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FHA Revises Appraisal Requirements for Manufactured Homes

The Federal Housing Administration (FHA) has published updated appraisal requirements for the valuation of manufactured homes certified under Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHome programs.

Federal Housing Commissioner Julia Gordon made the announcement at the Manufactured Housing Institute’s National Communities Conference Fall Leadership Forum in Chicago.

The updates in Mortgagee Letter 2023-18 align FHA appraisal requirements with those of other industry participants and will improve the valuation of these homes for borrowers seeking FHA-insured mortgages. These changes also contribute to FHA’s efforts to increase the availability and affordability of manufactured housing as part of the Biden Administration’s Housing Supply Action Plan.

“Increasing the supply of affordable homes in this country will require us to use every tool available to us. That includes innovative solutions like manufactured housing,” said HUD Secretary Marcia L. Fudge. “The critical step we're taking today ensures HUD is in alignment with our industry partners, and it will make more quality affordable housing available to people across the country.”

Effective immediately, FHA’s updated policy for the valuation of manufactured homes certified under the Fannie Mae and Freddie Mac programs requires appraisers to use the most appropriate site-built-home comparable sales when there are less than two comparable sales of these certified manufactured homes available. Manufactured homes certified under the government-sponsored enterprise (GSE) programs, also known as CrossMods, include design features that make them nearly indistinguishable from many site-built homes and address regulatory barriers in effect in some jurisdictions that have historically restricted the placement of manufactured homes.

“Updating FHA appraisal requirements to align with the Fannie Mae and Freddie Mac certification programs supports our comprehensive efforts to increase both the supply and affordability of manufactured homes,” said Federal Housing Commissioner Gordon. “Today, we’ve removed another roadblock limiting the effectiveness of FHA programs in serving buyers of these manufactured homes. We hope it will facilitate the continued growth and adoption of this important source of affordable and energy-efficient housing.”

Click here to read Mortgagee Letter 2023-18, Update to the Sales Comparison Approach for Manufactured Housing.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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