Nicole Daniels had been living with her father in Berlin and taking care of him when he died. He had lived in a manufactured home park since 1986, but his residence was old and needed a lot of work. It would cost so much to fix, Daniels said, that it made more sense to replace it with a new one.
She applied for help with a down payment from Champlain Housing Trust’s Manufactured Housing Down Payment Program.
The program received an extra $1.25 million this year, part of a total of $5 million in additional funds the Legislature appropriated to help people who live in manufactured homes. The funds would help people buy new homes, make repairs to their existing ones, and assist owners of manufactured home parks to make their own repairs and improvements, such as removing abandoned homes and fixing up parks by installing new pads and foundations on vacant lots.
“Manufactured home communities … are disproportionately occupied by people who have very low incomes,” said Maura Collins, executive director of the Vermont Housing Finance Agency.
According to Vermont Housing Commissioner Josh Hanford, about 8% of Vermonters live in manufactured home communities.
(In this story, VTDigger is using the term manufactured homes to describe what are commonly referred to as mobile homes. “There hasn’t been a mobile home built in the United States since 1976,” said Joe Cicirelli, director of housing for the Cooperative Development Institute, a nonprofit that helps manufactured home owners turn the parks they are in into coops, “but it’s hard to shake that moniker.”)
The down payment program began after Tropical Storm Irene in 2011, when floods devastated many mobile home communities across Vermont. Michael Monte, chief executive officer of the Champlain Housing Trust, said his organization has financed 256 homes across Vermont in this way since Irene. The average household income of the recipient, he said, is $45,000 a year. Monte said his organization gets about 100 applications a year.
The program provides what Monte calls essentially a silent second mortgage. Someone who wants to buy a manufactured home takes out a first mortgage. Champlain Housing Trust comes in and provides a $27,500 zero-interest loan for an Energy Star home and $35,000 for a home with net-zero energy consumption. The manufactured homes financed by the program range in cost from $65,000 to $180,000.
All payments on the loans are deferred until the home is sold, transferred or refinanced, and if the homeowner sells the home, the next buyer can assume the loan.
“The funds (in the manufactured housing down payment program) are recycled, so it sort of lives on and helps folks in an ongoing way,” Hanford said.
The money for the program that helps people buy new manufactured homes comes from a state tax credit. The Vermont Housing Finance Agency sells these tax credits to banks and insurance companies at a discount and makes the money available to Champlain Housing Trust and Addison County Community Trust, according to Collins.
For example, an investor could buy $500,000 in tax credits for $450,000 and the $450,000 goes to the Champlain Housing Trust. The investor makes a $50,000 profit on the tax credit and the Housing Trust gets the rest for the program.
This year, the Legislature appropriated an additional $1.25 million to finance these tax credits over the next five years, according to Hanford, more than doubling the amount of money available for homebuyers.
Daniels, the Berlin homeowner, was able to have her old home removed and a new base pad, foundation and utility connections installed on the same lot.
In all, she spent $100,000 for her new home, including prep work at the site. She said she would not have been able to afford it without the additional $27,500 grant she received toward her down payment.
The total price tag was far less than she would have had to pay for a more traditional home, and she’ll only have to pay back the zero-interest loan if she sells the structure.
A recent study by Harvard University’s Joint Center for Housing Studies found that a median-priced home in Washington County cost $313,464.
“It is such a tight housing market,” Daniels said. “It’s so expensive.”
The 23-lot manufactured home park where she lives is safe and quiet, she said, with some younger couples and a lot of older people, some of whom have lived there for 30 or more years.
“Great people,” Daniels said. “I broke my arm in the middle of the moving process and now I’m trying to move back in and I can’t do a whole lot because I’m still injured and I’ve got elderly neighbors that are coming over and (asking): ‘Can we help you bring in your stuff?’”
Daniels sees great value in manufactured home communities.
“A lot of people like myself can’t afford to buy land and do all of the work to get the land ready,” she said. “I’ve got great neighbors. I’m close to everything. It allowed me to be in my own place, and I’m not in an apartment with a neighbor upstairs or next door. I’m in my own home.”
Like most owners of manufactured homes, she rents the land on which her home sits.
On top of the tax credit that allowed Daniels to buy a new home, the Legislature directed $4 million in federal funding from the American Rescue Plan Act this year to help owners of manufactured homes and of mobile home parks, Hanford said.
About $1.5 million is for small grants to mobile home park owners to make repairs and improvements, such as removing abandoned homes, fixing up lots and otherwise improving the parks, Hanford said.
Part of the balance was for grants to install frost-free pads and foundations on vacant lots, he said, noting that Vermont has about 350 vacant lots in mobile home parks. The rest was for small grants to owners of manufactured homes to make repairs, he said.
The federal money appropriated this year is in addition to $15 million appropriated a year ago from the American Rescue Plan Act to finance infrastructure for manufactured housing, Cicirelli said. The state Agency of Natural Resources is administering those funds.
“They are a very affordable source of housing that receives very little in ongoing public investment to maintain that affordability,” Hanford said. “So this will be a good chance to really invest in those communities and keep people housed in a very affordable way. We’ve got the money now to make a difference to really help people.”
Want to stay on top of the latest business news? Sign up here to get a weekly email on all of VTDigger's reporting on local companies and economic trends. And check out our new Business section here.