Fannie Mae announced today that it is working with nine lenders to “transform” the manufactured housing sector. One of its goals would be to offer 30-year manufacturing housing borrowers loans with down payments as low as 5%.
According to the Fannie Mae release, the following lenders are participating in the program: AgFirst Farm Credit Bank, Flagstar Bank, GMAC Manufactured Housing, Huntington Mortgage Group, Origen Financial, RBC Mortgage, 21st Mortgage, Vanderbilt Mortgage and Washington Mutual.
“By working with these lenders, we want to learn from their best practices as well as ensure that they have a more widespread adaptation (of these practices),” said Alfred King, director of public affairs at Fannie. He added that by working with these lenders, Fannie could help transform the manufactured housing market to add stability and lessen problems arising from borrowers in trouble.
King said that the 5% down payment would help ensure that borrowers have a sufficient stake in their homes. “We heard that 5% down is the amount at which borrowers feel like they have a chance at an affordable mortgage payment.” Having the 5% down payment option could reduce the borrower’s monthly mortgage payment by $100 dollars. “For borrowers in the lower end of the income scale, that could make a difference between being a homeowner or not,” King said.
In related on news, on Monday GMAC-RFC announced the forming of GMAC Manufactured Housing (listed above in Fannie’s program), a division intended to originate, service and eventually securitize MH loans.