The Wall Street Journal had an interesting article on Friday, June 21 describing how Fannie Mae and Freddie Mac, which back about half of the new mortgages in the U.S., are rolling out financing programs for factory built homes. June is National Homeownership Month, and the hope of this new financing program is that more lower- and middle-class Americans can become homeowners. The main manufacturer of these homes in the U.S. is Clayton Homes, owned by Berkshire Hathaway. But there are many creative designers, architects and builders who are currently involved in prefabrication ventures, and Home Builder Digest lists nineteen of them in the article “The Best Prefab/Modular Home Builders in the United States.” The number of manufactured homes in the U.S. has dropped from close to 400,000 in the late 1990s to just under 100,000 last year. This number represents almost 10% of new single-family home starts, according to the industry group Manufactured Housing Institute. MHI cites an independent research study that found 90% of people are satisfied with their manufactured homes, and 87% would recommend a manufactured home to others.
The focus at eVolve MEP is with mechanical and electrical contractors in the commercial space, enabling prefabrication across both of these trades to help lower costs and improve on-time delivery. There are other challenges faced in the residential side of the prefabrication business. Those relate to financing and historical perceptions of flawed finished products compared to stick-built homes. The article pointed out that Fannie Mae and Freddie Mac require eligible homes to have pitched roofs and other characteristics to make them indistinguishable from site-built homes.
The WSJ article closed with quotes from buyers who used the new Fannie Mae program to close their loan. One remarked, “Clayton homes used to be so trailer-looking. It didn’t have that look about it anymore.” Take a look around any commercial project, and you will see prefabrication all around you; these days it doesn’t look any different.
Let us know your thoughts on how you are using prefabrication and if any of your clients or prospects have concerns with your approach. Let us know how we can help you make the move to prefab by contacting eVolve MEP for a short discovery call to learn more.