Building Security

Grant makers and loan programs help bring financial stability to owners of mobile homes

Martha and Peter Bartlett’s home could be a modern-day update of a vintage Currier & Ives lithograph.

With a snowy hill dotted with towering pine trees out back and plenty of room for a large collection of local antiques and memorabilia inside, the Bartletts’ place rates as a picturesque monument to the good life.

Yet, when the couple decided to move here 13 years ago, their children balked. Before seeing the house, Martha Bartlett had her doubts, too. “The way I was brought up, you didn’t move into a mobile home,” she says. “You wouldn’t have caught me dead in one of these places.”

Now, the Bartletts, both 67, serve as examples for those who want to eliminate the negative stereotype surrounding such homes, while making what have sometimes been derisively called “trailers” part of the solution to a nationwide dearth of low-cost housing.

With the help of an organization in nearby Concord, the Bartletts and 140 other homeowners in their neighborhood formed the Freedom Hill Cooperative in 2001, in hopes of scotching the plans of a New York developer who was trying to buy the land their homes sit on. Aided by a second mortgage from the New Hampshire Community Loan Fund, co-op members were able to secure a first mortgage from a bank, then buy the land for $4-million. They were further aided by a New Hampshire law that gives residents of what housing advocates call manufactured home parks — residents bristle at the use of the term “mobile-home park” — 60 days to match an offer to buy park land that has been placed on the market.

Peter Bartlett, a retired state employee who serves as curator at the town’s local-history museum, says that residents feel much more secure with the new arrangement. “It’s less of a headache knowing that we’ve got control of it than it was waiting for someone to pull the rug out from under us,” he says.

Besides helping residents at 57 such parks in the state buy land, the New Hampshire Community Loan Fund has aided homeowners in finding affordable mortgages. The group is also the brain trust behind a home-building program in Barrington, N.H., with an eye toward making it a national model for improving the quality of manufactured homes — houses that are built and partly assembled at a factory before being shipped and nailed together on site.

By organizing residents into co-ops, creating loans for them, getting mortgage bankers involved, and developing better-built housing, the loan fund works to maintain owners’ investments and elevate to respectability the lowly image of their homes, which typically retail for less than half of the cost of a conventional home. With studies showing that 5.5 million rural households pay more than 30 percent of their income for housing — and that 30 percent of all new homes are factory-made — the loan fund’s housing advocates say that the time to support such homes has come.

“We’re part community organizers, part community lenders, and part manufactured-housing advocates,” says Paul Bradley, vice president of the New Hampshire Community Loan Fund. “Part of the challenge we have is to show the nonprofit housing industry how manufactured housing can work.”

Foundations Take Notice

While advocates, such as Mr. Bradley, admit that such homes aren’t likely to solve the nationwide dearth of low-cost housing, ownership of manufactured dwellings can help those with low incomes both increase their assets and avoid having to find inexpensive apartments to rent. The growing popularity of manufactured homes “shows that many people of moderate incomes believe that they are viable places to live,” adds Mr. Bradley.

After years of ignoring manufactured homes, grant makers are beginning to find value in such housing — and in the New Hampshire Community Loan Fund’s approach to increasing its value. Nearly half of the group’s 2002 budget of $3.7-million came from foundations and affluent individuals — an unprecedented amount in the fund’s history. By comparison, the group received half of its $2.5-million 2001 budget from private loans and grants.

The organization, founded 20 years ago to help elderly residents of a Meredith, N.H., home park that was under pressure from developers, has become a model for fledgling loan programs in other states, says George McCarthy, program director at the Ford Foundation, in New York. As part of its emphasis on helping those with low incomes increase their net worth, Ford has made grants of $500,000 to the loan fund the past two years, as well as loans totaling more than $2-million, and it recently announced a $200,000 grant for the manufactured-home-park program for this year. Ford believes that providing lower-rate mortgage loans to people and helping them buy the land on which their homes sit increases the value of the homes, helping some homeowners overcome poverty, Mr. McCarthy says.

In addition to arranging loans for co-ops and their members, the loan fund dispenses financial and logistical advice. With the help of an $84,000 grant from the Great Bay Foundation, in Portland, Me., the organization is publishing a free guide to managing parks for co-op members.

The loan fund has also received $120,000 in grants from the Jessie B. Cox Charitable Trust, in Boston, so the group could improve its fund raising. And it has received support from the New Hampshire Charitable Foundation ever since it was started.

“We said to ourselves, ‘This is a group that could be a national bell ringer,” says Lewis M. Feldstein, president of the New Hampshire Charitable Foundation. The community foundation admired the way the group’s founder and president, Juliana Eades, steered clear of political battles that can surround discussions of low-cost housing. “She kept an unerring focus on housing issues, particularly manufactured-housing issues,” Mr. Feldstein says.

Owners Vulnerable

The organization made those homes its point of emphasis in the beginning because of the vulnerability of those who live in them, says Ms. Eades.

While purchasing land might seem like it would rank second to residents’ ownership of the homes themselves, those who have bought factory-built homes have often been adversely affected when parks have been sold to private developers. Ground rents have been raised beyond the reach of the fixed-income elderly and the poor. Sometimes, residents have been evicted to make way for pricier developments, particularly in states such as New Hampshire, with its zoning laws that favor construction of expensive homes (and the property-tax dollars they bring in). Because the homes aren’t easy to move once they are assembled — the term “mobile home” is a misnomer these days, many owners say — those who live in them are particularly prone to changes in land ownership.

Owners of manufactured homes are vulnerable in other ways, as well. Nationwide, almost 80 percent of the seven million homes owned by those who live in them are financed through personal-property loans, the average interest rate of which is 3 percentage points higher than typical mortgage loans. The members of the 57 cooperatives in New Hampshire formed with the help of the loan fund pay a median rate of nearly 12 percent on their home loans because many of them have higher-rate personal-property loans. Because of high interest rates and mortgage lenders’ belief (a mistaken one, advocates say) that the homes won’t hold up as well as conventional homes do, the value of factory-made homes rarely appreciates.

Changing Perceptions

The Ford Foundation became involved with the New Hampshire Community Loan Fund partly to help change the downtrodden image lenders have of manufactured homes. “We’re trying to show that a manufactured-housing loan can be as profitable as any other home loan,” says Mr. McCarthy. “Banks need to see that.”

Ford is also supporting the loan fund’s work in Barrington, where the organization has embarked on a program to build 44 high-quality, energy-efficient manufactured homes. “We’re playing developer,” Mr. Bradley, the loan fund’s vice president, says. “We’ll enter the market with homes in the $80,000 to $100,000 range, in an area where the median price for a house is over $200,000.” He adds that Ford’s involvement marks “a departure for philanthropy. Most foundations want to run away from this, and nonprofit rural-housing developers are brutal toward manufactured homes,” he says.

The resistance has been seen nationally. Rip Rapson, president of the McKnight Foundation, in Minneapolis, says that research it financed during the 1990s found that many local decision makers didn’t like the idea of including factory-built housing in their neighborhoods. “It’s perceived as being at the bottom of the housing food chain,” Mr. Rapson says.

To help counteract that stigma, McKnight is supporting new programs to make manufactured homes that resemble conventional ones, Mr. Rapson says. The foundation has also made grants to support University of Minnesota research into the viability of creating inexpensive boards made from wood waste products. The boards would form inexpensive materials with which to build manufactured housing. “We’re encouraging our grantees to look at what makes homes affordable as they are being built,” Mr. Rapson says. But one group that helps finance the construction of low-cost homes says that building prefabricated structures that look like conventional homes may be too expensive. Houses made from typical lumber cost about the same as high-quality manufactured ones, although factory-made homes may be useful in areas where construction workers are at a premium, or the land is not owned, says Warren Hanson, president of the Greater Minnesota Housing Fund, in St. Paul.

Problems Inherited

At Freedom Hill, residents say that land ownership has helped them improve the neighborhood. Past owners had done little to correct water-availability problems and had moved in residents who lacked the wherewithal to both buy their homes and pay ground rent of around $300 per month. “Everything was done on the quick and dirty,” Mr. Bartlett says.

Now that they own the park’s 150 acres, members of the co-op’s board have hired a maintenance man and begun to dole out work to their neighbors.

“We’re getting residents to volunteer services,” such as mowing common areas and plowing snow, to keep costs down, says Laurie Palmer, a four-year resident of the park and a program assistant at the New Hampshire Community Loan Fund.

Although their rent — each member’s portion of the monthly mortgage payment — is about 10 percent higher than when others owned the land, Ms. Palmer says that her combined $800 mortgage payment and ground rent is less than the cost of a small apartment in Concord. Co-op members won’t have to pay ground rent, only maintenance costs, once the loan is paid off in 2032.

Peter Bartlett says that creating a co-op has brought other advantages to the neighborhood. He and his neighbors at “Cardiac Corner” — a section of Freedom Hill where each manufactured home coincidentally holds at least one heart-attack victim — appreciate a new sense of togetherness. “It’s a lot friendlier of an atmosphere now,” he says. “People wave. It’s really brought the whole community together.”