Expanding Affordable Homeownership Opportunity in Kentucky

Stacey Epperson

By Stacey Epperson, Next Step President & Founder

In 2015, Next Step began our SmartMH initiative. We started with a bold goal: expand the number of ENERGY STAR® manufactured homes in the Kentucky housing market. We spent a year creating partnerships and building a coalition of stakeholders in Kentucky to support SmartMH.

In October 2016, the concept of the SmartMH program evolved and expanded. Through an innovative partnership with Freddie Mac and eHome America – an online homebuyer education platform – we crafted a new vision for the SmartMH program: working with manufactured home retailers, lending institutions and housing counselors to create an ecosystem where more prospective homeowners gain access to homebuyer education and housing counseling services that increase homeownership opportunity.

Homeownership rates across the country are in decline, and Kentucky is no exception. In 2016, just 67.9 percent of Kentuckians owned their home. For those in the market for a home, affordability remains a key issue. Nearly 29 percent of households in Kentucky making less $20,000 per year that live in rental housing pay 30 percent or more of their income on housing costs.

Owning a home is so often associated with the concept of the “American Dream” that it has become a cliché. But cliché or not, owning your own home remains one of the key factor for building wealth and securing a better financial future for your family. As the availability of affordable housing stock decreases – and rental prices rise – the number of Kentucky families in need of affordable homeownership solutions is growing dramatically.

Manufactured housing is how affordable homeownership gets done in Kentucky.

Manufactured housing remains the largest source of unsubsidized, affordable housing in the U.S., with 18 million Americans living in manufactured homes across the country. Kentucky ranks tenth in the nation for manufactured home shipments, with 2,700 units placed in 2016. This represents a 19 percent growth since 2015.

A key challenge for these prospective homebuyers is securing financing. According to 2015 HMDA data, of 10,785 Kentuckians that applied for a manufactured home loan, only 2,442 secured a loan. For those who did not secure a loan, credit history, debt ratios and collateral were listed as the primary reasons for denial.

This is where our SmartMH network members enter the picture. Whether they enter the market by shopping at a retail center or talking to their local banker, our SmartMH retail and lending partners commit to helping those individuals and families who may not be ready to buy a home yet. Our SmartMH network members engage with these homebuyers to help assess their needs, and connect them with HUD-certified housing counseling organizations. These nonprofit organizations help homebuyers make an action plan to get them “mortgage ready’, including administering our factory-built homebuyer education course hosted by eHome America.

Affordable housing requires innovative solutions. By creating a network of SmartMH lenders, home retailers and consumers, we are building a sustainable chain of business for our network, that increases access to smart, affordable and energy-efficient homes for more families in Kentucky.

Comments are closed.