Urban Wire Manufactured Housing Could Ease the Supply Shortage, but Stakeholders Need to Be Cognizant of Existing Inequities
Karan Kaul, Daniel Pang
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The US housing market is facing a severe shortage of homes, which has pushed prices out of reach for low- and middle-income households, first-time homebuyers, and households of color. Monthly mortgage payment affordability has worsened as interest rates have risen to the highest level in 12 years. Although no single solution exists, increased production of manufactured homes can play a positive role.

The quality of newly built manufactured homes has improved dramatically, and these homes cost less than one-third as much as site-built homes. The average sales price for new manufactured homes, excluding land, was $108,100 in 2021, according to the US Census Bureau. For comparison, the average price of new site-built homes, excluding land, was $365,900.

Yet, the manufactured home share of new single-family production remains historically low, primarily because of zoning barriers and chattel financing constraints, both of which affect production. Chattel loans have higher interest rates, shorter terms, and higher denial rates than mortgages on manufactured homes, and they are rarely refinanced. But households of color depend more on chattel financing than manufactured home mortgages. As a result, better access and improved affordability for chattel financing can promote equity in homeownership and more broadly ease the supply shortage.

Households of color depend more on chattel loans

Black, Hispanic, and Asian homebuyers combined make up a larger share of chattel purchase lending than manufactured home mortgage purchase lending. A third of chattel purchase loans in 2021 were originated to Black, Hispanic, and Asian homebuyers, compared with 18.7 percent of manufactured home mortgage purchase loans. Chattel financing was particularly crucial for Hispanic borrowers, who accounted for more than one in five chattel purchase loans in 2021. (We use the term “Hispanic” to align with the dataset but recognize it’s not necessarily inclusive of how all members of this group identify.)

In absolute terms, between 2018 and 2021, more than 16,500 Black households and 37,000 Hispanic households purchased homes using chattel loans, while manufactured mortgages enabled homeownership for around 9,300 Black households and 29,400 Hispanic households. Put differently, chattel financing accounted for 63.9 percent of all manufactured home purchase loans to Black households and more than half of manufactured home purchase loans to Hispanic households. Among white borrowers, the chattel share was 36.9 percent.

Households of color, particularly Black households, depend more on chattel financing than manufactured home mortgages in both absolute and relative terms. But chattel financing is substantially more expensive than mortgage financing. In 2021, chattel purchase loans had an average interest rate of 7.8 percent, compared with 3.5 percent for manufactured home mortgages. Chattel loans also carried an average term of 20 years, compared with 30 years for manufactured home mortgages.

Number of Manufactured Home Purchase Loans Originated, 2018-2021






Manufacture home mortgages





Chattel loans










Chattel share 





Source: 2018-2021 Home Mortgage Disclosure Act (HMDA)

Chattel loan applications have high denial rates

Manufactured home mortgages have substantially higher denial rates than mortgages for site-built homes, and chattel loans are denied more frequently than both. In 2021, overall 64 percent of chattel purchase loan applications were denied, compared with 44 percent of applications on manufactured home mortgages and just 9 percent for site-built home mortgages.

Black applicants were most likely to be denied for all three loan types. Black applicants were denied 76.3 percent of the time for chattel loans and 74.2 percent of the time for manufactured home mortgages. Black applicants experienced nearly identical denial rates for chattel and manufactured home mortgages, whereas all other racial groups had lower denial rates for manufactured home mortgages than for chattel loans.

The chattel lending market is highly concentrated, limiting lender competition

The chattel market is mostly non–federally backed. Fannie Mae and Freddie Mac don’t acquire chattel loans, and the Federal Housing Administration’s share of the chattel market is negligible. Without federally backed financing, fewer lenders with expertise to underwrite and manage this risk operate in the space. In 2021, 85 percent of chattel lending volume was originated by the largest five lenders, compared with 21 percent of manufactured home mortgage lending. Limited lender competition may be one reason chattel loans are rarely refinanced.

In 2021, one of the best years to refinance in a generation, the refinance share of chattel originations was only 7.5 percent, compared with 43.4 percent for manufactured home mortgages and 61.2 percent for mortgages on site-built homes. For Black borrowers, the chattel loan refinance share was only 1.7 percent. A federally backed chattel product could give other lenders incentives to enter the space and increase competition.

Stakeholders should be cognizant of these inequities when addressing manufactured housing challenges

Housing market stakeholders increasingly appreciate the role manufactured housing can play in easing the supply crisis. The Federal Housing Finance Agency’s final Duty to Serve rule and the administration’s housing supply action plan both included support for manufactured homes. The Federal Housing Administration and Ginnie Mae recently issued a joint request for information to explore changes to the Title 1 Manufactured Home Loan Program to improve chattel lending.

But inequities in manufactured home lending are prevalent. Compared with manufactured home mortgages, chattel loans are expensive, harder to qualify for, and rarely refinanced. These burdens fall disproportionately on Black and Hispanic households because of the role chattel loans play in enabling homeownership for them. As we explore ways to increase manufactured housing’s role, we must remember that these inequities, if left unaddressed, could widen the racial homeownership gap.

Research Areas Housing finance
Tags Homeownership Housing markets Racial homeownership gap
Policy Centers Housing Finance Policy Center