1

Multifamily Economic and Market Commentary

Manufactured Housing Community Fundamentals Remain Steady Mid-Year 

Sales Rise in 2021 

During the first half of 2021, sales of MHC 

totaled $3.2 billion, which is 75% higher than 

the sales for the first half of 2020. This total was 

the strongest start to any year since 2017, as 

shown in the adjacent chart. The volume was 

evenly split between single asset sales and 

portfolio sales, which each totaled about $1.6 

billion in the first half of the year.

Investor Interest in Many Metros

Investors have appeared most interested in 

Los Angeles over the past few quarters, 

spending about $600 million to acquire MHC in 

the large Los Angeles metro area, as shown in 

the adjacent chart. Investors also remained 

interested in another traditional stronghold for 

MHC, snapping up just under $350 million in 

properties in the Phoenix metro area.

Investor interest in MHC has also grown 

beyond the Sun Belt. Investors acquired just 

under $165 billion in MHC in Detroit, making it 

one of the top metros for investment in MHC 

over the past year.

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

2017 2018 2019 2020 2021

Sales Volume ($B)

1H Volume Full Year Volume

MHC Sales Volume ($billions)

Jan. 1, 2017 – June 30, 2021

Source: Real Capital Analytics

$0

$100

$200

$300

$400

$500

$600

$700

Los

Angeles

Phoenix Daytona

Beach

Dallas Detroit

Sales Volume ($M)

Single Asset Portfolio

Source: Real Capital Analytics

MHC Sales Volume ($millions)

Q3 2020 – Q2 2021

According to the Urban Institute, owners and renters of manufactured homes are more likely than residents of 

other housing types to work in the five industries most vulnerable to job loss during the pandemic, with 35% of 

owners and 43% of renters working in the food and accommodation, retail, construction, entertainment, and other 

services sectors. While these sectors have been adding jobs, they are not yet at pre-pandemic levels, and an 

ongoing threat remains from the resurgence of COVID-19 due to the Delta variant. This may have had a negative 

impact on manufactured housing communities (MHC) and investor interest in the segment. However, to date, MHC 

fundamentals remain steady, despite volatility in the job market. We believe this bodes well for continued investor 

interest in the MHC sector.

SEPTEMBER 2021
2

Multifamily Economic and Market Commentary

Two Types of MHC

There are two types of MHC: All Ages communities and Age 55+ communities. Age 55+ communities, as the 

name implies, are targeted to seniors. All Ages communities tend to attract families and those who do not 

want to live in Age 55+ communities. Fundamentals in both segments of MHC appear to have weathered 

the pandemic across all regions of the country so far. 

Current 

Occupancy

Previous 

Occupancy

Change Q2 2021 Q2 2020 Change

Midwest 93% 91% +1.2% $500 $481 +4.0%

Northeast 97% 97% +0.3% $515 $500 +3.0%

Pacific 98% 98% -0.1% $773 $750 +3.1%

South 96% 96% +0.3% $587 $563 +4.3%

Southwest 95% 95% +0.3% $568 $545 +4.2%

West 94% 93% +0.7% $652 $626 +4.2%

National 96% 96% +0.2% $628 $605 +3.8%

Age 55+ - MHC Occupancy and Rents for Select Regions as of July 1, 2021* 

Source: Datacomp/JLT * Based on Trailing 12-month average as of July 1, 2021

Note: Rents exclude utility payments. 

Occupancy Remains Solid in 55+ Communities

Some seniors like to purchase homes in Age 55+ communities for the ease of maintenance and enjoyment of the 

amenities that are usually offered. This trend has not changed over the past several months, despite the 

ongoing pandemic. Nationally, the occupancy rate in Age 55+ communities has remained high at 96%, as shown 

in the table above.

With occupancy rates of 97% or higher, Age 55+ communities in the Northeast and Pacific regions of the country 

had the highest occupancy rates as of Q2 2021 among the six regions tracked by Datacomp. The other regions 

saw a slight increase in occupancy. Even the Midwest, which traditionally has had the weakest occupancy, saw 

occupancy grow over the past year by 1.2% to 93% as of July 1, 2021.

Healthy Rent Growth in Age 55+ Communities

Despite the pandemic, rents grew 3.8% over the past year for pad sites rented in Age 55+ communities as of Q2 

2021. This is not surprising as most retirees living in these type of communities tend to have steady monthly 

sources of income, like retirement and Social Security payments. In fact, four of the six regions tracked by 

Datacomp recorded rent increases in excess of 4.0% over the past year, with the South recording the highest 

increase at 4.3%.
3

Multifamily Economic and Market Commentary

All Ages Occupancy Improves as of Q2 2021

Despite the pandemic, the data for All Ages communities shows that occupancies improved over the past 

year in all six regions tracked by Datacomp. While this may seem counterintuitive, in surveying MHC 

owners, Datacomp/JLT found the demand for homes grew during 2020 as some renters looked to purchase 

new homes for additional space and then chose to locate those homes on a pad site rented in an MHC. This 

trend has continued into 2021 and has been limited only by a delay in the delivery of new homes due to 

supply chain disruptions during the pandemic, as well as still elevated (but recently falling) lumber prices. 

Nationally, the average occupancy rate for All Ages communities increased by 1.1% during the year, ending 

Q2 2021 at 93%. Occupancies remain at 94% or higher for five of the six regions tracked by Datacomp as of 

the end of Q2 2021, as shown in the table below. While the Midwest shows the weakest occupancy, it 

strengthened by 1.8% over the past year to 88% as of the end of Q2 2021.

Rent Growth Positive in All Ages Communities

Although not as strong as the rent growth in Age 55+ MHC, on average, pad site rents in All Ages communities 

increased year over year. Despite the pandemic, rents grew by 3.4% over the past year for pad sites rented in 

All Ages MHC communities to a nationwide average of $553 as of Q2 2021, as shown in the table above. In 

fact, pad site rents increased by at least 3.0% over the past year (ended Q2 2021) in five of the six regions 

tracked by Datacomp. 

Pad site rents are the least affordable in the Pacific region, which includes California, Washington, and 

Oregon. However, even in this expensive region, rents grew by 2.8% during the year ending Q2 2021 to $915 

on average. Rent growth was strongest in the West and South, growing by 4.3% during the year to $657 and 

$507, respectively, as of the end of Q2 2021.

Current 

Occupancy

Previous 

Occupancy

Change Q2 2021 Q2 2020 Change

Midwest 88% 86% +1.8% $442 $428 +3.3%

Northeast 94% 93% +0.4% $519 $504 +3.0%

Pacific 98% 98% -0.2% $915 $890 +2.8%

South 94% 93% +0.9% $507 $486 +4.3%

Southwest 95% 93% +1.3% $478 $461 +3.7%

West 96% 96% +0.9% $657 $630 +4.3%

National 93% 91% +1.1% $553 $535 +3.4%

All Ages MHC - Occupancy and Rents for Select Regions as of July 1, 2021* 

Source: Datacomp/JLT * Based on Trailing 12-month average as of July 1, 2021

Rents Exclude Utility Payments 
4

Multifamily Economic and Market Commentary

MHC Cap Rates for Sales Remain Stable... 

With ongoing interest from a wide variety of 

investors, and few new communities under 

construction, capitalization rates for institutionalquality MHC have declined significantly in recent 

years. According to Real Capital Analytics, which 

tracks larger transactions, the average cap rate for 

MHC sales fell from an average of 7.0% in Q2 2014 to 

just under 5.0% as of Q2 2021, as shown in the 

adjacent chart. While more volatile, CoStar data also 

shows similar compression, with the average cap 

rate for MHC sales falling from 9.5% in Q2 2014 to 

8.3% as of Q2 2021. 

...but There is Wide Dispersion

Both Real Capital Analytics and CoStar show a wide 

dispersion of cap rates at the time of sale during the 

first half of 2021. For example, CoStar data shows 

that about 22% of MHC cap rates at the time of sale 

for the first half of 2021 were under 6%, as shown in 

the chart to the right. Another 33% fell into the 6% 

to 7.9% range, and 19% fell in the 8.0% to 9.9% 

range. 

CoStar data reflects the sales of many smaller MHC 

properties, which tend to have higher cap rates on 

average due to potential volatility in cash flow. 

CoStar data reported that the average number of 

pad sites per MHC sold in the first half of 2021 was 

just under 100, compared to just under 200 pad sites 

for sales tracked by Real Capital Analytics during the 

same time period. This is reflected in CoStar’s cap 

rate dispersion, with about 12% of MHC cap rates at 

the time of sale greater than 12%. 

Source: Real Capital Analytics (RCA), CoStar

Note: RCA data is the quarterly average excluding refinances. 

Based on a trailing 12- month average. Includes property or 

portfolio sales of $2.5 million or greater.

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

RCA MHC Average Cap Rate

CoStar MHC Average Cap Rate

Manufactured Housing Community (MHC) 

Average Cap Rate for Sales

Source: CoStar

Manufactured Housing Distribution of Cap Rates 

during 1H 2021
5

Multifamily Economic and Market Commentary

0%

20%

40%

60%

80%

100%

'17 '18 '19 '20 '21

Property Acqusition Refinance

Share MHC Financing For Property Acquisition vs. Refinance

Jan. 1, 2017 – June 30,2021

Source: Real Capital Analytics, August 2021

0

1,000

2,000

3,000

4,000

2013 2014 2015 2016 2017 2018 2019 2020 2021

1H

CMBS MHC Lending Volume ($millions)

Jan. 1, 2013 – June 30, 2021

Source: Commercial Mortgage Alert

Includes both Conduit financing, which excludes agency lending, and 

Rule 144A financing, which includes securities registered with the 

SEC.

MHC Price per Site Dips Slightly 

According to data from Real Capital Analytics, MHC 

prices per site declined 5.8% during Q2 2021 to an 

estimated $63,000 per site. However, this still 

represents a 12.5% increase over the average 

$56,000 per unit recorded in Q1 2020, which was just 

at the start of the pandemic-induced recession. This 

data suggests to us that MHC have held their value 

relatively well despite the pandemic. 

Further, MHC are far less expensive to purchase than 

other multifamily properties. The average MHC price 

per site as of Q2 2021 was only a third of a traditional 

multifamily property price per unit -- another reason 

this segment remains of interest to investors.

Refinances Decline Modestly in 2021 

The split between lending for property acquisition 

and refinance of existing properties varies from year 

to year. As shown in the adjacent chart, over 75% of 

MHC lending in 2020 was for refinances, due to a 

combination of factors. Property owners took 

advantage of low interest rates to refinance in last 

year, and many owners held off on selling properties 

during the pandemic. During the first two quarters of 

2021, sales are again rising. Accordingly, the 

financing of acquisitions has risen to about 35% of 

MHC lending volume in 2021, according to data from 

Real Capital Analytics.

CMBS Comes Roaring Back

As shown in the adjacent chart, it appears that the 

CMBS sector is again financing MHC. CMBS lending 

volume for MHC grew to $3.5 billion in the first half of 

2021, compared to just $150 million for all of 2020. 

This is primarily due to an affiliate of Brookfield Asset 

Management securing a $2.2 billion refinancing on 

its portfolio of 124 U.S. MHC properties extending 

across 13 states in April 2021.

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

Apartment PPU

MHC Price Per Site 

RCA MHC Price per Site Apartment PPU

Manufactured Housing Community Price per 

Site vs. Multifamily Price per Unit

Source: Real Capital Analytics

Quarterly based on trailing 12 month average. Includes property or portfolio 

sales $2.5 million or greater
6

Multifamily Economic and Market Commentary

Fannie Mae Finances MHC...

As shown in the adjacent chart, Fannie Mae financing of 

MHC has grown. Fannie Mae financed $5.5 billion of 

lending on MHC during calendar year 2020, a 120% 

increase over the $2.5 billion financed in 2019. 

...Which Have Performed Well

As of Q2 2021, Fannie Mae had financed almost 1,600 

MHC loans with a total unpaid principal balance of just 

over $17 billion. This represents 4% of Fannie Mae’s 

multifamily guaranty book of business, on par with the 

shares represented by Student and Seniors housing. As 

of Q2 2021, there were no MHC loans in forbearance 

and the serious delinquency rate was just 0.02%. While 

the average UPB was about $10.9 million.

Source: Fannie Mae Multifamily Business Information 

Presentation as of August 2021

Total

UPB* 

($B)

Loan 

Count

Average 

UPB* ($M)

Average 

OLTV**

Share 

Fixed 

Rate

Share Full 

InterestOnly

Share Partial 

Interest – Only1

Share Small 

Balance2

Loans in 

Forbearance 

(%)

Serious 

Delinquency 

Rate3

$17.2 1,573 $10.9 65% 94% 24% 57% 51% 0% 0.02%

Source: Fannie Mae Q2 2021 10Q Financial Supplement

* UPB : Unpaid Principal Balance

** Weighted Average Origination Loan to Value Ratio

1 Includes any loan that was underwritten with an interest-only term less than the term of the loan, regardless of whether it is currently in its interest-only period.

2 In Q1 2019, the DUS program updated the definition of small multifamily loans to any loan with an original unpaid balance of up to $6 million nationwide. The updated definition 

has been applied to all loans in the current multifamily guaranty book of business, including loans that were acquired under the previous small loan definition.

3 Multifamily loans are classified as seriously delinquent when payment is 60 days or more past due.

Select Credit Characteristics of Fannie Mae MHC Book of Business as of June 30, 2021

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$2.0

$3.0

$4.0

$5.0

$6.0

2017 2018 2019 2020 Q2 2021

Acquisition Volume ($B)

Fannie Mae MHC Acquisition Volume ($billions)

Jan. 1, 2017 – June 30, 2021

Limited New Construction Supports Investor Interest 

The MHC sector does face some headwinds. Unemployment in certain job sectors remains elevated and rental 

assistance under the Federal Emergency Rental Assistance Program (ERAP) has been distributed at a relatively slow 

pace. While Age 55+ communities may have more stable sources of income providing a measure of stability during the 

pandemic, the lasting impact of the COVID-19 pandemic on All Ages communities remains less clear. These 

communities tend to have both lower-income homeowners and renters, and many residents in these groups have 

been particularly hard hit by the pandemic. As a result, All Ages communities may yet see some deterioration of 

fundamentals in the second half of 2021, as extended unemployment benefits expire.

While there is growing recognition that MHC are critical sources of affordable housing, the creation of new 

communities is still extremely limited. According to Datacomp, only nine new MHC were built in 2020, although that is 

up from six new communities in 2019. Even so, this is extremely limited. Given the lack of affordable housing in the 

country and the fact that so few new MHC are likely to be built near term, we expect investor interest in the asset class 

to remain stable in 2021.
Multifamily Economic and Market Commentary

7

Tanya Zahalak

Senior Multifamily Economist

Fannie Mae Multifamily Economics and Strategic Research

September 14, 2021

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic and 

Strategic Research (ESR) Group included in these materials should not be construed as 

indicating Fannie Mae’s business prospects or expected results, are based on a number of

assumptions, and are subject to change without notice. How this information affects Fannie 

Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, 

estimates, forecasts, and other views on information it considers reliable, it does not 

guarantee that the information provided in these materials is accurate, current, or suitable 

for any particular purpose. Changes in the assumptions or the information underlying these 

views could produce materially different results. The analyses, opinions, estimates, 

forecasts, and other views published by the ESR Group represent the views of that group as 

of the date indicated and do not necessarily represent the views of Fannie Mae or its 

management.

Copyright 2021 Fannie Mae