Freddie Mac Multifamily has announced it will begin purchasing and securitizing Manufactured Housing Community (MHC), or trailer park, loans. These will be commercial loans made to the community owners who own the land on which mobile homes reside.
The move is just one of the latest indicators from the government sponsored enterprises (GSE) that signals their intention to help make credit more available for borrowers. Mel Watt, director of the Federal Housing Finance Agency (FHFA), said in a May 13 speech that the GSEs would be moving to ease requirements on banks in order fortify the nation’s housing markets.
Freddie’s announcement should especially help ease affordability in rural areas.
"Manufactured housing communities are an affordable housing option for many low-income individuals, especially in rural communities where affordable apartments are less prevalent," said David Brickman, executive vice president of Freddie Mac Multifamily.
"Our financing can help to increase debt capital to rural areas and help provide housing options for underserved populations,” Brickman continued. “Nearly half of the nation's manufactured homes are located in rural, non-metropolitan areas."
Freddie Mac initially will work with a few established MHC-experienced lenders in its Program Plus Seller/Servicers network. Additional lenders will be added later this year.
Eligible properties for the loans will be stabilized, high-quality, professionally managed communities owned by experienced operators, and the collateral securing MHC loans will primarily consist of the community's land, infrastructure, amenities and any community-owned rentals.
The primary income securing the mortgage will be from mobile home owners’ pad site rent paid by individuals in the communities.
Freddie loans will be securitized through Multifamily K-Deals along with conventional loans.