An Innovative Approach Pairs Tax Credits and Manufactured Homes

Nearly 50 affordable manufactured homes, known collectively as Dorsey Homes, are filling vacant lots around Petersburg’s Delectable Heights neighborhood. The development marks the first time Virginia Housing has supported the development of manufactured housing by allocating Low-Income Housing Tax Credits (LIHTC) to be used to finance construction. It also features a future opportunity for tenants to purchase their homes.

Manufactured housing, which refers to homes that are built in a factory and arrive on site needing only small finishing touches, is an excellent way to bring safe, affordable housing to communities across Virginia. The factory-based approach also requires fewer workers at individual sites, allowing skilled construction labor to support housing all over the region from one central manufacturing facility. Manufactured housing also comes with lower construction costs and shorter build times, largely because work in a factory is not subject to weather delays.

Virginia Housing was on hand for a recent ribbon cutting for Dorsey Homes. Nine of the units are tenant-occupied today, and the remaining 38 will be delivered soon. The homes, which include a mix of two-, three- and four-bedroom homes, were developed under the leadership of Equity Plus and Tom Heinemann, a development partner at MH Advisors.

The development team behind Dorsey Homes put forth considerable effort to make this first-of-its-kind endeavor a success, working with manufacturer Eagle River Homes, who produces manufactured homes on a large scale, to ensure that each unit meets Virginia Housing’s LIHTC eligibility requirements. Beyond pairing manufactured homes with LIHTC, Dorsey Homes has taken an additional innovative approach by using LIHTC to develop homes that tenants will have the opportunity to purchase in the future. Most LIHTC properties focus solely on rental units.

“The development team approached Virginia Housing with a unique plan to not only bring quality manufactured housing to help revitalize the Delectable Heights neighborhood but also allow rental units to be sold to tenants after the initial rental period,” said Virginia Housing Assistant Director of Tax Credit Programs Phil Cunningham.

The Dorsey Homes development required research, refinement and an ongoing commitment to seeing its unique elements through to the finish line. The result is an excellent model for pairing LIHTC with both manufactured housing and homeownership opportunity.

“Our team had not encountered this type of innovative approach to affordable housing before in the Commonwealth,” said Cunningham. “We’re so excited to have been part of working bringing this incredible idea to fruition and increasing affordable housing in this region of Virginia.”