David Burnett thinks business is about to get worse for his already slumping manufactured home dealership in Alabama.
That's because mortgage giant Fannie Mae, in response to a rising number of delinquencies and foreclosures, is making it tougher to get manufactured home loans. The company now requires a ten percent down payment for 30-year mortgages on such homes, plus a fee of point-five percent of the loan amount. The changes went into effect August 24th.
Previously, those who qualified could put no money down, while others put down no more than three percent. No fee was required.
Critics say the changes could price some would-be homeowners, especially low-income families, out of the market.
Burnett, who owns the Deep South Home Gallery in Montgomery, said seven of his area's 13 dealers have gone out of business over the past two years.
The Department of Housing and Urban Development says mobile or manufactured homes account for one-third of all new single-family home sales. There are about 7.2 million such homes, many in rural areas and the south.
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