“This move to make mortgage payments lower has merit, but the real problem is income,” Gelbman said. “How is it that the federal minimum wage is still at $7.25? A recent study came out that states that for a single person to be able to live, eat, and pay rent, the minimum annual income needs to be in the $47,000 range. Of course, this will vary depending on what part of the country you live in.”
He also suggested manufactured houses can be a solution for affordable housing, especially for first-time buyers. However, it can sometimes be a challenge to get neighborhoods to accept this type of housing, as it has historically been viewed negatively.
“The use of new manufactured homes is a good way to lower the entrance price point,” he said. “But the widespread use butts up against zoning restrictions in most cities. When you mention manufactured homes, all you hear is, ‘Not in my backyard.’ We are not talking about your grandfather’s mobile homes, either.”
Condos as affordable housing
In many areas, condominiums are the affordable housing option for locals. However, deferred maintenance and limited lending options have kept many borrowers from choosing that option.
“Since FHA changed its approval process some years ago and went from a permanent approval, like VA, to an approval that must be updated every few years, there are fewer and fewer FHA-approved condos, where first-time buyers may have a better chance of ownership,” Gelbman said.