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I'M HOME - Innovations in Manufactured Homes
request for proposals - spring 2007

Innovations in Manufactured Homes (I'M HOME) 2007

Introduction
Funding Goals
Selection Criteria
Award Parameters
Application & Selection Process
Application Timeline
Contact Information

Questions, Information & Technical Help

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Submit a Concept Paper

Introduction

Homeownership anchors asset building in the United States. For very low-income families, home equity accounts for 80% of household wealth. Yet, for many of the approximately 10 million American families living in manufactured housing, homeownership has not always fulfilled its traditional wealth-building promise. Despite the prevalence of MH and its importance as a source of affordable homeownership, there are problems in the sector that have undermined its ability to provide the same level of financial security and wealth-building opportunities offered by traditional, site-built homeownership. When combined with negative stereotypes about the homes and their occupants, many who choose this type of housing are treated, in effect, as second-class homeowners.

In 2005, CFED launched a multi-year, multi-million dollar initiative to address this situation, with generous support from the Ford Foundation, and in collaboration with a range of other partners including the Meredith Institute, NeighborWorks America, and the Opportunity Finance Network. The Innovations in Manufactured Homes (I'M HOME) initiative, building on CFED’s partnership with path-breaking organizations such as the New Hampshire Community Loan Fund, funds organizations to develop and implement products, programs, policy change efforts, or research that seek to address problems in the sector and to realize the potential of MH as a source of affordable, asset-building housing.

For 2007, organizations may apply for either of two categories of funding:

Implementation grants of up to $150,000 will be awarded to organizations whose proposals reflect mature initiatives ready to be implemented; and
Catalyst grants of up to $50,000 will be awarded to organizations that submit proposals for projects in earlier stages of development, and for feasibility studies, market research, or similar types of work. Recipients of catalyst grants whose projects advance may apply for future funding in either category.

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Funding Goals

CFED and its I’M HOME partners have generated evidence that manufactured homes can appreciate in value and represent an affordable, attractive housing option. Fulfilling this promise, however, requires MH that is well built and designed, transported and sited competently, situated on land that is either owned by the homeowner or where the homeowner has long-term secure tenure, financed responsibly and fairly, and well maintained. In today’s market, these conditions do not always apply, leading to increased financial risk for owners and feeding negative stereotypes.

I’M HOME seeks to address these issues by seeding innovative approaches and sharing the lessons learned with the broader housing field. The initiative has three central objectives:

To foster innovative, replicable products and approaches that illustrate the use of MH as an affordable housing and asset-building strategy;
To build a field of practitioners knowledgeable about this sector and how it impacts low-income families and communities; and
To lay the groundwork for a national policy discourse that takes into account the true costs and benefits of MH.

CFED and funded organizations collect evidence and data to draw lessons learned from the work. Successful applicants will join a peer group of organizations addressing MH as an affordable housing issue. Grantees will receive technical assistance in a peer group setting and be expected to share lessons learned with other organizations in the initiative.

The I’M HOME initiative focuses on four issues areas:

New and replacement development
Mortgage financing
Long term security for MH communities
Public policy

New and Replacement Development
Negative perceptions about manufactured homes and their residents seriously hinder efforts to demonstrate that the sector can provide attractive, appreciating and affordable housing. These perceptions are based both in reality – images of substandard homes that were constructed or sited poorly, or that were not maintained by the owners – and in lingering stereotypes of homes built before the federal HUD code.

I'M HOME seeks to partner with developers and others that plan to either replace dilapidated homes or create new housing using good-quality, affordable manufactured homes that are likely to appreciate in value. Examples of such projects include, though are not limited to:

Cost-effective replacement of older and/or substandard homes with high-quality new units;
Development of new, high-quality MH subdivisions; or
Scattered-site or infill development.

Successful proposals will:

Demonstrate the applicant’s experience developing affordable housing in general and/or manufactured housing specifically;
Describe construction, design, and/or financing features that make the homes likely to appreciate in value;
Address how the proposed development strategy can be replicated and/or taken to scale,
Evidence site control or likelihood of obtaining site control;
Demonstrate knowledge of zoning issues, if applicable, and likelihood of community acceptance; and
Make clear that the homeowners will have long-term security in the land (fee-simple ownership, condominiums, cooperatives, land trusts, or long-term lease agreements).

Mortgage Financing
Obtaining financing is an intimidating experience for most homebuyers. For buyers of MH, however, this is further complicated by the difficulty of obtaining conventional mortgage financing. Many buyers are forced to use higher cost chattel, or personal, financing. Not only is this financing costly, it is also more likely to contain predatory lending features. Mortgage financing, while more affordable and carrying with it consumer protections, is not available for manufactured housing at equivalent terms to site-built housing. Financial institutions, government sponsored enterprises (GSEs), and mortgage insurers share a historical reticence to providing mortgage financing for MH. When they do operate in the MH sector, they face underwriting challenges due to lack of reliable comparable values, experienced appraisers and resale options. Additional problems include constraints when units are titled as personal rather than real property, problems related to the quality of transportation and siting, owners’ lack of land control, and other issues.

I’M HOME seeks to partner with nonprofits, financial institutions, and others promoting creative strategies to address this issue. Examples of such initiatives include, though are not limited to:

Developing mortgage products for the purchase of new or used manufactured housing at terms comparable to products designed for site-built housing;
Developing mortgage products for refinancing and/or home-equity funds (for repair);
Developing local appraisal networks and/or creating a database of comparable values of MH to build the collateral confidence of lenders; or
Creating a database to track the performance of MH loans.

Successful proposals will:

Provide financing at terms comparable to products designed for site-built housing;
Help low-income families purchase or replace, repair, and ultimately sell their homes; and
Offer financing in ways that attract investment from the secondary market.

Long Term Security for Manufactured Housing Communities
Life is uncertain for owners of manufactured homes that are located in land-lease communities (“parks”), particularly in states where investor-owners are not required to give their tenants significant advance notice of sale. Owners of homes on rented land lack control over their own lives, face the possibility of relocation (moving MH units is costly and can damage the home), and cannot make investments in their home with the assurance that they will increase the value of their home by doing so. In addition, lack of long-term control of the land adds to the perceived risk for financial institutions, severely constraining financing options for owners of homes under these circumstances. Some investor-owned MH communities may also suffer from disinvestment (such as poorly maintained water and septic systems, roads, and other infrastructure), which undermines value appreciation and quality of life.

I’M HOME seeks to partner with organizations interested in addressing the ownership and financing of MH communities. Examples of such initiatives include, though are not limited to:

Loan products and/or organizing efforts that convert land-lease communities to residential ownership;
The acquisition and rehabilitation of communities by nonprofit organizations that provide long-term leases to homeowners; or
The establishment of community land trusts by/for MH owners.

Successful proposals will:

Indicate the organization’s familiarity with issues facing residents of MH communities;
Demonstrate a plan for organizing and/or acquiring communities, if applicable; and
Demonstrate expertise in community organizing, if applicable, and the ability to leverage sufficient financial resources to carry out proposed plan.

Public Policy
Public policy influences the ability of manufactured housing to hold its value over time and thus to serve as a vehicle of wealth creation. In different but important ways, public policy touches upon three central problems in the MH market: site control, access to fair financing, and quality control. Despite the fact that the production of HUD-code homes is regulated at the federal level, state and local policies also play a pivotal role in the MH ownership experience. Localities and states control zoning, titling, and consumer protections, for example, affecting where and how MH units are located, how they are appraised in comparison to site-built homes, and the recourse available to homebuyers when faced with poor service or construction. These factors, among others, help determine the extent to which a homebuyer can assume that their new purchase will appreciate.

I’M HOME seeks to partner with organizations working to address public policies that affect owners of manufactured homes. Eligible uses of funds include, but are not limited to:

Research, advocacy, and/or public education efforts aiming to increase understanding of current policy environments;
Research and/or advocacy campaigns seeking to achieve specific changes in state/local policy (including zoning, appraisal, and related topics); or
Advocacy campaigns focused on the development and implementation of stronger consumer protections.

Successful proposals will:

Describe the specific policy outcomes to be achieved;
Demonstrate familiarity with the public policy issues affecting owners of MH in their area;
Show a track record of experience in effecting policy change at similar levels to those in the proposal; and
Demonstrate how the local activities of the proposal may be translated in ways that can help advocates in other areas of the country.

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Selection Criteria

To qualify for consideration:

Proposals should focus on HUD-code manufactured housing rather than modular, panelized, or pre-fab housing.
Organizations will be required to match the I’M HOME award on at least a 1:1 basis from external sources. Loans or equity may not be used to fulfill this requirement.
Proposed projects must respond to a demonstrable need in the organization's target community.
Organizations should be experienced in the affordable housing arena. If proposing to develop housing, organizations should have a development track record. If proposing public policy work, organizations should have experience with policy research and/or advocacy.
Organizations must demonstrate familiarity with zoning ordinances for the site in question if they propose to develop housing.
Proposals must demonstrate how the proposed MH strategy fits within the organization's strategic priorities.
Applicants must demonstrate an orientation to sharing information and playing an active role in the learning network comprised of I’M HOME grantees and partners.

Additionally, the strongest proposals will:

Demonstrate organizational experience in the MH sector;
Reflect a strong grasp of the barriers to asset building for owners of MH and present innovative strategies in response to these challenges;
Set forth clear, measurable project goals and explain how these align with the goals of I'M HOME;
Articulate how I'M HOME funding would provide value added (particularly for projects already under way);
Show potential to leverage external funds beyond the required 1:1 match;
Address the ability of the product, program, policy change effort, or research to be replicated by other organizations and/or to inform the broader goals of I’M HOME; and
Include evidence of site control, if applicable, for development projects. (Lack of site control will not disqualify a proposal, but disbursement of funds will be contingent upon site control as applicable.)

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Award Parameters

I'M HOME will award “Implementation Grants,” up to a maximum of $150,000, to support the development and implementation activities of organizations that can demonstrate they are already knowledgeable about these issue areas. “Catalyst Grants” of up to $50,000 will be made in support of projects at a smaller scale or at a more preliminary stage. Funded organizations must match any I'M HOME investment through external funders on at least a 1:1 basis. These challenge grants are designed to provide incentives to bring new support to the applicant organizations for this work, so preexisting grant commitments, or equity or reserves held by the applicant, do not qualify as a match. Loans or recoverable grants do not qualify as matching sources of funds.

I'M HOME seeks to identify, test, and share innovations that improve the effectiveness and asset-building impact of MH strategies. In order to share local lessons learned with a broader audience on a national basis, outcomes and information resulting from the initiative may be used both by the grantee and by CFED. CFED will be advised in the selection of the awardees by an external Investment Committee, which includes representatives from the affordable housing sector, foundations, the MH industry, and financial institutions.

Funded organizations will join 2005 and 2006 grantees in participating in peer learning exchanges, including a gathering of grantees shortly after funding decisions are announced. CFED will also facilitate access to consultants with MH development expertise.

Grants will generally be structured with a one-year term, although exceptions will be made, as applicable, to meet the logical timeframe of the proposed scope of work. Funds will be disbursed to successful applicants in installments, generally 40% upon execution of grant agreements, 40% upon attainment of agreed-upon midpoint benchmarks, and 20% upon completion of project.

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Application & Selection Process

I'M HOME uses a two-step process for proposals. The first step is a concept paper, to be filled out and submitted online, outlining the proposed work. Organizations that submit promising concept papers will be invited to write a fuller, more detailed proposal that will be reviewed by the I’M HOME Investment Committee. The process may include a site visit by CFED staff before proposals are forwarded to the Investment Committee.

STEP ONE: THE CONCEPT PAPER
The concept paper form should be completed and submitted online. The form will ask for:

Organizational Description (up to 500 words):
- Brief overview of the organization’s mission and background, current structure, major programs, target market or service area, and any other relevant details; and
- Evidence of organization’s experience and capacity to carry out the proposed work.
Project Description (up to 1,000 words):
- Brief description of the project for which you are soliciting funding, including the market need or gap to be addressed, a preliminary timeline, and desired outcomes;
- Description of market to be served and evidence of market demand;
- Explanation of strategic “fit” of proposed MH initiative with the organizational mission; and
- Brief qualifications of key personnel to manage the initiative or project.
Project Cost (up to 250 words):
- Estimated total project costs and prospects for matching I’M HOME grant dollars on at least a 1:1 basis.

Note: Please prepare your answers ahead of time in a separate document, and then cut and paste the text into the online form. Please do not format your text, as all formatting (such as bullets, tables, etc.) will be lost when text is pasted into the online form.

The completed concept paper form must be submitted via the website by 5 p.m. PDT on April 13, 2007.

Applicants that submit promising concept papers will be invited on May 7, 2007 to submit full proposals.

STEP TWO: THE FULL PROPOSAL
Upon invitation, the eight- to 10-page (excluding financials and attachments) proposal, due by 5 p.m. PDT on June 8, 2007, should include:

Summary of the total funding request, with sources and amount of matching funds identified;
Detailed description of methodology for project implementation or program development;
Detailed work plan, performance benchmarks, and outcomes to be achieved;
Budget for uses of all funds, including I’M HOME investment and matching funds (Budget should include travel for two staff members to attend a two-day grantee retreat at commencement of the project);
Description of how the work of the proposal can inform the goals of the broader I’M HOME initiative;
Description of organizational capacity, including identification of key personnel, to conduct proposed development activities;
Most recent (YTD) organizational financial statements and most recent audited organizational financial statements;
Resumes of all key personnel; and
Evidence of 501(c)(3) status. If the applying organization is not a 501(c)(3) non-profit, it may apply if it can demonstrate a charitable purpose for the funds (see Frequently Asked Questions for more information).

In addition, proposals for implementation grants should include:

Presentation of existing market research, analysis and strategy;
Outline of marketing/communications plan to disseminate lessons learned;
Audited financial statements for the preceding three years; and
Current organizational strategic plan with a description of how the proposed work fits into this plan.

CFED may conduct site visits to organizations proposing implementation grants. Funding decisions will be announced in September 2007.

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Application Timeline

April 13, 2007, 5 p.m. PDT       Deadline for submission of concept papers

May 7, 2007                             Invitation for full proposals from selected applicants

June 8, 2007, 5 p.m. PDT          Deadline for submission of full proposals

September 2007                        Announcement of funding decision

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Contact Information

The concept paper form should be completed online at www.cfed.org/go/imhome/cp.

E-mail confirmations will be sent upon receipt of concept papers. If you do not receive confirmation within two business days, please contact us.

Questions concerning the I'M HOME initiative should be sent via e-mail to imhome@cfed.org.

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