On Oct. 23, The Pew Charitable Trusts sent a letter to the Federal Housing Finance Agency (FHFA) regarding Fannie Mae and Freddie Mac’s proposed 2021 “Duty to Serve” plans. The proposals build on Fannie and Freddie’s work since 2018 related to the Duty to Serve rule, which requires them to improve or create a secondary mortgage market for very low-, low-, and moderate-income families, particularly in the areas of manufactured housing, affordable housing preservation, and rural housing.
Pew’s letter praises the work Fannie and Freddie have done to promote access to mortgage loans on manufactured housing. However, it also notes that despite those efforts, most manufactured homebuyers still must finance their purchases using personal property (also known as “chattel”) loans, which tend to have higher interest rates and weaker consumer protections than mortgages.
Pew therefore urges FHFA to take additional steps to understand and resolve challenges that personal property loan borrowers face and to expand access to mortgage loans. In addition, the letter encourages Fannie and Freddie to build on certain promising efforts to improve the financial and housing stability of owners who lease the land on which their manufactured homes sit, particularly bolstering tenant-site lease protections and improving the availability of credit for the creation of resident-owned communities.