Manufactured Housing FAQ

A manufactured home is built in a factory in accordance with the Manufactured Home Construction and Safety Standards of June 1976 (“the HUD Code”-- 24 C.F.R. Part 3280) and secured on a permanent, non-removable steel frame or chassis. The home can be built as one complete section, or in multiple sections, and then transported, assembled and installed at the home site.

Mobile homes, or trailers, were built on wheels, prior to the 1976 HUD Code, and could be pulled by a vehicle. Mortgages secured by mobile homes are not eligible for sale to Freddie Mac.

Modular homes (or other factory-built dwellings) are not built in compliance with the HUD code. They're built to conform to state, local, or regional building codes and are usually legally classified as real property. Typically, modular, or other factory-built homes are eligible as site-built single-family homes for financing, appraisal, and construction financing purposes.
 

Traditional site-built homes are constructed at the building site, not offsite in a factory. Common construction materials are 2x4 and 4x6 precut wood used for framing and trusses. Site-built homes must conform to the state, local or regional codes where the house is located. Most new homes constructed today are site-built.

When newly built, every manufactured home is inspected at the factory by an independent third-party inspector certified by HUD. The manufactured home will have:

• A special HUD Certification Label affixed to the exterior of each section of the home indicating it has been designed, constructed, and inspected to comply with the HUD Code standards
• A HUD Data Plate/Compliance Certificate, which is a paper label mounted in the home, that contains, among other things, the manufacturer's name, trade/model name, year manufactured and serial number, and a list of the certification label number(s), etc. The data plate is typically affixed in a readily accessible and visible location (e.g., near the main electrical panel, in a kitchen cabinet, or a bedroom closet).

No. An engineering inspection is not required for all manufactured home transactions. Our guidelines require the appraiser to perform a complete visual inspection of the interior and exterior areas of the manufactured home. If the appraiser observes conditions that require further investigation, the appraiser must make the appraisal "subject to" an inspection by an appropriately licensed professional or another person trained in the particular field of concern.

Manufactured homes may be legally classified as real property or personal property based on how they are titled in accordance with state law. In general, manufactured homes can only be classified as real property if they are permanently affixed to the land. A loan secured by a manufactured home titled as real property will be secured by the manufactured home itself and the land the home is located on. Freddie Mac purchases mortgages secured by manufactured homes titled as real property.

Manufactured homes classified as personal property are generally treated more like vehicles under state law. In many cases, the owner owns the manufactured home and leases the land on which the manufactured home is located. A loan secured by a manufactured home that is titled as personal property will generally be secured by the home only. Freddie Mac does not purchase mortgages secured by manufactured homes titled as personal property.

Yes, a mortgage secured by a single-wide manufactured home is eligible for sale to Freddie Mac as long as all Guide requirements are met.

Mortgages secured by Manufactured Homes are eligible for sale to Freddie Mac if the requirements in Guide Section 4204.2 and 5703.3 are met.

Freddie Mac mortgage products for manufactured homes include 15-, 20- and 30-year fixed-rate mortgages; 7/6- and 10/6-month adjustable-rate mortgages (ARMs); integrated construction conversion documentation; Freddie Mac GreenCHOICE Mortgages and Freddie Mac CHOICERenovation Mortgage.

Yes. Our Single-Family Seller/Servicer Guide allows the use of gift and/or grant money that the borrower does not have to repay.  Home Possible mortgages may be secured by manufactured homes, subject to conditions.

No. Loans secured by manufactured homes are not eligible for an ACE waiver.

All Mortgages secured by manufactured homes must be submitted to Loan Product Advisor. Mortgages secured by single-wide manufactured homes must receive a Risk Class of Accept. Mortgages secured by multi-wide manufactured homes that receive a Risk Class of Caution or an assessment status of invalid, ineligible, or incomplete, must be manually underwritten in accordance with the requirements of Topics 5100 through 5500 and comply with the minimum Indicator Score requirement found in Exhibit 25.

Manufactured homes on leasehold estates are eligible for sale to Freddie Mac, provided the requirements of Chapter 5706 are met. Sellers must obtain Freddie Mac’s written approval before selling Mortgages secured by a Manufactured Home on a leasehold estate to Freddie Mac.

See Exhibit 19 for applicable credit fees in price for manufactured homes.

You can access our Duty to Serve planpdf, at Freddie Mac Underserved Markets Plan.

Integrated Construction Conversion Documentation allows lenders to close the interim financing for construction of a manufactured home (i.e., site preparation, purchase, setup, and delivery) and permanent financing in one transaction. Once the home purchase and installation are complete, the loan seamlessly converts into permanent financing.

Manufactured homes are eligible for single close construction conversion financing using integrated construction conversion documentation. Reference 4602.3 for more information.

With separate documentation, lenders conduct two closings for construction conversion mortgages secured by manufactured homes: one closing to fund the purchase, delivery, and setup of the home and a second closing to establish the permanent financing. This two-close process requires two loans to be processed and approved, two layers of closing cost fees, extra requirements for compliance and paperwork for two loans.

With integrated documentation, lenders conduct a single closing that incorporates both the interim construction financing and permanent financing in one set of documents, with one set of closing costs and fees, plus one appraisal and approval process.

Yes. We've just provided an additional financing option. Choose the most efficient process for your business and consult state and county guidelines on titling.

With single-close financing, you'll save time and money by having only one loan closing, with one set of closing costs and fees, plus one appraisal and approval process.

Freddie Mac requires lenders to comply with all applicable laws, including state-specific property requirements for manufactured housing. It is important for you to review your state's laws and regulations, including real property conversion guidelines to ensure you can take advantage of the single close option.

Yes.

Yes. Delivery to Freddie Mac will occur after the construction financing phase ends and conversion to permanent financing has occurred. Please note, only the permanent financing is eligible for sale to Freddie Mac.

Yes, Freddie Mac permits modification documentation for construction conversion mortgages secured by manufactured homes for a two-close transaction.

Contact your Freddie Mac representative for more information. Also, review details under Integrated Construction Conversion Documentation in our Single-Family Seller/Servicer Guide Section 4602.3.