Freddie Mac announced plans to expand its CHOICEHome mortgage program to include modern single-section manufactured homes among the conventional financing options that qualify for the program. The move will provide lenders more innovative financing options in an attempt to help increase the affordable housing supply.
The government-sponsored enterprise (GSE) also hopes the expansion will make “factory-built” homes a more attractive option to homebuyers and builders, according to a press release issued by Freddie Mac Chairman and Federal Housing Finance Agency (FHFA) Director Bill Pulte.
“Under President (Donald) Trump, U.S. Federal Housing is committed to delivering affordable homeownership and finding ways to grow our nation’s housing supply,” Pulte said. “Modern single-section factory-built homes can offer high-quality alternatives at a lower price point. Freddie Mac’s expansion of the CHOICEHome program helps make more homes accessible to more Americans through the conventional mortgage market.”
Modern single-section factory-built homes are typically more affordable than traditional site-built houses because they combine the advantages of factory- and site-built construction, the release noted. Clayton, a manufacturer of “CrossMod” homes, welcomed Freddie Mac’s announcement.
“We join the entire industry in celebrating Freddie Mac’s significant effort to add the single-section home design to their CrossMod mortgage program,” said Kevin Clayton, CEO and namesake of Clayton, in the release. “This important update will now provide attainable, energy-efficient homeownership to many more deserving families, helping to make these homes available in established neighborhoods and narrow urban lots.”
Freddie Mac asserted these homes are “built to exceed federal standards” mandated by the U.S. Department of Housing and Urban Development with a mean price of approximately $200,000, including the cost of land in most markets. Traditional single-family site-built homes frequently cost more than $500,000 on average, according to the release.
“Freddie Mac’s support for modern single-section factory-built homes will play an important role in creating and promoting affordable housing in markets that need additional supply to help first-time homebuyers,” Freddie Mac Executive Vice President and Head of Single-Family Acquisitions Sonu Mittal added. “Lenders can leverage our existing CHOICEHome mortgage offerings to finance these homes, and we are ready to purchase these loans now.”
Freddie Mac’s existing financing options include financing for multi-section factory-built homes with a 3 percent down payment option.
As of Aug. 6, Freddie Mac is providing financing options for single-section, or single-wide, modern factory-built homes for the first time in its history.
The GSE also emphasized its commitment to ensuring that CHOICEHome financed manufactured homes meet specific construction standards. These include features such as permanent foundations, energy-efficient designs, pitched roofs, attached garages and enhanced durability and comfort of the home, which are meant to make for easier integration with existing neighborhoods that include site-built homes, including urban infill.