Manufactured Housing

Manufactured homes are built in factories. They are then transported in their own steel frame with attached wheels, called a chassis. The wheels are removed once they get to the site, but the frame stays in place. They are not placed in a traditional foundation. Manufactured homes are not subject to local building codes. Rather, they are subject to federal regulations from the Department of Housing and Urban Development (often referred to as the HUD Code). There is no requirement for structural inspection.

Manufactured housing provides a major source of unsubsidized housing that is affordable for households with low and moderate incomes. This includes many older adults. According to the Census Bureau, 5.1 million older adults lived in a manufactured home in 2022. The Consumer Financial Protection Bureau found that older owners of manufactured homes are more likely to have low and moderate incomes. They are also more likely to have a mobility-related disability than older adults who live in other housing settings.

Manufactured housing thus plays a critical role in serving the housing needs of older adults. Without this option, many would find it difficult to afford housing. Nevertheless, manufactured homeowners can face important challenges. Lenders typically treat manufactured homes differently from site-built homes that have a foundation. Manufactured homes are generally classified as personal property rather than real estate. This has important implications for manufactured homeowners.

• Less favorable financing options: Manufactured homes classified as personal property are not eligible for conventional mortgage financing. They are financed through so-called chattel loans, similar to vehicle loans. These loans are more expensive than mortgages and must be repaid over a shorter period, leading to higher monthly payments.
• Lower resale value: Manufactured homes typically have a lower resale value, making it more difficult to build equity.
• Taxation: Manufactured homes are typically taxed as personal property. Manufactured homeowners, therefore, often do not pay property taxes on the land, but they may still be subject to personal property taxes on the home itself.
• Limited consumer protections: Some consumer protection laws apply to real property but not personal property. For example, state foreclosure prevention laws typically apply to homes that are considered real property. Manufactured homes, which are considered personal property, can simply be repossessed if a homeowner falls behind on payments.

The Uniform Law Commission’s Model Manufactured Housing Act would create a simple process to enable manufactured homeowners to classify their homes as real property if they wish to do so.

Manufactured home communities: About 40 percent of manufactured home occupants live in manufactured home communities. They typically own their home but rent the land it sits on. This creates unique challenges. They may face steep rent increases that create a housing-cost burden. Alternatively, they may have to move when the land is sold or changes uses. In areas with high-value housing markets, manufactured home developments can be particularly vulnerable to conversion to other uses. This risks the displacement of current residents, who are often challenged to find equally affordable housing elsewhere in the vicinity.

Unfortunately, manufactured homes are not easy to move. Alternative sites are often hard to come by. And even when they have a place to move, manufactured homeowners must obtain permits and use licensed and bonded professionals for the move. Moving is burdensome and expensive. As such, most manufactured homes do not move from their original site.

Manufactured homeowners who own the underlying land are much more housing secure. Those who rent the land can form resident associations to improve their bargaining power. However, they sometimes fear retaliation from community owners for doing so. Consequences can include eviction.

Policy options: To improve outcomes for owners of manufactured homes, policymakers can:

• classify manufactured homes as real estate,
• provide more favorable financing options,
• support the creation of resident-owned communities,
• change zoning to enable more manufactured home communities to be sited, and
• provide support to manufactured homeowners who are forced to relocate their homes.