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Rocket Mortgage is now expanding home loan options in a rapidly shrinking industry by offering traditional loan options to buyers looking to purchase or refinance a manufactured home.
Borrowers said Wednesday they could use the loan to finance a home with a down payment of at least 5 percent for a primary home and 10 percent for a second home.
The cash-out refinance can be used on a primary home, and the interest and term refinance can be used on a primary or secondary home.
“Manufactured home sales last year were about $12 billion. These are high-income, high-credit, reliable customers.
The quality of manufactured homes has improved over the years and has become an affordable option for home buyers.
The building materials used for manufactured homes today are the same as those used for site-built homes. But according to a report by the Manufactured Housing Institute, manufactured homes cost about 30 percent less than locally built homes.
Prefab homes are built in a closed location and shipped to a location chosen by the owner.
When a building is permanently installed on land, it becomes real estate and can be financed with a mortgage.
However, not all prefab homeowners own land. A borrower taking out a home loan (manufactured home loan) may or may not own the location of that property, but the home loan remains the same even if the property is transferred.
However, the home itself is a depreciating asset, making it difficult for manufactured homeowners to build equity or intergenerational wealth.
According to the Consumer Financial Protection Bureau (CFPB), about 17.5 million Americans have mortgages, which is 42% of the manufacturing market. GSE, which provides mortgages for existing homes under construction on site, does not currently offer real estate financing.
Although Rocket Mortgage delivered more than double the production of all lenders in 2021, the lender’s mortgage production in the second quarter fell to $34.5 billion from $53.8 billion in the first quarter.
Lenders turned to mortgage purchases and introduced products to attract more borrowers to court.
In September, lenders announced an anti-inflation program that cuts homebuyers’ monthly mortgage payments by 1 percentage point in the first year of the loan.
Rocket Companies, through its subsidiary Rocket Mortgage, recently launched a loyalty program that lowers closing costs for home purchases.
Rocket is due to report its third-quarter results on Thursday, November 3rd.
Reference Source: Housing Wire
