SAN ANTONIO, Texas – Think there's not a demand for manufacturedhousing? With the cost of site-built homes skyrocketing nationwide,the popularity of lower-priced manufactured housing is growing, anda wholly-owned CUSO of San Antonio FCU – CU Factory Built LendingLP – is helping members buy those types of homes. CU Factory BuiltLending launched in 2002 as a manufactured home lender. The CUSO isalready doing business in 20 Midwest and South Eastern states.Headquartered in San Antonio, it has branches there as well one inFederal Way, Wash. It also has a large manufactured home loanprocessing center in Greensboro, N.C. When Chase Manhattan Bank gotout of the manufactured housing lending market in April 2004, theCUSO acquired staff who had worked for the bank, many of whom had20-25 years of experience in the area. CU Factory Built Lendingcounts 100 people on its staff, including those employed at branchoffices. According to Andy Griggs, COO, CU Factory Built Lending,there are over 8 million people in the U.S. living in manufacturedhomes. He emphasizes that figure does not include people who livein trailers or mobile homes – “there is a difference between thoseand manufactured homes,” he says. Trailer homes are commonlyreferred to as “RV trailers” and can be pulled by these vehicles.Manufactured homes, in comparison, refers to homes and dwellingsthat aren't `stick-built' (constructed at the site). They're builtentirely off-site, usually in factories and are very heavy so theyneed to be hauled by heavy-duty rigs to sites where they'reinstalled. There are two types of manufactured homes – HUD Code andmodular – and they come in single-section or multi-section styles.Single-section manufactured homes are typically 16-18 feet wide and48-80 feet long. The HUD Code regulates manufactured home designand construction, strength and durability, fire resistance, andenergy efficiency. The code also mandates wind resistance ofmanufactured homes in areas susceptible to hurricane-force winds.“When you look throughout the U.S., even if you take out the priceof the land, there's at least a $40 per square foot gap in costbetween the price of site built versus manufactured homes,” saysGriggs who came to CU Factory Built Lending with more than 25 yearsof lending experience to the manufactured home market. “If you lookat credit union members, there are a lot of them for whomaffordability is a major issue in home ownership. CU Factory BuiltLending wants to provide a solution for that group of members.” Fornow, CU Factory Built Lending originates manufactured housing loans– both traditional chattel and land-home products – for SAFCUmembers. The CUSO however also participates loans out with othercredit unions, and it has Ginnie Mae capability so it can makenon-conforming type loans for members outside of Texas. In 2004,Griggs said the CUSO originated about $75 million in manufacturedhome loans. He said the company hopes to be originating loans formembers of other credit unions around the country within threeyears. “Manufactured built homes in many ways are like site builthomes in that location is a factor in the cost,” says Griggs. “Ifyou look at the overall market today compared to six or seven yearsago the price of manufactured built homes has gone up, but onaverage the increase has been less than for site built homes.”Griggs says that's mostly because manufactured built homes arebuilt in a very controlled environment and a lower production ratethan site built homes – about 135,000 HUD code homes are built andapproximately 45,000 modular homes are built annually. “Becausethese homes are built in very controlled environments that keepsthe prices down,” he says. Griggs estimates there are about 30-35companies in the U.S. that do “any measureable” building of HUDcode homes. Griggs describes the manufactured housing market asbeing a niche market. “These homes are put down in resortcommunities in Malibu Beach, California to retirement communities,and so the style and price varies by different parts of the countryand where the manufactured home will be,” he explains. “This is amarket you need to understand very well. If you think you know whatyou'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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