WASHINGTON - Manufactured homes are a popular choice for low-income families, but new regulations from mortgage giant Fannie Mae could price some of those would-be homeowners out of the market.
Concerned about rising loan delinquencies and foreclosures, Fannie Mae has begun requiring a 10 percent down payment for 30-year mortgages on such homes, plus a fee of one-half of 1 percent of the loan amount. Previously, people could put no money down and paid no fee.
For those who cannot afford 10 percent, Fannie Mae has introduced a 20-year loan requiring a 5 percent down payment. However, monthly payments are higher.
Manufactured homes are built in factories and assembled on building sites. They include mobile homes, though many manufactured dwellings have characteristics found on traditional single-family homes — pitched roofs, decks and porches.
The Department of Housing and Urban Development says mobile or manufactured homes account for one-third of all new single-family homes. There are about 7.2 million such homes, many in rural areas and the South.
The average sale price is roughly $49,000, compared with about $164,000 for a traditional single-family home, according to the Manufactured Housing Institute, an industry trade group.
Rep. Barney Frank, D-Mass., has sent numerous letters to Fannie Mae chief ex- ecutive officer Franklin Raines asking him to withdraw the down payment guidelines, which went into effect Aug. 24.
‘‘To make it harder for people to buy homes in this way is a great mistake,’’ said Frank, ranking member of the House Financial Services Committee.
According to Fannie Mae’s Deborah Tretler, the changes were prompted by a spike in delinquencies and foreclosures on manufactured home loans.
That came after many home sellers and lenders in the late 1990s extended loans to buyers with poor credit histories or not enough income to pay their mortgages, industry experts say.
‘‘We don’t serve borrowers well when it is easy for a borrower to get into a home under very flexible terms, only to have them lose their home, their credit ruined and their homeownership dreams turned into a nightmare,’’ said Tretler, vice president of single-family homes.
Lance George, research associate for the private Housing Assistance Council, said of the changes: ‘‘In some remote rural areas, that will knock people out’’ of the housing market.
But he also said, ‘‘It’s not all Fannie Mae’s fault. It’s the industry. They let a lot of the retailers go wild and give loans to everyone.’’