Selling Guide

Published April 25, 2017

B2-3-02: Special Property Eligibility and Underwriting Considerations: Factory-Built Housing (04/15/2014)

This topic contains information on factory-built housing, including:

Manufactured Home Property Eligibility Requirements

Fannie Mae defines a “manufactured home” as any dwelling unit built on a permanent chassis and attached to a permanent foundation system. (For additional information, see B5-2-02, Manufactured Housing Loan Eligibility.)

The table below provides additional manufactured housing property eligibility requirements. For manufactured housing appraisal requirements, see B4-1.4-01, Factory-Built Housing: Manufactured Housing.

Requirements
The manufactured home must be built in compliance with
  • the Federal Manufactured Home Construction and Safety Standards that were established June 15, 1976, as amended and in force at the time the home is manufactured; and

  • additional requirements that appear in HUD regulations at 24 C.F.R. Part 3280.

Compliance with these standards will be evidenced by the presence of both a HUD Data Plate and the HUD Certification Label. If the original or alternative documentation cannot be obtained for both the Data Plate/Compliance Certificate and the HUD Certification Label, the loan is not eligible for delivery to Fannie Mae.

The HUD Data Plate/Compliance Certificate is a paper document located on the interior of the subject property that contains, among other things, the manufacturer’s name and trade/model number. In addition to the data required by Fannie Mae, the Data Plate includes pertinent information about the unit, including a list of factory-installed equipment. The HUD Certification Label, sometimes referred to as a HUD “seal” or “tag,” is a metal plate located on the exterior of each section of the home. The Manufactured Home Appraisal Report (Form 1004C) must show evidence of both the HUD Data Plate/Compliance Certificate and the HUD Certification Label.

As an alternative to the original HUD Certification Label, the lender may be able to obtain a verification letter with the same information contained on the HUD Certification Label from the Institute for Building Technology and Safety (IBTS). A duplicate HUD Data Plate/Compliance Certificate may be available from IBTS or by contacting the In-Plant Primary Inspection Agency (IPIA) or the manufacturer. (A list of IPIA offices is posted on HUD’s website.)

The unit must not have been previously installed or occupied at any other site or location, except from the manufacturer or the dealer’s lot as a new unit.
The manufactured home must be a one-unit dwelling unit that is legally classified as real property.
The towing hitch, wheels, and axles must be removed. The dwelling must assume the characteristics of site-built housing.
The borrower must own the land on which the manufactured home is situated in fee simple, unless the manufactured home is located in a co-op or condo project.
  • For co-ops, both the land and dwelling must be owned by the co-op.

  • For condos, both the land and dwelling must be subject to the condo regime.

  • Mortgages secured by manufactured homes located on leasehold estates are not eligible.

Multi-width manufactured homes may be located either on an individual lot or in a project development.

Project approval for mortgage loans secured by multi-width manufactured homes located on individual lots in subdivisions or in PUDs is generally not required, but Fannie Mae may choose to require project approval. For further information about project approval requirements, see Chapter B4-2, Project Standards.

Co-op or condo project developments must be Fannie Mae-approved.

Single-width manufactured homes must be located in a Fannie Mae-approved subdivision, co-op, condo, or PUD project development.

The manufactured home must be at least 12 feet wide and have a minimum of 600 square feet of gross living area.

Fannie Mae does not specify other minimum requirements for size, roof pitch, or any other specific construction details for HUD-coded manufactured homes.

Site preparation for delivery of the manufactured home must be completed.

The manufactured home must be attached to a permanent foundation system in accordance with the manufacturer’s requirements for anchoring, support, stability, and maintenance.

The foundation system must be appropriate for the soil conditions for the site and meet local and state codes.

The manufactured home must be permanently connected to a septic tank or sewage system, and to other utilities in accordance with local and state requirements.

If the property is not situated on a publicly dedicated and maintained street, then it must be situated on a street that is community owned and maintained, or privately owned and maintained.

There must be adequate vehicular access and there must be an adequate and legally enforceable agreement for vehicular access and maintenance. See B4-1.3-04, Site Section of the Appraisal Report, for additional information about privately maintained streets.

Mortgages secured by existing manufactured homes that have incomplete items, such as a partially completed addition or renovation, or defects or needed repairs that affect safety, soundness, or structural integrity, are not eligible for purchase until the necessary work is completed.

Exceptions to the foregoing may be made only for minor items that do not affect the ability to obtain an occupancy permit — such as landscaping, a driveway, or a walkway – subject to all requirements and warranties for new or proposed construction provided in B4-1.2-03, Requirements for Postponed Improvements.

Manufactured homes that have an addition or have had a structural modification are eligible under certain conditions. If the state in which the property is located requires inspection by a state agency to approve modifications to the property, then the lender is required to confirm that the property has met the requirement. However, if the state does not have this requirement, then the property must be inspected by a licensed professional engineer who can certify that the addition or structural changes were completed in accordance with the HUD Manufactured Home Construction Safety Standards. In all cases, the satisfactory inspection report must be retained in the mortgage loan file.

Modular, Prefabricated, Panelized, or Sectional Housing Eligibility

Modular Homes. Fannie Mae purchases loans secured by modular homes built in accordance with the Uniform Building Code administered by state agencies responsible for adopting and administering building code requirements for the state in which the modular home is installed. Loans secured by on-frame modular construction are not eligible for sale to Fannie Mae. On-frame modular construction is defined as having a permanent chassis, but no evidence of compliance with the June 15, 1976, Federal Manufactured Home Construction and Safety Standards.

Prefabricated, Panelized, and Sectional Homes. Loans secured by prefabricated, panelized, or sectional housing are eligible for purchase. These properties do not have to satisfy HUD’s Federal Manufactured Home Construction and Safety Standards or the Uniform Building Codes that are adopted and administered by the state in which the home is installed. The home must conform to local building codes in the area in which it will be located.

Modular, Prefabricated, Panelized, or Sectional Housing Requirements

Factory-built housing not built on a permanent chassis such as modular, prefabricated, panelized, or sectional housing is not considered manufactured housing and is eligible under the guidelines for one-unit properties. These types of properties

  • must assume the characteristics of site-built housing,

  • must be legally classified as real property, and

  • must conform to all local building codes in the jurisdiction in which they are permanently located.

The purchase, conveyance, and financing (or refinancing) must be evidenced by a valid and enforceable first-lien mortgage or deed of trust that is recorded in the land records, and must represent a single real estate transaction under applicable state law.

Fannie Mae affords modular, prefabricated, panelized, or sectional housing homes the same treatment as site-built housing. Therefore, Fannie Mae does not have minimum requirements for width, size, roof pitch, or any other specific construction details.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2014–03 April 15, 2014
Announcement SEL-2011–06 July 26, 2011