Affordable housing is in short supply across the country, creating a need for market innovations that can preserve affordability for the long haul. Although manufactured housing communities are often an affordable option, they are typically subject to market-based rent increases. One model that can preserve affordability is manufactured housing resident-owned communities, (MHROCs) which are manufactured housing communities (MHCs) owned by residents through a cooperative.

Though MHROCs are affordable, they are also rare, due to significant hurdles to both formation and financing. A 2019 Freddie Mac white paper demonstrated that MHROCs made up only 2% of the overall manufactured housing market, with just 1,065 resident-owned communities across the country.

Opportunities & Challenges

The limited availability of financing options and technical assistance has stunted the formation of these communities, a fact that Freddie Mac is trying to address with a loan offering designed specifically for MHROCs.

“Our research has found that MHROCs are one of the few sources of unsubsidized naturally occurring affordable housing in the country that is not subject to market-based rent increases,” says Nick Miller, a director at Freddie Mac. “This is a really great affordable housing option, but these communities face a lot of challenges. Freddie Mac is focused on working with its lender network to problem-solve through these challenges and deliver affordable financing options for qualifying communities.”

Beyond affordability, MHROCs also give residents agency over their homes and futures. In an MHROC, residents in the community participate in a cooperative via memberships or shares. The cooperative owns the land, amenities, infrastructure and facilities, and the residents continue to own their own homes. Residents govern themselves through an elected Board of Directors, which handles day-to-day operations of the property. Depending on the size of the community, the board may also hire a professional management company.

“MHROCs are advantageous for residents because it gives them more control over their monthly lot rent and improvements in the community,” explains Miller. “Because all residents own a share of the community, they have a say in how the property is managed.”

Specialized Debt Products Are Available

Creating an MHROC requires manufactured housing tenants to band together to acquire the land from the operating entity and create the cooperative. A major part of that process is obtaining specialized equity and debt financing. “We have identified this as a critical sector of the manufactured housing market, and we are determined to come up with solutions to get these deals done,” says Miller.

Freddie Mac’s unique offering provides flexible financing terms to specifically address MHROC borrower requirements. These transactions often involve longer loan terms of 15 to 30 years, compared with a typical apartment loan with five to 10-year terms. “We have found that a lot of the cooperatives like longer-term financing, and so being amenable to their desire to acquire longer-term debt is something that we are willing to do,” says Miller.

One example of how these flexible terms can work for communities is in Woodland, California. A property called Leisureville, where 150 homes are occupied by residents 55 years or older, is owned by a cooperative and run by an elected board made up of community members. Freddie Mac financing is enabling the cooperative to make essential repairs to water and sewer lines to keep the property safe and healthy.

In addition, Freddie Mac is offering loan minimums as low as $500,000, significantly less than the $1 million requirement on a standard MHC. “We want to be as flexible as we can,” Miller says. “We understand that tailoring loan aspects for these deals is incredibly important to getting them done.”

For communities that are not resident owned, Freddie Mac has also been a pioneer. Since late 2021, the agency has required certain tenant protections for all MHC transactions. These standards go above and beyond state and local requirements, protecting the residents of these communities.

“Affordable housing is our mission and our focus,” said Miller. “We’re interested in the full range of solutions that can make a meaningful difference in the lives of tenants, whether that’s through innovating offerings to support MHROCs, or industry-leading tenant protections.”

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More information about Freddie Mac’s MHROC offering is available at