But I Won’t Do That…

Factory-built housing retailers and contractors want to do whatever it takes to satisfy your housing needs and to make sure that you have the best home-buying experience you can.

But, did you know that there are some things they just won’t do?

That’s right!

In some parts of the home buying process, no matter how much you want help, no matter how helpful retailers and contractors could be, and no matter how nicely you ask, there are some things they just will not do.

So, do they really want to be that unhelpful to you, the customer? After all, isn’t the customer always right?

The fact of the matter is that there are some ways in which you might want or expect a factory-built housing retailer or contractor to be helpful to you, but they are prohibited by federal and state law from doing so. The government has decided who can help you navigate certain parts of the home-buying process, and in most cases, that list does not include retailers or contractors working with you as a new home buyer.

Specifically, in years past, it was customary to help new home buyers navigate the process of financing their new manufactured or modular home. In a nutshell, new state and federal laws that were enacted in the wake of the housing downturn prevent folks who are not licensed mortgage loan originators (MLO’s) from helping with even some of the most basic things that would have been common practice in years past.

So, while our members will do many things to help you, unless they are licensed MLO’s, here are some things they cannot do:

• Complete your loan application
• Take your mortgage loan application
• Offer or negotiate loan rates
• Suggest a specific lender who might finance your new home
• Advise you on loan terms or discuss particular credit terms
• Present loan terms to you

There are some administrative things they can still do, such as faxing in the loan application that you complete, but what they can do is severely limited.

So, what should you as a homebuyer do?

Here are some tips:

1. Recognize that the retailer or contractor from whom you are purchasing a new home is very limited in what they can do to help you finance your home. Don’t expect them to do more than they can.
2. Ask lots of questions. Retailers and contractors CANNOT steer you to a lender or discuss specific terms and rates with you. But, they can discuss the loan process and provide you with general information.
3. Seek out a lender or mortgage broker with who you feel comfortable and ask them lots of questions, too. Like your retailer or contractor, you need to be very comfortable working with your lender or mortgage broker. Clear communication by all parties will make the transaction go much smoother.

Yes, retailers and contractors want to bend over backwards to please you, the customer. But, because of federal and state law, there are some things they just won’t do.

Cross posted to VBS Mortgage Blog.

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What is Factory-Built Housing?

If you have shopped around for a new home, you have no doubt seen various types of factory-built housing. But, just what are the different types, and what distinguishes them from each other?

In a nutshell, factory-built single family housing can be broken down into two types: manufactured housing and modular housing. The legal difference between the two is the code to which the homes are built.

Manufactured homes are built to a federal building code that is administered by the Department of Housing and Urban Development (HUD). It is not uncommon for these homes to be referred to as “HUD homes.” Based on the number of sections, they may also be called singlewides (one section) or doublewides (two sections). By rule, these homes are shipped to the building site on metal frames that are used for transportation and then remain under home after it is sited.

Modular homes are homes that are built in factories to the locally prevailing building code. In Virginia, that is the Virginia Uniform Statewide Building Code, the same code that applies to site-built homes. There are number of variations among modular homes. For example, modular homes may also be shipped on frames that remain under the home (on-frame modular) or they may be shipped on flatbeds and not have a frame under them when sited (off-frame modular). Some homes may only consists of two sections, and others may consist of a few more.

While all purchasers of factory-built housing can be assured of quality because these homes undergo a number of rigorous inspections, it bears stating that just as is the case with site-built housing, there is a great deal of diversity among different types of factory-built homes. And those differences – manufactured or modular, what kind of manufactured or modular home, and where and how the home is sited – will affect the home’s initial cost, appraisal value and financing availability. Just like site-built housing, there is no “one size fits all” approach for factory-built housing.

The best advice is to speak with retailers and builders of factory-built housing so that you can decide for yourself which type of factory-built housing best meets your short and long term needs. That conversation should also involve lenders, such as VBS Mortgage, who can tell you what loan products are available for the type of home you wish to purchase.

Cross posted to VBS Mortgage Blog

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Culpeper County and Town of Culpeper Impose New House Tax

Live in Culpeper County? Thinking about doing business there? Take note that tax increases are set to take effect there on July 1, 2012. Culpeper County and the Town of Culpeper have imposed new taxes on a number of folks, including new home buyers, according to this story.

In addition to a tax increase on new home buyers, the County and Town have also heaped new taxes on other land uses. Want to build a bank? It will cost you over $12,000 in new taxes according the County website.

Oh, and the other irony? You go to the County website, and right before the section on the new taxes they have imposed, there is a post about an affordable housing needs survey.

You really cannot make this stuff up.

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Federal Reserve Survey Says Housing Market Improving

According to this story from the Washington Post, a survey of real estate agents conducted by the Federal Reserve states that a majority of those survey expressed optimism about the Virginia housing market.

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Housing Continues to Improve, Don’t Mess It Up

There is a story of a cartoon floating around in builder circles that features a builder praying something along the lines of, “Please give me one more recovery, and I pray not to mess it up this time.”

Well, that recovery is coming, according to this story. But, as is the case with many stories about the economy, and especially housing, there is a note of caution to be gleaned that can best be summed up from this statement from the Freddie Mac economist quoted in the article:

Taken together, the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery.  While not uniformly positive, for the most part the data trend in the right direction.

In other woods, signs are promising, but we are not out of the woods yet. While the numbers look better, they are not quite where we want them to be.

The net result is that we need to be very careful about policies affecting housing lest we make the wrong policy choices that could send housing and the entire economy back into a tailspin.

That means avoiding policies at the federal, state and local level that raise the cost of housing. Examples of these would be things like impact fees, onerous provisions in financial regulations like the Dodd-Frank Act and SAFE Act and the like.

It also means supporting pro-housing policies such as HR3849, The Preserving Access to Manufactured Housing Act, sponsored by Representative Stephen Fincher or state and local polices geared towards fair, balanced land use practices and avoidance of back-door house tax mechanisms like impact fees and cash proffers.

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Housing Rebound Continues — Let’s Not Mess It Up!

According to this story in the Washington Post, builder confidence is higher than it has been in five years. We continue to see signs, statistical and anecdotal, that things are improving. That means two things: 1. now is not the time to add new costs and regulatory burdens to home ownership, such as the unintended consequences of Dodd-Frank and the SAFE Act on manufactured housing, and 2. please be sure to contact your Congressional delegation and ask them to support HR 3849, which will make sure that number one does not happen.

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More Affordable Housing Choices = More Investment = More Jobs

The laws of economics know no international boundaries. Supply and demand works the same in the United States as it does in Australia. With that in mind, you ought to check out this story from South Australia.

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Delaware Moves Step Closer Hurting Affordable Housing

What is the best way to make sure private firms do not invest in a particular industry? Take the profit out of it. That is exactly what some politicians in Delaware are doing by trying to impose rent controls on manufactured housing communities. (Story here)

The real gem in this story is this quote:

Laurel Sen. Robert Venables, who voted against a similar bill last year, cast one of the deciding votes for the measure Thursday despite opponents’ concerns the restrictions will result in fewer manufactured-home communities across the state.

“I’ve always been a no vote,” Venables said. “But I told landowners last year if they kept raising rents in this economy, I was going to have to support the bill.”

In other words, do what I say, or else.

By imposing these sort of draconian regulations, investors will simply find other places to invest (Virginia welcomes investment — call us — we can put you in touch with someone!). That means less affordable housing choices, and the real losers end up being the folks who these politicians claim they are trying to help.

Ahh, election year politics at its finest.

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Delaware Considers Legislation to Stymie Development of Affordable Housing

So says this article. It is a shame that some want to embark on policies that could potentially scare scarce investment away from manufactured housing and that are detrimental to the creation of additional affordable housing choices for everyone.

Housing concerns aside, when thinking about these types of government controls on private capital, one must never forget this beauty of an observation from P. J. O’Rourke:

When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.

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March Housing Numbers Up for Manufactured Homes

According to the Manufactured Housing Institute, shipments of manufactured homes for March, 2012 were up 16.4% from the same month one year ago. While this is welcome news, there is one nugget of concern in the information:

The seasonally adjusted annual rate (SAAR) of shipments was 57,268 in March 2012, down 9.3 percent from February 2012 which had 63,111shipments. The SAAR corrects for normal seasonal variations in shipments and projects annual shipments based on the current monthly total.

You can read more by clicking here.

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