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Manufactured homes — and owners — gain respect By Sue Kirchhoff, USA TODAY
BARRINGTON, N.H. — After 15 long years, Richard Doherty makes the final mortgage payment on his cheerfully cluttered manufactured home — don't call it a trailer — this month. But ownership may not bring longed-for security.
Doherty and 73 other families who rent lots in the Barrington Estates manufactured home community, with its tidy gardens and wooded avenues, received notice this spring that the owner plans to sell. That has bred distress among tenants, who fear they could be forced to move if a buyer redevelops the property. (Photos: Modern manufactured homes)
"To know you have your own home, that's fine. But knowing that you don't own the land that it's on top of, it doesn't feel right," says Doherty, 53, as he prepares for the 6 p.m.-6 a.m. shift at a nearby factory while his wife, who works a different schedule, gets some sleep in a back bedroom.
Doherty's predicament illustrates the pitfalls and possibilities of manufactured housing — an oft-maligned, but important slice of the housing market that accounted for two-thirds of all affordable housing built in the nation from 1997-1999 and 20% of all new housing in the late 1990s, according to some studies. That figure has since dropped to less than 10%, after bad loans to stretched buyers produced a crash in the manufactured-home market.
Manufactured homes, which cost $58,000 on average, compared with $267,400 for new site-built houses (the conventional home price includes land), are a potential solution for millions of low- and moderate-income families who otherwise can't afford to buy in frenzied housing markets.
But the sector has been riddled with such problems as high-cost lending that can leave borrowers owing more than their home's value. Only about half those living in manufactured homes own their land, though ownership is rising. Residents who rent lots can be turned out if a park is sold — forcing some to lose their homes, especially older units that aren't in condition to be moved. (Related story: Working families grow house poor)
As lack of affordable housing becomes a problem for more Americans, groups that once ignored manufactured housing are giving it a fresh look, trying to soften the trailer-trash stigma and make it a stable option for working families.
"Nine million families in the U.S. are living in this housing stock. I've been working in the housing field for 20 years, and I'd never really even given it a half-a-second thought," says George McCarthy of the Ford Foundation, which plans to invest $10 million in the next several years on efforts to turn manufactured housing into a secure, appreciating asset.
McCarthy says the problem isn't quality of the housing — better-looking, larger units are becoming the norm — but how the market delivers and finances the product. "Those are correctible things," he says.
The non-profit group HomeSight has developed two-story manufactured housing in Seattle with pitched roofs and front porches that blend with existing neighborhoods. More than 70 New Hampshire manufactured-home parks have been bought by tenants and turned into owner-run cooperatives, with rising values and years-long waiting lists.
Interest from Warren Buffet Super-investor Warren Buffet's Berkshire Hathaway has been investing in manufactured housing, buying Tennessee-based Clayton Homes. Berkshire Hathaway officials hope to bring non-profit housing groups to a shareholders meeting to discuss opportunities to work together on development.
"It has real potential for the industry. ... There is wonderful financing available through those non-profits who can help homeowners who would not have an opportunity to own," says Kevin Clayton, CEO of Clayton Homes.
Some states, such as Washington, are passing zoning laws to ease the way for manufactured housing. Mortgage giant Fannie Mae has tightened guidelines for the manufactured-housing loans it buys.
Still, change is uneven. A number of states remain cool to uniform zoning. The majority of manufactured housing is still deemed personal property rather than real estate, forcing buyers to take out higher-interest loans rather than home mortgages. Many existing, older structures are past their prime, posing problems, including abandoned homes. Ronald Wirtz of the Federal Reserve Bank of Minneapolis, in a series of recent articles, says land-use rules and other pressures are making it more difficult to build manufactured home parks. A big part of the problem? Negative public perception.
"It has a lot of potential. It really meets the affordable segment of the market, but it's got to be done right," says Chuck Rumfola, vice president of manufactured housing for Fannie Mae. "We're trying to build a solid foundation, so you don't have the boom and bust."
The stakes are high, given that home equity makes up 80% of wealth for very-low-income Americans. Dave Buchholz of the Washington non-profit CFED, which helps lower-income people build assets, is overseeing the Ford Foundation grant. He hoped for a dozen proposals, but got more than 100.
Tenants no more While Doherty has his headaches, he's still luckier than many. New Hampshire law gives tenants in manufactured home parks the right to make a purchase offer if an owner plans to sell the land.
For the past several weeks, Doherty has been meeting with other tenants to organize a cooperative to buy and manage Barrington Estates, including figuring out the cost of repairs or improvements, and a fair purchase offer. He'll know whether he's a co-owner, or still an uncertain tenant, in a few weeks.
"All of us are pretty skittish, but we're pretty well set that we need to do this," Doherty says.
Doherty's efforts reflect more than two decades of work by the non-profit New Hampshire Community Loan Fund, which borrows money from individuals, churches and financial institutions, then relends it. The fund has been a leader on the issue since 1984, when tenants of the Meredith Trailer Park were faced with the possible loss of their community. They worked with the fund to form the state's first tenant cooperative.
To date, the fund has helped organize 71 cooperatives, representing 15% of manufactured housing in parks in the state. The co-ops generally own the land jointly, form a board that sets monthly rents, votes on improvements and signs off on home sales.
Paul Bradley, vice president of the fund, is a lanky bundle of enthusiasm who appears to know the history, and residents, of every manufactured housing park. He says anecdotal evidence suggests homes in the co-ops are appreciating well, and monthly rents are rising less rapidly.
Bradley sees other gains, as co-op members learn about financing and management. There is determination to instill pride of ownership, so much so that the state organization of manufactured-home owners used to make people pay a quarter every time they used the "T" word — trailer.
Lowering interest rates Many owners bought their homes with high-interest loans. A fifth of co-op members were paying 14% interest, with an average 11.8% rate. The situation got worse in the late 1990s after the sector went bust and lenders went bankrupt or fled the market.
The fund initially made loans. As the co-ops got bigger, the New Hampshire Housing Finance Authority, a quasi-public agency, stepped in, followed by commercial banks. Starting in 2002, the loan fund introduced fixed-rate mortgages, refinancing and home-equity loans in tenant-owned communities, aided by New Hampshire banks. Manufactured-home buyers in co-ops can now get conventional mortgages at market, or even below-market rates.
Florence Quast, 68, a retired nurse and part-time Wal-Mart worker, helped organize the second co-op in the state, which celebrates its 20th anniversary this year. She got a 16% interest rate on her first loan in 1978, above the average 9.64% for site-built mortgages. Quast bought her current home, a double-wide unit with a fireplace, big kitchen and wall full of family photos, with a conventional mortgage.
"We're not looked on really as the best in society until I say it's a co-op and we all own it. There's a little more respect because you're a homeowner," Quast says.
While New Hampshire residents now must get 18 months' notice before they can be forced to move, some states still allow parks to be closed in 30 days. In regions where the housing market is hot, and land scarce, a number of manufactured-housing parks are being sold.
Officials at the Manufactured Housing Institute, which represents owners and manufacturers, says owners, typically mom-and-pop operations, are getting large offers to sell to private developers.
Higher-quality homes Which brings Bradley and other non-profits to the next frontier — development. Fannie Mae is also interested in backing projects that showcase the higher quality of new manufactured homes, which can be fitted with front porches, garages, higher roofs and other amenities to blend in to a community.
Bradley bounds around Pepperidge Woods, a 44-site cooperative development (plus a community center) that's not your stereotypical trailer park. The three-bedroom homes have concrete foundations, energy-efficient appliances, drywall rather than vinyl walls and granite stoops with cast-iron railings. Some have pitched roofs with attic storage or full basements.
Prices run from $147,900 for a 1,344-sq-ft, home to $174,900 for a house with a walkout basement. The homes — sold without subsidies — are targeted at households making $35,000-$65,000.
"Traditional single-family starter homes aren't being developed," Bradley said. "It's $350,000 for a starter home, and families of moderate means can't get in."
Clayton, of Clayton Homes, adds that because manufactured housing is built in a factory, it can be put in place faster with potentially fewer cost overruns. In New Hampshire, zoning laws allow higher density for manufactured homes, cutting down land costs.
Bruce Ouellette, 36, and his wife, Rebecca, 31, were at Pepperidge Woods watching workers pour the foundation for their new house. The couple — she does accounting and he is disabled after working in construction — read about the development in a local paper. They call their new home a vast improvement over what they saw during a year of hunting.
"Every time we tried to get a house, it's like a shut door," Bruce Ouellette says. "I've always been renting. I want to own. I want to have responsibility."
To find out where manufactured houses are going, click this link: http://www.usatoday.com/money/perfi/housing/2005-08-07-manufactured-homes-usat_x.htm
Low to moderate income? Setting your sights on a home By: Mike Dillon, Beacon Hill News South District Journal April 27, 2005
In January of this year the median price sale for a single family home in King County hit $329,950. Don't even think of seeking solace in the once rustic San Juan Islands - January's median home sale price up there checked in at $475,000.
Closer to home, homebuyers on Beacon Hill in 2004 paid a median selling price of $239,925. That's relatively low, sure, but still beyond the reach of too many. High demand, short supply and low interest rates, though they're creeping up, are driving the Puget Sound - area price surge.
Affordability, like the future, isn't what is used to be. But there are avenues of relief for low to moderate-income homebuyers. HomeSight, headquartered in the Rainier Valley, is a non-profit community development corporation that promotes affordable homeownership. HomeSight means more than just applying for a mortgage, however. It may mean a paradigm shift for some.
"Our goal is to get a person to buy a house in the most healthy way financially as possible," says Tanesha Van Leuven, HomeSight's Marketing and Resource Development Manager. That means the kind of eye-to-eye financial counseling that serves as a reality check for prospective clients.
"Income is one thing, debt is another," Van Leuven notes. "We look for 12 percent debt of gross monthly income." It's quite a contrast with some lenders who don't blink at a 50 percent debt ratio for certain purchasers in this hot housing market.
The HomeSight program offers three main features: home buyer education and financial planning - meaning, in most cases, working to get their clients' debt down; buyer assistance loan underwriting; and new home construction.
Through a combination of private and public partnership, HomeSight will provide housing loans of up to $45,000 for certain of its clients. All clients must be first-time homebuyers. HomeSight, which serves selected areas in King and Snohomish counties, including southeast Seattle, works with about 120 families a year.
Van Leuven says the typical clients are single parents with two children or two individuals with a baby. Van Leuven has advice for prospective low to moderate-income homebuyers. "Buy what you can and move up," she says, adding that to expect a $400,000 dream home the first time out is unrealistic.
She says she is quick to remind clients that however modestly they start out, "When you pay your mortgage you're paying yourself."
Turning dreams of ownership into reality
By: Staff, Seattle times August 28, 2004
EVERETT — Owning a home is the great American dream. The prospect is ripe with possibilities, igniting your imagination with thoughts of decorating, entertaining, and relaxing in your new space.
While many families and individuals aspire to ownership, rising home
prices in the Puget Sound region have made the American dream just that, a
dream. But a new development south of here is making the dream a reality
for 35 lucky homebuyers.
Priced from $179,950, Kokanee Creek is an intimate neighborhood of townhomes located on a pedestrian friendly, tree lined cul-de-sac. Today and tomorrow from 11 a.m. to 6 p.m., the community will host tours of its model home. Visitors can enjoy an end-of-summer ice cream social and learn more about a limited time $3,000 buyer bonus.
At Kokanee Creek, homeowners can choose from three innovative homes with three bedrooms and 1.5 or 2.5 bathrooms.
The “Snohomish” plan (three bedrooms and 1.5 baths) is a three-level townhome with garage and basement below two additional floors of living space. The main level features a spacious great room, an open kitchen and a private balcony and back porch. Visitors this weekend will be able to tour a designer-furnished Snohomish showcase home.
The “Columbia” (three bedrooms, 2.5 baths) is a contemporary two-story townhome design with attached garage and large front and back porches. An open great room and kitchen on the main level connects to a bonus room, perfect for an office, hobby room or guest room.
The largest of the three designs is the “Snoqualmie” (three bedrooms, 2.5 baths), a traditional two-story townhome. Like the Columbia, the Snoqualmie features an attached garage, front and back porches, and a bonus room. A large great room welcomes guests and the chef’s kitchen with island opens up to a family room.
Ranging in size from 1,266 to 1,571 square feet, each of the homes features nine-foot ceilings on the main level, economical gas heating, and natural alder kitchen cabinets. GE appliances, including gas range, refrigerator, and dishwasher dishwasher are included with purchase.
Kokanee Creek offers a preferred financing program for qualified first-time homebuyers, says Debra Hodgkins, community sales manager with Builder Sales Group/Windermere, the firm representing Kokanee Creek.
“With mortgage rates continuing to rise, now is the perfect timeto take advantage of the pricing, financing program and bonus offered at Kokanee Creek,” Hodgkins says. “There‘s simply no better personal investment than Kokanee Creek.”
View these homes: A furnished model is open Saturdays and Sundays from 11 a.m. to 6 p.m. and Mondays through Wednesdays from noon to 6 p.m. at 12730 15th Ave. W., Everett.
Getting there: From I-5, take Exit 186. Turn west onto 128th Street Southwest. Travel nearly one mile and turn left on Admiralty Way. Turn left onto 128th Street. From Highway 99, turn east on Airport Road. Turn right onto Admiralty Way. Turn left onto 128th.
Prices: Starting in the upper $170,000s.
Homebuilder: Peter Davis Builders & HomeSight.
Promotions: $3,000 buyer bonus available through Sept. 30, 2004. Financing program for qualified first-time home buyers.
August 02, 2004
HomeSight is a non-profit community development corporation with a mission. That mission is to make affordable home ownership a reality for those who otherwise might not be able to purchase a home. The result is revitalized neighborhoods and financially healthy families.
HomeSight's latest project is Kokanee Creek, currently under construction in South Everett. The 35-home development features three bedroom townhouse style condos, starting at $179,950 in a cozy, quaint neighborhood. Families can purchase one of these brand new homes for below market value, and access several tools, including loan assistance, to make buying a home affordable.
So how does HomeSight accomplish this in a housing market that makes even the wealthy cringe? Their approach is three-fold: by constructing affordable housing, educating homebuyers on how to purchase a home, and offering financial assistance, HomeSight has been able to successfully turn 1,100 people into homeowners.
HomeSight began in 1990 in response to a piece of land left vacant when the new I-90 freeway and tunnel was constructed. Twelve hundred houses were torn down to build the freeway, but a 12-lane design turned out to be only 8 lanes, leaving residents demanding the neighborhood be restored.
A homeownership model was created, a board formed and HomeSight was born. Construction of 55 houses started in 1992, providing affordable homes to families in the area.
One thing became evident in the process, says HomeSight's Marketing and Resource Development Manager Tanesha Van Leuven - many people did not understand the home buying process. So the folks at HomeSight created a two-hour class to help educate potential homeowners on how the process works.
HomeSight also works like a small bank, offering low interest loans for families that earn at or below 80 percent of the median income. A family of four can earn up to $57,500 and still access the funds. Borrowers can reduce their monthly payments through several loan products. Similar to a second mortgage, one loan offers no principle payments the first 30 years. Up to $35,000 can be used in combination with a traditional mortgage loan, making monthly payments affordable.
Another product, an amortizing loan, offers very low interest, such as five percent, on as much as $75,000. No mortgage insurance is needed, making payments even lower.
Funds come from a variety of public sources such as Washington State and, in the case of Kokanee Creek, the Housing Authority of Snohomish County, and Snohomish County itself.
"Homesight has compiled three distinct tools so we can reach very low income levels," said Van Leuven.
Houses built by HomeSight are available to anyone. HomeSight loan products, however, can only be accessed if buyers meet income requirements.
Van Leuven says it doesn't matter where people buy, as long as they are meeting their goal of making successful homebuyers.
The most challenging group is actually middle-income buyers who make too much money, or think they make to much money, to access public funds, but not enough to buy a home.
"Working people cannot afford (Seattle's) market - it's outrageous," says Van Leuven.
But there is hope for some of these buyers. Though they may not think of themselves as low-income, some may be able to utilize public sources to purchase a home.
"We try to understand what's going on in the market to help them buy a home," she explained. HomeSight offers free financial counseling, and can often help potential buyers rearrange their budget, or lower their debt to reach the goal of owning a home.
By turning renters into homeowners and vacant land into affordable neighborhoods, HomeSight has created and revitalized areas in King and Snohomish Counties that are now thriving communities.
But the best part, Van Leuven says, is seeing people buy their first home. "It's neat to see someone come into their house for the first time and they're ecstatic. It's great." HomeSight is a long-time advertising client of the Journals' because of the paper's far-reaching distribution.
"The Journal has the ability to reach the different markets I want," said Van Leuven. The staff at HomeSight also appreciates the positive, local content in the Journal.
"Most news is really negative. The Journal has a range of interesting topics for everyone," she said. "People who don't want the negative news know they can pick up the paper and it comforts them."
For more information on HomeSight's new development at Kokanee Creek, or their other services, call (206) 723-4355.
By Mike Benbow
425-339-3459;
benbow@heraldnet.com.
During the
late 1990s, officials at an organization that provides affordable housing
realized that constructing single-family homes on individual lots just
wasn't cutting it anymore.
"We
realized there's not enough land in the area and that a single-family house
was often too far out of the financial reach of low- and moderate-income
people -- the teachers, maintenance workers and even college professors who
were not making a lot of money," said Tanesha Van Leuven of HomeSight.
The
nonprofit group helps educate people about homeownership and provides
affordable homes in Snohomish and King counties. Van Leuven said HomeSight
looked for new ideas and settled on one from the East Coast -- manufactured
townhouses sold as condominiums.
"We came
back to the Pacific Northwest and looked for a (manufactured home) builder
who was interested in playing with the concept," she said.
The result
is a two-story townhouse built by Marlette that was first used at the Noji
Gardens development in King County. It's now being used at Kokanee Creek, a
35-unit development on 3.44 acres on 128th Street SW in south Everett.
The
townhouses are intended to look like regular stick-built houses.
"We were
trying to achieve an architectural design typical of the Northwest so people
couldn't tell the difference in the exterior or the interior from
stick-built components," Van Leuven said. "We also wanted to make sure it
was something that would be very durable."
The homes,
which have two or three bedrooms, or three bedrooms and a bonus room, range
from $180,000 to $220,000. That is lower than the median home price in
Snohomish County, which was about $228,000 in March.
The homes
range in size from 1,266 to 1,571 square feet.
In
addition to lower prices, qualified first-time home buyers can get up to
$35,000 in purchase assistance, financial coaching from HomeSight and
preferred loan rates and fees.
A family of
three with an annual income of $51,750 could buy a two-bedroom, one-bath
home for $180,000. The family would need to come up with $3,600 for the down
payment, and would have to make monthly payments of $1,100, including taxes
and insurance.
The Kokanee
Creek property was sold to HomeSight by the Snohomish County Housing
Authority, which purchased it in 1992 for use as a manufactured home
community.
"On this
particular site, if we'd used the single-family manufactured product, we
would have had fewer homes," said the housing authority's Ann Schroeder
Osterberg.
She said it
made sense to have HomeSight develop the project since it had experience
with Noji Gardens. "They cut their teeth on it down at Noji," she said.
"They know how to put these developments together.
"Then it
becomes one among a number of strategies brought together at that site.
There are savings because HomeSight is a nonprofit developer. There are
savings because manufactured housing is used. Then you add their education
and counseling program, along with purchase assistance and affordable
financing."
Dashiel
Wham, a spokeswoman for Northwest Pride, the manufactured home association
for Washington, Oregon and Idaho, said the two-story townhouses recently won
an award from the U.S. Department of Housing and Urban Development.
"Mostly it
was for visibility and an affordable package," she said.
Wham said
the homes are also well-constructed, using the same fixtures and materials
as stick-built houses. "They've moved to building exactly the same home a
builder would do on a lot, but they do in a factory," Wham said. "They truck
it to the site, and it locks down to a foundation."
Builders
started constructing the development last week on a site that also includes
a landscaped play island for kids and a wetland greenbelt.
The reliability factor: Selecting a real estate agent who can best represent your interests
By: Kristin Fetters-Walp Special to the Herald
If you're about to select a real estate agent, be prepared to ask questions.
You'll even need to ask yourself a long list of questions to make sure you understand your own needs and goals.
That's the most common advice from people in the know for would-be homebuyers and sellers looking for a reliable real estate agent.
"The first thing you do is homework about yourself," said Tanesha Van Leuven, HomeSight marketing manager. HomeSight is a Seattle-based, not-for-profit home buyer's assistance and education organization.
She suggested that families start by finding a reputable lender to give them loan pre-approval. Pre-approval helps buyers determine how large and what type of a mortgage loan they can expect to be approved for and at what interest rate. Most loan pre-approvals have a fixed period of time.
Next, Van Leuven advised deciding how much you want to pay, when you want to buy and what type of home you want in what kind of neighborhood.
"Write it all down," she said. "Drive through the neighborhoods you think you like at different times of day. Do the commute." For sellers, Tom Jacobi of the HomeSight Revolving Loan Fund recommends deciding when the house needs to be sold and also checking around the neighborhood for what similar homes have sold for recently.
Once that initial homework is complete, the HomeSight professionals and Erin May, public relations manager for the Better Business Bureau Serving Oregon and Western Washington, agreed that it's important to develop a list of at least three potential agents to interview. They strongly advised beginning by seeking referrals from friends, family, neighbors and co-workers.
Darryl Bradshaw, owner and instructor of the Lynnwood-based Mykut Real Estate/Appraisers School of Washington, agreed. "If I want to find a doctor, I check around to find out who's the best in that area," Bradshaw said. "I never, never just go ahead and make an appointment. I want character references first."
He said that the most successful real estate agents have earned their reputations by consistently treating clients with respect and integrity, and that a good way to spot a reliable brokerage firm is to note how many agents are waiting to join its ranks.
When friends, family and associates don't have good suggestions, HomeSight and many other home assistance agencies offer referrals.
Additionally, buyers and sellers can check customer service records of some 686 real estate agents and companies in Western Washington at the BBB's database. There is no charge. When all else fails, real estate classified ads, the Yellow Pages, open houses and for-sale lawn signs are places to start finding agent and brokerage company names. But the experts advise caution in using that approach.
"Anyone can put an ad in the Yellow Pages, and you don know just by looking who's legitimate," May said. "For example, something like 10 percent of contractors listed in the Yellow Pages are operating illegally. So compile a long list and weed it out. Check licenses and check our reliability reports."
In Washington, the department of licensing keeps track of real estate agents' and brokers' licenses. To earn a real estate sales license, an agent must complete 60 hours of classroom education by a certified school, such as Mykut, and pass two tests about real estate practice and law. To remain licensed, an agent must take 30 hours of continuing education and apply for renewal every other birthday.
Agents are forbidden by law from operating independently and must work under the supervision of a state licensed real estate broker in order to receive commissions. Additionally, agents can't charge a buyer fees: They are paid commission out of the sales price.
Bradshaw, who has taught would-be real estate agents for 22 years, said continuing education matters. Many agents historically learned a sales method called trial closing, he said, in which they were taught to respond to buyer questions by asking if a particular deal would mean the difference between buying a house and not.
Now, Bradshaw counsels students that the most important traits of a successful real estate agent are strong teaching and listening skills.
"You're looking for someone who is a good teacher and listener, and who is honest and knowledgeable, and who holds you in total respect," Bradshaw said. "A modern salesperson doesn't play games. You ask them a question and they just answer it."
Van Leuven and Jacobi advised looking for specific experience buying or selling the particular type of home in question and in a similar location and price range.
For sellers, Jacobi additionally recommended asking potential agents how they would market the home and what they would expect the home to sell for.
"Don't be tempted to choose the Realtor who gives you the highest sales price estimate for your home," Jacobi warned. "An agent might misrepresent this ... and later ask you to lower the price."
He advised sellers who disagree with what all of their interviewees suggest for a list price to consider getting a professional appraisal, which he said typically costs $300-$450.
Once the choice has been made, considerate consumers inform their interviewees. As for the agent of choice, it's important to be clear about your expectations and offer feedback.
"A lot of people might have the impression that real estate agents are hard to trust," Van Leuven said. "This is a business deal, and the agent's best chance of making money is by honestly helping you get what you need. So be forward, be assertive, be clear and share your information."
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Manufactured homes. What many think of as trailers or mobile
homes. Built entirely in factories to 1976 Department of Housing and
Urban Development (HUD) standards which regulate things such as
design, durability, transportability, fire standards and operating
systems such as plumbing and heating. Called single- or double-wide,
depending on size, homes are usually "mobile" only when moved to the
lot. Once installed, owners might add decks, porches or other
structures that meet state or local building codes.
