Key takeaways:
- U.S. faces a housing shortage of up to 7 million homes, pushing prices to record highs
- Experts urge policy reforms to expand access to mortgages and safer loans for manufactured homes
- Outdated titling laws and financing gaps keep millions of affordable homes out of reach
As the United States grapples with a historic housing shortage of 4 to 7 million homes, experts say an overlooked solution is hiding in plain sight: manufactured housing. At a recent event hosted by The Pew Charitable Trusts, housing advocates, lenders, and policymakers emphasized the urgent need to modernize financing rules for these homes, which are often cheaper, energy-efficient, and just as durable as traditional houses.
Affordable yet out of reach
Modern manufactured homes, built under updated HUD construction codes, can cost up to two-thirds less per square foot than site-built homes. More than 22 million Americans currently live in them, yet many remain locked out of affordable financing due to outdated laws and systemic lending obstacles, Pew researchers say.
A key issue? Titling. In 49 states, manufactured homes are automatically titled as personal property, like a vehicle—rather than real estate. This classification often disqualifies buyers from mortgages, forcing them into higher-cost, riskier alternatives.
“Manufactured home financing is the major holdback,” said Dave Anderson, executive director of the National Manufactured Home Owners Association. “If the financing was improved, it would open the floodgate.”
The risks of alternative financing
According to Pew, only 44% of manufactured home buyers have a mortgage. The rest rely on home-only loans, which carry higher interest rates, shorter terms, and fewer protections.
Worse, a significant portion—particularly those unable to title their home as real estate—resort to contract financing arrangements like lease-purchase or land contracts. These deals often lack clear terms and legal protections, putting borrowers at elevated risk of eviction, equity loss, or fraud.
“There are so few safeguards,” said Daniel Rezai, a housing attorney at the Virginia Poverty Law Center. “Oftentimes the seller never even owned the home—they just evicted the previous tenant and sold it again under contract.”
Three key policy opportunities
Speakers at the Pew event identified three major reforms to unlock safer, more accessible financing for manufactured homebuyers:
Modernize Titling Laws: States can revise legal frameworks to make it easier for manufactured homes to be titled as real estate, enabling access to mortgages and refinancing options.
Revive FHA Title I Loan Program: The Federal Housing Administration should update its home-only loan program to mirror standard mortgage policies—such as underwriting automation and allowable fees—making it more attractive for lenders.
Enhance Protections for Contract Financing: Lawmakers at both the federal and state level should bolster consumer protections for borrowers using nontraditional financing arrangements.
A hidden opportunity in the housing crisis
Despite being safer and more affordable, home-only loans remain limited by the absence of a robust secondary market, leaving lending to private equity groups with fewer resources and higher pricing.
“We could offer homeownership to more Americans,” said Paula Reeves, president of the Affordable Housing Division at Land Home Financial Services. “It’s got to happen.”
With home prices soaring and millions priced out of the market, policymakers now face a clear opportunity: reforming manufactured home financing could not only bring relief to underserved buyers but also boost the national housing supply—quickly and affordably.
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