Manufactured Housing Finance: New Insights from the Home Mortgage Disclosure Act Data

56 Pages Posted: 27 Aug 2021

See all articles by Karl Schneider

Karl Schneider

Consumer Financial Protection Bureau

Nick Schwartz

affiliation not provided to SSRN

Jessica Russell

Independent

Nora O'Reilly

affiliation not provided to SSRN

Nicolas Melton

affiliation not provided to SSRN

Sam Leitner

CFPB

Date Written: May 27, 2021

Abstract

Manufactured housing is the largest source of unsubsidized affordable housing in the United States, but financing a manufactured home can be costly, especially for borrowers who do not own the underlying land. Whether the homeowner owns the underlying land plays a key role in whether the manufactured home is titled as personal (chattel) property or real property, a distinction which in turn affects many aspects of the home financing and can have major implications for the homeowner in terms of cost and security of tenure.

This report uses new information collected under the Home Mortgage Disclosure Act (HMDA) to explore the differences between mortgage loans for site-built homes, mortgage loans for manufactured homes (referred to as “MH mortgages”), and chattel loans for manufactured homes. Comparison of these three financing types finds that borrowers with chattel loans face higher denial rates when applying for financing than manufactured housing mortgage and site-built borrowers. When they do get a loan, these borrowers pay higher interest rates than their MH mortgage and site-built counterparts and are also less likely to refinance. Analysis shows that Black, Hispanic, and American Indian and Alaska Native borrowers are more likely to get chattel loans than their non-Hispanic white counterparts, even when controlling for land ownership. Additionally, the market for MH lending—and chattel in particular—is more concentrated among relatively few lenders than the market for mortgages on site-built homes. This research also compares HMDA data with results from commonly used manufactured housing datasets to illustrate how HMDA fits into the MH research space.

Suggested Citation

Schneider, Karl and Schwartz, Nicholas and Russell, Jessica and O'Reilly, Eleanor and Melton, Nicolas and Leitner, Samuel, Manufactured Housing Finance: New Insights from the Home Mortgage Disclosure Act Data (May 27, 2021). Consumer Financial Protection Bureau Office of Research Reports Series No. 21-5, Available at SSRN: https://ssrn.com/abstract=3911409 or http://dx.doi.org/10.2139/ssrn.3911409

Karl Schneider (Contact Author)

Consumer Financial Protection Bureau ( email )

United States

Nicholas Schwartz

affiliation not provided to SSRN

Jessica Russell

Independent

Eleanor O'Reilly

affiliation not provided to SSRN

Nicolas Melton

affiliation not provided to SSRN

Samuel Leitner

CFPB ( email )

United States

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