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
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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).
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Construct homes with a permanent foundation.
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Ensure that all homes will have mortgages.
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Follow Next Step specifications and plans.
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Comply with Next Step inspections (minimum 20% of units)
as a condition of continued participation in the program.
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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.
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Structure
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Foundation
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Mechanical
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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
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ENERGY STAR Qualified
High Quality Construction
Affordable Price Points
Wholesale & Transparent Pricing
Factory Built Options
Multi-Family Modular Options 
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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
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R-22 Floor Insulation
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R-19 Wall Insulation
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R-40 Ceiling Insulation
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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 
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Appliance Packages
o
White & Black Dream Kitchen
o
Clean & Stainless Steel
Cabinet Options
o
Cherry, Mahogany
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Composite Decking
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Custom Built-Ins
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Composite Decking
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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?
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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.
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How using factory built housing could increase your operational capacity.
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What financial tools and programs are available.
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How this line of business may compliment your operational capacities.
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What will it take to breakeven using this new method of providing homes?
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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
a.barnard@nextstepus.org
865.585.2369 (m), 865.377.3382
Stacey Epperson, President & CEO
s.epperson@nextstepus.org
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.