As the United States grapples with an escalating housing affordability crisis, manufactured housing—modern, factory-built homes—has emerged as one potential solution. Here is recent research by The Pew Charitable Trusts that underscores both the promise and the challenges of this housing option.
Manufactured homes offer a cost-effective alternative to traditional site-built houses. Even after accounting for transportation and installation, these homes can cost between 35% to 73% less than comparable site-built counterparts, excluding land costs . Modern manufactured homes are able to feature high-quality finishes and energy-efficient designs, making them comparable in appearance and functionality to traditional homes.
For middle-income Americans earning between $50,000 and $100,000 annually, manufactured housing presents an affordable path to homeownership, especially in areas where traditional housing is out of reach. Additionally, these homes can be deployed more rapidly than site-built homes, addressing urgent housing shortages in both urban and rural settings, reducing capital costs as well.
Despite their affordability, financing manufactured homes can be a significant hurdle. A key issue is the classification of these homes as personal property rather than real estate in many states, limiting access to traditional mortgages. Consequently, many buyers resort to personal property loans or riskier alternative financing methods.
Pew’s research indicates that 20% of manufactured home buyers use alternative financing arrangements, such as land contracts or lease-purchase agreements, which often lack the consumer protections associated with traditional mortgages . These arrangements can lead to higher interest rates and an increased risk of default.
Furthermore, the denial rates for manufactured home loan applications are notably high. In 2021, approximately 40% of mortgage applications and 64% of home-only loan applications for manufactured homes were denied. These barriers disproportionately affect low- and moderate-income families seeking affordable home ownership options.
Pew suggests there are several policy areas that would improve the ability of manufactured housing to deliver on the promise:
- Address Zoning Barriers: Local governments should revise zoning codes to allow for the development of manufactured housing in areas where single-family homes are permitted, increasing the availability of affordable housing options.
- Reform Titling Laws: States should consider reclassifying manufactured homes as real property, enabling buyers to access traditional mortgage financing.
- Expand Federal Loan Programs: Federal agencies like the FHA and Ginnie Mae have begun updating programs to increase access to financing for manufactured homes. However, further reforms are needed to streamline regulations and encourage lender participation.
- Enhance Consumer Protections: Pew indicates that by implementing stronger safeguards for alternative financing, buyers can be protected from predatory practices and financial instability.
Pew states that manufactured housing holds significant promise as one solution to the U.S. housing crisis, offering affordable and efficient homeownership opportunities. However, to fully realize this potential, systemic barriers—particularly in zoning and financing, must be addressed. By implementing targeted policy reforms, policymakers can expand access to manufactured housing and provide more Americans with the opportunity to own a home.
References:
- The Pew Charitable Trusts. (2025). 1 in 5 Manufactured Home Borrowers Use Risky Contract Financing. Retrieved from https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2025/01/1-in-5-manufactured-home-borrowers-use-risky-contract-financing
- The Pew Charitable Trusts. (2024). Despite Reforms, Barriers Still Make It Difficult for Americans to Finance a Manufactured Home. Retrieved from https://www.pewtrusts.org/en/research-and-analysis/white-papers/2024/12/16/despite-reforms-barriers-still-make-it-difficult-for-americans-to-finance-a-manufactured-home(Pew Charitable Trusts)
- The Pew Charitable Trusts. (2024). Additional Manufactured Housing Could Benefit Millions of U.S. Homebuyers. Retrieved from https://www.pewtrusts.org/en/research-and-analysis/articles/2024/11/20/additional-manufactured-housing-could-benefit-millions-of-us-homebuyers(Pew Charitable Trusts)
- The Pew Charitable Trusts. (2024). Builders Tap Manufactured Homes to Increase Supply of Lower-Cost Housing. Retrieved from https://www.pewtrusts.org/en/research-and-analysis/white-papers/2024/04/builders-tap-manufactured-homes-to-increase-supply-of-lower-cost-housing