Virginia Public Radio – Mobile Homes, Part 2

Mobile homes used to be thought as one of the most affordable housing options in America, but a new study finds the opposite is often true. As Robbie Harris tells us in Part 2 of this report, affordable housing advocates are working on ways to help residents dig out of the mobile home money pit and start building wealth.

With half the renters in older mobile homes spending more than half their incomes on utility bills alone, the notion of these homes as an affordable option goes right out the window; And in too many of them that window is not very well insulated. Stacey Epperson founded a non-profit called Next Step, 6 years ago, with a goal of making sustainable affordable housing possible for everyone.

“So if we look at Appalachia we look at the delta, native lands we’re going to find is a prevalence of mobile homes and what we know about them is that they are they are the most inefficient homes in America today.”

She says, for many people in these homes it’s a losing enterprise.

“They may not have the resources to take care of them and the homes have been used past their functional life. And so the best solution is to replace the home.”

That’s because new energy efficiency and construction techniques make replacing them more cost effective than retro fitting. She’d like to see a federal grant program to help people replace these older models with new, Energy Star rated manufactured homes.  And she’s urging utilities to reinstate incentive programs like the one Appalachian Power has in place for its manufactured home customers.

“Appalachian power is paying $1300 for every Energy Star manufactured homebuilt and they pay it directly to the manufacturer.  So if I’m a consumer and I go to buy a manufactured home and if I tie into their power, basically, when I buy my home I’m getting a free Energy Star upgrade.  And the value on that is anywhere between 2-thousand and4-thousand dollars.”

That’s a start toward digging out of the mobile home money pit. But the next step is transforming them into wealth builders. Mel Jones of the Virginia Housing Research Institute says banks typically treat so called mobile home as personal property, and that means they charge higher interest rates. And owners of the newer, better built homes looking to refinance their mortgages when rates dropped have been told they can not because mobile homes depreciate too much.

“Manufactured homes now far exceed HUD standards and really if you put them on a foundation they almost look like stick built homes.  People are saying well this doesn’t need to be depreciating in the same way we think about personal property depreciating, this can really be more like real estate, a fixed improvement to land and that allows folks to build wealth like we think about when people are getting equity in their home and becomes an investment instead of simply a sort of self owned rent.  Jones says even though the rules on financing of manufactured housing changed in 2004 many banks are still not up to speed. So its best to get an appraisal first, then go to a government related lenders, which under the new policy, have a duty to finance manufactured homes.

“New mobile or manufactured homes can be more efficient than stick built homes because everything is made in a controlled environment. Everything is made to strict standards.  It’s a very energy efficient option.”

These days, high-end manufactured homes are gaining in popularity for those very reasons. Again Stacy Epperson.

“Yeah, you know it’s interesting somebody said to med over lunch in a way that just really resonated with me, they said, ‘You know what, tiny homes on HGTV has made your industry cool again. You know, we’re constantly battling image but there’s this whole new dialogue about the right size small home, so yes it can become chic.”

And more affordable, leaving its occupants more money for other things in life.

I’m Robbie Harris.