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Fannie Tightens Mfg Housing Guidelines

Fannie Tightens Mfg Housing Guidelines

Lower LTVs among changes

September 8, 2003



A growing concern about the performance of manufactured housing loans had led Fannie Mae to issue new guidelines for making and servicing the loans.Loans secured by manufactured homes must meet new mortgage underwriting, appraisal and title and lien requirements to be eligible for purchase by Fannie, according to a joint statement from the Appraisal Institute and the Manufactured Housing Institute.

Two organizations are offering online education seminars to “provide appraisers, underwriters and others in the industry with an in-depth look at manufactured housing and give appraisers instructions on the necessary observation and reporting procedures,” according to the statement.

Information about the online seminar is available at

“We have worked with (Manufactured Housing Institute) for nearly a year to address the appraisal and financing issues” raised by lenders and the secondary mortgage market regarding financing for manufactured homes, Alan E. Hummel, president of the Appraisal Institute, said in the statement.

The online seminar will be followed by live versions of the classes that will be held across the country through 2004.

Lending requirements on borrowers have also been tightened. Downpayments must be higher and equity available through refinancings must be lower, the government sponsored housing enterprise said.

In June, Fannie issued the guidelines and in a statement said while the company is “committed to providing funding for this important segment of the housing market,” it will do so “under terms that will provide successful homeownership opportunities for consumers while ensuring that mortgages we purchase meet our credit standards.”

Fannie expressed concerns about the state of the manufactured housing industry, which the company said has “undergone many changes in recent years.”

“Shipments of new homes are at their lowest levels in decades and many traditional manufactured housing lenders have exited the market, resulting in a reduction of financing options,” the secondary lending giant said. “Industry sources estimate that the number of repossessed and foreclosed manufactured homes has reached an all time high.

Lending needs more scrutiny because too many borrowers are taking out mortgages they cannot afford, “leading to financial hardship and in some cases default,” the company said.

Freddie Mac is expected to adopt the guidelines by the end of the year.

The new guidelines will help “ensure that borrowers continue to have opportunities for long-term homeownership under financing terms that are appropriately suited for this housing product,” Fannie said.

Chris Stinebert, president of the Manufactured Housing Institute, said the training and education on the appraisal of manufactured homes “will significantly enhance the quality of … appraisals and address the needs of lenders, Fannie Mae and Freddie Mac.”

Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at:

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