George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

February 19, 2016

Annual HUD-Code ‘Shipments’ Compared to Site-built Housing ‘Starts’ in 2009 & 2015!

Filed under: Uncategorized — George Allen @ 4:25 am

Blog # 386 Copyright 2016 COBA7® @ 21 February 2016;

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the national advocacy voice, official ombudsman (press), research reporter, & online communication media for all LLLCommunities in North America!

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance®, a.k.a. COBA7®, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7® Motto: ‘U Support US & WE Serve U!’, & Goal of its’ print/online media = to ‘Not only inform & Opine, but transform & improve MHBusiness Model Performance!’


Part I. As an industry, particularly as a type of factory-built housing, we oft talk and sometimes grouse, about our ‘competitor sister’, the site-built, stick, or traditional home builder. Well, here’s a rare statistical comparison of both housing types, side by side, ‘production wise’ during the Great Recession years 2009 – 2015! An interesting tale it is.

Part II. Haven’t yet read the ‘National Registry of ALL Lenders Serving the MHIndustry & LLLCommunity Asset Class’, yet wonder what it is like? Well, here’s the prelude to this annual seminal document, second in popularity only to the ALLEN REPORT. If you’re involved in MH and or LLLCommunity finance, this is a Must Have Resource!


Annual HUD-Code Home ‘Shipments’ & Site-built Housing ‘Starts’ Compared; 2009 & 2015!

Twice during the past 40 years, HUD-Code home ‘shipments’ competed handsomely with site-built housing ‘starts’: during 1973 when 579,960 new ‘mobile homes’ were distributed throughout the U.S., and in 1998, when 372,843 new ‘manufactured homes’ were shipped. Since then, HUD-Code manufactured housing, denied reasonable access to chattel capital (Initially, for good reasons) to originate ‘home only loans’ within land-lease-lifestyle communities (a.k.a. manufactured home communities), has been ‘on the ropes’, experiencing an historic nadir year in 2009, with only 49,789 new homes shipped. Today, we’re only up to 70,535 during year 2015. *1

So, how does this up – & – down factory-built housing scenario compare with the similar recent ‘boom – & – bust experience’ suffered by site-built housing throughout the U.S.?

Here are some interesting numbers to parse and compare:

• According to the National Association of Home Builders (‘NAHB’), the ideal number of annual new site-built housing ‘starts’ is 1,300,000. In 2009, their homebuilders ‘start’ volume plummeted to only 351,000 new homes, or just 27 percent of the stated ideal production level! Fast forward to year 2015. Last year, homebuilders’ new ‘starts’ numbered 549,000, or 42 percent of NAHB’s stated ideal production level, a tepid 15% recovery over a seven year period of time.

• Similarly, sources within the manufactured housing industry informally cite the ideal number of annual new HUD-Code housing ‘shipments’ to be 200,000+/-. In 2009, manufactured housing ‘shipment’ volume plummeted to only 49,789 new HUD-Code Homes, or 25 percent of the estimated ideal production level! Fast forward to year 2015. This past year, new home ‘shipments’ numbered 70,535 units, 35 percent of the estimated ideal production level, and a slow 10% recovery pace over a seven year period of time. *2

Assuming the accuracy of the ‘start’ & ‘shipment’ numbers just stated, it’s interesting to observe the nearly parallel performance of these two types of housing during the past seven years. Nadir (‘lowest point) production levels at only 27 & 25 percent of ‘ideal’ production levels respectively, now improved to 42 & 35 percent of said ‘ideals’.
In summary, site-built housing production is recovering only slightly faster than factory-built housing – likely because reasonable access to chattel capital continues to elude the manufactured housing industry sector.

So, what’s the Big Picture, or Macro View, of housing during the past seven years? The following is quoted from Integra Realty Resources’ VIEWPOINT, dated January 2016:

“The home building industry suffered a significant blow from the Great Recession, shutting off the housing creation supply pipeline for roughly three years. In 2015, the housing sector did not recover to pre-recession levels, and the long-term view for housing growth remains unclear. This major pillar of the U.S. economy continues adjusting to demographic, geographic, and generational shifts.” P.5

Frankly, this veteran MHIndustry observer does not see significant improvement to the new HUD-Code housing ‘shipment’ scene until several things occur:

• More LLLCommunity owners/operators buy more new HUD-Code ‘Community Series Homes’ for placement – and resale/seller-financing or lease-option, on the estimated 250,000 vacant rental homesites in properties throughout the U.S! At present, an estimated 40 percent of new HUD-Code home shipments go directly into LLLCommunities. How high might this percentage climb? 50, 60, 70%?

• MHIndustry leaders to do something they’ve resisted to date: caucus openly and nationally, to brainstorm practical, even new ways to foster increasingly attractive lending environments on-site within LLLCommunities! Yes, this might in time, mean moving away from traditional vehicular titling of manufactured homes, and adoption of long term written leases, to attract and protect lenders who favor originating and underwriting real estate – secured ‘home only’ loans.

• And as the previous two changes are effected, the MHIndustry to plan, fund, and launch its’ ‘first ever’ national factory-built housing brand advertising campaign! No point in doing this step until the first two are firmly in place; then, ‘pull out all the stops’ and introduce U.S. citizenry to ‘Affordable Housing that Appreciates in Value & Fulfills the American Dream of Home Ownership!’

There’s a lot said in the previous paragraphs; even more to be said once you’ve read them and reflected upon their content. If YOU agree, then copy and send this blog posting to your state and national MH advocacy organizations, encouraging them to ‘get on board’ this plan to rejuvenate our long suffering industry and realty asset class!

Disagree? Then write and let me know ‘why’; and, ‘what’ might work better1 Seriously. GFA

End Notes.

1. Statistics in this paragraph quoted from COBA7®s Signature Series Resource Document, or SSRD, titled: INDUSTRY BRIEFING SHEET; ‘The Decade (2005 – 2015) of Factory-built Housing & Land-lease-lifestyle Community’.

2. 70,535 new HUD-Code homes shipped during year 2015, is based on research conducted and reported, for a fee, by the Institute of Building Technology & Safety (‘IBTS’), and embraced unchanged by HUD, the MHARR, COBA7®, and VAMMHA.


Prelude to 18th annual National Registry of ALL Lenders Serving the Manufactured Housing Industry & Land-lease-lifestyle Community Asset Class!

Last year’s ‘17th annual National Registry of ALL Lenders…’ began with this heady prediction, “2015 is the perfect time to be a borrower in the commercial/multifamily space because capital is plentiful, interest rates remain near historic lows, and real estate fundamentals are improving.” Well, as you’ll read in the paragraphs to follow, this has certainly been the case during the past 12 months; and guess what? Expect ‘even more of the same’ during year 2016!

Proof? This from NREI, January 2016: “Lenders on track to originate $224 billion in permanent loans on multifamily properties (alone) in 2015, according to the Mortgage Bankers Association. That’s a 15 percent increase from 2014, which in turn marked a 13 percent increase from 2013. And that year marked an 18 percent increase in originations from 2012.” P. 28

OK, so how ‘bout the land-lease-lifestyle community (a.k.a. manufactured home community) ‘acquisition & refinance’ segment of the multifamily market? Total 2015 dollar volume, among 26 reporting lenders and brokers, was $4,175,000,000.00. Yes, that’s four billion dollars plus! And this compares well with the $3,487,000,000.00 originated during all of 2014; in summary, a 20 percent increase in loan production!

All this is just part of an overall, bigger story. Beyond the multifamily property lending segment, lies the rest of the commercial realty market. Again, according to the MBA, expect originations of commercial and multifamily mortgages together to rise six percent in 2016, to $485 billion total!

So, why all this interest, on the part of investors and lenders, in multifamily and commercial in general, LLLCommunities in particular? According to Chris Finlay, chairman & CEO of Lloyd Jones Capital, “…smart people…have chosen real estate as their investment class, (knowing) real estate provides a stable diversification to the volatility of the equity markets, outperforming those markets for many, many years.” (1/13/2016 email). Want a peak at the future? Finlay goes on to say, “…consider the Millennials: 25 million classic apartment renters are still living at home. And it will be a while before they can afford – or want – to purchase a home (due to) student debt, flexibility to move for job opportunities, later marriages and children, etc.. (And get this!) Recently, the FHA has ruled potential home buyers who carry student debt will have to include said debt (even if deferred) in their debt-to- income calculations. So it will be even harder (for them) to qualify for a (home) mortgage. The 25 million will need rental housing.” That’s a lot of apartments; that’s also a lot of manufactured homes leased as rental units!

Well, is all rosy? Not at all. Label what follows here as ‘Certain Uncertainty!’ This paragraph quoted from Integra Realty Resources (‘IRR’) VIEWPOINT, ‘2016 Commercial Real Estate Trends Report’ publication:

“Though the U.S. is in its’ seventh year of the current economic cycle, uncertainty as to the recovery’s strength continues to persist. One view opines the U.S. is nearing an end of the current upward cycle, with a high probability of real estate price correction owing to asset appreciation that is ahead of real growth. An alternate view notes the U.S. economy may be on a long runway that will continue to accelerate. The various global and domestic economic forces are mixed, and as a result, the state of the economy feels edgy, volatile, chaotic, and oftentimes fragile.” P.4. Conflicted yet? You should be. Reread Part I of this week’s blog posting.

Now let’s turn to the specialty (real estate secured) finance markets, Commercial Mortgage Backed Securities, a.k.a. CMBS, and land-lease-lifestyle community lending.

Once again NREI provides insightful summary. “The CMBS market staged an impressive comeback in the aftermath of the recession. Having posted a paltry $2.7 billion in U.S. issuance in 2009, the market has realized a steady upward trajectory during the past six or so years. Lenders issued $94 billion in new loans in 2014, and expectations are 2015’s volume will top $10 billion.” With that said, CMBS lending is still nowhere near the 2006 & 2007 levels of issuance @ $198.4 billion & $228.6 billion respectively! What to expect in 2016? Again, Certain Uncertainty – in part driven by $111 billion in CMBS loan maturities in 2016, and $116.4 billion in 2017, but only $21.2 billion in 2018. The challenge? There’s simply not enough business to go around, e.g. 30+ lenders vying for about $100 billion in loans.

As we segue into the land-lease-lifestyle community realty lending environment, know the GSEs (government sponsored enterprises, Fannie Mae & Freddie Mac) have become, and will likely continue to be major players in this market. For example, in the February 2016 issue of MULTIFAMILY EXECUTIVE magazine, LLLCommunities receive ‘rare mention’:

“…experts anticipate more activity financing sizable workforce-housing properties in higher-cost markets, and also in niches such as small properties, assisted-living, and land-lease-lifestyle communities, and energy-and water-efficiency retrofits.” P.27

And at this point, in the ‘18th annual National Registry of ALL Lenders…’ we take a close look at the nearly two dozen lenders and loan brokers who routinely originate acquisition loans, and refinance mortgages, for LLLCommunities nationwide. If you’re not yet affiliated with COBA7®, but would like to be – to receive the 27th annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLLcommunity Portfolio Owners/operators Throughout North America!’), the 18th National Registry of ALL Lenders….’ And ten additional Signature Series Resource Documents, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or email:


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