The housing supply shortage has caused public and private policymakers to consider manufactured housing (MH) as a potential solution for increasing the affordable housing stock. This brief focuses on the financing for manufactured housing through personal property loans and evaluates recent policy efforts to expand government-backed financing for this type of loan.

Why this matters

The benefits of federal participation and greater liquidity for personal property loans can play a critical role in supporting the low-cost segment of the housing market and expanding affordable housing supply.

 Key takeaways

• Of the 55,703 MH loans originated in 2022, around 42 percent were personal property loans. There are various possible reasons for the popularity of personal property loans.
• In general, personal property MH borrowers are in a riskier legal and economic position than purchasers of homes that can be titled and mortgaged as real property.
• Both the government-sponsored enterprises’(GSEs’) Duty to Serve and underserved markets plans and President Biden’s Housing Supply Action Plan call for support to increase the availability of financing for MH loans.
• Expanding the conventional securities market for personal property loans may produce many benefits, including better disclosures of pricing, terms, and borrowers’ rights; a larger number of lenders and loan products; more competition in the pricing and terms of personal property loans; and standardization of many personal property loan origination and servicing processes.
• As policymakers consider creating greater liquidity for personal property MH loans through the GSEs and the Federal Housing Administration, we believe these developments lend themselves to a reevaluation of the protections available to personal property MH owners. Industry, Congress, the Federal Housing Administration, and the GSEs should consider adding greater consumer protections into personal property MH loan purchase programs.