SmartMH: Educating Manufactured Homebuyers

Next Step is changing the market system of how manufactured homes are built, sold and financed, while preparing and supporting homebuyers.

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  • I am not an employee of BNY Mellon, or an immediate family member of a BNY Mellon employee
  • I am over 18 years of age
  • My organization is incorporated as a non-profit, for-profit, or hybrid organization, or I have a partner that is incorporated and could accept funds on my behalf
  • I have already piloted my initiative and have some initial evidence of impact
  • My organization is headquartered and creating impact in the United States


  • Woman

Where are you making a difference?

Next Step works nationwide, focusing on persistent poverty and underserved rural regions such as Appalachia, the Delta, the Colonias and Native Lands. In 2017, we launched SmartMH in Kentucky and are currently expanding the program to other Appalachian states, including Tennessee and North Carolina.

Focus Areas (required)

  • Business & Social Enterprise
  • Development & Prosperity
  • Environment & Sustainability

Date Started


Organization Type

  • nonprofit/NGO/citizen sector

Project Stage: Select the description below that best applies to your approach.

  • Growth (have moved past the very first activities; working towards the next level of expansion)


  • $250k - $500k

Website or social media URL(s) (optional)

Twitter URL

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1.Founding Story: Share a story about the "Aha!" moment that led the founder(s) to get started or the story of how you saw the potential for this to succeed.

The genesis of Next Step came out of a desire to make manufactured housing a practical, sustainable solution to the housing affordability crisis facing many rural Americans. Coming from Appalachia, I was frustrated when homeowners would ask for help with their deteriorating mobile homes. Homeowners often owed more on their home than it was worth and struggled to pay high utility bills. As I looked beyond my region, I grappled with the challenge of the two million mobile homes built before the HUD Code was established in 1976. These homes are scattered across rural America, particularly in persistent poverty and underserved regions, and I deemed it the worst housing stock in America. I posed the question: “What would it take to do it right?"

2. The Problem: What problem are you helping to solve?

Manufactured housing is home to 18 million Americans, two of three in rural areas. Eighty percent of buyers get chattel loans with higher fees and rates for low credit scores. Retailers offer financing and quick sales like buying a car, but only one in five are ready to buy. Buyers need a trusted advisor from the point of shopping online, where 92% start their search, to when they visit a retailer where limited information is available to them.

3. Your Solution: How are you planning to solve this problem? Share your specific approach.

Next Step works through national partners and policy makers to achieve systems change. Partnerships include the nation’s largest factory home builders and Freddie Mac. We influence change through standardization in the secondary market lending system and use strategies to empower homebuyers to become homeowners, including financial education and homeownership counseling, quality ENERGY STAR homes, and fair mortgages with consumer protections.

SmartMH Retailers refer home hopers not ready to buy to a national call center staffed by Next Step trained and certified counselors. When a home hoper calls 1-844-MHTODAY, the counselor triages based on credit and homebuyer readiness. There are three categories: Near Ready/Needs Education, Not Ready for 6 Months/Needs Counseling, and Not Ready for 12 Months/Needs Credit Repair. SmartMH Retailers are trained and incentivized to sell ENERGY STAR homes, allowing homeowners to save 30% on utility bills.

SmartMH Lenders offer fair mortgages compared to subprime, high-cost chattel loans. We advertise digitally to reach buyers before they visit a retailer, routing them to education and a fair lender before reaching an in-house subprime lender.

4. Example: Please walk us through a specific example of how your solution is working to solve the problem.

Crystal Welch is the first homebuyer to complete SmartMH education and counseling before purchasing an ENERGY STAR home. Crystal is an emergency dispatcher in Owingsville, Kentucky, and her public service income is modest. She had been renting an unhealthy home and was ready to buy a new home of her own. She visited Frontier Housing, a nonprofit in Morehead, Kentucky, where she received housing counseling and completed the SmartMH homebuyer education course on eHome America. She purchased land from Frontier and an ENERGY STAR manufactured home from local retailer, Clayton Homes of Grayson. Her housing counselor acted as her trusted advisor to help her navigate her purchase, including why she should buy an ENERGY STAR home. To finance her home, Crystal received a USDA mortgage from our partner, JustChoice Lending. Crystal is thrilled with her new healthy and energy-efficient home.

5a. Too many people in the U.S. have unmet needs for financial products and services. How is your work reaching a population(s) that is currently underserved? If it is not reaching an underserved population yet, how might it in the near future?

Subprime lenders serve homebuyers with very low credit scores and charge 10% or more interest with 35% cash down. If we can reach buyers first to increase their credit score, we can reduce the interest rate and downpayment. We must disrupt the market and reach home hopers while they are shopping online. We are testing digital advertising in California and Texas, and plan to launch a web platform that can navigate buyers to education, trusted advisors and partners offering better loans and homes.

5b. Please specify if the population you are reaching is underserved due to any of the following characteristics:

  • geography
  • socio-economic class

6. Marketplace: Who else is addressing the same problem? How does the proposed project differ from these approaches?

Unscrupulous for-profit credit repair companies work with clients paying upfront fees for credit building and debt management, while subprime lenders make risk-based loans for low credit scores. SmartMH is the alternative, and the only manufactured housing education and counseling program. Retailers sell homes based on a sales cycle time of 30 days, with in-house loans that fit this quick cycle. A traditional mortgage takes 120 days, so retailers are the gatekeeper for informing buyers of options unless Next Step reaches the buyer first or the retailer refers the buyer to education.

7. Impact: How has your project made a difference so far?

The SmartMH program benefits families as it delivers homebuyer education and counseling tailored to the manufactured housing market that helps consumers make informed choices, manage their finances and budget for homeownership. Since launching SmartMH in April 2017, 236 clients have called our 1-844-MHTODAY hotline and enrolled in the homebuyer support program. Currently 119 buyers are active in homebuyer education, housing counseling or credit counseling. We expect the numbers to more than double and are on track to serve 275 homebuyers through the SmartMH program this year. In addition, our retail network has made more than 4,000 referrals of unqualified homebuyers to housing counseling and education. We are increasing the call rate of those who decide to take the next step in seeking out our services. Repairing credit and preparing homebuyers requires commitment and hard work.

8a. Spread Strategies: Moving forward, what are the main strategies for scaling your impact?

Next Step is a scaled solution for delivering affordable homes. Our business plan details a five-year national roll-out. We are currently expanding from Kentucky into Tennessee and North Carolina. In 2019, we will expand to Texas, Mississippi and California, where we are already testing the market. Our call center has national presence and our education is online. We hire local market experts on contract to enroll and train retail stores. To rapidly scale, our ability to disrupt the market through technology innovations is critical to reach homebuyers online before they go to a retail store.

8b. If applicable, which of the following scaling strategies have you launched?

  • Organizational Growth
  • Large Scale Partnerships
  • Organizing Conferences
  • Trainings, Consultation
  • Lobbying, Policy Change
  • Industry Standards (labels, certification, awards, etc.)

9. Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

There is a $99 fee for the online homebuyer education course. Next Step earns a portion with the balance split between the counselor and online platform provider. We also earn membership fees from participating lenders, retailers and manufacturers. In addition, Next Step sells homes and manufacturers pay a royalty fee. We also provide consulting services, including a contract with Freddie Mac. We have a five-year sustainability plan. In 2017, our self-sufficiency ratio was 86% in earned revenue.

10. Team: What is the current composition of your team (types of roles, qualifications, full-time vs. part-time, board members, etc.), and how do you plan to evolve the team’s composition as the project grows?

Next Step has 13 team members, eight full time and five part-time, and plans to add three with growth. The leadership team has over 50 years’ experience in this housing industry and lending. Next Step's board of directors has 12 members with diverse backgrounds and expertise to support our mission. Next Step's advisory board, the SmartMH Task Force, has industry and lender partners. We also have 134 members who deliver quality ENERGY STAR homes, better loans and homebuyer education nationwide.

Help Us Support Diversity! Part 1 - Which of the following categories do you identify with? (optional)

  • White (for example: German, Irish, English, Italian, Polish, French)

Help Us Support Diversity! Part 2 - Do you identify as part of any of the following underrepresented communities? (optional)

  • No, I do not identify with an underrepresented community

How did you hear about this challenge?

  • Ashoka page or contact
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Attachments (3)

Clayton_NS Home Facts.pdf

Understand the facts, dispel the myths of manufactured homes.

Woody Family Story.pdf

The Woody family talks about homebuyer education and counseling being important to their homebuying process.

SmartMH Program Book - Digital-2.pdf

Outreach book for lenders and retailers to join the Next Step Network.


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