November 7, 2023
If you need an FHA manufactured home loan, you may benefit from updated FHA and HUD appraisal policies announced in November 2023.
The FHA published its revised manufactured housing guidelines, specifically for the appraisal of manufactured homes certified under Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome programs.
These homes and other manufactured housing now get added consideration in the appraisal process when there are less than the required amount of “certified manufactured homes available.”
FHA Loan Appraisal Changes Explained
When the FHA changed its policies, the new rules ordered FHA appraisers to use “the most appropriate” comparables “when there are less than two comparable sales of these certified manufactured homes available.”
A “comparable” is a similar property type the FHA appraiser can review side-by-side with the property being appraised to see how the two compare. The new requirement for mobile home comparables is “effective immediately.”
These rule changes came about in part because certain manufactured homes certified under Fannie Mae and Freddie Mac programs, such as those known as “CrossMods,” may include design features “that make them nearly indistinguishable from many site-built homes.”
The FHA and HUD literature addressing these alterations notes they may “…improve the valuation of these homes for borrowers seeking FHA-insured mortgages. These changes also contribute to FHA’s efforts to increase the availability and affordability of manufactured housing…”
Ending Regulatory Barriers
The manufactured housing appraisal changes are meant to be a solution to certain prior “regulatory barriers” that affected some housing markets “jurisdictions that “have historically restricted the placement of manufactured homes.” The new appraisal rules are meant to ease some of those restrictions.
Why The Changes Matter
The changes are designed to be part of a larger Biden Administration plan intended to increase the affordability of manufactured homes. The new policies also bring the FHA and HUD closer to industry standards already present in other parts of the housing sector.
Making Affordable Housing More Widely Available
FHA officials say these rule adjustments were meant to change the supply of affordable housing in America. HUD Secretary Marcia L. Fudge, quoted in an FHA/HUD press release, says, “The critical step we’re taking today ensures HUD is in alignment with our industry partners, and it will make more quality affordable housing available to people across the country.”
FHA officials add these new rules eliminate “another roadblock” to helping Americans find affordable homes.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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