Manufactured Housing and the Rural Small-Balance Mortgage Market
Construction Method Total Originations % of Small Loans Small-Loan Segment¹ Median High-End Segment² Site-built 372,870 8% $125,000 $275,000 $635,000 Manufactured Home 47,652 26% $75,000 $165,000 $315,000 Totals 420,522 10% $115,000 $265,000 $605,000
¹ Small-Loan Segment: Represents the property value at the 10th percentile, meaning 10% of homes are valued at or below this amount.
² High-End Segment: Represents the property value at the 90th percentile, meaning 90% of homes are valued at or below this amount.
This analysis offers a more complete picture of the non-MSA purchase market by examining the distribution of loan amounts, rather than relying on a single average. By showing the median alongside the ‘Small-Loan’ and ‘High-End’ segments, the data reveals the fundamentally different market structures for site-built and manufactured homes in rural communities.
The data shows manufactured home mortgages are significantly smaller, with a median loan amount ($145,000) that is $80,000 less than for site-built homes ($225,000). This distinction is most pronounced in the ‘Small-Loan Segment,’ defined as the bottom 10% of originated loan amounts. A full 24% of manufactured home mortgages fall into this category, compared to just 8% for site-built.
For lenders, this data reinforces that any strategy for serving non-metro areas must address the unique dynamics of manufactured housing. The small-loan market is notoriously challenging due to fixed origination costs, but it's a vital pathway to homeownership in these regions.
Focusing on operational efficiencies for smaller-balance manufactured home loans is a direct strategy to serve these communities and meet affordable housing goals.
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