Appraisals and Valuations

FHA updates appraisal requirements on GSE-certified manufactured homes

The updates apply to manufactured homes certified under GSE lending programs and serve House’s housing affordability and inventory goals

The Federal Housing Administration (FHA) announced this week that it has implemented updated appraisal requirements for the valuation of manufactured homes certified under Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome programs.

The updates, detailed in Mortgagee Letter 2023-18, are effective immediately. They require appraisers to “use the most appropriate site-built home comparable sales when there are less than two comparable sales of these certified manufactured homes available,” the FHA said.

The updates apply to both the forward and reverse mortgage programs, according to the document.

Manufactured homes that are certified under the GSE programs — which are also known as “CrossMods” — include features that make them “nearly indistinguishable” from certain site-built homes, and address regulatory barriers that in the past have “restricted the placement of manufactured homes,” according to the FHA’s letter.

FHA Commissioner Julia Gordon announced the move during her remarks at the Manufactured Housing Institute’s National Communities Conference Fall Leadership Forum in Chicago on Thursday, with an informational notice sent by FHA shortly thereafter.

“The updates align FHA appraisal requirements with those of other industry participants and will improve the valuation of these homes for borrowers seeking FHA-insured mortgages,” the FHA said in its announcement. “These changes also contribute to FHA’s efforts to increase the availability and affordability of manufactured housing as part of the Biden-Harris Administration’s Housing Supply Action Plan.”

With housing affordability a centerpiece of the White House’s overall housing strategy, U.S. Department of Housing and Urban Development (HUD) Secretary Marcia Fudge described the role that manufactured housing can play in the conversation.

“Increasing the supply of affordable homes in this country will require us to use every tool available to us. That includes innovative solutions like manufactured housing,” Fudge said. “The critical step we’re taking today ensures HUD is in alignment with our industry partners, and it will make more quality affordable housing available to people across the country.”

Gordon added that the FHA is making this move to serve needs for both inventory and affordability.

“Today, we’ve removed another roadblock limiting the effectiveness of FHA programs in serving buyers of these manufactured homes,” Gordon said. “We hope it will facilitate the continued growth and adoption of this important source of affordable and energy-efficient housing.”

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