Hillside Home

Mortgage

Innovations in Real Property:

Manufactured Homes,Alternative Ownership Models,

and the Availability of Mortgage Financing
Table of Contents

© 2022 Fannie Mae Page 1 of 10

Introduction

Profiles in Unique Manufactured Homeownership Scenarios:

1. Resident ownership in land-home cooperatives

New Opportunities: Leveraging Manufactured Housing in a

Community Land Trust Shared Equity Model

The Path Forward: What Else Is Needed to Support the Availability

of Mortgage Financing for Manufactured Homes on Leased Land?

About the Author

2

3

3

5

8

9

10

2. Long-term leasehold communities owned by privately

 owned manufactured home community operators
Introduction

As part of our commitment to promote transparency regarding our Duty to Serve activities and to

invite collaboration and new perspectives from a diverse range of stakeholders, Fannie Mae is

sharing this document that summarizes research and industry outreach to stakeholders interested

in broadening access to mortgage credit to consumers living in manufactured housing

communities.

With respect to manufactured housing financing, Fannie Mae’s business processes and policies

require a manufactured home (MH) to be legally treated as real property. Titling a manufactured

home as real property provides certain protections to a mortgage lender extending financing for

the property while also offering consumer benefits in the form of potential wealth-building

through home price appreciation and stronger consumer protections.

1 While not a requirement in

all states, real property treatment of a manufactured home is generally possible when the

consumer owns both the home and the land underneath in fee simple and converts the home to

real property under a conversion statute specified by state law.

While the consumers’ ownership of the underlying land is typically a feature of homes titled as real

property, rising housing and land costs in recent years have exacerbated the housing crisis, and

many consumers may not have the financial standing to own their land as a result. With

manufactured housing generally understood to be the lowest-cost homeownership option, the

ownership and stewardship of the underlying land by qualified entities, including private

community operators, non-profit or government entities, or cooperative organizations comprised

of resident shareholders, could present an opportunity to expand access to conventional financing

for low-income consumers. While Fannie Mae’s participation in these markets is limited, our

current Duty to Serve plan for manufactured housing anticipates outreach and product

development efforts to expand access to credit for homes in these scenarios, which may, in turn,

serve as a catalyst for broader acceptance of these types of communities.

Our plan is to update this document as our outreach efforts expand in this segment of the

manufactured housing market through 2024.

© 2022 Fannie Mae Page 2 of 10

1. “Key Legal Distinctions between Manufactured Home Chattel Lending and Real Property Lending,” Fannie Mae.

 Available at: https://www.fanniemae.com/media/28481/display
Profiles in Unique Manufactured 

Homeownership Scenarios: 

1. Resident ownership in land-home cooperatives

Most manufactured home communities in the country are multifamily properties under mom-and-pop 

ownership or increasingly held by institutional real estate investors. Residents of these communities pay a 

monthly fee to site their manufactured home in the community and typically own the manufactured home 

itself. Similarly, while residents of a resident-owned manufactured home community own their homes, they 

also buy a share membership in the cooperative corporation which owns the land. 

This membership affords them the right to site their MH unit on the land and may also include access rights 

to any amenities in the community. While this community ownership model is a relatively small 

component of the overall manufactured home community sector, residents in these communities have 

been found to benefit from lower lot rents and greater resale value for their homes when compared to 

residents living in traditional manufactured home communities.2In addition to these economic 

benefits, residents benefit from the financial security and peace of mind that comes from indirectly owning 

the land underneath their homes. 

As discussed in the introduction, being considered real property under state law is a key 

condition needed to enable traditional mortgage financing for a manufactured home. 

© 2022 Fannie Mae Page 3 of 10

2. Sally K. Ward, Charlie French & Kelly Giraud, “Resident Ownership in New Hampshire’s ‘Mobile Home Parks:’ A Report on Economic

Outcomes” (rev. 2010). Available at: http://scholars.unh.edu/cgi/viewcontent.cgi?article=1009&context=carsey 
While most of Fannie Mae’s real property manufactured home lending involves financing MH units sited on land 

that the borrower owns, Fannie Mae has long financed MH mortgages for homes sited on leased land in residentowned cooperatives located in the state of New Hampshire through a special program.3

Importantly, New 

Hampshire law provides that manufactured homes placed on a site and connected to utilities are considered 

real estate for the purposes of transfer and are conveyed, mortgaged, and leased as real estate—regardless 

of whether the homeowner owns the land underneath the home.4 Numerous academic and industry trade 

publications have heralded New Hampshire’s approach to titling for manufactured homes as a standard-setter for 

enabling homeowners to access competitive mortgage financing and for garnering interest from mortgage lenders 

by ensuring the security of the real property designation. 

As the accommodating laws in New Hampshire have provided the framework for the success of mortgage 

financing initiatives for homes sited in resident-owned cooperatives in the state, consumer advocates have sought 

to promote a national standard for title conversion, which would replace disparate state laws and simplify the 

process of conversion for consumers and mortgage lenders alike. The Uniform Law Commission finalized its 

Uniform Manufactured Housing Act (UMHA) in 2012, which proposed a straightforward way for converting a 

home’s legal status from personal property to real property and offered the act to the states for consideration.5

For example, Minnesota changed its titling law in 2021 to allow homes sited on 

land owned by cooperatives or non-profits to be treated as real property, opening 

up the possibility of bringing low-cost mortgage financing to hundreds of 

homeowners in Minnesota.6

Our outreach to stakeholders involved in supporting cooperative ownership in Minnesota suggests 

that these developments are encouraging, but significant hurdles remain before this becomes the 

default option for owners of manufactured homes sited in communities. This is especially true of 

manufactured homes that are already constructed and for which the consumer has been making 

routine payments on their chattel loan. 

While adoption of the UMHA has been scant, there have been recent success stories as state 

legislatures have updated laws to allow for real property designation of certain manufactured homes.

1. Resident ownership in land-home cooperatives cont.

© 2022 Fannie Mae Page 4 of 10

3. Lenders interested in selling this type of loan to Fannie Mae should first engage their customer account team.

4. “Titling Requirements for Manufactured Homes,” Fannie Mae. Available at: https://singlefamily.fanniemae.com/media/18186/display

5. Titling Homes as Real Property. National Consumer Law Center. Available at: https://www.nclc.org/wp-content/uploads/2022/09/cfed-titling-homes.pdf

6. “Minnesota Legislature passes housing bill, includes big wins for manufactured homeowners,” Northcountry Cooperative Foundation. Available at: 

https://northcountryfoundation.org/blog/2021/9/15/minnesotas-legislature-passes-housing-bill-includes-big-wins-for-manufactured-homeowners

The Home Mortgage Disclosure Act (HMDA) dataset provides some insight into loan origination trends for 

manufactured housing loans under various ownership scenarios, including loans under “indirect 

ownership”—a property characterization understood to be inclusive of loans in resident-owned cooperative 

communities. Of the 715 loans on manufactured homes reported as under “indirect ownership” in 2019, 263 

loans (~37%) were mortgage loans. 
In an analysis of the resident-owned cooperative loans Fannie 

Mae has purchased since its New Hampshire program began, 

2. Long-term leasehold communities owned by privately owned

manufactured home community operators

MH co-op mortgage loans have 

met the statutory income 

requirements for Duty to Serve7

Standard manufactured housing 

loans have met the statutory income 

requirements for Duty to Serve7

95% 

of the time

61% 

of the time

These numbers highlight an opportunity to increase the utilization of mortgages by consumers living in these 

communities and spotlight a form of homeownership that consistently serves low- and moderate-income 

homebuyers, which the Duty to Serve regulation is intended to support. 

While cooperative ownership is touted by many as an important ownership model, most manufactured housing 

communities are still owned by private entities whose goals for the property may be different from those of a cooperative 

organization comprised of community residents. In certain states, holding a recorded lease of a certain term may allow 

the home to be converted into real property. Allowing a real property mortgage to be recorded on a home sited on their 

land may be a dubious proposition for many community owners. However, institutional investors are increasingly 

involved in the construction and acquisition of manufactured home communities to hold in a portfolio of real estate 

assets with the intention of collecting cash flow from the pad rents over a long period of time. As such, a long-term lease 

may serve the interests of the private community owner, a borrower seeking a competitive financing arrangement, and a 

lender anticipating a long-term lease to serve as a component of the collateral for the mortgage loan. 

1. Resident ownership in land-home cooperatives cont. 

© 2022 Fannie Mae Page 5 of 10

7. Fannie Mae analysis of manufactured home cooperative loans delivered from 2008. Standard MH Duty to Serve criteria delivered from 2021 loan purchases only.
2. Long-term leasehold communities owned by privately owned manufactured home community operators cont. 

In our research and outreach this year, two distinct use cases 

for the long-term leasehold model have become evident: 

In “purpose-built” communities, such as planned 

unit developments or condominiums, private 

manufactured home community operators may 

build a large community from the ground up with 

the intent of offering long-term leases to tenants. 

Large and well-respected manufactured housing 

community ownership companies, such as YES! 

Communities, are known to have been involved 

in the construction and ongoing management of 

homes sited in long-term leasehold parks outside 

of the greater Denver, Colorado, metropolitan 

statistical area. 

Based on a review of loans delivered to Fannie 

Mae, we have purchased mortgage loans in at 

least two of these communities: Antelope Ridge in 

Colorado Springs and Prairie Greens in Frederick. 

The purpose-built nature of these communities, 

combined with professional property and asset 

management by well-capitalized owners/

operators, is likely to ensure the long-term 

success of the community and is, therefore, likely 

to attract interest from the mortgage lending 

community as well. 

Conversely, our industry outreach has also uncovered 

scenarios under which the owner of a traditional “land/

lease” manufactured home park consents to the 

recording of a real property mortgage onto a leasehold 

estate for homes sited on individual lots in their 

community. In a break from the traditional short-term 

lease model, the community operator would recognize 

the value of allowing a tenant to secure a low-cost 

mortgage loan and would replace a short-term lease 

with a lease of a term long enough to ensure that the 

home can be financed with a mortgage. 

As many lenders will be looking for a lease term that 

extends at least five years past the maturity date of the 

mortgage, a practical lease term in this scenario could 

be a minimum of 35 years. While this would be a stark 

contrast when compared to traditional leasing practices 

in the manufactured housing community industry, 

providing a path for more mortgage capital to become 

available for consumers could increase occupancy in 

the community and thereby improve the performance 

of the multifamily property. This arrangement also has 

obvious benefits for the consumer, who, in “converting” 

their financing arrangement from a chattel loan to a 

mortgage loan, could save a good deal of money on 

their housing costs. 

“PURPOSE-BUILT” 

COMMUNITIES

TRADITIONAL “LAND/LEASE” 

COMMUNITIES

© 2022 Fannie Mae Page 6 of 10
2. Long-term leasehold communities owned by privately owned manufactured home community operators cont. 

Recent additions of new data points in the Home Mortgage Disclosure Act dataset have provided some 

insight into mortgage loan originations for manufactured homes in these unique scenarios. In 2019, while 

over 60,000 mortgage loans were originated on homes sited on land owned by the borrower, just 26 

mortgage loans were reported as being originated on homes under a “paid leasehold” ownership scenario.8

As the industry-standard financing option for homes on leased land is chattel lending, this is not a 

surprising finding. Even so, the presence of a few real property mortgage loans on land not owned by the 

borrower suggests there are opportunities to better clarify Fannie Mae’s experience lending in these 

communities and to partner with industry stakeholders to ensure the availability of conventional mortgage 

financing for homes in these unique ownership scenarios. 

Fannie Mae will finance manufactured homes subject to a leasehold estate in established condo or 

planned unit development projects approved through its Project Eligibility Review Service. For more 

information on this process, please refer to this fact sheet or Fannie Mae’s Selling Guide. 

© 2022 Fannie Mae Page 7 of 10

8. Fannie Mae review of data tables published in connection with “Manufactured Housing Finance: New Insights from the Home Mortgage Disclosure Act.”

Available at: https://www.consumerfinance.gov/data-research/research-reports/manufactured-housing-finance-new-insights-hmda/
New Opportunities: Leveraging 

Manufactured Housing in a Community 

Land Trust Shared Equity Model 

In addition to the opportunities noted above, Fannie Mae has conducted routine outreach to non-profit 

community land trusts around the country to educate them on its loan product offerings for manufactured 

housing. Community land trusts administering shared equity programs offer homeownership opportunities 

to low-income consumers by lowering the cost of purchasing a home in exchange for retaining some 

percentage of the borrower’s equity in the home at the time the home is resold. Combining the affordability 

of a shared equity mortgage with the inherent affordability of manufactured homes has the potential to lower 

the barrier to entry for homeownership for low-income consumers in communities across the country. 

In a first-of-its-kind development, the Housing Land Trust of Sonoma County in Sonoma, California, 

purchased and installed five MH Advantage® homes on infill lots through partnerships with the California 

Housing Finance Agency and homebuilder Renew Now Homes.9 As of November 2022, the initial homes in 

the community were sold, and Fannie Mae purchased loans originated in this community, providing liquidity 

to a nascent market and highlighting a potentially scalable approach in using manufactured housing to add 

affordable housing stock to the portfolios of community land trust organizations across the country. 

Jamie Lane Development in Sonoma, California

© 2022 Fannie Mae Page 8 of 10

9. For previously published research on this project, see research commissioned by Fannie Mae and conducted by the Terner Center for Housing Innovation at

UC Berkeley. Available at: https://ternercenter.berkeley.edu/research-and-policy/clt-jamie-lane/
The Path Forward: What Else Is 

Needed to Support the Availability of

Mortgage Financing for Manufactured

Homes on Leased Land? 

For the success of its land-home cooperative loan program in New Hampshire, Fannie Mae has relied heavily

on the expertise and convening power of the state’s housing finance agency (HFA). As mission-driven

lending entities, HFAs may be able to bring additional funds to the closing table to support consumers

purchasing manufactured homes, such as down payment assistance funds and funds for closing costs.

In expanding real property mortgage lending in cooperatives to new markets across the country in future

years, Fannie Mae expects to lean heavily on its HFA relationships to promote the program to correspondent

lenders and community banks who share a dedication to serving low- and moderate-income consumers

with competitive loan products.

Down payment

assistance funds

Fannie Mae

While land ownership by an experienced lessor and enabling legislation at the state level are

two key conditions for ensuring the success of a mortgage lending program for manufactured

homes sited on leased land, the realities of small-dollar mortgage lending present

challenges in enticing lender participation, particularly amongst those lenders who

originate loans with the intent of delivering those loans into the secondary market.

© 2022 Fannie Mae Page 9 of 10

Consumers

Strengthen HFA Funds for closing costs

partnerships through

collaborative outreach
Fannie Mae has recently announced several

flexibilities which could incentivize further

lending for small-dollar mortgages and reduce

the cost of origination for such mortgages or

remove potential barriers to loan qualification.

The Path Forward: What Else Is Needed to Support the Availability of

Mortgage Financing for Manufactured Homes on Leased Land? cont. 

Positive Rental Payment Reporting

Positive rental payment reporting is a feature in Desktop Underwriter® (DU®) that allows lenders to use

verification of assets reports (e.g., bank statement data) to identify recurring rent payments to potentially

enhance DU’s credit assessment of prospective, first-time homebuyers. The offering announced in

September 2021 has enabled more than 2,000 loan applications

10

to become eligible for purchase by

Fannie Mae that otherwise would not have been eligible.

Average Median Credit Score

Fannie Mae also launched an average median credit score product flexibility in September 2021. For loans

with more than one borrower, the flexibility will allow lenders to take the median credit score for each

borrower and produce an average score across both borrowers to determine a new score used for the

purposes of loan eligibility. HMDA 2019 data on mortgage originations for MH real property loans

suggested that MH loans under “indirect ownership”

11

that are later defined as being inclusive of homes

sited in resident-owned cooperatives, are more likely to have co-borrowers than real property loans on

homes under direct ownership.

12

© 2022 Fannie Mae Page 10 of 10

10. Available at: https://themreport.com/news/government/06-28-2022/making-rent-count

11. Manufactured Housing Finance: New Insights from the Home Mortgage Disclosure Act Data. CFPB.

 Available at: https://files.consumerfinance.gov/f/documents/cfpb_manufactured-housing-finance-new-insights-hmda_report_2021-05.pdf

12. Fannie Mae analysis of HMDA 2019 data.

These flexibilities include:

About the Author

Will Stoker leads the implementation of Fannie Mae’s Duty to Serve plan

for the manufactured housing market by partnering with members of its

Single Family and Multifamily lines of business.