The Consumer Financial Protection Bureau (CFPB) recently released a report which found that manufactured-home owners typically pay higher interest rates for their loans than borrowers whose homes were built onsite. The report also found that manufactured-home owners are more likely to be older, live in a rural area, or have lower net worth.
“Manufactured housing is a critical source of affordable housing for some consumers,” said CFPB Director Richard Cordray. “These consumers may be more financially vulnerable.”
Manufactured homes are commonly referred to as “mobile homes” or “trailers.” They are a specific type of factory-built housing. After the homes are built in a factory, they are then transported on their framework to a retail center or the placement site if they have been purchased. Manufactured homes are required to be built and installed in accordance with standards set by the Department of Housing and Urban Development.
The report concluded:
- One out of seven homes outside of a metropolitan area is a manufactured home. Manufactured homes account for only about 6 percent of all occupied U.S. housing. Outside metropolitan areas, however, one out of every seven homes is a manufactured home. These homes are more prevalent in the southeastern and western states. South Carolina has the highest prevalence of manufactured housing in the country, followed by New Mexico.
- Manufactured-home owners are more likely to be older: Nearly one out of five families that live in manufactured homes do not have children in the home and are headed by someone aged 55 or older—compared with less than 15 percent of families that live in site-built homes.
- Manufactured-home owners are more likely to have lower net worth. Bureau research has found that manufactured home residents tend to have lower net worth than other families. The 2004–2010 Surveys of Consumer Finances indicate that the median net worth among households that lived in manufactured housing was just about one-quarter the median net worth of families living in all other types of housing.
One of the main differences between a manufactured home and a home built onsite is that manufactured homes may be titled as either real estate property or personal property. A home built onsite is almost always titled as real estate property. For a manufactured home to be titled as real estate property, the home generally must be set on a permanent foundation on land that is owned by the home’s owner. If a manufactured home is titled as personal property, it generally must be financed through a personal property loan, also known as a chattel loan.
Published with permission from RISMedia.