As more of the homebuying population discovers the affordability of today’s manufactured homes, the demand for manufactured and modular homes titled “real property” will continue to grow. In order to keep up with such demand, it is important that the home appraisal industry understand the value of today’s manufactured housing.
What appraisers, homebuyers, realtors, and lenders need to know is that manufactured homes are REAL homes. When placed on a permanent foundation and on owned land, they qualify for conventional mortgages and appraise similarly to site-built homes. However, those facts are often muddled by misinformation and misperceptions.
We invited Scott Reuter, Director of Valuation and Chief Appraiser at Freddie Mac to talk to us about their work. His current focus is ensuring appraisers have the appropriate information and resources to accurately value manufactured homes as more lenders provide conventional financing on these factory-built homes. Scott’s work is directly related to the growth of manufactured housing, as it allows Freddie Mac to buy more manufactured home loans (think billions of dollars.
“The Manufactured Housing industry has a great message that will get better,” Reuter said. Quality, efficiency, and affordability are what make manufactured housing a great housing solution, and informed, knowledgeable appraisers will support their momentum. Freddie Mac’s collaboration with the Appraisal Institute has created the foundation to inform appraisers, with over 3,000 appraisers completing the program. Reuter believes the number will continue to grow. There are similar programs offered by others, such as the Columbia Institute as well as resources created by Fannie Mae that will help the momentum.
As more appraisers go through the training and educational programs, the larger the population that can appropriately value today’s manufactured homes leveraging the policies that exist. One such policy is the ability for appraisers to use site-built comparable homes when valuing CrossMod™, CHOICEHome™, and MH Advantage™-eligible homes. There is a progression that appraisers can apply when determining suitable comparable properties. For example, if there are no comparable CrossMod™ or CHOICEHome™-eligible homes (which is often the case), it’s appropriate to use site-built homes.
While the responsibility of determining a home’s market value falls upon the appraiser, the industry can help. Manufacturers, lenders, and retailers/dealers can provide the appraiser with information and facts that will help them make an informed decision. Most appraisers welcome the additional information. As more CrossMod™, CHOICEHome™, and MH Advantage™-eligible homes are sold, more of them will show up in the MLS and can be used as comparable properties.
Reuter has a positive outlook for manufactured and modular housing. As we enter an era where the old stigmas are dying, they are instead being replaced with quality, efficiency, and curb-appeal that comes with today’s manufactured homes. Freddie Mac intends to continue doing its part in staying current, updating its manufactured housing policies and guidance for appraisers. They also commit to continue communicating through educational resources, training, and outreach.
For lenders, appraisers, or anyone interested in the valuation resources Freddie Mac has made available, go to freddiemac.com/appraisers.
To read Freddie Mac’s approach to appraising manufactured housing, go to freddiemac.com/next-gen-manufactured-housing-requires-a-new-appraisal-approach.
For more information and to watch an encore of Chris Nicely’s conversation with Scott Reuter, visit learnmh.com/past-webinars.
Our next webinar will be on Wednesday, September 15th. The topic of discussion will be, “The Greatest Marketing Event in the History of Factory-Built Housing.” This session will spark creative ideas in promoting the best of factory-built housing. Register now to save your spot!