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?

Through local partners, we improve housing, replace mobile homes and strengthen communities, particularly in rural regions such as Appalachia, the Delta, the Colonias and Native Lands. In 2017, we launched SmartMH homebuyer education in Kentucky and are expanding into 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

Facebook URL

LinkedIn URL

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.

Next Step came from a desire to make manufactured housing a sustainable solution to the housing affordability crisis facing rural Americans. Coming from Appalachia, I was frustrated when homeowners asked for help with their aging mobile homes, often owing more on their home than it was worth and struggling to pay utility bills. As I looked beyond Appalachia, I grappled with the challenge of millions of old mobile homes. I asked: “What would it take to do it right?" The answer was to prepare homebuyers with education so they could qualify for better financing, allowing them to afford higher-quality homes. Access to fair mortgages is a path to wealth creation, which means the family and home need to be on the “right foundation” to qualify.

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

Manufactured housing is home to 22 million Americans, two of three in rural areas. Despite its affordability, 80% of buyers get chattel loans with higher fees and rates for low credit scores. Retailers offer financing and quick sales. With only one in five ready to buy, shoppers need a trusted advisor as they begin their home purchase journey. When a home is done right, with support and counseling for a fair loan, the family builds wealth.

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

We train and support a network of nonprofits, industry partners, and lenders committed to consumer education, providing better loans and homes. Because only 20% of shoppers become homeowners, we partnered with Freddie Mac and eHome America to launch SmartMH, where retailers refer shoppers not ready to buy to a call center staffed by trained and certified counselors. Counselors triage based on homebuyer readiness and credit scores. Each shopper receives an individual counseling plan and is referred to online education when they are ready to buy. By 2020, we will educate 2,000 homebuyers. We are building capacity to educate the 400,000 who are seeking to buy a home. We advertise online to navigate shoppers to counseling before committing to a high-cost loan. We source education and partners so a buyer knows the pitfalls of buying and financing a home. Our lenders offer mortgages with market terms, saving buyers thousands in interest. We work to increase access to ENERGY STAR homes, saving homeowners 30% on utilities. By 2020, our goal is to increase national ENERGY STAR home production from 11% to 15%. We teach homebuyers and retailers the benefits of ENERGY STAR homes.

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 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 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 a local retailer. 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 loan from our partner, JustChoice Lending. Crystal is thrilled with her new healthy and energy-efficient home, saving $200 monthly in utilities and interest.

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?

Chattel lenders serve homebuyers with very low credit scores and may charge 10% or more interest with 35% cash down. These are risk-based loans, so lower credit scores have higher interest rates and downpayments. If we can reach buyers first to increase their credit score, we can improve their loan terms. Our strategy is to reach consumers early in their decision making to help them avoid pitfalls and navigate them to all their purchase and financing options, including a downpayment program.

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, and some lenders have loans to fit this quick cycle. A traditional mortgage takes 120 days, so it is critical that counselors support buyers and encourage them to slow down and make long-term decisions that have rewards for proper due diligence.

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

We have impacted 5,362 individuals with provide better homes and loans for prepared and supported buyers. Our success is our homeowners’ success, thus building stronger communities. Impact is measured by numbers of counseled home buyers, trained partners, ENERGY STAR homes, and American jobs, mostly in rural areas. It also includes improved credit and loan performance, saved loan interest and energy, and reduced carbon. Our researcher, SBRA, tests our homes’ energy performance, which lowers monthly housing costs by $200-300 and saves homeowners $5M on utilities. In 14 months, SmartMH has served 264 clients who have called our hotline and enrolled in the homebuyer support program. We are on track to serve 275 this year and 475 next year. In addition, our retail network is making 1,000 referrals each month. We have graduated 12 buyers ready to prequalify for a SmartMH loan to buy a home.

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

The manufactured housing industry sells 93,000 homes with 10% annual growth, helping meet the gap of 430,000 affordable homes. We are certifying counselors to support this growing market. Today our call center deploys online education 24/7. We are expanding lender, retailer, and counseling networks from Kentucky to Tennessee and North Carolina. In 2019, we will expand to Texas, Mississippi, Oregon and California. By 2023, our counselor network will be national. Risk is deregulation of the national finance system, not requiring Freddie Mac to invest in manufactured housing and rural markets.

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. Freddie Mac provides vouchers and support with no cost for consumers. Next Step shares the fee with partners. We earn membership fees from participating lenders, retailers, nonprofits and manufacturers. In addition, Next Step’s for-profit subsidiary sells homes for a royalty fee and charges consulting rates to developers. Our programs require fee-for-service, and we earn 80% of our income.

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 185 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)

  • Low-income community

How did you hear about this challenge?

  • Ashoka page or contact

Organization name

Next Step Network, Inc.

Program Design Clarity

SmartMH counselors help buyers budget, save for downpayment, improve credit, qualify for loans, and learn about the homebuying process. Counselors spend at least 8 hours helping the buyer. After working with a counselor, buyers take an online 4-hour homebuyer education course and counselors track their progress. Then, they work with a Next Step lender to prequalify for a good loan, and at that point, are prepared to buy an energy-efficient home from approved retailers. Counselors teach buyers about home maintenance and budgeting post purchase to ensure long-term homeownership success.

Approach to financial wellbeing: does your project focus on creating financial wellbeing through innovating on any of the following?

  • credit
  • education / literacy
  • loans
  • payment
  • saving

Innovation type: Please select which of the following types of innovation best characterize your work

  • Product innovation (Introduction of a good or service or improvements made to existing products)
  • Other

If you marked "Other" in the question above, please specify:

Improve lending ecosystem through secondary market standardization and lender competition. We change policy and remove unfair harmful stereotypes.

Partnerships in detail: tell us about your partnerships that enhance your approach.

Our SmartMH partners include Freddie Mac and eHome America. Regional and local partners include Next Step’s network of 185 manufactured housing retailers, factories, lenders, housing counselors, nonprofits, and the nation’s largest factory-built home manufacturers, Clayton Homes, Champion Homes and Cavco. Our cross-sector approach is inclusive of like-minded nonprofits and industry working together, leading to a more robust and sustainable network.

If you won the Unlocking ₵hange Challenge, how would you invest the prize money of $50,000?

Next Step would invest in the following: • Training and supporting more counselors in expansion states. • Training retailers on new loan products and downpayment programs. • Paying for digital advertising to refer borrowers to education and counseling services. • Storytelling homebuyer success.

Awards & Recognitions: What awards or recognitions has the project received?

The U.S. Environmental Protection Agency 2017 ENERGY STAR® Certified Homes Market Leader Award.

Evaluation results

3 evaluations so far

1. Overall, would you champion this entry as a excellent example to move forward to the next phase of the challenge and become a semifinalist?

Yes, absolutely! - 33.3%

Yes/maybe - 33.3%

Maybe - 33.3%

Maybe/no - 0%

No - 0%

2. Is this entry INNOVATIVE?

Yes, absolutely! - 66.7%

Yes/maybe - 0%

Maybe - 33.3%

Maybe/no - 0%

No - 0%

3. Is this entry IMPACTFUL on financial wellbeing?

Yes, absolutely! - 66.7%

Yes/maybe - 0%

Maybe - 33.3%

Maybe/no - 0%

No - 0%

4. Is this entry SUSTAINABLE?

Yes, absolutely! - 33.3%

Yes/maybe - 33.3%

Maybe - 0%

Maybe/no - 33.3%

No - 0%

5. What are some of the HIGHLIGHTS of strengths of this entry?

Connection to underserved community - 100%

Clarity of Model - 0%

Clarity of Writing - 50%

Idea Originality - 50%

Understanding of the marketplace or sector - 100%

Impact measurement - 50%

Impact Potential - 50%

Financial Sustainability - 50%

Team - 0%

Partnerships - 0%

Potential to scale - 0%

6. What are some of the areas for IMPROVEMENT of this entry?

Connection to underserved community - 0%

Clarity of Model - 100%

Clarity of Writing - 0%

Idea Originality - 0%

Understanding of the marketplace or sector - 0%

Impact measurement - 100%

Impact Potential - 0%

Financial Sustainability - 0%

Team - 0%

Partnerships - 0%

Potential to scale - 0%

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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.


Join the conversation:

Photo of Brittany Corner

Great work with an underserved and often overlooked community.

Photo of Stacey Epperson

Thank you Brittany Corner!