Fannie Mae and Freddie Mac Have a New Plan

Fannie Mae and Freddie Mac Have a New Plan


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Fannie Mae and Freddie Mac Have a New PlanFannie Mae and Freddie Mac have a new plan. The Washington Post tells us that Nebraskan employers seem willing to pay more to attract workers. Average weekly earnings have grown faster in Nebraska since 2014 than in all but two states — Delaware and Washington. Our unemployment rate is fourth-lowest in the United States over the past year — 2.8 percent, compared with a nationwide 4.2 percent over that time — as employers raise wages to compete for scarce workers. But workers aren’t biting. Nebraska job growth ranks 40th in the country since 2014. (All rankings include the District of Columbia.)

Manufactured housing or mobile homes could provide the low priced housing for new Nebraskan workers. However there are some barriers in place,

Problem one: Land prices. The farmland is so valuable for farming that farmers near cities don’t want to divert farmland for housing.

Barrier two: The hidden costs of higher standards. Regulations, such as the requirement for foundations, so the house doesn’t blow away are expensive and don’t fit another mobile home.

Problem three: Financing. Many people who would consider a mobile home have lower incomes that don’t allow them to qualify for bank loans.

Fannie Mae and Freddie Mac Have a New Plan

Now, Fannie Mae and Freddie Mac may change that, with a plan to purchase tens of thousands of manufactured-home mortgages, and perhaps even chattel loans, over the coming years. Mobile homes may be considered chattel loans because they rent the underlying property and like a car depreciate over time. The goal of the new plan is to entice more lenders into the market and help fulfill the companies’ mandate to provide affordable housing, rural housing and manufactured housing.

Pushing the perceived stigma aside, more than 17 million Americans live in manufactured homes, according to Census data.

And the median household incomes of those living in manufactured homes, typically trailers made in a factory, are about $30,000 a year, according to the Manufactured Housing Institute. That’s about half of the 2016 national median of $59,039, according to the U.S. Census Bureau.

Manufactured homes are significantly cheaper than stick-built homes, which construction workers put up on lots outside. For example, they cost a median $73,800—about a quarter of the $269,500 median cost of new homes nationally, according to the latest U.S. Census Bureau and realtor.com® data available.

Freddie Mac calls them “a critical source of affordable housing.” Indeed, they make up a good portion of the occupied homes in some of the poorest parts of the country, accounting for more than 20% in middle Appalachia and 17% in the Lower Mississippi Delta.

That may help to explain why sales are on the rise. Shipments of newly manufactured homes rose from 64,000 in 2014 to 93,000 in 2017, according to Census data.

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