Silverton Mortgage, an affiliate of billionaire Warren Buffett's Berkshire Hathaway, has joined a small but growing group of lenders in offering a newer form of government-sponsored enterprise financing for manufactured homes.
The move could be significant because Clayton Properties Group, an affiliate of Berkshire Hathaway, is a closely watched and influential participant in the manufactured home market. Silverton is one of the names that Clayton's Vanderbilt Mortgage and Finance affiliate is doing business under. Vanderbilt acquired Atlanta-based Silverton last year.
Silverton is specifically offering a new form of housing financing Fannie Mae introduced in 2018 called MH Advantage. MH Advantage offers a lower rate to borrowers who buy approved manufactured-housing units that are titled as real property and have architectural features similar to traditional site-built homes. Fannie's rival, Freddie Mac, is testing a similar loan product.
Some mortgage lenders have been eager to offer this type of financing, but noted that providing it has been contingent on the production of qualifying housing units.
The manufactured housing sector has become more attractive to mortgage lenders because the supply of existing homes for sale generally has been falling short of demand, particularly in lower price tiers, and factory-built units can be quicker and cheaper to produce and install on properties than site-built homes.
Other mortgage lenders that have offered MH Advantage include American Financial Resources and Guild Mortgage.
While annual figures for manufactured housing units shipped remain far below their peak of 372,843 in 1998, they have climbed considerably from a post-crisis low near 49,789 in 2009, according to data analyzed by the Manufactured Housing Institute. The MHI used data that has been tracked since 1980 by the U.S. Census Bureau, the Commerce Department and the Institute for Building Technology and Safety in its analysis.
In 2018, there were 96,540 manufactured housing units shipped, representing more than 10% of U.S. single-family housing starts and more than 14% of single-family homes sold.
Manufactured housing shipments as a percentage of single-family homes sold fell below 10% in 2004; the percentage has fluctuated between about 10% and 15% since then. Precrisis, that figure peaked at almost 37% in 1982.
As a percentage of total housing starts, manufactured housing shipments peaked in 1982 near 27%. That percentage was at its lowest in 2006 when it was a little over 7%. Post-crisis, that percentage has fluctuated between 9% and 12%.
