According to a recent Home Mortgage Disclosure Act (HMDA) report published by the Consumer Financial Protection Bureau, the stunning 65% increase in originations we saw last year was predominantly driven by the refinance wave, with originations jumping from 8.3 million in 2019 to 13.6 million in 2020. But how many of those refinance originations were for manufactured homes? Less than 1%.
There are several reasons for borrowers to consider a cash-out refinance this fall, including manufactured home owners.
Did you know that a lot of lenders don’t allow cash-out refinances for manufactured homes (or, if they do, they cap the LTV beyond the program requirement)?
At AFR, we offer cash-out refinances on Manufactured Home loans! Additionally, there are no appraisals needed on streamline loans (FHA/USDA) or interest rate reduction refinance loans (VA).
As the largest source of unsubsidized affordable housing in the United States, Manufactured home owners may be prime candidates for refinancing, flying just under your radar. In fact, recent Consumer Financial Protection Bureau research found that “people living in such residences are more likely to have low incomes, assets, and net wealth than those in traditional site-built homes. Interestingly, they also have lower debt-to-asset ratios, which may be due to more conservative borrowing behavior or less access to credit for these households.”
Plus, since many homeowners put their mortgages into forbearance last spring, a lot of those loans — insured by the FHA, VA, and USDA — will have to exit forbearance this fall. This mass exodus from forbearance could create a substantial refinance opportunity. Another recent development to consider is the elimination of the Adverse Market Refinance Fee, which will allow families to save more as they look to lower their monthly payments.
With the removal of the half-point hit on conventional conforming refinances, now is an excellent time to educate your borrowers that they can
-lower monthly payments
-take cash out to pay for large expenses
-and/or consolidate debt
…even if they live in a manufactured home! You can help homeowners streamline debt payments by combining them into one lower interest rate loan, which can help provide easier and more predictable financial planning. Record numbers of families have already seized the opportunity to refinance.
You may already know that AFR Wholesale has more than a decade of experience in manufactured home lending, and offers a comprehensive suite of manufactured home financing, including FHA, VA, USDA, and Conventional, plus options like MH Advantage® and CHOICEHome®. Plus, we are one of the few lenders that offers financing for singlewides.
It may be time to empower manufactured home owners to use their equity and consider a cash-out refinance. Another conversation worth having with clients, and AFR Wholesale is here to help.
Photography by [Vitalii Vodolazskyi] © Shutterstock.com