Economy Cutting five words from this law could make houses cheaper

[Rob Battisti]

Not all, just arbitrary ones.

It's true though, 30 year fixed mortgages are backed by the government which allows them to offer lower interest rates than would would otherwise be the case. You can them deduct the interest rate of your mortgage from your taxes.

Not saying that's necessarily bad, in fact I'd like to extend those subsidies to prefab homes.

And you can. I’m not against this rule.

By all means, find ways to make trailers cheaper.

This backing reduces lender risk, enabling lower interest rates or more lenient terms, which can be considered a form of subsidy but calling it “government subsidies” is really walking the line.

The term “subsidized” often implies direct financial assistance, like grants or below-market rates, which doesn’t fully capture the role of government-backed mortgages.

They reduce risk by backing the loans.

 

[method115]

What's more likely in an existing suburb of SFHs is not so much replacing existing SFHs with prefab ones but rather adding smaller prefab homes as accessory dwelling units to those existing properties though idk what the average lot size in your subdivision is and whether it would actually fit an ADU.

Yea no one would be able to do that here with the way we are setup. You could park 1 car between me and the next house with enough space to get out on each side but that's it. I just see this sort of stuff happening more out in the farm areas where people have a lot more land and when I drive through I do see people doing this.

One of my cousins I'm pretty sure lives in a manufactured home with her husband and it's all on his parents land.

 

[Islam Imamate]

And you can. I’m not against this rule.

By all means, find ways to make trailers cheaper.

One way to do that beyond cutting these arbitrary rules like the permanent chassis requirement and zoning restrictions is to extend traditional, government backed home financing to prefab homes

This backing reduces lender risk, enabling lower interest rates or more lenient terms, which can be considered a form of subsidy but calling it “government subsidies” is really walking the line.

The term “subsidized” often implies direct financial assistance, like grants or below-market rates, which doesn’t fully capture the role of government-backed mortgages.

They reduce risk by backing the loans.

A subsidy can be direct or indirect payments and tax cuts, like the mortgage interest deduction, absolutely count and are in fact one of the more common forms of subsidies.

The risk is reduced through a government subsidy to lenders. A government backed mortgage is by definition below market rate as without the gov't subsidy the interest rates would be higher to price in the added risk.

 

[SoSo]

A few years back when I was still appraising, I appraised some pretty nice (for the price range) modern manufactured homes. On rural lots. The problem isn't chassis or no chassis, the problem is land. Or should I say, lack of developed lots. You used to be able to buy a small parcel in a new subdivision for a reasonable price inside or on the outskirts of the cities around where I live.

Last I looked at residential land comps of any size in the past year inside the city of Boise I think I found only 6 closed sales. Idaho is a "non-disclosure State" but still. WTF? Number of sales didn't increase much when broadening the search area to include surrounding cities. All new subdivisions, if they aren't for the exclusive use of the developer/builder are developed with intent of only selling land to "select" builders. To get on that list you have to pay the developer a fee plus agree to other stipulations. The average Joe can't buy a lot anymore to build a house, let alone place a manufactured home. If you're an average Joe that wants a house in the burbs, you are pretty much at the mercy of the developer/builder model of home ownership.

 

[Rob Battisti]

One way to do that beyond cutting these arbitrary rules like the permanent chassis requirement and zoning restrictions is to extend traditional, government backed home financing to prefab homes

A subsidy can be direct or indirect payments and tax cuts, like the mortgage interest deduction, absolutely count and are in fact one of the more common forms of subsidies.

The risk is reduced through a government subsidy to lenders. A government backed mortgage is by definition below market rate as without the gov't subsidy the interest rates would be higher to price in the added risk.

I said it was walking the line. It is.

Can you not get a mortgage on a manufactured home?

 

[Rob Battisti]

Tiny homes are still expensive AF. Even with this change it’s still so damn much.

I’m converting a shed to an outside office to save money.

 

[Islam Imamate]

I said it was walking the line. It is.

It's not, it's a quintessential example of a subsidy.

Can you not get a mortgage on a manufactured home?

Not a gov't backed 30 yr fixed rate mortgage.

Tiny homes are still expensive AF. Even with this change it’s still so damn much.

I’m converting a shed to an outside office to save money.

Okay sure but all things equal they're relatively cheaper.

 

[Rob Battisti]

It's not, it's a quintessential example of a subsidy.

Not a gov't backed 30 yr fixed rate mortgage.

Okay sure but all things equal they're relatively cheaper.

Are they?

Maybe if you’re building a home.

For a basic home it’s about 100-115$ sqft for a manufactured home it’s about the same.

Mid range would be 130-175$ sqft

Government-backed mortgages aren’t the classic subsidy we all think of because they work indirectly by guaranteeing loans to lower lender risk, not dishing out straight cash or discounts. Plus, stuff like FHA loans can come with extra costs like insurance premiums, so they don’t feel like a straight-up handout.

Either way, sure make them qualify for 30 year fixed that’s fine.

Once again, not against this at all. I also like barndominiums.

 

[RemyR]

I'd never want to live in one but I'm all for this. Something needs to be done about housing. I legit feel bad for some of the younger guys I work with who want to buy their first house but can't afford it.

 

[Islam Imamate]

Are they?

Maybe if you’re building a home.

For a basic home it’s about 100-115$ sqft for a manufactured home it’s about the same.

Mid range would be 130-175$ sqft

Maybe the price per sqft is the same but you're paying for fewer sqft.

Government-backed mortgages aren’t the classic subsidy we all think of because they work indirectly by guaranteeing loans to lower lender risk, not dishing out straight cash or discounts. Plus, stuff like FHA loans can come with extra costs like insurance premiums, so they don’t feel like a straight-up handout.

The government subsidizes lenders so they can offer below market rate, fixed 30 yr mortgages and then the gov't is allowing you to deduct the interest on your mortgage, which is already below market rate as we established.

This is on top of other programs like down payment assistance that state and local governments offer.

The two primary forms of subsidies are direct payments and tax cuts, both are used to subsidize mortgages.

Either way, sure make them qualify for 30 year fixed that’s fine.

Once again, not against this at all. I also like barndominiums.

That would obviously increase demand for them right?

 

[Rob Battisti]

Maybe the price per sqft is the same but you're paying for fewer sqft.

The government subsidizes lenders so they can offer below market rate, fixed 30 yr mortgages and then the gov't is allowing you to deduct the interest on your mortgage, which is already below market rate as we established.

This is on top of other programs like down payment assistance that state and local governments offer.

The two primary forms of subsidies are direct payments and tax cuts, both are used to subsidize mortgages.

That would obviously increase demand for them right?

Probably. Like I said, I’m not against it

 

[Kassitus]

It can help, but it won't solve the problem. It's also troubling that the solutions are creeping towards "you vill live in ze shipping crate". Remember when building huge amounts of 500 sq ft apartment units seemed messed up? That was only like 10 years ago.

 

[SoSo]

I said it was walking the line. It is.

Can you not get a mortgage on a manufactured home?

You can get a mortgage. The manufactured home has to be placed on a permanent foundation of some type (I think pier and beam counts, doesn't have to be a full concrete foundation, but I can't remember. All the ones I've seen have been on a concrete foundation with a crawl or even a basement). Can't leave it on the trailer.

 

[Rob Battisti]

You can get a mortgage. The manufactured home has to be placed on a permanent foundation of some type (I think pier and beam counts, doesn't have to be a full concrete foundation, but I can't remember. All the ones I've seen have been on a concrete foundation with a crawl or even a basement). Can't leave it on the trailer.

Makes sense

 

[Islam Imamate]

Probably. Like I said, I’m not against it

You say that but you're weirdly snarky about it and still want them zoned out of existing neighborhoods of SFHs so you don't come off like a supporter.

Tbh most of your housing takes come off as having a thinly veiled, underlying disdain for the lower classes. ITT you even mocked me for being a "have-not"

Which I guess is not entirely baseless, you certainly come off as wealthy and are richer than I am and by WR standards its a tame insult so I'm not saying my feelings were hurt or that you were out of line or anything. But I think it helps explain why you're so detached from the experience of lower middle class folks and the trade offs they have to make in regards to things like housing.

 

[Islam Imamate]

You can get a mortgage. The manufactured home has to be placed on a permanent foundation of some type (I think pier and beam counts, doesn't have to be a full concrete foundation, but I can't remember. All the ones I've seen have been on a concrete foundation with a crawl or even a basement). Can't leave it on the trailer.

You can get a mortgage but prefab homes don't qualify for FHA loans IIRC, at least not the typical ones middle class Americans use to finance sure built homes. There are lots of smaller housing subsidies that may or may not help with buying a prefab home.

 

[plataoplombo]

Not taking tax revenue into consideration, yes, they should be allowed more easily in certain parts of a city like the outskirts.

Like others have mentioned, the loss of tax revenue would be substantial.

 

[Rob Battisti]

Not taking tax revenue into consideration, yes, they should be allowed more easily in certain parts of a city like the outskirts.

Like others have mentioned, the loss of tax revenue would be substantial.

I’m less concerned about that as not only is all tax theft, but property tax especially

 

[Rob Battisti]

You say that but you're weirdly snarky about it and still want them zoned out of existing neighborhoods of SFHs so you don't come off like a supporter.

Tbh most of your housing takes come off as having a thinly veiled, underlying disdain for the lower classes. ITT you even mocked me for being a "have-not"

Which I guess is not entirely baseless, you certainly come off as wealthy and are richer than I am and by WR standards its a tame insult so I'm not saying my feelings were hurt or that you were out of line or anything. But I think it helps explain why you're so detached from the experience of lower middle class folks and the trade offs they have to make in regards to things like housing.

The issue is that I’m firmly middle class despite my income and net worth. Life is too expensive.

My main issue with your takes is you have no experience with how the suburbs work and come up with fantastical ideas as to forcing the square peg into a round hole

 

[plataoplombo]

I’m less concerned about that as not only is all tax theft, but property tax especially

Man, as I get closer to retirement I hate property taxes more and more.