Manufactured home discrimination is a very real issue in America. Manufactured homes and the people living in them are one of the few remaining groups that face outright discrimination and bias. This isn’t about name-calling or humorous jabs, either, there are outright bans on manufactured homes in towns across the nation. Discrimination doesn’t get much more obvious than that!
Manufactured Home Discrimination is Everywhere!
In addition to outright housing bans, manufactured home owners face blatant discrimination in practically every industry involving housing. This includes finance, insurance, and real estate.
Banks usually refuse to finance most manufactured homes or if they do finance them they have numerous restrictions. Insurance companies use unfounded data to charge more to insure a manufactured home over a site-built home. Realtors and appraisal companies often refuse to deal with manufactured homes at all.
Manufactured Homes are Banned Across the Nation
Many people have protested, both publically and privately, to keep manufactured homes away from their site-built homes for fear of lower property values and higher crime rates.
In response to these protests, towns have been placing land use restrictions on manufactured homes for decades.
Man, They Sure Do Hate Single Wides
One of the most popular land use restrictions involves single wides, they are not allowed within city limits in most areas of the nation.
My hometown in West Virginia, in one of the poorest counties in the entire country, prohibits single wides from being installed within city limits. This is a town of coal camp homes that are over 60 years old and built with no insulation (maybe a single layer of newspaper). The walls are often framed with 2″x 2″ studs but a brand new single wide isn’t allowed.
Luckily, our property is grandfathered in so if we remove our single wide from the property we have one year to install a new single wide, otherwise only a double wide will be allowed.
Double wides are a bit more acceptable but the list of regulations they must meet are usually long and expensive. Common restrictions are roof pitch, siding material, foundation design, skirting, and even landscaping.
They Don’t Like Manufactured Home Communities Much, Either
It isn’t just the homes that are discriminated against, entire manufactured home communities have been kept from development due to mundane ordinances and land use laws. These parks don’t even have to be close to the gated communities. A manufactured home community going in on the same road can cause protests.
According to Frank Wolfe, co-owner of the 5th largest manufactured community owner in the United States, new manufactured home park construction is effectively banned in almost every major city in the U.S., “There are less than ten mobile home parks built per year in the entire nation combined.” (manufacturedhomes.com)
If one manufactured home can plummet property values and bring drug dealers and violence into a community just imagine what several manufactured homes would do?
NIMBY – Not in My Neighborhood!
These regulations and bans against manufactured homes are due to a phenomenon called ‘not in my neighborhood.’
NIMBY is a fear and prejudice based on emotions more than actual facts or data. Some people can’t let their bias of mobile homes go even though their opinions are based on decades old experiences and unfounded data. You could give them endless statistics and data backed up by undeniable resources but it will never change their opinions.
They don’t understand that the modern manufactured home is a completely different thing from the older, and much more mobile, homes of the past.
But Unwritten Bans on manufactured Homes are Just as Common
In some cases, a town may not have a written ban on manufactured homes but that doesn’t mean they actually allow them. They simply put the burden on the building inspections and permitting office to ensure all new homes meet the codes and the standards of the neighborhood, and the neighbors, and the nearby businesses. It’s not hard to create a situation where it becomes too expensive to install a manufactured home. We actually suspect that exact scenario happened to one of our readers.
You can’t fight unwritten bans. Heck, you can barely fight written bans without a lot of money and a ton of connections.
Manufactured Home Discrimination in Banking and Finance
It’s no secret that many lending institutions refuse loans for manufactured homes. Finance discrimination of manufactured housing begins with the US government.
Fannie and Freddie maintain a distinct set of criteria for mortgages secured by manufactured housing that include more demanding appraisal requirements and, for some lenders, an extra pricing charge. Fannie Mae does not permit state housing finance agencies (HFAs) to include MH mortgages in their preferred pricing programs for securitized loan sales. Most lenders follow the lead established by the GSEs (whether or not they actually sell loans to the GSEs) and treat manufactured housing mortgages as different than mortgages for site-built homes. Many lenders simply avoid MH entirely. (Source: I’M HOME)
Discrimination Against Buyers that Don’t Own Land
If you want to buy a new manufactured home and install it in a beautiful manufactured home community you will likely be restricted to a personal loan or chattel loan at higher interest rates.
It’s a system setup to benefit a select few and was created by design. It’s no accident that you will probably have to finance your new manufactured home through the very dealer that sold it to you. Not to mention at higher interest rates than comparable home loans. Consider it a ‘buy here, pay here’ deal for manufactured housing instead of used cars! Ironically enough, manufactured home salespeople are paid on commission just like a used car dealer.
One study indicates that the rates for chattel loans are typically at least two to five percentage points higher than those on mortgages for similar homes and that the chattel loans typically hold twenty-year, rather than thirty-year, terms. A 2006 study found one lender’s chattel loan rates ranged between seven and 10.5%, and a second lender’s between 7.5% and 15%. (Source)
They Discriminate against Land Owners, too!
Don’t worry, manufactured home buyers that own their own land will likely face discrimination as well.
If you do own your land that the home will be installed on you will probably be asked to use it as collateral against the home loan.
If I own my land, I should be able to put any kind of home I want on it. I can understand restrictions if the property is within a gated community or part of a housing authority but not private property.
Are Manufactured Home Loans Really More Likely to be Foreclosed?
Nope. These higher interest rates are not warranted. Recent analysis shows that manufactured home loans perform just as well as site-built home loans. In a couple of areas, they actually do better than site-built home loans!
A groundbreaking I’M HOME report released this week by CFED in partnership with the Fair Mortgage Collaborative, titled Toward a Sustainable and Responsible Expansion of Affordable Mortgages for Manufactured Homes, analyzes $1.7 billion in loan performance data and finds that, contrary to common belief, mortgages on manufactured homes perform as well as comparable site-built home mortgages.
The study goes on to identify manufactured home mortgage products that actually outperform other loans. (Source)
Manufactured Home Discrimination in Appraisals
The discrimination within the manufactured home financing industry begins with home appraisals.
Many within the industry believe that real property appraisers commonly appraised manufactured homes for far less than they are actually valued. This, in turn, is reflected by the poor loan rates. It’s a vicious cycle.
…in some cases appraisers may undervalue a property simply because it is manufactured housing, without adequate regard for the factors that should be taken into account in an appraisal: quality, appearance, interior finishes, other similar characteristics and truly comparable sales. The issue is important because an appraisal that does not value a manufactured home appropriately may prevent borrowers, particularly those with low or moderate incomes, from obtaining the financing that they need to purchase a home, and may artificially depress the asset value of a home, even if the owner has made major investments in it.
ManufacturedHomes.com argues that it is a common practice for home appraisers to automatically lower the value of a home as soon as they determine it to be manufactured. In turn, lenders will use these lower appraisals as justification to discriminate against the manufactured home borrowers.
Realtors Spread Misinformation
Zillow, a popular online real estate listing site, has an advice thread that allows potential homebuyers to ask licensed real estate agents questions. It was in one of these threads that I learned about the rampant misinformation and outright lies that licensed real estate agents tell people about manufactured homes.
The question was simple enough, Are Manufactured Homes A Poor Choice in Housing? Unfortunately, over 40 agents freely provided answers that were based on opinion and emotion far more than actual data.
Just one of my replies in the thread:
Yeah, I got a bit upset…
Manufactured Home Discrimination in the Insurance Industry
One of the best examples of blatant and obvious discrimination against manufactured housing is within the insurance industry. It’s difficult to find an insurance company to insure a manufactured home and if they do it’s not gonna be cheap. Also, you’ll have an even tougher time finding a company that will cover an older manufactured home or mobile home. You’d think, based upon this difficulty, that manufactured homes were more likely to catch fire or burn completely down, huh? That’s not the case at all!
In fact, manufactured homes built after 1976 (when the HUD Code became law) have 38-44% FEWER fires than site-built homes!
Here are a few more facts from the 2013 National Fire Protection Association (NFPA) report comparing fires of manufactured homes against site-built homes:
- The fire death rate in HUD Code homes, those built after 1976, was equivalent to other site-built housing. And that manufactured homes have 38-44 percent fewer fires than site-built homes.
- Manufactured homes have essentially the same fire death rate as other single-family residential homes.
- Manufactured homes have a lower rate of civilian fire injuries per 100,000 occupied housing units than other one or two-family homes. Also, post-HUD standard manufactured homes are more likely than other homes to have fires confined to the room of origin. (Source)
Insurance companies certainly don’t want the truth about manufactured homes to come out. Consumers don’t complain much if they really think manufactured homes catch fire more.
I wrote a whole article a few years ago about the obvious discrimination against manufactured homes within the modern journalism and mass media industry.
Ever notice that you read a lot more about fires, thefts, murders, and other nefarious activities when it involves a mobile home than you do with site-built homes?
How Do We Fix Manufactured Home Discrimination?
We’ve established that manufactured homeowners are systematically treated differently by governments and industries. This isn’t just silly name-calling here, this is life-altering issues that impact our lives tremendously.
So, how do we fix it?
Speaking out against manufactured home discrimination is an important step. Most of us are so accustomed to the discrimination we don’t even realize it’s happening.
I believe knowledge is power. Also, when people understand what they are up against when it comes to manufactured homes it creates a powerful consumer.
We aren’t just fighting silly little opinions and rumors here. We are fighting against huge industries and governments that are making huge profits because of this manufactured homes discrimination. As a whole, we have to be vocal about these issues and make people understand that affordable housing has an important role in our country and that their fears are based on lies and emotions and not facts.
Getting Help from Organizations
One person may not be able to make a big difference against manufactured home discrimination. However, many people working together can.
Thankfully, there are several national organizations that are fighting manufactured home discrimination. Organizations such as Corporation for Enterprise Development (CFED), Manufactured Home Owners Association of America (MHOAA), and the National Consumer Law Center (NCLC),
Have you experienced manufactured home discrimination? Tell us about it in the comments below.
As always, thank you so much for reading Mobile Home Living!