The U.S. Department of Housing and Urban Development unveiled a manufactured home community loan product, which opens up Federal Housing Administration-backed funding for the purchase or refinance of existing properties. The initiative makes use of the FHA's 223(f) multifamily program to open up permanent financing to manufactured communities that previously may have been ineligible. 

"HUD is providing new resources for preserving and revitalizing these communities by providing FHA-insured financing to mission-focused groups to buy or refinance and revitalize manufactured homes," said Adrianne Todman, the department's acting secretary, in a press release.

The program will allow organizations — including cooperatives, nonprofits, state and local governments, tribal communities and resident-owned manufactured-home communities — to take advantage of FHA financing for development and maintenance. It also will preserve affordable housing for existing residents, protecting them from rent increases or neglect when land or properties are sold to outside private equity interests, according to HUD leadership. 

"With this product, HUD aims to support resident-owned communities and other mission-focused owners who are committed to high-quality, affordable manufactured housing that is not at risk of exorbitant land rent increases that jeopardize the stability of their homes and futures," said assistant secretary for housing and FHA Commissioner Julia Gordon.

HUD estimates that more than 5,000 individuals and families, based on average community size, will benefit from the program over the next five years. 

The announcement comes after several other moves HUD has made over the past 12 months to support manufactured-housing development, including its Preservation and Reinvestment Initiative for Community Enhancement, or PRICE, program, which the new product is intended to bolster. Last summer, the department also opened an independent office of manufactured housing overseen by Gordon.

FHA's efforts to address home affordability and supply over the past year also encompasses new guidance on issues surrounding loan assumptions and renovation or rehabilitation financing with its 203(k) product. Last fall, the agency said it would raise borrowing limits for the loans.

"Partly why we are looking to enhance this program is  — to the extent that there is inventory out there — a lot of times it needs work. We want to make sure that our borrowers have an easier product to use," said Sarah Edelman, assistant secretary in the office of single-family housing at FHA, during a recent panel at the Mortgage Bankers Association Secondary and Capital Markets Conference. 

Among other initiatives to boost housing inventory, the FHA announced in late 2023 it would allow a percentage of projected rental income from new accessory-dwelling unit construction to be included in underwriting for 203(k) loans. Similarly, it said it would permit rents from existing ADUs to be taken into consideration in applications for the mortgages it backed.  

ADU development received a further boost this week in Massachusetts, where the proposed Affordable Homes Act passed by a vote of 145 to 13 in the state's House of Representatives. An accessory-dwelling units provision within the $6.5 billion bill will grant property owners the right  to construct an ADU in single-family zoning districts statewide.

State officials estimate that more than 8,000 new units could be built over the next five years if signed into law. The ADU provision within the act heavily incorporated proposals originally made  by nonprofit group Abundant Housing Massachusetts. 

"ADUs are a gentle yet effective tool in the Massachusetts toolbox to address our severe housing storage," said Jesse Kanson-Benanav, the organization's executive director, in a press release.

"I am proud to see the adoption of ADUs within the House bill without any unnecessary restrictions or poison pills. Advocates from across the state have spoken of the need for standardization and less barriers to building ADUs," he added.  

The bill is expected to be voted on by the Massachusetts Senate at some point this summer.