There is increasing interest in creating new subdivisions and communities with today’s modern manufactured homes. This reflects well for our industry and scales the demand for our housing as real estate developers place homes in large quantities. Real estate development using manufactured housing is a game-changer for our industry because it transforms outdated perceptions and introduces more people to a clear path to homeownership through manufactured housing. To address this topic, we invited two trusted subject matter experts to share their experiences.
Ray Gritton is the owner and CEO of Homes Direct, one of the nation’s largest retailers of manufactured housing. In 2021, his organization sold over $175 million of homes through its retail outlets, and another $100 million through its wholesale business, all of it was manufactured housing as real estate. Brad Waite is the President and CEO of Land Home Financial Services, a leading lender with origins in manufactured housing. His passion to bring manufactured housing as real estate on par with traditional site-built housing grew into a mission to support affordable housing and transformed his business into a national brand. Ray and Brad are recognized leaders and champions of manufactured housing as real estate. Here are a few of the important points they shared:
- Manufactured housing titled as real estate property is where the real industry growth will come from. Developing subdivisions of our homes scale growth and accelerates the change in perception of our product.
- The two obstacles challenging developers, appraisal values and mortgage financing, have been addressed with Fannie Mae’s MH Advantage® and Freddie Mac’s HOMEChoice®. Appraisers can now compare manufactured homes to similar site-built versions to determine value. Conventional mortgage financing is now on par with site-built homes. With these two obstacles addressed, real estate developers are recognizing all the benefits of our homes.
- Since the target home buyer’s decision is between new site-built and our manufactured homes, the presentation, quality, and floor plans of our homes play an important role. The home buyer expects the same or better from our homes, so model homes are critical to a successful subdivision.
- Best practices for developing a subdivision starts with placing it in a jurisdiction where it’s wanted and having a land consultant to provide support. Resources to help educate decision-makers not familiar with manufactured housing are important. Understanding elevations, specifications, and plot renderings are necessary, particularly where there are architectural requirements and restrictions.
- States like California and New Mexico — where there are no new manufactured housing communities or limited supply of communities — are where we’re seeing manufactured homes as real estate and subdivisions of manufactured homes. We need more of this type of housing across the country to address our nation’s lack of housing supply.
Developing real estate with manufactured housing is very different from home-only sales, as it requires the retailer to be the builder/developer. Can it be profitable? The answer is yes! The current housing supply challenges have created the opportunity for our industry to shine. As more local zoning exclusions are addressed, demand for subdivisions of manufactured homes that mirror their surroundings will increase. Ray Gritton and Brad Waite have focused their careers on manufactured homes as real estate, and are the white paper (or proof-of-concept) that real estate subdivision development is necessary and a game-changer for our industry.
Watch the encore presentation of our webinar, Developing with Manufactured Housing, for the complete discussion with Ray and Brad. You can also see past webinars at https://www.learnmh.com/past-webinars/.