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How Manufactured Homes Can Build Housing Stability

By Cameron Rifkin and Maddie Davis  |  June 28, 2022

As rental and owner-occupied home prices continue to rise and the supply of affordable housing for low- and middle-income families continues to fall, manufactured housing has emerged as an appealing option for many buyers.

One of the main benefits of factory-built housing is its relatively low cost. Based on average sales prices, a manufactured home cost roughly half as much as a site-built home in 2018—$55 per square foot versus $114 per square foot, respectively. And factory-built homes can be constructed year-round using processes that are consistent, reliable, efficient and unaffected by weather.

But expanding the use of manufactured housing is not without legal and regulatory challenges, including financing, zoning and landlord-tenant laws.

Manufactured Housing Defined

Manufactured housing” refers to homes that meet Department of Housing and Urban Development safety codes and were built in a factory after June 15, 1976. Factory-built homes have floor plans of at least 320 square feet and are constructed on a chassis before being transported to their permanent placement. Mobile homes, also known as trailers or trailer homes, were made before this building code was enacted but are similar in dimensions to modern manufactured housing. Older mobile homes are still used by many people across the country. Legislation sometimes includes both manufactured and mobile homes or refers to them interchangeably. Modular homes are not required to meet the HUD safety codes for manufactured housing but instead are subject to the same local, regional or state building codes as site-built homes.

Bipartisan Federal Actions

Recent federal initiatives have focused on expanding the use of manufactured homes as a source of affordable housing. HUD recently released a final rule to update building codes for manufactured housing to promote safety and reduce regulatory barriers for use. The rule also allows for increased design flexibility and consumer choice by encouraging more contemporary structures. In 2021 and 2022, the Biden administration announced additional steps to help boost the affordable housing supply, including providing zoning reform incentives, allocating flexible HUD block grants and expanding financing options for manufactured homes through Freddie Mac, Fannie Mae and Federal Housing Administration loans.

In addition, Congress passed HR 3332 in 2021 requiring HUD to award grants to nonprofit organizations, public housing agencies and other entities for the preservation of manufactured housing communities. The Frank Adelmann Manufactured Housing Community Sustainability Act, currently pending in the House, would create a business-related tax credit equal to 75% of the gain from the sale or exchange of property to a manufactured home community cooperative or corporation. A bipartisan Senate bill introduced in 2019 would have helped state and local governments leverage federal funds for the development of manufactured homes as affordable housing. The legislation did not pass.

Common Legal and Regulatory Hurdles

Financing manufactured housing can be tricky. Even though nearly half of manufactured homes are on land owned by the homeowner, they are typically titled as personal property, rather than real estate. Owning the home as personal property means the buyer cannot finance with a mortgage, and the process for converting a manufactured home into real property to obtain a mortgage or deed varies by state.

Instead, the purchaser must take out a personal property or “chattel” loan with just the home as collateral rather than the house with the land. Personal property loans for manufactured homes often have much higher interest rates and fewer consumer protections than home mortgages.

Zoning can also present challenges for manufactured housing because of city or county restrictions on lot sizes, density and location of the homes. Urban communities tend to have stricter requirements about what materials must be used, parking space allocations and lack of by-right zoning. This makes manufactured housing difficult, if not impossible, to establish in many neighborhoods.

In some situations, lack of landlord-tenant laws are another obstacle to ensuring that owners of manufactured houses have stable, long-term rights to the land beneath their homes. Landlord-tenant laws can outline protections for traditional tenants regarding rent increases, habitability requirements, pest control, maintenance and other issues, but they often exclude residents of manufactured homes. Even where they are in place, the laws can favor landlords disproportionately at the expense of tenants.

Laws vary greatly by state, and policies that apply to site-built homes might not apply to manufactured homes. Tenants who own their manufactured home, but not the land beneath, are at greater risk of housing instability due to increasing lot rental costs, which may not be affordable, or to property redevelopment, which could lead to eviction. Moving a manufactured home can be difficult or impossible as the process generally costs thousands of dollars and can damage or ruin a home; finding a new location is often challenging.

Bipartisan Opportunities in State Legislatures

According to former Colorado Sen. John Kefalas, affordable housing has become a much less partisan issue. “There is a recognition that we have an affordable housing crisis,” he says. “It goes beyond partisanship, and there are concerted efforts to address it.” Republican- and Democratic-led legislatures have enacted measures to expand access to manufactured homes, improve landlord-tenant relationships, and reduce regulatory barriers to increase the supply of lower-cost housing. Though the situation varies state to state, legislative reforms are gaining traction, particularly as they relate to financing, zoning and landlord-tenant rights.

Homebuyer Financing

Because more than half of all loan applications for the purchase of manufactured homes are denied and smaller mortgages are less profitable for banks and other lenders, homebuyers often find it difficult to acquire funding to purchase or resell the homes. However, the expansion of federal lending programs, such as FHA, or increased loan purchases from Fannie Mae and Freddie Mac in a secondary market, could help improve access to safe, affordable loans for manufactured homes.

Lawmakers in Minnesota recently enacted a bill enabling owners of manufactured homes who own their land as part of a co-op to obtain mortgage financing options for their homes. In New York, policymakers have introduced similar legislation to streamline the process of converting manufactured homes into real property, which would allow buyers to apply for mortgages immediately instead of first converting their homes from personal to real property. In 2022, Colorado established a revolving loan and grant program to help residents of manufactured home parks purchase their communities. The legislation also provides funding to nonprofit organizations that provide support and technical assistance to eligible homeowners seeking to organize and purchase their mobile home parks.

Research shows land ownership, individually or as a community, is associated with improved housing stability. Jennifer Hall, executive director of the Mississippi Manufactured Housing Association, stresses the importance of home and land ownership for residents of manufactured housing. “I just see where our homes have come from and how they’ve completed families. It’s just given them that joy of owning their own home,” she says. “And whether it’s a young couple, whether it’s a couple with four or five kids, whether it’s an elderly couple, whether it’s a single parent, we are making dreams come true.”


Addressing strict zoning requirements for manufactured homes is another strategy for increasing the supply of affordable housing. How states address zoning today varies widely. Some promote the permitting of manufactured housing in their municipalities, while others inhibit it. Still others leave the decisions up to local governments.

Evaluating potentially restrictive laws for opportunities to better utilize manufactured housing is one strategy for legislators to consider. Such options may include preserving existing manufactured housing communities and creating new communities or subdivisions. For example, Virginia now requires localities to include plans to promote manufactured homes as affordable housing into their comprehensive plans and it bolstered land-renter protections.

Community and Landlord-Tenant Laws

The unique landlord-tenant dynamics in manufactured home communities have led some legislatures to bolster renter protections. Some states have created dispute resolution programs and others require justification of lot rent increases.

Iowa recently enacted legislation that binds landlords who buy a manufactured housing community or mobile home park to the same legal obligations of the previous owner, including rental agreements. The new law also addresses retaliatory behavior by landlords and requirements that could prevent a tenant from moving a home in the future.

Colorado also enacted reforms of landlord-tenant laws for manufactured housing. In 2020, the state began requiring all records associated with an eviction filing to be suppressed until a final determination of eviction is approved. The goal is to prevent housing discrimination due to a filing that did not ultimately result in an eviction. In 2022, the state clarified landlord maintenance responsibilities, extended the period in which a homeowner could offer to purchase a manufactured home park, and began requiring landlords who change the use of their land to provide financial compensation to displaced homeowners.

Mississippi updated its landlord-tenant laws this year to create additional protections for tenants in eviction proceedings and included tenants of manufactured housing in the revisions.

Policy reforms that work for one state may not be necessary or appropriate in another, but housing costs are escalating in markets throughout the country, and many lawmakers view manufactured housing as a potential remedy.

Cameron Rifkin is a policy associate and Maddie Davis is an intern in NCSL’s Children and Families Program. Both cover housing, homelessness and other topics related to the well-being of children and families.

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