FHA Updates Appraisal Requirements for Manufactured Homes to Boost Affordable Housing Supply

Chris Nicely

In a significant move to bolster the supply of affordable housing, the Federal Housing Administration (FHA) has recently announced updates. 

These updates affect its appraisal requirements for manufactured homes certified under Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome programs.These changes, set to take effect on November 2, 2023, mark a critical step in aligning FHA policies with industry partners and expanding the availability of high-quality, affordable housing across the nation.

Manufactured homes, especially those certified under the government-sponsored enterprise (GSE) programs, commonly referred to as CrossMods, have been steadily gaining traction in the housing market. These homes boast design features that closely resemble traditional site-built homes, effectively blurring the line between the two housing types. Furthermore, they address long-standing regulatory barriers that have limited the placement of manufactured homes in various jurisdictions.

One of the most notable updates to the FHA’s appraisal policy is the requirement for appraisers to utilize the most suitable site-built-home comparable sales data when there are fewer than two comparable sales of these certified manufactured homes available. This adjustment acknowledges the increasing popularity and demand for CrossMod homes, ensuring that their valuation accurately reflects their market value.

Speaking on the matter, HUD Secretary Marcia L. Fudge emphasized the importance of utilizing every available tool to expand the supply of affordable housing in the United States. She stated, “Increasing the supply of affordable homes in this country will require us to use every tool available to us. That includes innovative solutions like manufactured housing.” Secretary Fudge’s remarks underline the government’s commitment to addressing the housing affordability crisis and leveraging manufactured housing as a viable solution.

These policy changes are expected to have a far-reaching impact on the housing market, benefiting both homebuyers and the industry as a whole. By ensuring that manufactured homes certified under Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome programs are appraised accurately, potential buyers can make more informed decisions, and the market can better meet the growing demand for affordable housing.

The FHA’s updated appraisal requirements represent a significant step towards increasing the availability of quality, affordable housing in the United States. By aligning its policies with industry trends and promoting innovative housing solutions like manufactured homes, the government is working to provide housing options that are both accessible and of high quality for people across the country. These changes signal a promising future for the housing market, where affordable homeownership becomes a reality for more Americans.

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