Guild lists houses that remedy fire risk, affordability issues

Guild Mortgage is listing two homes set up through a partnership in Paradise, California, that could prove to be a more broadly used model for disaster recovery and affordable housing.

The lender and servicer, in conjunction with Clayton Homes and two other companies, are collectively planning to put up a total of four CrossMod houses in the area, which experienced one of the worst fires in the U.S. five years ago. Golden West Homes of Chico and Redline Installation are the other companies involved in the partnership.

The listings will test the theory that specialized manufactured homes eligible for financing from government-related mortgage investors could be used to replace housing in a disaster area, or more generally, relatively quickly and in a cost-effective manner. 

"They can provide affordability and they can be built quickly: 10 days in the factory and then several weeks onsite," said David Battany, executive vice president, capital markets, at Guild. That could be an improvement on temporary trailers otherwise used.

While CrossMods can usually be constructed fairly quickly, they took more time to bring to market in Paradise for several reasons, including supply chain issues during the pandemic that slowed both manufacturing housing and traditional building, Battany said. 

One big question surrounding rebuilding housing in Paradise, where almost 90% of the homes were originally destroyed, is insurability.

Interestingly, the fact Paradise has been through a conflagration reduced its risk in that regard, said Battany, who is a former wildland firefighter. Fewer trees remain that could burn, while the municipality also updated its building requirements.

"There are updated fire codes in Paradise. Everything has to be built here using things like nonflammable exterior materials, special vents and so forth," he said.

In addition, manufactured homes that carry the Department of Housing and Urban Development's CrossMod designation are larger and built to higher standards than traditional MH structures, making them more akin to traditional site-built or modular homes. They still have to be insured as manufactured homes, but they're likely to be viewed relatively favorably by insurers due to their structural soundness, Battany said.

To get a sense of how different CrossMods are from the traditional single-wide manufactured home, consider that the ones listed in Paradise are each 1,620 square-foot structures with three bedrooms, two bathrooms, a covered front porch and a two-car garage. They also come with quartz or granite kitchen countertops and a large kitchen island with seating. One of the homes will be kept open as a demonstration model to spread awareness of this type of housing.

More broadly, the houses starting to re-establish Paradise as a community are a mix of traditional manufactured homes, CrossMods and site-built structures that could help encourage businesses to reopen in the area, Battany said. That could in turn be more of a draw for residents.

"For a while, building was really slow because people weren't sure what they wanted to do. It was hard to get permits, and there were shortages of labor and materials; but now a lot of properties that were built are starting to come online. It's a turning point," he said.

Finding ways to rebuild homes in a fire area is just one aspect of a broader issue, said Battany, who worries that in the world at large, people are unaware of all the right steps they need to manage fire risk on properties related to concerns like tree maintenance.

However, policies like Paradise's new building codes and repeated public-service messaging about the importance of clearing brush during a recent sporting event suggest awareness is growing, he noted.

"People are just starting to figure things out," Battany said.