SAN ANTONIO, Texas – Think there's not a demand for manufactured housing? With the cost of site-built homes skyrocketing nationwide, the popularity of lower-priced manufactured housing is growing, and a wholly-owned CUSO of San Antonio FCU – CU Factory Built Lending LP – is helping members buy those types of homes. CU Factory Built Lending launched in 2002 as a manufactured home lender. The CUSO is already doing business in 20 Midwest and South Eastern states. Headquartered in San Antonio, it has branches there as well one in Federal Way, Wash. It also has a large manufactured home loan processing center in Greensboro, N.C. When Chase Manhattan Bank got out of the manufactured housing lending market in April 2004, the CUSO acquired staff who had worked for the bank, many of whom had 20-25 years of experience in the area. CU Factory Built Lending counts 100 people on its staff, including those employed at branch offices. According to Andy Griggs, COO, CU Factory Built Lending, there are over 8 million people in the U.S. living in manufactured homes. He emphasizes that figure does not include people who live in trailers or mobile homes – “there is a difference between those and manufactured homes,” he says. Trailer homes are commonly referred to as “RV trailers” and can be pulled by these vehicles. Manufactured homes, in comparison, refers to homes and dwellings that aren't `stick-built' (constructed at the site). They're built entirely off-site, usually in factories and are very heavy so they need to be hauled by heavy-duty rigs to sites where they're installed. There are two types of manufactured homes – HUD Code and modular – and they come in single-section or multi-section styles. Single-section manufactured homes are typically 16-18 feet wide and 48-80 feet long. The HUD Code regulates manufactured home design and construction, strength and durability, fire resistance, and energy efficiency. The code also mandates wind resistance of manufactured homes in areas susceptible to hurricane-force winds. “When you look throughout the U.S., even if you take out the price of the land, there's at least a $40 per square foot gap in cost between the price of site built versus manufactured homes,” says Griggs who came to CU Factory Built Lending with more than 25 years of lending experience to the manufactured home market. “If you look at credit union members, there are a lot of them for whom affordability is a major issue in home ownership. CU Factory Built Lending wants to provide a solution for that group of members.” For now, CU Factory Built Lending originates manufactured housing loans – both traditional chattel and land-home products – for SAFCU members. The CUSO however also participates loans out with other credit unions, and it has Ginnie Mae capability so it can make non-conforming type loans for members outside of Texas. In 2004, Griggs said the CUSO originated about $75 million in manufactured home loans. He said the company hopes to be originating loans for members of other credit unions around the country within three years. “Manufactured built homes in many ways are like site built homes in that location is a factor in the cost,” says Griggs. “If you look at the overall market today compared to six or seven years ago the price of manufactured built homes has gone up, but on average the increase has been less than for site built homes.” Griggs says that's mostly because manufactured built homes are built in a very controlled environment and a lower production rate than site built homes – about 135,000 HUD code homes are built and approximately 45,000 modular homes are built annually. “Because these homes are built in very controlled environments that keeps the prices down,” he says. Griggs estimates there are about 30-35 companies in the U.S. that do “any measureable” building of HUD code homes. Griggs describes the manufactured housing market as being a niche market. “These homes are put down in resort communities in Malibu Beach, California to retirement communities, and so the style and price varies by different parts of the country and where the manufactured home will be,” he explains. “This is a market you need to understand very well. If you think you know what you're doing and you don't, it can come back to bit you,” he says. “You have to know the nuances.” -

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