House Financial Services Committee Passes FHA Manufactured Housing Loan Modernization

Washington, DC - The House Committee on Financial Services today passed H.R. 2139, the FHA Manufactured Housing Loan Modernization Act of 2007, a measure to help thousands of potential homeowners across the country with Federal Home Administration (FHA) loans for manufactured housing.  The bill will modernize the FHA Title I Personal Property Manufactured Loan Program, to stem a decline from some 30,000 loans a year 10 years ago, to less than 2,000 loans a year in recent years.  Personal property loans are defined as financing for people who do not own the land, but leases the land on which the manufactured home is located. 

            "The FHA Manufactured Housing Loan Modernization Act of 2007 would fix the problems with the current FHA Title I loan program and increase the number of loans available to buyers of manufactured housing,” said Rep. Joe Donnelly (D-IN), the sponsor of the bill. “If we increase the number of people who are able to buy manufactured housing, we allow more Americans to achieve the dream of homeownership. I will continue working with the Financial Services Committee and Chairman Frank to get this bill to the House floor for a vote as soon as possible.”

             “We cannot have a serious discussion in this country about increasing homeownership without including manufactured housing,” said Congressman Frank.  “Manufactured Housing is an important element of our nation’s affordable housing formula, and gives people the ability to own a home that otherwise would be shut out.”

Specifically, the bill passed the House today will:

• Make FHA personal property manufactured home loans more acceptable to GNMA for securitization by providing a guarantee comparable to that for FHA single family loans, and eliminating the volume cap on the amount of loans FHA can guarantee for any lender
   
• Raise statutory loan limits for manufactured homes, manufactured home loans, and combined home and lot loans, to catch up with inflation over a decade in which such limits have not been raised.  Also indexes loan limits for inflation in the future.
   
• Authorize an upfront premium up to 2.25% of the loan amount and an annual premium of up to 1% of the loan amount.  However the bill limits such fees only to such minimum amounts as are necessary to keep the program in the black.
   
• Require HUD to revise its underwriting criteria for FHA personal property manufactured home loans to ensure that the program is financially sound.