1. © 2004 HFI On the Web Introduction to Manufactured Housing August 10, 2005

2. © 2004 HFI On the Web Before We Begin, Please… Put your phone on mute except when you want to ask a question Don’t put your phone on hold during the seminar Wait until the end of the seminar to print out the presentation THANK YOU!

3. © 2004 HFI On the Web Your Instructor Today Kelly Vespucci Senior Underwriting Consultant

4. © 2004 HFI On the Web Your Subject Matter Expert Virginia Mahoney Senior Risk Manager Single Family Business

5. © 2004 HFI On the Web Introduction & Definition of Manufactured Housing Review of Eligibility Parameters & Underwriting Requirements Examine new Appraisal Requirements Explore Title Issues and Lien Requirements Offer Servicing Guidance Objectives for this Session

6. © 2004 HFI On the Web Manufactured homes make up approximately.5 % of our total book of business Volumes have been low, however, we have seen a significant increase in the past 2 years Introduction & Definition

7. © 2004 HFI On the Web Mortgages secured by manufactured homes default at higher rates and have higher losses than mortgages secured by comparable site-built homes Our previous guidelines for manufactured housing allowed for mortgage characteristics that did not match the asset Introduction & Definition (continued)

8. © 2004 HFI On the Web Introduction & Definition (continued) Modifying our requirements and providing additional guidance for lenders will Reduce the likelihood of default Help ensure that borrowers have every opportunity to become and remain successful homeowners Fannie Mae remains committed to providing liquidity to this important segment of the housing market

9. © 2004 HFI On the Web Built on a permanent chassis and attached to a permanent foundation system Definition of Manufactured Housing

10. © 2004 HFI On the Web Built in compliance with Federal Manufactured Home Construction and Safety Standards - June 15, 1976 A one-family dwelling, legally classified as real property. The land must be owned as fee simple. Leasehold estates are not eligible. “On-Frame” modular homes built on a permanent chassis must meet the HUD Code to be eligible for delivery. Eligibility Parameters

11. © 2004 HFI On the Web Eligibility Parameters (continued) Multi-width may be located on an individual lot in a co-op, condo or PUD Single-width manufactured homes are eligible only if located in a co-op, condo, or PUD Project acceptance is required for cooperative or condominium PUD if a single-width manufactured home

12. © 2004 HFI On the Web Mortgage Eligibility General Eligibility Criteria is defined by Transaction Types & Loan-to-Value Ratios Purchase Refinance transactions Underwriting Fannie Mae’s automated underwriting system Desktop Underwriter® is required Borrowers with less-than-perfect credit are eligible under our Expanded Approval™ option in Desktop Underwriter (EA I/Eligible & EA II/Eligible only)

13. © 2004 HFI On the Web Mortgage Eligibility (continued) Pricing Adjustments: A one time price adjustment of 0.50% is required for each mortgage loan Deeper Mortgage Insurance Requirements Seasoning Requirement on land as equity Based on length of ownership Greater than 12 months Equal or Less than 12 months

14. © 2004 HFI On the Web Summary of Manuf Home Guidelines Up to 95% now permitted on Primary residences, Purchase & Limited Cash Out ONLY 35% MI coverage required with term > 20 up to 30 years Up to 95% now permitted on Primary residences, Purchase & Limited Cash Out ONLY Announcement 04-07 changes in RED below

15. © 2004 HFI On the Web Revised Appraisal Requirements Additional guidance on the selection of appraisers Adequate training & knowledge of manufactured housing Experience with property type and location Access to appropriate data sources Modifications to appraisal standards Continue to require market-based property valuations Sales comparison approach supported by a detailed cost approach

16. © 2004 HFI On the Web Revised Appraisal Requirements (continued) Enhanced appraisal reporting requirements with new Manufactured Home Appraisal Report Addendum (Form 1004C) Addendum reinforces existing valuation and reporting requirements Addendum also implements revised requirements New certifications by the appraiser

17. © 2004 HFI On the Web Revised Appraisal Requirements (continued) Sources of manufactured housing data N.A.D.A. Manufactured Housing Appraisal Guide Marshall & Swift Residential Cost Handbook Manufactured home dealer costs

18. © 2004 HFI On the Web Title Issues and Lien Requirements Overview Did not previously provide much guidance related to titling Previously, we required properties to be secured by a single lien on both the home and land Fannie Mae requires that manufactured housing loans be secured by a lien on real property

19. © 2004 HFI On the Web Title Issues & Lien Requirements (cont’d) Guidance on Fannie Mae’s website to assist lenders state-specific does not relieve lenders of responsibility for reps and warranties (Consult with your own legal counsel) available on www.efanniemae.comwww.efanniemae.com Legal requirements covered in Announcement 03-06 titling properties as real estate use of standard instruments that support characteristics of properties as real estate and specifies information that must be included on the security instrument (VIN #, Serial #, make model and size of unit) recorded affidavit from lender & borrower that home will be a permanent part of real property that secures the loan

20. © 2004 HFI On the Web Title Issues and Lien Requirements (continued) Link to Titling information Resources on www.efanniemae.com www.efanniemae.com http://www.efanniemae.com/singlefamily/mortgage_products/ manufactured_housing.jhtml

21. © 2004 HFI On the Web Clarifies existing servicing requirements & addresses issues unique to manufactured home mortgages Stresses the need for servicers to identify mortgages as manufactured homes on their internal systems & to notify Fannie Mae if the servicer discovers a mortgage not delivered with the Special Feature Code Specifies collateral documents to be retained by servicer Servicing Requirements

22. © 2004 HFI On the Web Servicing Requirements (continued) Addresses collection of personal property taxes if they are assessed Addresses loan modifications completed as part of loss mitigation efforts Requires the servicer to notify the attorney in advance of foreclosure and bankruptcy proceedings that a property is a manufactured home

23. © 2004 HFI On the Web Additional Resources Link to Titling Information Resources on www.efanniemae.comwww.efanniemae.com http://www.efanniemae.com/singlefamily/mortgage_products/m anufactured_housing.jhtml Announcement 03-06 Link to Manufactured Housing Appraisal Addendum http://www.efanniemae.com/singlefamily/pdf/1004c.pdf

24. © 2004 HFI On the Web Questions?