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Before We Begin, Please…
• Put your phone on mute except when you want to ask a question
• Don’t put your phone on hold during the seminar
• Wait until the end of the seminar to print out the presentation
THANK YOU!
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Your Instructor Today
Kelly VespucciKelly VespucciSenior Underwriting
Consultant
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Your Subject Matter Expert
Virginia MahoneySenior Risk Manager
Single Family Business
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• Introduction & Definition of Manufactured Housing
• Review of Eligibility Parameters & Underwriting Requirements
• Examine new Appraisal Requirements • Explore Title Issues and Lien Requirements • Offer Servicing Guidance
Objectives for this Session
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• Manufactured homes make up approximately .5 % of our total book of business
• Volumes have been low, however, we have seen a significant increase in the past 2 years
Introduction & Definition
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• Mortgages secured by manufactured homes default at higher rates and have higher losses than mortgages secured by comparable site-built homes
• Our previous guidelines for manufactured housing allowed for mortgage characteristics that did not match the asset
Introduction & Definition(continued)
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Introduction & Definition(continued)
• Modifying our requirements and providing additional guidance for lenders will • Reduce the likelihood of default• Help ensure that borrowers have every
opportunity to become and remain successful homeowners
• Fannie Mae remains committed to providing liquidity to this important segment of the housing market
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Built on a permanent chassis and attached to a permanent foundation system
Definition of Manufactured Housing
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• Built in compliance with Federal Manufactured Home Construction and Safety Standards - June 15, 1976
• A one-family dwelling, legally classified as real property.
• The land must be owned as fee simple. Leasehold estates are not eligible.
• “On-Frame” modular homes built on a permanent chassis must meet the HUD Code to be eligible for delivery.
Eligibility Parameters
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Eligibility Parameters(continued)
• Multi-width may be located on an individual lot
in a co-op, condo or PUD
• Single-width manufactured homes are eligible
only if located in a co-op, condo, or PUD
• Project acceptance is required for
cooperative or condominium
PUD if a single-width manufactured home
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Mortgage Eligibility• General Eligibility Criteria is defined by Transaction Types
& Loan-to-Value Ratios
• Purchase
• Refinance transactions
• Underwriting
• Fannie Mae’s automated underwriting system Desktop Underwriter® is required
• Borrowers with less-than-perfect credit are eligible under our Expanded Approval™ option in Desktop Underwriter (EA I/Eligible & EA II/Eligible only)
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Mortgage Eligibility (continued)• Pricing Adjustments:
• A one time price adjustment of 0.50% is required for each mortgage loan
• Deeper Mortgage Insurance Requirements
• Seasoning Requirement on land as equity • Based on length of ownership
• Greater than 12 months• Equal or Less than 12 months
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Summary of Manuf Home Guidelines
Up to 95% now permitted on Primary residences, Purchase & Limited Cash Out ONLY
35% MI coverage required with term > 20 up to 30 years
Up to 95% now permitted on Primary residences, Purchase & Limited Cash Out ONLY
Announcement 04-07 changes in RED below
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Revised Appraisal Requirements• Additional guidance on the selection of appraisers
• Adequate training & knowledge of manufactured housing • Experience with property type and location• Access to appropriate data sources
• Modifications to appraisal standards
• Continue to require market-based property valuations• Sales comparison approach supported by a detailed cost
approach
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Revised Appraisal Requirements (continued)
• Enhanced appraisal reporting requirements with new Manufactured Home Appraisal Report Addendum (Form 1004C)
• Addendum reinforces existing valuation and reporting requirements
• Addendum also implements revised requirements• New certifications by the appraiser
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Revised Appraisal Requirements (continued)
• Sources of manufactured housing data
• N.A.D.A. Manufactured Housing Appraisal Guide
• Marshall & Swift Residential Cost Handbook• Manufactured home dealer costs
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Title Issues and Lien Requirements• Overview
• Did not previously provide much guidance related to titling
• Previously, we required properties to be secured by a single lien on both the home and land
• Fannie Mae requires that manufactured housing loans be secured by a lien on real property
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Title Issues & Lien Requirements (cont’d)• Guidance on Fannie Mae’s website to assist lenders
• state-specific• does not relieve lenders of responsibility for reps and
warranties (Consult with your own legal counsel)• available on www.efanniemae.com
• Legal requirements covered in Announcement 03-06 • titling properties as real estate • use of standard instruments that support characteristics of
properties as real estate and specifies information that must be included on the security instrument (VIN #, Serial #, make model and size of unit)
• recorded affidavit from lender & borrower that home will be a permanent part of real property that secures the loan
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Title Issues and Lien Requirements (continued)
Link to Titling information Resources on www.efanniemae.com
http://www.efanniemae.com/singlefamily/mortgage_products/manufactured_housing.jhtml
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• Clarifies existing servicing requirements & addresses issues unique to manufactured home mortgages
• Stresses the need for servicers to identify mortgages as manufactured homes on their internal systems & to notify Fannie Mae if the servicer discovers a mortgage not delivered with the Special Feature Code
• Specifies collateral documents to be retained by servicer
Servicing Requirements
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Servicing Requirements (continued)• Addresses collection of personal property taxes if they
are assessed
• Addresses loan modifications completed as part of loss mitigation efforts
• Requires the servicer to notify the attorney in advance of foreclosure and bankruptcy proceedings that a property is a manufactured home
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Additional ResourcesLink to Titling Information Resources on www.efanniemae.com
http://www.efanniemae.com/singlefamily/mortgage_products/manufactured_housing.jhtml
Announcement 03-06
Link to Manufactured Housing Appraisal Addendum
http://www.efanniemae.com/singlefamily/pdf/1004c.pdf