Challenge

• Document an understanding of the manufacturing housing (MH) industry and the end-to-end home buying process through a focus on lenders, dealers, manufacturers, contractors, appraisers, and title companies with experience in MH
• Identify key touch points and audience for the marketing team to deploy upcoming MH campaign

Problem

In recent history, the Fannie Mae has never mapped out the entire manufactured home buying process and instead relied on anecdotes from relationship managers interfacing with lenders and MH retail partners (MH dealerships). This was often in conflict with each other and relied on specific SMEs at the company. When a big marketing campaign was scheduled to launch, the marketing and affordable team realized they needed a single source of truth to ensure they understand the end-to-end process and who the key audience needs to be for the campaign.

Approach

• Use a human-centered design approach to establish an end-to-end view of the MH process while also surfacing common pain points, barriers, and bright spots of key stakeholders.
• Facilitate sessions with internal subject matter experts to gather the the current understanding of the MH industry
• Conduct contextually rich deep-dive of site visits to dealers and manufacturers throughout the United States. This includes in-depth interviews with appraisers, title and escrow agents, construction coordinators, and MH lenders and MH buyer interviews
• Design a set of maps that outlined the overall MH home buying process, deep dives into the shop and finance phases, and a ecosystem of key industry stakeholders

Manufactured housing (MH) refers to factory-built homes that meet the Manufactured Home Construction and Safety Standards issued by the U.S. Department of Housing and Urban Development. Known for its affordability, MH has been the largest source of unsubsidized affordable housing since the late 1990s and has allowed millions to achieve homeownership.

As we spoke to stakeholders, we uncovered how complex this entire process is compared to the single-family home buying process. Since land is needed for a conventional mortgage to be possible, manufactured homes are treated as personal property first (similar to a car) and once it’s tied to land, it can be treated as a traditional house and qualify for a conventional mortgage that can be bought by Fannie Mae or Freddie Mac.

Mapping all of this out took many discussions, continuous fact checking, and a deep dive into the insular world of MH. This project demonstrates how we took disparate information from a complex system that can often be conflicting to parse out a single source of truth.

Even though we mapped out the overall process, there was a need to zoom into a couple of the phases to truly understand what was happening.

To provide further clarity of how industry stakeholders relate to each other in this intersectional and interrelated system, we mapped out an ecosystem that visualizes the interaction points.

In addition to the system and process maps, we also synthesized insights from the research.

• Challenges in Scaling: The MH industry faces challenges that make it difficult to expand and scale. Lenders often fail to understand the MH process as well as the loan product itself; local regulations affect site prep, permitting, and the areas where MH can be placed; manufacturer labor shortages increase lead times; and dealer business models vary from all-inclusive “turnkey” service models to bare bones sales.
• Relationships as the Main Currency: The MH industry is based on trusting relationships, which can foster cooperation, partnerships, and innovation that are often regionally focused. Relationship-based industries may attract less outside innovation, thus harnessing and diffusing local innovation may be challenging.
• MH Perception Has No Owner: Negative perceptions of MH impact all key stakeholders, including homebuyers, lenders, appraisers, and realtors who are vital to the success of MH as an affordable housing option. Firsthand experiences can change perceptions, but no single stakeholder feels responsible for changing public perceptions of manufactured housing, which results in new customer segments going untapped.

As part of providing further business value, we uncovered 3 sets of key recommendations in the areas of communication & education, eligibility & secondary market , and scaling innovation & troubleshooting processes.

OUTCOME 

Learnings from this project will help Fannie Mae determine their engagement with industry stakeholders to design and test meaningful solutions. This research offers a foundational understanding of the MH process and its key stakeholders that provides needed context to help identify opportunities for improvement or innovation.

We identified the importance of MH dealers as a key audience for the marketing campaign. They are the hub that link the buyers with lenders, contractors, manufacturers and title agents. Subsequently, the marketing team deployed a marketing campaign that sent materials about the Fannie Mae loan product, MH Advantage to hundreds of dealers across the United States. This included a focus on educating lenders on manufactured homes and opportunities to help homeowners who want this affordable option.