Chase Financial Corp., Cleveland, has entered into an agreement with Transamerica Commercial Finance Corp. to provide financing for manufactured housing to retailers.
The two-pronged product will provide dealers with capital to purchase the homes through the Chicago-based Transamerica unit, and provide retail financing for homebuyers through Chase.
Some of the elements for the alliance include incentives for retail contracts and customized wholesale programs.
The agreement allows Chase to enroll new dealers in its manufactured housing finance network, bringing the number to 1,000 from 650.
Relationships with manufactured home dealers are said to be key to originating these loans on the retail side.
"To be a player in the manufactured home finance arena, you need to be able to offer retailers all the tools they need to do business," said Richard Strickler, vice president of Transamerica's Home and Recreational Products group in a written statement. "This new alliance gives us that added dimension."
Dwaine Rhea, executive vice president at Chase Financial, adds that the alliance will give manufactured home dealers a "convenient and profitable way to do business".
Chase is one of the top five lenders to manufactured homeowners, along with Green Tree Financial Corp. and Bank of America.
Chase has been providing financing for manufactured homes since 1978, but it began an intense focus on the product two years ago, said Rhea.
Manufactured housing financing has been an "exciting growth business" for Chase since 1994, and the new alliance should help push Chase's manufactured home loan originations to "the next tier," he said.
Chase will also continue to add facilities, space, and employees to its three manufactured home loan origination centers in Winston-Salem, N.C., Houston, and Atlanta, he said.
"It's been an exciting five years for manufactured housing, and we think it's just going to continue," said Mr. Rhea.
Still, customer delinquencies on manufactured home loans rose slightly in 1995 to 2.5%, from 2.3% a year earlier, according to a Manufactured Housing Institute survey. Despite the survey's findings, Rhea said he likes the credit quality of the manufactured housing customers.
Manufactured-home lending has been rapidly expanding as the product becomes more widely accepted. According to the survey, the retail market for manufactured housing has increased at an average rate of 26.5% since 1991. Because of this growth, securitization of these loans has become more popular.
Last year, the 233 financial institutions in the survey reported a total of $30.37 billion in manufactured home loans outstanding.