With the economic downturn starting in the autumn and winter of 1998 the U.S. economy witnessed the collapse of home prices. What’s more it has more than a few people worried and left scratching their heads. The question we all have is will it ever make a turn for the better and what will that turn look like? What aided in the collapse and can we learn how to prevent such a collapse from happening again? We in the Manufactured Home Industry have seen an unprecedented decline; although the Manufactured Home has seen many advances, there has always and continues to be an underlying problem that many cannot place their finger on.
What are or is the problem(s)?
Is the problem value? Value has been the cornerstone of the industry. We have made great advances in quality, affordability and customer service. As we continue to make improvements many of the ideas are showing up in the competing site-built and modular home markets. Many of these changes are so apparent that it has become hard to tell a manufactured home from a site-built or modular home.
Is the problem the steel frame/ wood joist combination? No, actually the steel frame and wood joist floor system that has been the method of constructing manufactured homes since the beginning has proven to be a very resourceful method of construction. Our industry has saved many trees so they can be used for other purposes.
Is the problem financing? And if so why? Financing has been a problem for our industry because it comes with many risks involved. The risks can all be related to one cause and that is the used Manufactured Home.
The used manufactured home as far as the consumer is concerned is a very poor investment. Once a consumer buys a new manufactured home it is considered used and thus it is on a time constraint for its resale value because many lenders will not make loans available for Manufactured Homes that are over 10 years old. This has become a huge problem for the more informed consumer in today’s market.
The consumers need to ask themselves the obvious question:
What value is there in owning a home that cannot easily be sold in the future? Pondering this question coming from the more informed buyer in today’s market can be gut wrenching for many of the honest hard working sales and support staffs in our Industry. Many of us are not proud in the light of this financing problem and when we are honest to the consumer we fail to sell people on our cornerstone sales facts of better quality, service and affordability when comparing our product to a site-built or modular home.
What can we do to solve this problem?
We are aware that the finance companies make a distinction between home products by simply a steel frame. Is this a wise distinction or is it just for ease of recognition? The steel frame is really close to being extinct because of this distinction. It is not for its construction method, but the lack of imagination that the regulators have had on our industry. We now have two different ways HUD can look at these homes. One is the standard HUD regulation of temporary housing and the other is HUD permanent foundation regulation.
The problem is that the banking industry lumps all of the Manufactured Homes into one category and loans to both equally. The banking industry is right in its evaluation of the Manufactured Homes because of the current regulations.
The question then arises, why should lenders make money available to these kinds of homes unless something can be more certain with the intentions of the permanent set Manufactured Home?
What more can be said for Manufactured Homes that are permanently set and how can we give the consumer and the banking industry more confidence in our product?
A permanently set Manufactured Home is a home that has been permanently affixed to a said property or condominium association and meets all the regulations of “HUD PERMANENT FOUNDATION GUIDE”. These homes have foundations & skirting for manufactured homes that are equivalent to a site-built of modular home, but are not necessarily constructed the same way because of the stronger floor system that is achieved from the combination steel/ wood floor system (only available on Manufactured Homes). It has been obvious to people in our industry that this type of regulation intentions should have reached to the banking industry, but it has fallen short from the confidence needed in banking industry and therefore does not meet the consumer’s needs for resale equity. Because of this reason we are seeing a huge decrease of sales that are directly related to our more and more informed consumer.
Do we really want or need more regulations? Will more regulations fix bankers confidence and therefore boost consumer confidence in favor of Manufactured Homes?
The reason for many of the regulations we have on homes today is geared toward consumer safety and adding long term value. For Manufactured Homes it has been an uphill battle for consumer confidence with pothole after pothole being tossed at us just when we all thought we had everything solved. Can we finally reach the summit of permanent confidence? We must endeavor to find out or our industry will disappear forever.
I have a proposal that is equally the same as what the car industry has for factory certifying used cars so they can be sold with better finance rates. We need to certify used Manufactured homes so they can receive financing beyond the magical 10 year age limitation
How will a re-certification process work and what benefits would this mean to the consumer and the Industry?
Manufactured Home Re-certification proposal:
I am proposing that any manufactured home that was initially installed under the HUD “Permanent Foundation Guide” or any Manufactured Home that can be brought up to the most current HUD “Permanent Foundation Guide” can be recertified at any time to be sold as a “Certified Used Manufactured Home”. The purpose of this proposal is to regain bankers’ confidence for making loans available on Manufactured Homes that meet the proposed criteria of a “Certified Used Manufactured Home”. The proposal will require that any states certified installers or workers with four years or more experience in the manufactured Home industry can take classes to become licensed and certified as State Certified Manufactured Home inspectors. This license will require ongoing continuing education to retain your license. Each state will need to verify that the Certified Manufactured Home inspectors’ recommendations were completed and that all the requirements of the recertifying process are finished and then relabeling the home as “Certified Used Manufactured Home” giving the date.
The benefit in having these homes re-certified is to reward a homeowner or remodel contractor for taking care of their home and bringing them to a point of greater value. It is a great value have lending available to an owner of a used Manufactured Home regardles of its manufacture date, when there is little or none available. This is especially beneficial when the home owner decides to upgrade or sell their home. This brings up a truth that plagues our banking industry now.
How do homeowners leverage themselves in this kind of market to fight lenders for the best deal?
In the current lending environment we have thousands and thousands of consumers that own Manufactured Homes and are paying their mortgages. What if they all wised up to the fact that they couldn’t sell these homes because there is not any consumer financing available for people to buy their home? What if they all went to their lenders and demanded a lower rate of interest or even a lower payoff amount because the consumers do have leverage that should send shivers up the spines of the banking industry? The banks have given the consumer this leverage because they cannot sell their homes do to the lack of available financing. Once the consumer knows they cannot sell their home, even if they have equity, they will be more and more apt to default. How can all of these homes be resold if there is no used home financing available for them? The consumer will wise up to the problem and when they do, we will all be in trouble.
In conclusion:
The Manufactured Home industry has a real problem that I believe can be repaired in a very short time period. We can restore confidence in our industry, bankers and consumers while making our homes even more desirable than a site-built Home or Modular home. We can offer the consumer a greater confidence in the value after the initial sale and site completion. We can work together to “Paint a Bright Future for the Manufactured Home Industry.” A favorite quote I have always enjoyed by Thomas Jefferson is “when the heart is right the feet are swift.” Let’s get our hearts right so we can swiftly get back to work.
Richard Scott Imus
Richard helped to invent Duaraskirt to fill a need for manufactured housing. Duraskirt is a readily available concrete skirting product that installs quicky and easily to provide a long lasting skirting product for manufactured homes. Duraskirt meets the HUD Permanent Foundation Guide as a component of a Permanent Foundation.
Duraskirt - "A Concrete Solution For Life"
Creative Concrete Products, LLC
Call For A Quote: 360-419-9909
115 Lind Street, Mount Vernon, WA 98273
Website: www.Duraskirt.com
info: Duraskirt is a concrete mobile home skirting and our motto is “A Concrete Solution For Life.”