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CFED’s Doug Ryan Sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

October 4th, 2014 No comments

cfed-logo-posted-industry-voices-guest-blog-mhpronews-com-.gifThe CFPB report supports what CFED and other nonprofit organizations have said in recent years:  Manufactured Home loan borrowers are vulnerable to expensive products and are often not well-served by the current financing market due to the lack of competition, lack of liquidity and the costs of the loans.

I have no doubt, as the Bureau reported, that many borrowers of chattel products could have qualified for traditional, less expensive mortgages but did not get the chance simply because they were not offered or made aware of the options. Indeed, one clear way to address this issue would be for industry to support titling reform that would give families the option to title their homes as real estate and the opportunity to access real estate loans.

The report supports, quite explicitly, the need for the Bureau’s current rules to remain in place and enforced. As the Bureau wrote, “the manufactured housing borrowers being charged interest rates or upfront fees above the HOEPA thresholds are the very populations that HOEPA is designed to protect."

I also believe that this report, and related efforts by industry and CFED and its nonprofit partners, offers an opportunity to develop new loan products, expand the pool of lenders and, ultimately, lower the costs of borrowing.

CFED absolutely believes manufactured housing must be part of the affordable housing solution in communities across the US. Far too many advocates and policy makers are unaware of the quality and aesthetic appeal of manufactured homes. There is no doubt industry has made great strides to modernize the energy efficiency, the design and the value of the homes. Quite simply, the CFPB’s report underscores the need for the financing to be modernized, as well. ##

doug-ryan-cfed-posted-manufactured-home-living-news-industry-voices-guest-blog-mhpronews-

Doug Ryan
CFED
dryan@cfed.org

 

 

Related Links:

1) – MHI's Response to CFPB's Report (Note, the MHI link includes the full CFPB report as a free download)

2) – MHARR's Response to RV legislation and CFPB's Report on Manufactured Housing

3) - CFPB Report on Manufactured Housing Signals Areas of Future Concern

4) - Manufactured Housing Institute Responds to Doug Ryan-CFED commentary on CFPB report on Manufactured Housing Finance

(Image credit: Corporation for Enterprise Development (CFED logo.)

(Editor's Note: As with any opinion column, the views expressed by Mr. Ryan are his own and/or those of the organization he works for, and should not be construed to be the views of MHProNews or our sponsors. Other viewpoints on this or other industry topics are encouraged.

MHProNews plans an Industry in Focus Report using extensive comments from a range of industry professionals on this topic. Watch for it mid-week at the news/reports module link above!)

Exhaustion Sets In

August 8th, 2014 1 comment

I’m exhausted, Jerry, exhausted I tell you. “Exhausted, Marty Boy, why?” Well there are many reasons, and in trying to sort it all out, I’ve exhausted my feeble brain.

I speak of course about the state of the industry. It starts with L. A. ”Tony” K, the MHProNews impresario, whose boundless industry enthusiasm doesn’t quit. Now all this, mind you, as we scrape along on an annual shipments level which in the past we equaled and surpassed in a single month.

Getting your head around that enthusiasm is hard to sort out. So many reasons why MH should be great but woeful results, that’s what is exhausting me.

Story Time

Let me tell you a little story. Sometime along the mid 2000’s, say 2006 or 2007, I was invited to join Urban Land Institute, ULI, a well-known and respected real estate trade association/think tank. It is populated by some of the largest and most powerful real estate interests, a pretty awesome “who’s who” of the Big Boys in real estate.

Inside Trailerville then were people who had come to our industry from the real estate industry and thought manufactured housing communities was a land use that should be represented at ULI. An MH council was formed and I was invited, along with 30+ others, to join and was frankly flattered to accept. ULI has a great reputation.

I started going to the ULI meetings and the MH luminaries were everywhere in the council. My consulting assignment at Fannie Mae at the time profited from my attendance as I was at the industry’s train of thought at the highest level. All good, right?

First Class

Now, understand something, ULI is not MHI or MHARR. ULI goes first class only, no Motel 6’s here. They meet at the very highest level venues, read this to mean “Expensive,” and invite powerful and well-known guests and speakers. Contrasting this with the MH world is eye-popping. If one spends an average of $1,000-$1,500 to attend an MHI convention, ULI seems to come in at $4,000-$6,000 per conference, a not inconsiderable sum for poor boys like me who peeled those dollars out of my own back pocket to attend.

I don’t really mention the cost of attending an MHARR meeting, as long distance phone rates are so low that the occasional MHARR meeting takes little time and virtually no expense. Networking is not really what MHARR is all about.

Lacking Candor

Back to ULI. I found most of the early meetings of the MH council, or whatever its name, a poor version of MHI meetings. While the intent was to foster an exchange of ideas and information from the very highest level of MHdom, the Big Boys were there, but they were all wearing vests so they could keep thoughts and information close to their vests. Even when we were to break for lunch seemed to be a secret. The lack of candid response from participants, who seemed to be going through the motions, disappointed me.

Here we had the greatest minds in MH, but I could gain better industry knowledge and information from the third string attendees from the same companies at an MHI meeting, at 1/3rd to 1/4th the price. I was beginning to waiver about my continued involvement in ULI.

Excited

Then, a ULI conference was announced, where the MH council was to feature a housing study by a prominent economist whose expertise was in housing demand. Whoa! Here’s something I could get my head around. Maybe after the study was presented I could relearn the words to “Happy Days Are Here Again” which in ’06 or ’07 I hadn’t sung since that 1998 post-HUDcode record of 373,000 home shipments. The best industry performance since the 1973 573,000 homes shipped, which had occurred when I was a young man and before the HUDcode.

The economist came, the lights went out, and the demand charts started to flow. Holy craps, Robin, get that song out! It was back. So I kept following the economist’s report carefully and he said the same things then we are still saying today: low cost housing demand, high conventional housing costs, factory built quality, yada yada yada, it was all falling into place, Jerry. Music!

But despite the obvious buy-in by most participants there, their choirboy gleams revealing, I had the uneasy feeling that, just as I do today, of an unfinished report.

Finally, biding my time, as I was as insignificant a participant as there was there, I screwed up my courage and asked the following: Yes, of course, I understand the demand side of the MH equation, but can you tell me, Mr. Eminent Economist, how your exuberant MH sales expectations will be financed?

What?

Huh? He was a housing demand expert. not a finance guru. He hadn’t the slightest idea as to how it would be done. Note that as you hear all the reasons today why MH should be kicking housing azz, that question remains unanswered for the most part.

I could see narrowed eyes around the room directed at me, the thought clear on its face; how dare you, you F’ing Azzhole, challenge Mr. Eminence? He just returned from Mt. Sinai with this report! I though it a fair question to ask, just as I do today.

In 1972 I came into the industry. By the time of the ULI economist meeting I had been kicked around HUDville 35 years. Even with my extraordinarily thick cranium, some knowledge had managed to creep in. By the early 2000’s I had seriously begun to question whether the 1998 shipments top and heavy decline thereafter was a “normal pullback” as had happened frequently in the past. Ah, it will all be back soon was the industry refrain. If I believed that early on, by 2002 there were clear signs to me this time was different, very different.

Not This Time

Working against the industry grain, my study of MH loan performance, the horrific losses suffered by lenders and their investors, got me to thinking the industry had real, long-term problems, from which recovery would be difficult, at best. Did I envision a drop to 50,000 annual HUD shipments? No, I was not born in swaddling clothes.

Further, and this was hard to grasp and accept, since the industry’s real volume emergence in 1969 to the 1998 top, the great volume the industry enjoyed was based on faulty lending losses by most lenders during that period, averaging close to 250,000 annual shipments. I then did the presumptive math on what volume might be with a rigid, but survivable lending regimen, and the numbers were scary low. Not as low as they got, but low.

If you don’t understand the preceding paragraph, read no further until you do. Every time you hear of glowing future prospects for HUD Code homes ask the predictor “How will they be financed?”

Huge industry volume subsidized by huge lender losses. It was an illusion, and it went on so long we all believed it would always continue. When I wrote about this early on in my Newsletter, “Marty’s News and Notes,” I can say the concept was neither generally accepted nor was my writing and lecturing about it well received. Let’s just say I was not the industry’s Favorite Son.

The Book

Fast forward to the present. I just plowed though “Dueling Curves; The Battle for Housing” by Bob Vahsholtz. This is a prodigious work, with the slant from a man well familiar with much of the industry’s early years and a home designer with great home building knowledge. His book is worth reading for the history lesson and for his ideas for reviving the industry going against the site builders.

I sought the answer from his book to my “How will it be financed?” and found in his multiple step program to improve the industry the following on finance:

Accept the penalty of chattel financing or leasing and use it to include such necessities as skirting and exterior storage. Repos should result only from family disasters and crooks. Even better financing – even from local small-town banks – will come with a proven track record. Good affordable homes need no subsidies. Earn a solid reputation from performance rather than waiting for the government to enforce its arguable notions of engineering and financing.”

Very little to argue with there, but will that guide us back to 150,000 to 250,000 HUDcode homes? Annually? I wouldn’t hold my breath.

Phewff

Exhausted, Jerry, exhausted, I say, that questions just exhausts me.

Let’s be clear here, whether I was writing my newsletter, on my consulting assignments, at ULI or MHI, reading Vahsholtz’s book, or discussions with L. A. ”Tony” K and others, THE question which must be answered is to find a way to finance the demand for our housing, at a 150,000 to 250,000 annual sales level. The present sales level just won’t create a stable, growing industry.

So what is it that causes such low sales volume with such high demand? It is because a great part of our demand comes from a tier of people whose credit capabilities make them unfinanciable. Yah, Marty, no big secret there. And when we can finance some of our demand, it comes with a high tariff, an interest rate generally applied by Guido in his transactions These rates, often more than twice and even three times the present rate for site-builds, are needed to ameliorate our high default rates and high losses on defaults.

How?

Let’s deal with the most important reason for this missive; how does MH create demand that has a greater chance of being financed, assuming stupid lending money is not stage left, waiting to enter? How, indeed?

Sometime in the mid 2000’s, the industry commissioned a market study by Roper Associates to ascertain the public’s view of MH. Let me cut through the bull pucks, they reported they had never compiled a study where the industry had such a negative public perception. Oh, man, we finally were the best at something!

A lengthy industry discussion set in, mostly at MHI, meeting after meeting, innumerable committees, and finally a joint meeting with the RV boys to discuss the merit and results of their “Go RVing” campaign. The RV’ers were exuberant about their campaign and urged us in the strongest terms to do our own campaign.

The RV industry had a different problem than MH, just the opposite. Their customer demand came from buyers with good credit, they just weren’t seeing enough of them. On the other hand at MH, we see many customers, enough to fuel many more sales, we just don’t see enough customers with sufficient credit capability. We needed to find a way to get more credit capable people tromping our sales locations. The intent of the Roper study and the follow-up presentation was to lead to a campaign to induce more credit capable buyers to our stores. You know, a campaign to boast the image of the industry and consumer acceptance through increased positive knowledge.

Embarrassment

So meeting after meeting, discussions aplenty, and finally two outcomes, one embarrassing the other catastrophic. The first result was the campaign presentation meeting should have climaxed in a buy-in to move forward with the pros.

The initial presentation was hardly a finished campaign, but the MH Yahoos raised such a ruckus about their vision of what the campaign should be, that it turned into a bitching session of the first water. I saw MOBES who can’t spell “campaign” reaming the pros, turning into a bewildering babble of conflicting ideas. I found that in their other job, sales lot operators and LLC managers, carried out image campaigns, professing to know more than the pros, howling with authoritative criticism. The pros didn’t know MH. They, on the other hand, are the folks who brought you the 40-50,000 annual sales volume, so yes, they know MH.

I met one of the leaders of the campaign presentation after the meeting and he could only shake his head. Yes, not everything they had ever done for others went smoothly, but this was a different order of foolishness. He wondered why they had been hired, as the industry appear to have all the answers. Why, indeed?

Worse

But bad as that was, and yes I was embarrassed to see all of the negative comments I had heard about the industry from outsiders played out before me, the following was worse.

I don’t think I spill any secrets saying a small coterie of individuals run the industry associations. A cocked eyebrow from one of these Brahmins effectively ends any discussion. So the industry opportunity at salvation, already fleeting as all this occurred, tumbled completely due to the well-engrained industry principle, “never do anything that might help a competitor.” And the industry moment when there was still barely enough $$$ muscle to fund an image campaign passed, and with it the last of the passing life rafts.

Succinctly stated, so no one misses my meaning: The industry must find a way to attract a far more capable buyer to our sales locations, or what you presently see is what is likely to prevail. Chances are the image campaign train has left the station and another does not follow close behind.

Bear in mind that some people are prospering under the present scenario. Not too many, but a few, especially those with eyebrow power. Reduction of competition can be salubrious, even if it only consists of a larger portion of a smaller industry. I can only assume as the image campaign was eye browed down, people would know that, or at least suspect it.

No Mojo

So we now find ourselves as an industry with insufficient muscle to fire up any sort of campaign. Some have wondered whether social media or other Internet driven endeavors might substitute for the traditional media campaign we can no longer fuel as an industry, being a real block buster campaign driven by a $20-30 million effort, one that can successfully reach a broad segment of American consumers and educate them about the many advantages we claim for our housing, to attract those folks we so sorely need. Whether the vaunted Internet driven efforts can succeed, I have no knowledge, but I’ve seen no evidence it is being much attempted or positive residue therefrom.

Phone Call

Would it be that in 5 years someone calls me and says “Yah nana nana, you F’ing jerk. See I told you the ad hoc campaigns could work.” I’m not staying up nights in fear.

The years go by, the same silly things are repeated endlessly, about industry promise, the quality of the homes, the future of all homes to be factory built, the far lower cost, and on and on. All great stuff of course, but how do you sustainably finance 150,000-250,000 HUD homes annually? On that, which is the number one issue, the industry is remarkably silent. ##

marty-lavin-posted-on-mhpronews75x75MARTIN V. (MARTY) LAVIN
attorney, consultant, & expert witness
350 Main Street Suite 100
BURLINGTON, VERMONT 05401
802-660-8888 office / 802-238-7777 cell
marty@martylavin.com

Financing in the CFPB Era and the Path to Full Manufactured Home Communities

June 24th, 2014 No comments

Tony,

Great articles and comments made by others. 

I agree with 99% of what is said. The issues I see our industry has are: 

  1. People are so scared of the Dodd-Frank and Safe Act. Our industry needs to deal with this as the new reality and figuring out how to do business with these new regulations. 
  2. Lenders and community owners getting together on a win-win community home financing program that requires community owners to repurchase the homes that default and requires the lenders to originate loans at lower rates. 
  3. Community owners making their communities more appealing to today’s buyer:
    1. Updating their community amenities (Signage, clubhouse paint and carpet, pool furniture, road repairs, etc.)
    2. Enforcing communities rules to ensure that all homes are maintained and clean and neat
    3. Finding ways to improve the community lifestyle by organizing community events that enrich the residents lives.
    4. Moving in new homes and having 2 or more fully decorated models that will help prospects visualize how nice a manufactured home can be.
  4. Community owners should NOT jump into the rental home model so fast. Many markets can support true home sales business model by offering financing options that make sense to their customers. This does take more work but the full community with home OWNERS rather then renters is worth the extra work. 
  5. Community owners offering outside retailers attractive move in programs. 

We have implemented this in all our communities and are selling anywhere from 30-100 homes per community per year. 

Thanks for sharing this article. ##

scott-roberts-roberts-resorts-posted-industry-voices-guest-blog-mhpronews-com-Scott Roberts
Chief Executive Officer
Roberts Resorts
8350 E. Raintree DR. Ste 220
Scottsdale, AZ 85260
480.425.8696

scott-roberts-roberts-resorts-posted-industry-voices-guest-blog-mhpronews-com-(Editor's Note: The articles Scott's letter to the editor refers to are ones by Ross Kinzler and Jay Hamilton.

For those who may not have met Scott or know the progressive work being done in his communities, Scott was the recipient of the Manufactured Housing Institute's “Community of the Year” at the 2014 Congress and Expo.

The head shot above is actually part of a larger photo, that shows him holding his Community of the Year award.)

MHGrassroots: A Call to Action

June 17th, 2014 No comments

As I sit comfortably in a 737 at 30000 feet coming back from a thought provoking meeting at the MHI Expo in Las Vegas I don't have to go in great detail on how the world has changed since 2001.

From how we fly, how we communicate, and even how we conduct business, it has all changed in ways none of us truly imagined then.

Every day I read more about how a government I have grown up loving, is making changes that contradict the core beliefs and attributes it was built upon. With that said, let's look at a few issues that have faced, primarily as it relates to the manufactured home market in the past 15 years.

In Texas we were asleep at the wheel in 2001 when House Bill 1869 took effect. I was but one of the many independent dealers who were wondering how this could have happened. I even looked Gov. Rick Perry in the eye and told him point blank that this bill would cost Texans jobs and would reduce home order sales, which in turn would force the closing of several fine manufacturing plants.

Unfortunately I and those around me were right. Even though the TMHA through a lot of hard work was able to have this poor piece of legislature repealed in 2003, the damage was already done.

I won't go into the specifics of the law itself, but I will say it was a killer from day one. If you have any questions about it, just Google it. I have heard the experts’ state that 85% of the independents who were in the market at that time were wiped out by this law and the recession that hit us in 2008. And guess what. Those folks are gone, probably never to return again.

So let's take a look at where the train came off the tracks.

We were too late to stop one train simply because we weren’t aware it was heading for the station.

If we want to be successful in the legislative arena we have to stop the bills before they get that close to the tracks. We, the industry as a whole, must be vigilant in being aware of any laws, in every city, county, state and federal arena that could negatively impact not only us, but the people around us.

This means we have to know, and have a relationship with, the people in charge. Governor Perry signed that bill even after I told him the truth. Why? Simple, he didn't know me from Adam. No relationship equals no traction. We have to build those relationships in order for our voices to not only be heard but to be accredited.

How was it fixed? A grassroots effort. From the ground up. TMHA called upon every member….who in turn called on every state senator and state representative to repeal a bad piece of legislation. And it worked! Why? Because the industry stood up as a whole, and worked together for the common good of all. I call this a victory for the good guys.

Let's look at another victory.

Last year I received a phone call from a landlord who was my ‘competitor’ in Plainview, Texas. I use that word competitor only because we are after the same pool of customers. I call him a friend.

Basically this city was in the process of creating a city ordinance which would require an inspection on every rental inside the city once it was vacated by a tenant. Never mind the fact that this would be in direct contradiction to the HUD code on a manufactured home. Every house, apartment, and mobile home would have to be brought back to current code if this law passed.

This would mean thousands of dollars spent to update every unit.

One unintended consequence of this law would have forced the citizens to pay rent in excess of three times the current rate.

Another would have riddled the city with homes to be demolished due to the repair cost being more then the value of the home.

Yet another would have been a mass exodus of good paying tenants to the surrounding communities which didn't have this law.

So how did we stop this calamity before it was passed like Texas House Bill 1869?

We showed up in droves. There was standing room only at every hearing. Meetings with every city official we could get and we killed it before it could even be heard by city council. How? It took one phone call from each of us who took the time to make that call. And another victory ensued.

So what does all this mean to you, the reader?

It's time. It is time to make a difference and make a call of your own.

I know you are busy, but don't blow this one off.

Dodd Frank and the SAFE Act are not going away. So what are you going to do? I am calling not only those of us in the industry, but all of us.

The government doesn't need us, but this country does. We are this country's answer to affordable housing. But if the people can't get financing for that home what good are we to them?

If you don't know who to call that's ok. Call your state association. If you are not a member, sign up. If you are a member, get active. Make a difference. You can. ##

shawn-fuller-d-r-housing-new-deal-texas-industry-voices-manufactured-housing-mhpronews-com-75x75-Shawn Fuller
D & R Housing, LLC.
New Deal, TX 79350

Who’s in Charge Here?

June 3rd, 2014 No comments

Rick Rand’s excellent proposal for an all-industry conclave at a neutral location is gathering momentum. Such a venue should certainly not screen out the smaller operators who have always been a prime source of innovation, and it is vitally important that the “big guys” also be at the table. Make room for the various associations charged with the thankless task of placating the placating the industry’s many voices.

As a long-retired veteran of manufactured housing, I’m appalled at the conflicts, back-biting and lack of leadership that has always hamstrung our young industry. It was understandable in the early days when the largest manufacturers controlled less than ten percent of shipments and no other industry constituent was in a position make things happen beyond his own company (in those days, the leading players were all men).

Today, though manufactured housing is a shadow of its former self, the product itself is far better, the need for affordable housing is far greater, the leading manufacturers remain profitable, the market for manufactured housing communities is heating up and the stick competition is in disarray. So why are our sales volumes in the dumper?

It is true of course that we, as an industry, have made many mistakes. And we’ll make more.

In a free enterprise system, we learn from our mistakes and keep moving forward. That’s exactly what needs to happen at the kind of meeting Rick has proposed. Pull the tribe together with an agenda focused on the problems we’ve created, the opportunities ahead and agree upon a broad based strategy to deal with today’s challenges. Ideas and innovations are often sparked over a cup of coffee or glass of beer, and contacts have always been the lifeblood of the industry.

But far more is needed than griping about Dodd-Frank and what names we should use for our products. Consider some fundamentals.

Housing is one of America’s least efficient industries. That includes stick builders and us too. Why is that? Well, there’s no serious foreign or domestic competition, no real industry leadership, way too much regulation and negligible innovation. That’s been the case for a hundred years.

Academics and all sorts of advanced thinkers have, for at least that long, looked to industrializing the building process to break out of housing’s quagmire. It has finally happened. The industry we now call manufactured housing has demonstrated the ability to build good housing at roughly half the cost of traditional methods, and we have the black eyes to prove it.

As one result, America’s largest home builder is one of us, and one of the world’s richest men bankrolls MH financing. Something like 20 million Americans live in homes we’ve built and the vast majority of them appreciate the comfort and value those homes provide. There’s ever so much more that could and should be done, but we’ve made a better start than any other tilter at housing’s windmills. Many have tried.

One thing the MH industry agreed upon some 40 years ago was to unite under the HUD banner. That turned out to be a painful process with about as many negative as positive outcomes. We banded together again to reform that process with the Manufactured Housing Improvement Act of 2000 (MHIA 2000), but guess what? Big Brother has its own ideas about “Improvement” which do not include a lot of use for industry committee input.

We’ve got a lot going for us, and yet the squabbles continue. If there’s an industry strategy, it did not emerge from my recent research. What is happening is a plethora of tactics, put forward under various banners, mostly going nowhere.

As an industry professional, you can put forward some ideas for how to deal with these challenges. So can I, and I’ve done so in my recent book, Dueling Curves. It’s not enough.

Maybe at Rick’s gathering of the tribes, some sort of consensus can be reached, on a whole bunch of nifty ideas.

But that’s not enough either.

The single most important objective of such a congress—or whatever it’s to be called—should be to the emergence of industry leadership. Not a task force, committee or agency, but a person of vision who commands the respect of the industry.

A tribal chief who can weave the disparate strengths of the manufacturers, suppliers, financiers, retailers, MH owners and community operators into a strategy we can all salute. Oh well, yes, there will always be a few curmudgeons. No one will be entirely happy with any strategic vision adequate to unite us; not even the leader who ultimately propounds it.

But let me suggest this. Should we fail to unite behind competent leadership, I can suggest who will become take charge of the industry. Well, maybe I shouldn’t name names, but the initials are H.U.D. ##

bob-vahsholtz-author-dueling-curves-battle-for-housing-posted-industry-voices-guest-blog-mhpronews-com-manufatured-housing-professional-news-75x75-Bob Vahsholtz is the author of DUELING CURVES The Battle for Housing Bob can be reached at kingmidgetswest@gmail.com. Web: www.kingmidgetswest.com

The RV Industry is Attempting to Amend the HUD Manufactured Housing Code

May 28th, 2014 No comments

The Recreational Vehicle Industry Association (RVIA) is pushing a proposal through the U.S. Congress to change the definition of manufactured home in the National Manufactured Home Construction and Safety Standards Act.  The proposed change would specifically exclude certain “RV trailers,” including Park Model RVs, from the definition of a manufactured home in the federal HUD Code.

The stated purpose of the proposed change is to provide regulatory certainty to lenders, state or local taxation and land use officials that a Park Model RV is a recreational vehicle, not a manufactured home.

Their urgency for this change is that some lenders are apprehensive about making Park Model RV loans in light of the new Dodd-Frank Act requirements.

A concern with the language, as proposed, is that it may allow ANSI Park Model RVs to expand beyond the current 400 square foot size limitation. 

This would be harmful to the HUD-Code RV Park Model industry in states like Florida by encouraging the sale of ANSI Park Models that exceed 400 square feet.

The proposed amendment states, “a park model RV that has a gross area not greater than 400 square feet based on the exterior dimensions of the unit measured at the largest horizontal projections in the set-up mode, including all floor space that has a ceiling height of more than 5 feet” (emphasis added). 

The ceiling height language was inserted to codify a 1997 HUD interpretation that loft areas which are less than 5’0” in height are not considered in determining the size of the structure. The proposed language does not limit the ceiling height exclusion to loft areas, thus allowing for the possibility of “slide-out rooms” or “build-outs” less than 5 feet high.

RVIA is emphatic that the intent is not to increase the size of ANSI Park Model RVs.

According to RVIA, concerns about enlarging the size of Park Model RVs are unfounded because specific rules are in place to measure the size and calculate the square footage of Park Model RVs. Additionally, Park Model RVs are built to standards administered by the American National Standards Institute (ANSI), a national voluntary consensus body. The ANSI A119.5 standards would have to be amended to allow for larger structures.

While these safeguards are in place today, the statute will drive future requirements. If the federal law is ambiguous enough to assert that larger ANSI RV Park Models are allowed, then the rules will change to accommodate this view. 

The RVIA is working hard to get this amendment accomplished during the 2015 HUD appropriations process. RVIA is not looking for industry support, but rather seeks to quell any opposition.

MHI has taken a neutral position on the proposal, while MHARR is adamantly opposed to it.

This proposed change to the National Manufactured Home Construction and Safety Standards Act will have a negative impact on the HUD-Code Park Model industry in Florida. Most Park Models are permanently sited and larger ANSI Park Model RVs will encourage permanent, year round living. ANSI Park Model RVs are designed and intended for recreational use and seasonal living only and are not built to the more stringent HUD building code.

The Florida Manufactured Housing Association (FMHA) has asked RVIA to consider amending its proposal to specify that the 5 foot ceiling height exemption applies to loft areas only. This will ensure that ANSI Park Model RVs are not built in excess of 400 square feet.

Reasserting the current size restriction in the proposed amendment will satisfy the RV industry’s objective of clarifying the differences between ANSI Park Model RVs and HUD manufactured homes for financing and land use purposes, while promoting ANSI Park Model RVs as a desirable option for recreational and seasonal accommodations. ##

james-ayotte-Florida-Manufactured-Housing-Association-posted-on-mhpronewsJames R. Ayotte, CAE
Executive Director
Florida Manufactured Housing Association
3606 Maclay Blvd. South – Suite 200
Tallahassee, FL 32312
Ph:(850) 907-9111
F:850) 907-9119
jayotte@fmha.org
www.fmha.org

What More Can We Accomplish After This Year’s Manufactured Housing Institute (MHI) Congress and Expo?

May 13th, 2014 No comments

Like many others, I attended the 2014 National Congress & Expo two weeks ago in Las Vegas. I also chose to attend the National Communities Council Spring Forum held all day Tuesday prior to the opening reception. There were some exceptional programs! The attendance was very high according to reports from MHI. While there was an eye brow-raiser (or two…) on the agenda, off-agenda items that were pretty interesting and overall the Spring NCC Forum and MHI's Congress and Expo featured seminars with speakers focused on current industry topics and issues. Numerous vendors on hand shared their services, displayed their products and provided opportunities for deal making.

What should not come as a surprise was the number of new individuals who attended the Congress.

Many professionals from all facets of the housing, finance and investment sectors were on hand to listen and learn about the manufactured housing industry. This is another great indication on the positive future for the industry.

Today, there is something in the neighborhood of Two (2) Billion Dollars chasing the manufactured housing industry! That's Billion with a capital B!

Those dollars may or may not be invested in our sector; only time will tell. What we need to realize is that there is capital willing to invest and grow in manufactured housing. With new capital much can change, improve and set the stage for a brighter future of the industry.

Yet, even with the large amount of new capital looking to invest in the industry, manufactured housing will still be a very small piece of the roughly One (1) Trillion Dollar annual U.S. housing market.

The questions I continue to ponder are;

  • what can we do to grow the manufactured housing industry’s share of the overall housing industry?

  • How do we get to the root of the obstacles that continue to impede the MH Industry’s growth?

Flying home after Congress and Expo, those nagging questions bugged me. Below is a thought that came to mind that may provide a profitable starting point.

Why not host an – August 2014? – organizational networking/deal making opportunity event that is Trans-Associational?

Why not consider a location near a fine newer MHC property that breaks the stereotypes – such as Saddlebrook Farms in Grayslake, IL – where the potential for new development could better be understood by those who only know the 1 or 2 star MH properties? Would love to hear suggestions on other possible sites that fill the bill.

That property would also feature great looking, residential style product that is ground set, so this would shatter the 'mobile home' image for potential investors who only know the entry level product.

As you can see, I am not suggesting replacing any current event, such as the upcoming MHI annual meeting, NCC Fall Leadership Forum or other association or industry functions.

Rather I am suggesting something totally fresh and different.

Let’s bring the stakeholders and potential investors to the table at the same time with professional facilitation and the opportunity to participate.

The focus of the meeting would be how to get those multi-billions moving ahead, as well as advance the MH Industry as a larger and viable part of the overall housing market.

What makes this concept different than other current programs is that interested parties are invited regardless of current relationship issues or biases. Bringing goal and solution oriented individuals from differing backgrounds, all committed to growing the manufactured housing industry could be groundbreaking.

Please do not misunderstand; while I'd like to be involved, I am not volunteering to take the lead in this event due to my current business obligations. I am putting the idea out in this public forum for discussion.

The way this gets done is for

  • commercial real estate brokers and appraisers,
  • commercial RE lenders and brokers,
  • MH finance companies (personal property and Mortgage lenders),
  • Any – or all – HUD Code manufactured housing and modular builders,
  • developers
  • Suppliers and other service vendors

to pay for the costs of the meeting, mixers and main meals.

Pick a place that is nice clean convention location, and keep the entry fee really low.

Let's put an asterisks next to this one. What if we make it easy for the hundreds (or thousands?) of owners of MHCs who are looking to exit due to age, health or other reasons to come at a pre-event day to discuss their properties face to face with those who may want to buy them?

Might this be a good way to facilitate the capture of more of that circling capital which would also facilitate the improvement of languishing communities and the sales of more homes in them?

There also ought to be an ability for the event organizers to bar this or that person or group at will, so that the Ishbel Dickens/NMHOA or Industry naysayers don't get in. That keeps this focused on business and solutions.

Just think about the number of organizations who would want to take part in an event of this nature. Here are a few who I believe would join the effort.

rick-rand-industry-voices-mhpronews-com

There probably are others who should be included on this list. These are the organizations that came to my mind while thinking about who the stakeholders are in the future of the MH Industry.

One more critical point. Let's tackle the creation of a vibrant, efficient resale market for manufactured homes. This is absolutely critical for the future of our industry, the benefit of our residents and lenders as well as our homes' broader acceptance.

By being trans-associational, this could also prove to be fertile ground for meeting with and recruiting new members.

As to a target date, based on the interest being shown about the industry, sometime in the near term would be better than delaying. By doing it in the summer, a successful meeting could position the 2015 trade shows for dovetailing with this concept.

The location must be close to a major airport so that there is easy access to the event. As noted, having some newer and older MH communities nearby would be beneficial so that participants can take a charter actually view the new homes and better understand the true breadth of the MH product and variety of community lifestyles.

I believe that an event like this will assist in not only promoting the Manufactured Housing Industry but also could be a catalyst for additional new capital investment and future financing opportunities.

We must not lose sight of a key goal of the meeting; how to advance the MH Industry as a larger and viable part of the overall housing market.

Please feel free to comment below or email me with your thoughts. The future of the MH Industry is ours to create. ##

rRck RandRick Rand is the president of Great Value Homes, and has been involved in small and large scale MHC operations. You can contact him at:
Richard J. Rand, President, Great Value Homes, Inc.. 9458 N. Fairway Drive, Milwaukee, WI 53217-1321,

414-352-3855
414-352-3631(fax)
414-870-9000(cell),
RickRand@gvhinc.net

Community Owners! MHC Lessons Learned

January 8th, 2014 No comments

Join your peers in the MHC world for an exciting hour to learn real life proven methods of how to improve your land lease communities Bottom Line Performance! Get tips from seasoned professionals who have profited in large, medium and small Manufactured Home Community (MHC) operations.

This is a program you will not want to miss.

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The panel discussion will be moderated by Ross Kinzler, Executive Director of the Wisconsin Housing Alliance. Ross has over 25 years of experience in the Manufactured Housing Industry. He has been active at both the national and state levels. He is a founding member and past Chairman of the Manufactured Housing Educational Institute. Ross currently serves on the Executive Committee and Board of the RV/MH Hall of Fame. In addition, Ross has taken on many leadership roles industry wide and has served on numerous boards and committees dealing with issues facing MH communities.

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Among those in our three person panel is Tammy Fonk, an Associate with the CBRE MH/RV National Group. Tammy was born and raised in the MH industry with two family owned communities. She operated the family owned company's sales and marketing business as well as having an active role in day to day community operations and resident relations. As a member of the MHRV Team, Tammy now works closely with public and private investors on building business relations and opportunities to enhance the Manufactured Housing Industry as well as the RV Resort and Marina properties in North America. Tammy works with owners and buyers of small, medium and larger communities in addition to representing large portfolio owners.

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The panel also includes Don Westphal President of Don C. Westphal & Associates. Don has over 40 years of experience of working in; community conceptual planning, master site design and landscape architectural design for land lease communities. Don has represented developers and owners of communities from concept plan approval all the way through final construction. He also works with owners on Community Imaging and on Marketing Plans for communities. The communities have ranged in size from a small number of home sites to those with over 500 sites. Don was featured in this interview, A Cup of Coffee with…Don Westphal.

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The third panel member is Richard (Rick) Rand, President of Great Value Homes, Inc. Rick has over 33 years of experience in the manufactured housing industry. GVH is an acquisition, development and property management firm specializing in multiple aspects of the Manufactured Housing Industry. The Company currently operates 6 Manufactured Housing Communities and is also a distributor of Manufactured Homes sold in the communities.

In addition, GVH acts as a broker for the resale of existing manufactured homes for residents who reside in the land lease communities the Company manages. Richard also acts as a consultant to institutional investment and private firms on various aspects of the Manufactured Home Industry.

Rick was founder and President of Asset Development Group, Inc. and its affiliate, Home Source One, LLC. From 1984 time until his departure in 2004, he grew the company to the 25th largest owner of manufactured housing communities in the country. During his tenure at Asset Development Group, Inc. Rick managed all aspects of the enterprise. He was responsible for all of the Company's property acquisitions and requisite financing. From the Company's inception, he oversaw the staffing and training of the ADG/HSO employees and management team. In addition, Rick was responsible for the planning and development of over 2,500 new manufactured homes sites that were both additions to existing communities and new green field development.

Rick is featured in this exclusive interview, A Cup of Coffee with…Rick Rand.

The Louisville Seminars are one of the most popular draws for attendees to the show.

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Come Join us at the 2014 Louisville Manufactured Housing Show! The Show was the best attended event in all of Manufactured Housing in 2013. Most industry members can attend free, learn more at the link above, and learn more about the other valuable seminars available for industry members at this link. ##

rick-rand-great-value-homes-manufactured-home-pro-news-industry-voices-guest-blog-.pngRichard J. Rand
President
Great Value Homes, Inc.
9458 N. Fairway Drive
Milwaukee, WI 53217-1321
414-352-3855
414-352-3631 (fax)
414-870-9000 (cell)
RickRand@gvhinc.net

Whew! What a Whirlwind 44 Hours

October 20th, 2013 No comments

That is the NCC Fall Leadership Forum: “Building a Vision For The Future” held this past week in Chicago. First and foremost, kudos to my very good friend Jenny Hodge. Jenny is Vice President of MHI’s National Communities Council (NCC) and responsible for organizing and bringing forth this exceptional event. David Lentz is to be commended for his leadership and vision for the NCC.

While on the train from Milwaukee to Chicago I reviewed the agenda just to be certain I was up for the show which began in earnest Thursday morning. There was no doubt in mind that we were in for a very intense Thursday and Friday morning!

Wednesday evening’s reception was a very nicely arranged meet and greet with appetizers and an open bar. It has certainly been some time since we've seen MHI in a position to host such an event.

The real work began Thursday morning. The fact is that there was something to learn for everyone involved in the Manufactured Housing Community industry (MHC) whether you attended one session or attended all of the sessions.

The attendees were made up of a mix from the community business. When there was a show of hands early Thursday morning it appeared that there was a fairly even split of community owners present. One third were smaller owner with less than five communities, one third with less than 10 communities and one third owners or more than 15 communities.

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Rick Rand, Great Value Homes (l) Sam Zell, Equity Lifestyle Properties (ELS) Chairman (c),
Jim Clayton, founder Clayton Homes and Chairman of Clayton Bank (r)

In addition, in attendance were lenders specializing in community financing, manufactures who are interested in serving the community owners needs to provide homes for vacant sites, Real Estate Brokers who market and sell communities along home lenders and other firms providing resources to community owners.

As is not uncommon at events like this, networking opportunities were abundant. I am more than certain that new relationships were forged, deals discussed and ideas exchanged. That is part of what makes these interactive events such great opportunities for all segments of the industry.

For those who focused on the Build A Vision For the Future agenda, they were rewarded with session after session of individuals both from within the industry and from other industries sharing their knowledge and experience. Topics relating to marketing, selling, community relations and all the important component of customer service which forward thinkers in the MH Industry are working to accomplish. Not only did the presenters share their knowledge and experience, they also made time for provocative interaction and dialog amongst all of us in attendance. ##

(Editor's Note: Read more of Rick's commentary – plus photos – on the NCC Fall Leadership forum at this link here.

You can see NCC dinner cruise and event photos at this link here.)

 

rick-rand-great-value-homes-manufactured-home-pro-news-industry-voices-guest-blog-.pngRichard J. Rand
President
Great Value Homes, Inc.
9458 N. Fairway Drive
Milwaukee, WI 53217-1321
414-352-3855
414-870-9000 (cell)
RickRand@gvhinc.net

MHI 2013 Annual Meeting Recap

October 10th, 2013 No comments

IMHA Executive Director Mark Bowersox attended the Manufactured Housing Institute’s (MHI) annual meeting held September 28 – October 1 in Carlsbad, CA. As with most recent industry meetings, speakers and conversations at the event were focused on the impact of the Dodd-Frank consumer protection legislation and reforming the CFPB’s upcoming regulations. MHI and other industry representatives continue to work with the CFBP on three key areas:

Exemption for manufactured housing appraisal requirements

Based on the most recent rules issued by the CFPB loans on all new manufactured homes, regardless of whether or not they included land, are exempt from the appraisal requirement. Loans on existing manufactured homes, not including land, are also exempt from the appraisal requirements. Additionally, all mobile homes (pre-HUD code) home loans are exempt. The CFPB’s rule solidifying these exemptions is still pending. When finalized the rule will go into effect in January.

Key rule clarifications and exclusions

Loan originator compensation guidelines issued by the CFPB this summer provide the industry with key exclusions from the points and fees calculation that lenders must perform and clarifies certain activities that retail sales staff can engage in without being defined as loan originators.

Manufactured home sales price is excluded from the points and fees definition and does not have to be included in calculations performed by lenders unless a creditor has knowledge that the sales price includes compensation for loan origination activities.

 

Retail sales commissions paid to employees is excluded from points and fees calculation requirements unless the salesperson is receiving compensation from a lender for loan origination activities.

According to MHI, activities that do not classify a retailer or its sales personnel as loan originators include:

  • Providing or making available general information about creditors and loan originators that may offer financing for manufactured housing
  • Gathering or collecting supporting information or documentation on behalf of a consumer for inclusion in a credit application
  • Providing general credit application instructions so that a consumer can complete it themselves
  • Financing the sale of no more than three homes in a year.

Activities that will make a retail employee be considered a loan originator include:

  • Filling out a credit application for a customer
  • Discussing particular credit terms with a customer
  • Directing or influencing a customer to select a particular lender or creditor

MHI continues to seek from the CFPB to provide further clarification on what activities retailers can engage in without being defined as loan originators.

MHI is still working with the CFPB and various consumer interest groups on the need to revise the upcoming High Cost Mortgage Loan triggers for manufactured home loans. IMHA will continue to be engaged on this issue, along with MHI and other interested parties. ##

mark-bowersox-imha-posted-industry-voices-guest-blog-mhpronews.com-75x75pxl-.pngMark Bowersox
Executive Director
Indiana Manufactured Housing Association
Recreation Vehicle Indiana Council
3210 Rand Road
Indianapolis, IN  46241

(Editor's Note: You can find more info on the LO Comp Rule and HOEPA from DJ Pendelton's article published in the Industry In Focus Reports module, linked here.

 

You can also find Mark Bowersox's “It's Now or Never” featured article, linked here. )