Next Step® Affordable Housing Done Right Join. Engage. Deliver. This Presentation An introduction: 1. What we do. 2. How it works. 3. What are the qualifications to join in? 4. How much does it cost to start? 5. How much do we save and how? 6. What does this Network do for my nonprofit? 7. How do I get started? Building a National Network A New Delivery System for Factory Built Housing Factory Built Housing 101 Mobile Home A residential structure manufactured prior to the enactment of the Federal Manufactured Housing and Construction Standards, also known as the HUD Code, on June 15, 1976. Mobile homes are no longer being constructed. Manufactured Home Single family residential dwelling built in compliance with the Federal Manufactured Housing and Construction Standards, as amended, also known as the HUD Code, after June 15, 1976. Built in multi-sectional or single section units. Modular Home Homes built to the state Code where the home will be located. Sectional units are built in a production facility, transported to the site and assembled. What do practitioners need to know? Manufactured Housing is the largest unsubsidized affordable housing stock in the US 8.6 M Manufactured Housing “homeowners” Serving families with an average income of $29,000 (around 50% of AMI) About 2.9 M own homes, but rent the land under them in 50,000 MH Communities High density, low impact development and efficient production Subsidized Housing 2.5 M LIHTC 2 M Section 8 Vouchers 1.2 M Public Housing Units Total: 5.7 M What is possible? Capacity to convert or preserve 500 investor owned Manufactured Housing communities per year Development of 10-20 thousand new units per year by NPOs using MH Replacement of 20 thousand dilapidated units with new homes per year Retail mortgage volume $1.5 billion per year facilitated by I’M HOME Partners What is possible? The transformation of the lives of 17 million people living in Manufactured Housing Self-Determination: owning the land under their homes Security: the same protections offered to all homeowners Quality of Life: living in safe, sound, efficient homes Upward Mobility: improved prospects for entering the middle class Our Mission Our mission is putting sustainable homeownership within reach of everyone, while transforming the manufactured housing industry one home at a time. Next Step Homes Next Step worked with Manufacturers to develop a special line of homes, sold exclusively to Network Members at wholesale prices. While maintaining the efficiencies of construction in a home building facility, we give you flexibility by providing both manufactured and modular versions of most homes and customization for thermal and wind requirements. Floor plans and exterior styles that fit lifestyles across the US are available. Unveiling a Solution Next Step has teamed up with Clayton Homes and Kit Homebuilders West to create and distribute an innovative and special line of manufactured, modular and multi-family homes to meet the specific requirements of nonprofit housing providers and the customers they serve. Solution: A Scaled Market Strategy We have developed performance standards to ensure quality, not only for the homes, but for the entire home buying and placement experience. We call it – Affordable Housing Done Right Next Step® - How it Works Once trained and certified, Network Members Will use the Next Step® System to market homes, find and prepare homebuyers, sell and then order homes from approved Clayton home building facilities. Next Step will monitor ordering and assist the member in preparing for delivery. The Network Member will complete the homes following Next Step specifications for turnkey completion. Next Step will also coordinate warranty work between the factory and Network Member. Affordable Housing Done Right The Next Step System This System for doing business includes: 1. Homebuyers who are prepared and supported through certified homebuyer education programs; 2. Quality, ENERGY STAR homes on FHA Title II permanent foundations; 3. Life-cycle pricing that is transparent to the nonprofit and ultimately to the customer; 4. Sustainable financing: mortgages with fair terms that enable families to earn wealth or preserve assets; and, 5. “A Home is a Home” policy commitment advocating that owners of manufactured homes have the same rights as owners of site-built homes. Theory of Change Through proven experience and collaboration, we believe that when a home is done right every single time – on the right foundation, providing comprehensive homebuyer support and with the right financing – we can create an opportunity for systemic change. At Next Step, we believe: A manufactured home designed to balance quality with affordability, built to ENERGY STAR standards and placed on an FHA Title II Permanent Foundation is central to the appreciation of factory built housing values. Access to fair, fixed-rate home financing is essential to healthy housing markets and the capacity to build wealth through homeownership. Replacing pre-HUD Code mobile homes with ENERGY STAR homes can significantly drive down the cost of home ownership and reduce energy use. Scaling Strategy Our scaling strategy combines leveraging the power of business for good with building a high performing Network to deliver better homes. To effectively scale our program, we have… Developed a line of carefully engineered, ENERGY STAR certified homes to increase affordability and homeownership success. Engaged with key partners to achieve greater impact to advance the use of factory built housing as an asset-building strategy for lower income Americans. Developed a set of principles for doing business called the Next Step System. Network Members To qualify as a Network Member, nonprofits must demonstrate the following capacities: Operational Financial Marketing Sales Homebuyer Preparation Loan Underwriting Development Network Members Network Member Roles Licensing approvals (retailer, developer & lender). Construct homes with a permanent foundation. Ensure that all homes will have mortgages. Follow Next Step specifications and plans. Comply with Next Step inspections (minimum 20% of units) as a condition of continued participation in the program. Ensure that all homebuyers complete a homebuyer education program. Network Member Approval Process for approving a Network Member – 1. Next Step approval process. 2. NeighborWorks® Organizational Assessment Division assessment. 3. Clayton Homes approval. The current Network Member contract process will be changing in the near future. Updates will be provided as soon as they are available. Our Network Members Our Pipeline Members Retailer/Developer Licensing in Your State Your nonprofit must be willing to certify and license to sell and develop with factory built homes; manufactured housing or modular single- or multi-family. Most states require a license to sell manufactured housing. Next Step is reviewing each state and preparing summaries of the agencies involved and their jurisdictions to help you get started. Decommissioning Process Decommissioning is required with all mobile homes that were built during and prior to 1976, before the HUD Code established higher safety standards. It is strongly recommended that decommissioning of units built after 1976 be a decision made by the developer. Structure Foundation Mechanical Health & Safety Aluminum Exterior Side Walls Arched Roof Dry-Stacked Piers resting on soil (no concrete) Poor Energy Efficiency Improper Ventilation Improper Wiring Substandard Conditions Poor Building Materials Replacement Strategy What does this replacement program mean for my local community? You will be removing and destroying the worst housing blighting your communities; your rural areas. You can improve health and safety issues for your families for a mortgage payment which may be less than the utilities bill paid for the old home. You can provide an ENERGY STAR solution that benefits everyone in your community by eliminating the worst energy violators on the grid. How Much Does it Cost to Start? There is no fee for your organization to join the Next Step® Network. 1. You can anticipate staff time devoted to learning the Next Step System and attending our training in person or online. 2. There may be costs associated with certification or licensing in your state to sell and/or develop with factory built homes. Can this program be sustainable for my nonprofit? The short answer is that the entire System and Network is designed to support sustainability for both the homebuyer and the nonprofit organization. Next Step staff will be glad to discuss with you the specific factors in your business model. We have financial models developed to help you assess the breakeven point for this program. Next Step® Homes Savings Because of the Next Step relationship and the Network buying power; Network Members can buy homes at wholesale prices. This allows a margin in the sale price that Network Member nonprofits can chose to use as a mark up on the price of the home. What other savings can we expect? This type of construction process is: More predictable. Less susceptible to weather delays. Faster. Requires significantly less construction management by your staff. This potential for a quicker cycle time equals shorter carrying costs. Factory Built Options Single Family Manufactured & Modular Options ENERGY STAR Qualified High Quality Construction Affordable Price Points Wholesale & Transparent Pricing Factory Built Options Multi-Family Modular Options Custom Multi-Family Construction Available. Tax Credit Projects. ENERGY STAR Qualified Construction. Green Building Construction Techniques. Important Details Standard Features Base Options 2 x 6 Exterior Walls-2 x 4 Interior Walls R-22 Floor Insulation R-19 Wall Insulation R-40 Ceiling Insulation ENERGY STAR Rated Standard Features Base Options – Solid Wood Cabinetry ENERGY STAR Appliances Formica Counters w/ Ceramic Backsplash Drywall Throughout 25 oz. Carpet Vinyl Flooring Clayton Options & Upgrades Upgrade Options Appliance Packages o White & Black Dream Kitchen o Clean & Stainless Steel Cabinet Options o Cherry, Mahogany Composite Decking Custom Built-Ins Composite Decking Exterior Facades o Crane Board, Shakes, Hardi-Plank Many more options available upon request … Next Step Homes Pricing The prices shown on the following slides will be examples only based on the home styles and floor plans built by the Network in the Appalachian region during the last five years. Over 50 homes have been built and sold. All costs and prices will be transparent to the Network Members and to your homebuyers. We will guide the establishment of a relationship with the nearest appropriate home building facility and provide current pricing for homes, options and upgrades. After an order is placed the factory representative will provide a written confirmation of the price of the specific home ordered prior to construction. Note: Prices are subject to change Next Step® Homes Pricing What is included in the invoice price? This depends on whether the home is modular or manufactured. Manufactured homes Modular homes What other costs can we expect? Land Permits Site preparation Footings and foundation Water, sewer and utilities Transport of the unit to the site Installation and finish The prices on the following slides are for manufactured homes in the Appalachian region. Next Step Homes The Brookdale – 3BR, 2Bath, 1,159 sq. ft. $49,000 Next Step Homes The Bel-Air – 3BR, 2 Bath, 1,264 sq. ft. $51,500 Next Step Homes The Stacey II - 3BR, 2Bath, 1,264 sq. ft. $56,800 Next Step Homes The Cottage - 3BR, 2Bath, 1,396 sq. ft., $59,700 Next Step Homes The Aspen – 4BR, 2 Bath, 1,580 sq. ft. $60,800 Next Step Homes The Wilson – 3BR, 2Bath, 1,580 sq. ft. $63,900 Next Step Homes The Discovery – 3BR, 2Bath, 960 sq. ft. $34,500 Next Step Homes The Discovery – 3BR, 2Bath, 960 sq. ft. $34,500 Optional Clayton Plans Other Options… i-house claytonihouse.com e-home claytonehome.com Coming Soon – Mod 2.0e . . . Home Building Facilities Financing for the Family These homes have specific design specifications that exceed ENERGY STAR standards and meet the criteria of the following: U.S. Department of Housing and Urban Development; U.S. Department of Agriculture Rural Development; Kentucky Housing Corporation’s Universal and Minimum Design; and Fannie Mae MH Select™ Financing for the Family? How do you make financing work for the homebuyer? Rural Development 502 Direct Mortgage & 502 Guarantee. Local banks. Subsidies: o o o o o o o o USDA Housing Preservation Grant HOME State Trust Fund Federal Home Loan Bank NeighborWorks® America CFED I’M Home Institutional Donors; Service clubs, faith-based organizations. Rural Housing and Economic Development Grants What are the Advantages? Why should I implement this change? By participating in the Next Step® Network, nonprofits can serve more families by growing annual production, meeting their mission, employing local subcontractors and enhancing their financial sustainability. This addresses the core mission of creating greater access to affordable, quality housing and the impact it has on families’ health, education and economic opportunities through wealth creation. What are the Advantages? How do you build a home in 51 days? Thanksgiving, Christmas, the New Year and winter in Colorado didn’t slow down Community Resources and Housing Development Corporation of Alamosa, Colorado from completing their first Next Step modular home in only 51 calendar days – “in the time it took us to paint our office in two weeks, Ms. Gomez had a whole house built,” said Ty Coleman, CRHDC Corporate Program Coordinator. Employing Local Workforce We can train your local construction crews in a new building methodology, adding to their long term viability in the job market. Though it requires less hours per house; your local crews may be fully employed supplying more homes for your community. You can generate more business for your local suppliers as they provide needed materials for site development, landscaping and infrastructure for a larger volume of new homes. Clayton’s home office is in eastern Tennessee. The majority of home building facilities in the US employ a rural workforce to build homes. Evaluating the Benefits of Next Step To determine if your organization would benefit by becoming a Network Member, nonprofits may chose to evaluate: The potential market in your service area for various factory built options. How using factory built housing could increase your operational capacity. What financial tools and programs are available. How this line of business may compliment your operational capacities. What will it take to breakeven using this new method of providing homes? How Next Step may help you to meet your mission. Next Step is glad to provide information specific to your region to help with this evaluation process. Next Step’s Experience & Brand Delivering Value Network Members will be supported by experienced factory built housing experts and developers who understand the unique nonprofit business model, yet can also “speak the factory language.” By participating in the Next Step Network, Members can serve more families by growing annual production, meeting their mission, employing local subcontractors and enhancing their financial sustainability. Homebuyers will have access to high quality, ENERGY STAR homes on permanent foundations. They will receive quality homebuyer education and will be prepared and supported by a Network that has homebuyer success as their mission. They will be qualified for sustainable loans with special terms and assistance at a price they can afford. Getting Started with Next Step Is Next Step right for you? What tools will help your nonprofit decide? Getting Started Joining the Next Step® Network - Application. There is no cost for your organization to join the Next Step Network. We have contracted with NeighborWorks® OAD to provide organizational assessments as part of the application process. We will work with you as you place your first orders and ensure a smooth process from the factory to the final installation. Our success is measured by your success, and ultimately by the success of the homeowners. The Next Steps Contact Information For further information contact: Amy Barnard, Marketing & Operations Specialist firstname.lastname@example.org 865.585.2369 (m), 865.377.3382 Stacey Epperson, President & CEO email@example.com 606.776.0953 (m), 502.992.9424 x 123 Disclaimer This summary is intended to provide an introduction to nonprofits seeking to obtain a certification to sell and install factory built homes. This summary is not comprehensive. It outlines the types of certifications and regulatory processes required to work in the manufactured housing industry, but does NOT address the specific laws or regulations regarding the transportation, installation or servicing of manufactured homes. Next Step™ is providing baseline information to assist those who want to recycle or demolish uninhabitable mobile homes. There are many federal, state and local regulations which may apply with respect to the appropriate, safe and legal method to complete these processes. Next Step™ does not warrant the information contained herein on a legal basis and would encourage the use of contractors who are properly registered and licensed with all of the appropriate agencies.