Manufactured Home Sales Strengthening

Manufactured homes have consistently made up about 25 percent of all new homes built in Washington state in recent years. Now the numbers are climbing.

Sales rose about 7.1 percent statewide in 1994.

The attraction? Price is part of it. Such homes generally run $30,000 to $90,000. Quality is another part. It has gone hand-in-hand with quantity of sales, said Joan Brown, head of the Washington Manufactured Housing Association.

Today’s factory-built home features 2-by-6 construction, house-type siding, shingle roofs, tape-and-textured walls, vaulted ceilings, walk-in closets, oak cabinets, ceramic tile, jacuzzi tubs, skylights, bay windows, wood stoves and more.

The sales numbers are catching the attention of lenders statewide. Many are now offering home-and-land package financing that formerly was the exclusive province of stick-built housing.

“More and more companies are entering the market, and more are offering construction-type loans,” Brown said.

Erecting a manufactured home is quick because it’s delivered as a virtually finished product.

The homes themselves are built to standards set by the Department of Housing and Urban Development. Factory construction means cost efficiency, which means lower prices for buyers.

Land cost and development can add $40,000 to $60,000 or more, depending on location, to the price of a new manufactured home. But that still leaves them in the “affordable” range.

While the look and performance of manufactured homes has been steeply upgraded during the past few years, so too have the loan programs designed for their purchase.

Once upon a time, manufactured homes were known as mobile homes and were treated by the lending community as personal property - much the same as a car or a boat.

Washington Mutual started offering financing for what were then called mobile homes in 1967, said longtime banker Bob Schoos.

“What we offered for mobile homes was pretty much automobilestyle financing,” he said. “Later we were essentially the first to offer long-term simple-interest financing. We said what the interest rate was, and it was a direct loan to the buyer with no participation from the dealer.

“We started looking at these things more as homes than as cars. And we were structuring financing along similar lines.”

But they still were consumer loans, not mortgages, with a shorter loan term, higher interest rate and more restrictive debt ratios.

Many of the homes were sited on leased property. Since the homeowner didn’t own the dirt, the home was considered personal, not real, property.

Now, said Brown, most new manufactured homes are put on private land. The buyers are first-timers or last-timers - retirees scaling down their lifestyle.

“In 1992,” Schoos said, “we introduced mortgage loans for manufactured housing. In land/home loans, refinancing and/or take-out equity, you can get the same loan on a manufactured home on land exactly as you can on a regular house.

That includes conventional financing, fixed and adjustable rate mortgages, FHA and VA loans, 15- and 30-year terms, lower down payments, adjustable and fixed-rate combinations.

Those buying a new home and a lot at the same time can get a construction loan, structured with “draws” that are paid out for jobs done along the way. It’s the same loan used to finance custom stick-built construction.

Seafirst Bank also offers the same range of loans for manufactured homes. Seattle Mortgage Co. recently entered the market.

“We’re extending what we have been doing for the last 50 years with stick-built homes into manufactured homes and providing conventional, FHA and VA loans to this product,” said Kathy Ervin, director of Seattle Mortgage Co.’s manufactured home loan division.

Climbing sales and higher appreciation rates attracted Seattle Mortgage to the manufactured home market. Ervin is directing the mortgage company’s pilot program, which features “interim financing,” a custom construction loan.

The money is paid out by the lender in increments - at different stages of land development and home siting and after certain inspections have taken place.