirements such as higher loan-to-value ratios, standard mortgage insurance and reduced loan-level price adjustments.
LTV ratios are as high as 97 percent on purchase financing and limited cashout refinances. Combined LTV ratios can be as high as 105 percent with Community Seconds.
The 50-basis-point LLPA normally required for manufactured housing is not applicable to MH Advantage loans.
If a home has an MH Advantage sticker, lenders can confirm additional information about site improvements — like driveways and sidewalks — but aren’t responsible for confirming the physical characteristics of the home.
“The goal of this initiative is to help bridge the gap in affordable housing by encouraging more consumers to consider manufactured homes as an alternative to site built homes,” Fannie stated.
As of today, lenders can underwrite MH Advantage loans in Desktop Underwriter 10.2, submit the loans to EarlyCheck to validate the data through a new set of MH Advantage edits, and deliver them as whole loans.
