General
Q1.
What is a manufactured home?
Fannie Mae defines a “manufactured home” as any dwelling that is built on a permanent chassis and installed on a permanent foundation system. Manufactured homes must meet the federal Manufactured Home Construction and Safety Standards of June 16, 1976 (the HUD Code) as well as other guidelines per the Fannie Mae Selling Guide.
Other factory-built housing (not built on a permanent chassis), such as modular, is not considered manufactured housing (MH) and is treated the same as site-built housing, and thus is not subject to the MH guidelines.
Q2.
What is a modular home?
Modular homes are homes built in modules at a factory. The modules are transported to the home site on flat-bed trucks and installed. Unlike MH, modular homes conform to the same state, local, and regional codes that apply to site-built dwellings.
Off-frame modular homes are covered by the Fannie Mae Selling Guide as standard single-family detached homes and not as MH. On-frame modular homes are not considered single-family homes and loans secured by such properties are not eligible for delivery to Fannie Mae at this time.
Q3.
Why Does Fannie Mae invest in MH loans?
Fannie Mae invests in MH loans to serve its mission of expanding affordable housing by providing liquidity to a segment of the affordable housing market that is crucial to many Americans. And, although our participation in manufactured housing historically has been small, Fannie Mae remains very committed to this market because manufactured homes provide affordable housing for many low- and moderate-income borrowers seeking affordable housing in high-cost and rural areas.
MH constituted 12 percent of the new housing market in 2008. The average loan amount for a manufactured home mortgage delivered to Fannie Mae in 2008 was $113,000 (compared with $203,000 for site-built homes), making it an attractive option for a wide variety of home buyers.
Q4.
With regard to MH, what is the difference between a classification of “real property” and “personal property”?
With regard to MH, the term “real property” refers to a manufactured home that is permanently affixed to the land on which it is located and that meets all applicable requirements for characterization as real estate. Personal property MH (also referred to as “chattel”) consists of the home only, usually located on leased land. To be eligible for delivery to Fannie Mae as real property, an MH loan must be secured by a perfected lien (or liens) on real property consisting of the manufactured home and the land. The manufactured home must be legally classified as real property under applicable state law, including relevant statutes, regulations, and judicial decisions.
Property Eligibility
Q5.
What MH projects require project approval prior to delivery of the loan to Fannie Mae?
Single-width manufactured homes must be located in a Fannie Mae-approved subdivision, co-op, condo, or planned unit development (PUD) project. Prior to delivery of the loan to Fannie Mae, the project must have received approval from us via the Project Eligibility Review Service (PERS). In the case of cooperatives, both the land and dwelling must be owned by the cooperative. In the case of condominiums, both the land and dwelling must be part of the condominium legal structure.
For mortgage loans secured by multi-width manufactured homes located on individual lots in subdivisions or PUDs, project review generally is not required. For further information about project review and acceptance requirements, see Chapter B4-2, Project Standards.
Q6.
Does Fannie Mae require a special feature code for delivery of loans secured by MH?
Special feature code 235 is required at the time of delivery for loans secured by manufactured homes.
Q7.
May mortgages secured by manufactured homes that are located on private roads be delivered to Fannie Mae?
If the property of which the home is a part is not situated on a public dedicated and maintained street, it must be situated on a street with adequate vehicular access that is community-owned and maintained or privately owned and maintained.
If the property is located on a community-owned or privately owned and maintained street, Fannie Mae requires one of the following:
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There is an adequate, legally enforceable agreement or covenant in place for maintenance of the street and it meets Fannie Mae’s requirements except that, if the property is located in a state that has statutory provisions that define the responsibilities of property owners for the maintenance and repair of a private street, no separate agreement or covenant is required; OR
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If the property is not located in a state that imposes statutory requirements for maintenance, and either there is no agreement or covenant for maintenance of the street, or an agreement or covenant exists but does not meet Fannie Mae’s requirements, the lender must indemnify Fannie Mae for any losses or expenses it may incur due to the physical condition of the street or in order to establish and/or retain access thereto.
Q8.
What can a lender do if the HUD Certification Label or the HUD Data Plate/ Compliance Certificate is missing from the home?
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The HUD Certification Label, sometimes referred to as a HUD “seal” or “tag,” is a metal plate located on the exterior of each section of the home. As an alternative to the original document, the lender may be able to obtain a verification letter with the same information contained on the HUD Certification Label from the Institute for Building Technology and Safety (IBTS) (www.ibts.org.).
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The HUD Data Plate/Compliance Certificate is a paper document located on the interior of the subject property that contains, among other things, the manufacturer’s name and trade/model number. In addition to the data required by Fannie Mae, the data plate includes pertinent information about the unit, including a list of factory-installed equipment. A duplicate HUD Data Plate/Compliance Certificate may be available from IBTS or by contacting the In-Plant Primary Inspection Agency (IPIA) or the manufacturer. A list of IPIA offices is posted on HUD’s Web site
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Delivering Manufactured Housing Loans to Fannie Mae Frequently Asked Questions