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44 WHAT AILS MANUFACTURED HOUSING? In an effort to combat a shrinking affordable housing stock, Fannie Mae's Duty to Serve initiative is developing solutions including manufactured housing, affordable housing preservation, and rural housing. According to Fannie Mae, the initiative is looking at new ways to consider Manufactured Housing Communities (MHCs), as a reliable source of affordable housing for homeowners and renters in suburban and rural locations across the country. According to Jose Villareal, Manager, Multifamily MHC Housing Development at Fannie Mae, the Duty to Serve plan includes new strategies to support non-traditional owners of MHCs. Residents of MHCs make up 80% of Area Median Income (AMI) or less, and with land values rising in many suburban areas, MHCs have begun to consider selling. e problem is, when sold, these MHCs are often converted into traditional apartments, reducing the number of affordable housing options. "e problem worsens in rural areas where MHCs are older and in need of upgrades – reinvestment in the properties that owners are often reluctant to finance," said Villareal in a statement. "Non-traditional and non-profit ownership structures are a useful option, which allows non-profits to purchase and preserve MHCs and with a stronger incentive to complete necessary repairs in rural communities," Villareal added. Additionally, Fannie Mae is testing a product enhancement specifically for resident-owned communities, as well as non- profit communities. Part of Fannie Mae's product enhancements include guaranty fee discount of 7.5 basis points and a servicing fee discount of 7.5 basis points for non- profit owners, including up to $10,000 in reimbursement for third-party reports such as appraisals and environmental assessments. Resident-owned communities, Fannie Mae notes, provide stability other other options cannot, as homeowners have more of an opportunity to better manage and control MHC costs. "Fannie Mae has been a leading source of liquidity for manufactured housing transactions since 2000," Villareal said. "As part of our Duty to Serve plan, we are continuing to develop new strategies to support manufactured housing communities and the people who live there." HOUSING'S IMPACT ON ECONOMIC GROWTH A new report from CoreLogic examines how housing has played a part in what is now the longest economic expansion on record. e special report, titled "e Role of Housing in the Longest Economic Expansion," indicated that in July 2019, the United States' economic expansion reached 121 months. e economy has continued to grow since the recession ended in 2009, and with housing comprising approximately 15% of GDP since 2010, the real estate market is an important indicator of economic health. "During the last nine years, the expansion has created more than 20 million jobs, raised family incomes, and rebuilt consumer confidence," said Frank Nothaft, Chief Economist, CoreLogic. "e longest stretch of mortgage rates below 5% in more than 60 years has supplemented these factors. ese economic forces have driven a recovery in home sales, construction, prices, and home equity wealth." In Q1 2019, the total percent of homes underwater went to 4.1% from 25.9% in Q1 2010. Meanwhile, home equity reached $15.8 trillion up from $6.1 trillion during the same period. Additionally, the report notes that home flipping has increased significantly since the recession, reaching its highest point of 11.4% in 2018. e biggest drop in the number of underwater homes occured between 2012 and 2013 when the share of homes with negative equity went from 22.4% to 15.5%. is was driven in part by a 10.2% rise in home prices, the report indicated. "Home prices have increased steadily since 2011, creating record amounts of home equity and putting homeowners in a good position to weather future downturns," said Molly Boesel, Principal Economist, CoreLogic. According to the report, concerns over an imminent recession have been rising as the economy continues to progress. In the housing economy, while home prices are still growing, they are doing so at a slower pace. Home prices increased just 3.6% year-over- year in May 2019, down from 4.1% in January. Additionally, housing starts in May 2019 underperformed, dropping 0.9% below the revised April estimate. "We expect the housing market to enter a normalcy phase over the next 24 months," said Ralph McLaughlin, Deputy Chief Economist, CoreLogic. "With prices neither rising too fast nor too slow, and with a growing stream of young households looking to buy homes over the next two decades, the long-term view looks healthy."

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