Fannie Moves to Prop Up MH Sector

In an effort to prop up the sagging manufactured housing sector, Fannie Mae has reinstituted a 5% down, 30-year loan program for factory-built houses with nine lenders on a negotiated basis.The big secondary-market institution also pledged to work with the nine companies to transform the manufactured housing market by developing processes and procedures that lower the risk associated with mortgages on houses that are assembled in a factory, trucked to a building site, and fixed to the land. "This is both more and better," said Rep. Barney Frank, D-Mass., in praising the initiative. Fannie Mae invests in manufactured housing loans, but stepped back last year because of problems in the business. Shipments have fallen to their lowest level in decades, and many manufacturers and retailers have exited the market or declared bankruptcy, largely because of high delinquencies and loan losses. The number of repossessed and foreclosed manufactured homes also is said to be at record high levels. The nine lenders -- AgFirst Farm Credit Bank, Flagstar Bank, GMAC Manufactured Housing, Huntington Mortgage Group, Origen Financial, RBC Mortgage, 21st Mortgage, Vanderbilt Mortgage, and Washington Mutual -- have all demonstrated the "high levels of expertise necessary to understand the property, titling, appraisal, and servicing issues associated with manufactured homes," Fannie Mae said.