Community Frameworks’Next Step

Factory Built Housing

A New Delivery System for Factory-Built Housing

This Presentation

An introduction:

What is factory built housing? What are the advantages and challenges? What is the Next Step Network? How is Community Frameworks working with Next

Step? How can you participate in the Next Step Plus

Program?

Factory Built Housing 101

Mobile Home A residential structure manufactured prior to the enactment of the Federal Manufactured Housing and Construction Standards, also known as the HUD Code, on June 15, 1976. Mobile homes are no longer being constructed.

Manufactured Home Single family residential dwelling built in compliance with the Federal Manufactured Housing and Construction Standards, as amended, also known as the HUD Code, after June 15, 1976. Built in multi-sectional or single section units.

Modular HomeHomes built to the state Code where the home will be located. Sectional units are built in a production facility, transported to the site and assembled.

Urban, Suburban and Rural Communities across the US

Where is Manufactured Housing?

What are the Advantages?

While important in rural areas, manufactured housing (MH) also plays a critical role as a source of affordable housing in metropolitan areas. MH is not reliant on public subsidies. With policy and financing reform, MH has potential to be a

scalable private sector model for delivery of affordable housing. With design and energy efficiency advances, MH today is

indistinguishable from site-built homes and more energy efficient.

MH can be constructed for less costs and in a climate controlled environment with less waste.

As public funds are no longer assured, the need for a new solution has never been greater.

The Challenges

While Manufactured Housing (MH) is home to 17 million Americans, many challenges face this affordable housing solution.

The market system which produces and finances these homes doesn’t always lead to the best wealth/asset building strategy.

Nearly 2 million pre-1976 mobile homes (the year the HUD Code went into effect) still exist nationwide.

Nonprofit developers need greater control, predictability of costs, and green choices to meet their affordable housing missions.

What do Practitioners Need to Know?

Manufactured Housing is the largest unsubsidized affordable housing stock in the US

8.6 M Manufactured Housing “homeowners” Serving families with an average income of $29,000 (around

50% of AMI) About 2.9 M own homes, but rent the land under them in

50,000 MH Communities High density, low impact development and efficient production

Subsidized Housing 2.5 M LIHTC 2 M Section 8 Vouchers 1.2 M Public Housing Units Total: 5.7 M

Non Manufactured Homes Manufactured Homes Manufactured Homes in MHC$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

49500

$30,000 27000

Household Income, by Structure Type, 2009

Household Housing Structure

Med

ian

Inco

me

HAC Tabulations of 2009 American Housing Survey Data

Who Lives in Manufactured Housing?

One unit detached; 63.2%

One unit attached; 5.8%2 to 4 units; 8.0%

5 to 19 units; 9.0%

20 to 49 units; 3.3%

50 or more units; 4.5%

Mobile or manufac-tured home; 6.2%

Housing Structure Type, Occupied Units, 2009

HAC Tabulations of 2005-2009 American Community Survey Estimates

Who Lives in Manufactured Housing?

What are the Advantages?

Despite the downturn in the housing industry, manufactured homes continue to be appealing to certain homebuyer demographics: Start-up families First-time buyers Low to moderate-income buyers Retirees looking for smaller, more affordable homes Workforce housing

Factory built homes today are higher quality and offer more innovations than ever before.

Affordable housing providers can match factory-built housing savings with innovative designs to create attractive, compact and

affordable smart-growth communities in metro areas.

What do Practitioners Need to Know?

Manufactured Housing is home to about 17 million Americans.

Manufactured Housing accounts for 43% of all homes under $150,000.

73% of manufactured home owners earn less than $50,000 a year.

The market system that produces and finances these homes doesn’t always lead to the wealth building.

Nearly 2 million pre-HUD Code mobile homes still exist nationwide.

Next Step’s Theory of Change

When a home is done right every single time, we can create an opportunity for systemic change.

Next Step believes: A manufactured home designed to balance quality with

affordability, built to ENERGY STAR standards and placed on an FHA Title II Permanent Foundation is central to the appreciation of factory-built housing values.

Access to fair, fixed-rate home financing is essential to healthy housing markets and the capacity to build wealth through homeownership.

Replacing pre-HUD Code mobile homes with ENERGY STAR homes can significantly drive down the cost of home ownership and reduce energy use.

The Next Step SystemThis System for doing business includes:

1. Homebuyers who are prepared and supported through certified homebuyer education programs;

2. Quality, ENERGY STAR homes on FHA Title II permanent foundations;

3. Sustainable financing: mortgages with fair terms that enable families to earn wealth or preserve assets; and,

4. “A Home is a Home” policy commitment advocating that owners of manufactured homes have the same rights as owners of site-built homes.

The Next Step System

Network Members

Financing for the Family

Sustainable Financing: Mortgages with fair terms that enable families to earn wealth or preserve assets.

How do you make financing work for the homebuyer? Rural Development 502 Direct Mortgage & 502 Guarantee. Local banks. Subsidies:• USDA Housing Preservation Grant• HOME• State Trust Fund• Federal Home Loan Bank• NeighborWorks® America• CFED I’M Home• Institutional Donors; Service clubs, faith-based organizations.• Rural Housing and Economic Development Grants

What is an FHA Title II Foundation?A type of HUD FHA insured loan for manufactured housing—Real Estate Mortgage for homes on permanent foundations approved to FHA standards and by a structural engineer.

Meets highest quality standard for permanent foundation and all lender requirements.

Must meet all standards and be on a permanent foundation in compliance with the Permanent Foundation Guide for Manufactured Housing.

A licensed professional engineer's seal and signature are required to indicate compliance with the Foundation Guide.

The lender should furnish the appraiser with a design engineer's inspection of the foundation prior to the appraisal.

How Financing Affects the Development Process

Next Step’s Mission

Our mission is putting sustainable homeownership within reach of everyone, while transforming the

manufactured housing industry one home at a time.

Community Frameworks’Next Step

Factory Built Housing

A New Delivery System for Factory-Built Housing

Tools of the Trade

Factory Built Housing:

A Vital “Tool” for Fulfilling our Missions

as They Relate to Providing Quality, Affordable Housing to Low Income Individuals and Families

Why You Should Care!

Affordable Housing - Challenges:

Increasing Governmental Regulations

Increasing Production Costs

Increasing Land Costs

Increasing Demand

Decreasing Funding

Decreasing Quality/Quantity of Trades People

Factory Built – Systems Built – Prefab

Manufactured

HUD Code

Cost < Site Built

Minimal Design Flexibility

Energy Efficient with Energy

Star

Appraisal < Site Built

*Limited Financing Options

Modular

IRC – State Amendments

Cost = Site Built

Maximum Design Flexibility

More Energy Efficient

Appraisal = Site Built

Traditional Lending Sources

Production Partners

Manufacturing Facilities in the Northwest:

HUD Code Manufactured Homes (also do modular):5 – Oregon4 – Idaho1 – WA

Modular Homes:2 – ID1 – OR

Boutiques (Low Volume – Direct to Consumer)3 – WA1 - OR

What are the Advantages?

Benefits:

Shorter Build Time Environmentally Sensitive Exempt from “Prevailing Wages” Superior Interior Sound Abatement Less Site Disruption/Neighbor Annoyance Higher Quality Construction Ideal for Tight/Urban and Remote Sites Mitigated Risks of Weather Damage Inherently More Green Stronger Structure

Pacific Northwest Leaders

Northwest Examples:

NeighborWorks Umpqua and NeighborWorks Montana

OPAL Community Land Trust

Olympic Community Action Programs

Kodiak Island Housing Authority

WA State Migrant Council

Salish and Kootenai Housing Authority

Nez Perce Tribe

Whitman County Community Action Center

Native American Youth Family Center

What are My Options?

Factory Built Applications

Replacement of Old “Trailers”

Alternative to Traditional Site Built

Urban Infill

Multi-Family Development/Snr. Housing/Mixed Use

Infill at ROC’s/NP Owned Parks

Park Development

Elder Cottages

MH Example 1

MH Example 2

MH Example 3

Modular Example 1

Modular Example 2

Modular Example 3

Modular Example 4

Modular Example 5

Modular Example 6

Mobile Home Replacement:The Problem

Mobile Home Replacement Efforts

The Stringer Family approached NeighborWorks® Montana for assistance to weatherize their pre-HUD Code mobile home. Since the home was beyond repair, NeighborWorks Montana helped Ms. Stringer finance a new, ENERGY STAR certified manufactured home.

BeforeAfter

MH Interior

Mod Set 1

Mod Set 2

Mod Set 3

Mod Set 4

Mod Set 5

What are the Advantages?

Extreme Homebuilding with CRHDC

The holiday season, record lows and 2 feet of snow and frost didn’t slow down Community Resources and Housing Development Corporation in Colorado from setting 11 modular homes.

Just one example of how the factory-built construction process won’t come to a stand-still when weather, however extreme, hits.

Bremerton Mod

Bremerton Mod

Bremerton Mod

Bremerton Mod

Bremerton Mod

Bremerton Mod

Bremerton Mod

Bremerton Mod

Hinged Roof

Plant 1

Plant 2

Plant 3

Plant 4

Plant 5

Plant 6

Plant 7

Plant 8

Plant 9

Plant 10

Plant 11

SFR / Townhomes

Multi-Family

Senior Housing

OlyCAP Senior Housing

MF Set 1

MF Set 2

MF Set 3

MF Set 4

MF Set 5

MF Set 6

MF Set 7

ROC USA® – Infill Efforts

NeighborWorks® Montana is providing new homes in ROC USA® Communities, where the residents collectively own the land (cooperative) and individually own their homes.

Elder Cottage 1

Elder Cottage 2

Elder Cottage 3

Elder Cottage 4

Contact Information

Thank you for your interest and participation!

For further information, contact: Mark Wilson

Community Frameworks509.484.6733 x108