When in the market for a new home, many people are looking toward the attractive, low cost option of manufactured homes. Lending for these factory-built dwellings is different in some ways that a traditional mortgage for a house built on site. According to CFED, “financing manufactured home purchases and refinances can be a viable and effective community development activity for credit unions”. Thus, more and more credit unions have stepped up to answer the call, offering lending for manufactured houses.

  1. Credit Unions prefer helping members over making profit.

Credit Unions have a fundamental approach to building wealth by building their local community. Unlike banks, which lend money near and far for the sole purpose of turning a profit on each transaction, credit unions believe that their growth depends largely on the growth of their local community. What is good for the neighborhood is good for the credit union. Thus, if manufactured houses are in demand in an area, local credit unions want to offer loan products to meet those needs.

  1. Manufactured Home Loans address the demand for smaller home loans.

Ever since the financial crisis in 2008, consumers are demanding access to smaller, more affordable home loans. According to an article published by Wired, housing experts confess that “a family that makes $100,000 can’t afford to buy a house” in many cities. The new ‘Duty to Serve’ rule from the FHFA has allowed for more affordable originations of smaller loans, namely manufactured homes, opening the door to answer consumer demands for affordable home loan solutions.

  1. Manufactured Home Loans Diversify the Credit Union’s portfolio.

Although Credit Unions are not-for-profit, they also cannot operate at a loss. This means investment diversity matters to them, too. A diverse lending portfolio is the best strategy to mitigating risk and raising profits for credit unions, and manufactured home lending provides a nice alternative loan product to traditional mortgages.

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