Rule2024-04138
Indexing Methodology for Title I Manufactured Home Loan Limits
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 28, 2024
Effective
March 29, 2024
Issuing agencies
Housing and Urban Development Department
Abstract
Section 2145 of the Housing and Economic Recovery Act of 2008 (HERA) amended the maximum loan limits for manufactured home loans insured under Title I of the National Housing Act and required regulations to implement future indexing of the loan limit amounts for manufactured homes originated under the Manufactured Home Loan program. This rule establishes indexing methodologies using data from the United States Census Bureau ("Census") to annually calculate the loan limits for Manufactured Home Loans, Manufactured Home Lot Loans, and Manufactured Home and Lot Combination Loans ("Combination Loans") insured under Title I of the National Housing Act for the Manufactured Home Loan program. This final rule adopts HUD's October 18, 2022, proposed rule with changes.
Full Text
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<title>Federal Register, Volume 89 Issue 40 (Wednesday, February 28, 2024)</title>
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[Federal Register Volume 89, Number 40 (Wednesday, February 28, 2024)]
[Rules and Regulations]
[Pages 14582-14588]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-04138]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 201
[Docket No. FR-6207-F-02]
RIN 2502-AJ52
Indexing Methodology for Title I Manufactured Home Loan Limits
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Department of Housing and Urban Development (HUD).
ACTION: Final rule.
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SUMMARY: Section 2145 of the Housing and Economic Recovery Act of 2008
(HERA) amended the maximum loan limits for manufactured home loans
insured under Title I of the National Housing Act and required
regulations to implement future indexing of the loan limit amounts for
manufactured homes originated under the Manufactured Home Loan program.
This rule establishes indexing methodologies using data from the United
States Census Bureau (``Census'') to annually calculate the loan limits
for Manufactured Home Loans, Manufactured Home Lot Loans, and
Manufactured Home and Lot Combination Loans (``Combination Loans'')
insured under Title I of the National Housing Act for the Manufactured
Home Loan program. This final rule adopts HUD's October 18, 2022,
proposed rule with changes.
DATES: Effective March 29, 2024.
FOR FURTHER INFORMATION CONTACT: Mary Jo Houton, Acting Director,
Department of Housing and Urban Development, 451 7th St. SW, Room 9266,
Washington, DC 20410-4000; telephone number 202-402-2378 (this is not a
toll-free number). HUD welcomes and is prepared to receive calls from
individuals who are deaf or hard of hearing, as well as individuals
with speech or communication disabilities. To learn more about how to
make an accessible telephone call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
SUPPLEMENTARY INFORMATION:
I. Background
Title I of the National Housing Act authorizes the Secretary of HUD
to insure, through the Federal Housing Administration (FHA), loans made
by FHA-approved lenders to eligible borrowers to finance property
improvement and purchase, or refinance, of a manufactured home, with or
without the lot. HUD insures these loans under HUD's Property
Improvement Loan program and HUD's Manufactured Home Loan program. FHA
insures the lender against loss if the borrower defaults. A Title I
Manufactured Home Loan may be used for the purchase or refinancing of a
manufactured home, a lot on which to place a manufactured home, or a
manufactured home and lot in combination. The manufactured home must be
used as the principal residence of the borrower. Applicable loan limits
and requirements are codified in 24 CFR part 201.
Section 2117 of HERA \1\ added the definition of real estate to
include all natural resources and structures permanently affixed to the
land, amended the maximum loan limits for manufactured home loans and
certain property improvement loans insured under Title I of the
National Housing Act, and required future changes to the amounts for
manufactured home loans to be made through regulation. HERA also
stipulated that the Secretary develop a metric that uses U.S. Census
Bureau (``Census'') data \2\ on manufactured home prices to calculate
an index for adjusting loan limits in the future.
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\1\ Public Law 110-289, section 2117, 122 Stat. 2654, 2844-45
(2008).
\2\ See generally, U.S. Commerce Department, Census Bureau data
on manufactured homes, available at: <a href="https://www.census.gov/programs-surveys/mhs.html">https://www.census.gov/programs-surveys/mhs.html</a>.
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In compliance with HERA, on March 3, 2009, HUD published Title I
Letter TI-480 \3\ notifying lenders of the new statutory loan limits.
HUD also noted in that Title I Letter the need for the Secretary to
develop an indexing method that would determine future loan limits. HUD
regulations still reflect the outdated, pre-HERA Loan Limits. Initially
after HERA's enactment, Census data showed a decline in home prices.
However, for compliance with HERA, HUD did not lower loan limits and
the limits were kept at the threshold set under HERA. The outdated Loan
Limits, and the 2008 Loan Limits currently in effect for manufactured
homes as described in the Title I letter are outlined below:
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\3\ ``Increased Maximum Loan Limits for Title I Manufactured
Home Loans,'' <a href="https://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/title1">https://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/title1</a>.
Table 1--Loan Limits Under HERA Compared to Pre-HERA Loan Limits
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Eligible loan name 2008 loan limit basis per
Title I loan program name for property type Loan limits prior to HERA HERA currently in effect
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Property Improvement Loan Manufactured Home $7,500....................... $25,090.
Program. Improvement Loan
for units
classified as
real estate.
Manufactured Home Loan Program. Manufactured Home $48,600...................... $69,678.
Loan (unit only).
Manufactured Home $16,200...................... $23,226.
Lot Loan (lot
only).
[[Page 14583]]
Manufactured Home $64,800 ($48,600 + $16,200).. $92,904 ($69,678 + $23,226).
and Lot
(Combination
Loan).
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II. The Proposed Rule
On October 18, 2022, as required by HERA, HUD published for public
comment a proposed rule (87 FR 63018) (``the proposed rule'') to update
the loan limits in Sec. 201.10 and to establish an index for which
future loan limits would be revised through notice. HUD also proposed
to amend the definition of ``manufactured home'' in Sec. 201.2 to
conform to the loan limit change. HUD proposed to index loan limits
based on sale prices, unit sizes, and property data collected by the
Census Bureau.
HUD proposed to establish separate indexing methodologies to
annually calculate future loan limits for manufactured home loans,
manufactured home lot loans, and manufactured home and lot combination
loans under the Manufactured Home Loan program.
HUD proposed to create a dual index based on purchase prices of
manufactured homes, which are collected by the US Census Bureau
(Census): an index for single-section manufactured homes using only
single-section home sale data and a separate index for multi-section
manufactured homes using only double-section home sale data.\4\
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\4\ For an example of the latest data according to Census, see
``MHS Latest Data,'' <a href="https://www.census.gov/data/tables/time-series/econ/mhs/latest-data.html">https://www.census.gov/data/tables/time-series/econ/mhs/latest-data.html</a>.
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HUD also proposed to adjust loan limits for single-section and
double or greater-section manufactured home loans annually based on
changes to indexes for the average price of single-section and double-
section manufactured homes, respectively. HUD proposed to set each loan
limit at the average price data for the most recent 12 months available
at the time HUD calculates the adjustment, weighted according to the
number of manufactured units shipped during that same period.
HUD also proposed creating an index for Manufactured Home Lot Loans
based on median home prices in Census's New Residential Sales data.\5\
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\5\ The New Residential Sales data come from Census's Survey of
Construction. More information can be found here: <a href="https://www.census.gov/construction/nrs/index.html">https://www.census.gov/construction/nrs/index.html</a>.
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Finally, HUD proposed that the loan limit for manufactured home and
lot Combination Loans would be determined by adding the manufactured
home lot loan limit to either the single- or double-section loan limit,
depending on the home.
III. This Final Rule
HUD adopts the proposed rule with changes to the indices and
changes to the regulatory text.
Changes to the Indexing Methodology
As further discussed in the public comment summary, HUD received
several comments suggesting that the loan limits set by the proposed
indexing methodology would be too low to accurately reflect current
manufactured housing prices and that, if adopted, the proposed indexing
methodology would frustrate the purpose of section 2145 of HERA which
is to make FHA housing programs more widely available for low-income
homebuyers.
In consideration of these comments, HUD has decided to adjust the
proposed indexing methodology to more accurately reflect real-world
manufactured housing costs, improving the viability of the Title I
Manufactured Housing program and fulfilling HERA's purpose of making
FHA housing programs available to more homebuyers.
In addition to using the average manufactured housing prices for
single- and multi-section homes, HUD will use two additional factors in
calculating the manufactured home loan limits. First, HUD will set loan
limits at 15% above the average home price according to the Census data
for the given type of loan. This is consistent with the initial loan
limits set by HERA, which were set to about 15% over the average
manufactured home price at the time. This is also consistent with how
HUD calculates loan limits under Title II, where FHA limits loans to
115% of the median home price.
Second, to account for the time between when the Manufactured
Housing Survey data was collected and when the limits will be
effective, HUD will utilize an inflation factor. To calculate this
inflation factor, HUD will use an inflation forecast such as the CPI-U
forecast in the President's Economic Assumptions \6\ to increase loan
limits to account for inflation that has occurred since the relevant
Census data were collected. This will address the maintenance or
increase of the sales price from year-to-year according to the Census
data and intends to more accurately represent current prices for
manufactured homes.
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\6\ Available at <a href="https://www.whitehouse.gov/omb/budget/mid-session-review/">https://www.whitehouse.gov/omb/budget/mid-session-review/</a>.
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HUD's updated indexing methodology is demonstrated in the below
chart:
Table 2--Proposed Index Methodologies for Title I Manufactured Home Loan
Limits
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Eligible loan types Proposed methodology/index
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1. Manufactured Home Loan (Home <bullet> For single-section homes,
only). the loan limit will be set each
year at 115% of the average single-
section home price with an
adjustment for inflation.
<bullet> For homes composed of two
or more sections (multi-section
homes), the loan limit will be set
each year at 115% of the average
double-section home price with an
adjustment for inflation.*
2. Manufactured Home Lot Loan (Lot Manufactured Home Lot Loan limit
only). established by HERA, indexed using
changes in the median new home
price.***
[[Page 14584]]
3. Manufactured Home and Lot Loan The indexed Manufactured Home Lot
(Combination Loan). Loan limit, plus the applicable
Manufactured Home Loan limit.
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* Utilizing single- and double-section price averages based on the most
recent data from the Manufactured Housing Survey from the Census
Bureau, adjusted for the effective year of the limit using an
inflation forecast (such as the CPI-U forecast in the President's
Economic Assumptions or similar replacement data set or report as may
be specified by the Secretary). See MHS Latest Data Average Sales
Price by Region and by Size of Home <a href="https://www2.census.gov/programs-surveys/mhs/tables/time-series/mhstabavgsls.xlsx">https://www2.census.gov/programs-surveys/mhs/tables/time-series/mhstabavgsls.xlsx</a>.
** Utilizing median new home price based on the most recent data from
the Survey of Construction from the Census Bureau. See Median and
Average Sales Price of Homes Sold <a href="https://www.census.gov/construction/nrs/xls/usprice_cust.xls">https://www.census.gov/construction/nrs/xls/usprice_cust.xls</a>.
HUD will make changes to the indexing methodology through notice
where HUD determines that revisions are necessary to enhance or
maintain the accuracy of the index. HUD anticipates any such change(s)
would likely be technical in nature, but if a change were more than
technical, HUD would provide notice to the public with the opportunity
for comment prior to changing the index.
Table 3 below shows examples of the loan limits, based on recent
data from Census.
Table 3--Example Loan Limits
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Loan limit Example 2024 loan limits
Description of property methodology Current limits (per HERA) (based on 2022 Census data)
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Single-section Manufactured Set to average of $69,678...................... $106,405.
Home (unit only). 115% of single-
section home
prices. Note 1.
Multi-section Manufactured Home Set to 115% of $69,678...................... $195,322.
(unit only). average double-
section home
prices. Note 1.
Manufactured Home Lot (lot Set to median $23,226...................... $43,377.
only). sales price for
new single-family
homes. Note 2.
Single-section Manufactured Limit for Single- $92,904 (69,678 + 23,226).... $149,782 (106,405 + 43,377).
Home and Lot (Combination Section + Limit
Loan). for Lot Loan.
Multi-section Manufactured Home Limit for Multi- $92,904 (69,678 + 23,226).... $238,699 (195,322 + 43,377).
and Lot (Combination Loan). Section + Limit
for Lot Loan.
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Table 3 Notes:
1. Indexing to occur at the beginning of each year, based on the weighted average price data for the most recent
12 months available from the Manufactured Housing Survey.
2. Indexing to occur at the beginning of each year, based on the median sales price of the most recent 12 months
available from the New Residential Sales data.
Changes to the Regulatory Text
HUD is making only technical changes at the final rule stage. HUD
is removing references to ``double-section'' homes as they are already
covered by ``multi-section'' homes. HUD is also revising Sec.
201.10(h)(1) and (2) to remove the reference to changes to the
``average'' price of single-section manufactured home sales as
superfluous. HUD is also revising Sec. 201.10(h)(2) to change a
reference to data published by HUD because the data HUD will be using
is published by the Census Bureau. HUD is also revising Sec.
201.10(h)(1) through (3) to clarify that HUD will not lower loan limits
from previous years.
IV. Summary of Public Comments
The public comment period for the proposed rule closed on December
19, 2022. HUD received five distinct comments relating to the proposed
rule. Comments were submitted by an individual, associations
representing housing industry stakeholders (i.e., community banks,
manufactured housing, realtors), a lender, and anonymously. The full
text of each public comment can be found at: <a href="https://www.regulations.gov/document/HUD-2022-0078-0001">https://www.regulations.gov/document/HUD-2022-0078-0001</a>.
A. Support for the Proposed Rule
Multiple commenters expressed their support for the proposed rule.
One commenter said they support the proposed rule because of the
significant cost increase in modular homes since 2008 and because the
Housing and Economic Recovery Act of 2008's (HERA) current limits are
too low to allow low-income Americans to afford housing. Commenters
expressed support for the proposed rule because they said updated loan
limits would help address the declining trend in loans that qualify for
the Title I loan program. Another commenter expressed support for the
proposed rule because it would establish separate loan limits for
single-section and multi-section manufactured homes. The commenter
stated that home size has a significant impact on home cost and
separate loan limits help account for the different cost components
between single- and multi-section homes.
A commenter expressed their support for the proposed rule, stating
it would benefit low to moderate-income and first-time home buyers to
take advantage of financing through the Federal Housing Administration
(FHA) and begin to build wealth through homeownership. Another
commenter said the proposed rule would create opportunities for
creditworthy borrowers to access manufactured homes, and this is a
crucial bridge to address the housing supply gap allowing low to
moderate-income Americans to afford a home.
A commenter stated that the proposed rule creates a unique indexing
methodology that increases loan limits through annual adjustments that
would ensure the limits remain current with the housing market. Another
commenter stated that they are encouraged by the potential effect of
the proposed rule's indexing methodology because it will update
statutory loan limits established
[[Page 14585]]
in 2008 and allow for annual adjustments.
HUD Response: HUD appreciates these comments and the broad support
for this rule; these commenters identified many of the reasons why HUD
undertook this effort. HUD agrees that increased loan limits will
provide additional opportunities for low-to-moderate income borrowers
to access homeownership now and in the future.
B. Suggested Revision to the Proposed Rule's Loan Cap and the 130
Percent Home Invoice Limitation
A commenter stated they are supportive of the proposed rule's
attempt at increasing loan limits for FHA's Title I program and
believed that the index would capture the movement of manufactured home
pricing. However, the commenter believes that loan limits should be
increased further than described in the proposed rule. The commenter
stated that community banks typically choose to portfolio loans that
may otherwise be eligible for FHA's Title I program because the maximum
FHA loan amounts often fail to cover the cost of the unit. The
commenter, a lender, calculated the percentage of its own loans in 2022
that would have qualified under the proposed rule's example loan limits
for 2022 to be 22.7 percent of all single-section loans; 47 percent of
all multi-section loans; 46 percent of all single-section, land loans;
and 54.6 percent of all multi-section, land loans.
The commenter encouraged HUD to further increase the proposed loan
limits because the commenter was discouraged that a higher percentage
of its loans would not have qualified for the Title I program.
The commenter also stated that its figures do not account for the
advance structure limitations that accompany the Title I loan limits,
such as the 130 percent of home invoice limitation (including itemized
options and freight). The commenter estimated that only 3.4 percent of
its originated new home only loans in the last 12 months had a home
sales price under the 130 percent limitation.
The commenter stated that, in the commenter's experience, most
manufactured home retailers sell homes significantly above 130 percent
of the manufactured home invoice. To address this, the commenter
suggested that HUD either improve or remove the limitation altogether.
The commenter stated that annually adjusted loan limits can be a
sufficient ``check'' to ensure that home prices stay true to recent
market trends and, therefore, the 130 percent cap is an unnecessary
limitation that undercuts the effectiveness of the increased loan
limits. The commenter stated that, as an alternative to eliminating the
130 percent cap, HUD could increase the limitation to 160 percent. The
commenter stated that the 160 percent adjustment would represent a more
practical and realistic percentage that would not require retailers to
significantly cut sales prices for a home to qualify for a Title I
loan. The commenter stated that over the last 12 months, 44 percent of
its loans have involved homes sold under the 160 percent cap, compared
to only 3.4 percent under the 130 percent cap.
HUD Response: HUD appreciates the comment that the proposed limits
should be further increased. Section 2145 of the Housing and Economic
Recovery Act (HERA) of 2008 amended Title I, Section 2 of the National
Housing Act (12 U.S.C. 1703) to increase the maximum loan limits for
manufactured home loans insured under Title I and requires the
Secretary to develop an index to annually adjust the loan limits based
on U.S. Census Bureau (Census) data on manufactured home prices. The
indices adopted by the Secretary for manufactured homes in this
rulemaking to annually adjust the loan limits are based on the average
of the year-over-year changes in the all-units price series published
by Census, at the national level, and for a defined look-back period.
These indices are based on data from Census-collected surveys of firms
that sell new manufactured housing to individuals for residential use.
HUD will also adjust the average sales price, as determined by the
Census Bureau data, by 115% and apply an inflation factor, which more
accurately reflects the prices of manufactured homes since the
publication of the most recent Census Bureau report.
HUD includes the 130 percent cap on new manufactured homes to
protect FHA borrowers and in keeping with FHA's fiduciary
responsibility to taxpayers. The 130 percent cap is not the focus of
this rulemaking. Nevertheless, HUD will continue to consider this issue
in regard to the Title I manufactured housing program.
C. Alternate Method of Calculating the Lot Loan Index
A commenter stated that the proposed indexing methodology is not
sufficient to capture the reality of land and improvements costs for
manufactured homes. The commenter stated that the National Housing Act
requires HUD to base the index on manufactured housing price data
collected by the Census Bureau; however, the proposed rule seeks to
create an index based on median home prices in the Census Bureau's New
Residential Sales data. The commenter stated that the average total
costs of options (e.g., well, septic, driveway) is $30,000 across all
of its funded loans. When considering the example loan limit of $37,205
for 2022, the commenter stated that there is essentially no additional
room to purchase a parcel of property under the FHA Title I program
after the cost of options alone. Similarly, the commenter stated that
the average appraisal value for a parcel of real estate is roughly
$34,028, which leaves virtually no room for improvements to the land.
The commenter stated that improvements on purchased land are
usually vital with the purchase of a manufactured home with land
because each land site is typically developed individually, unlike
single-family homes built by a developer with the appropriate
infrastructure scaled across hundreds of lots.
To more accurately reflect the actual costs of purchasing a
manufactured housing lot, the commenter suggested the use of Census
Bureau MHS Annual Data, Cost & Size Comparison: New Manufactured Homes
and New Single-Family Site Build Homes that derives the average land
price for site-built homes, which, while not connected to manufactured
housing pricing data, at least accounts for the actual cost of land,
according to the commenter. The commenter stated that the derived
average land price in the Census Bureau data vastly exceeds the example
2022 loan limit and is directly related to the cost of land alone.
HUD Response: HUD appreciates the comment and the commenter's
opinion that the proposed limits should be further increased. HUD's
loan limits and indexing are dictated by the Housing and Economic
Recovery Act of 2008 (HERA). Section 2145 of the Housing and Economic
Recovery Act (HERA) of 2008 amended the maximum loan limits for
manufactured home loans insured under Title I and stipulated that the
Secretary develop a metric that uses U.S. Census Bureau (Census) data
on average manufactured home prices to calculate an index for adjusting
loan limits in the future. The index is based on data from the Census'
site, which is derived from surveys that were collected from firms that
sell new manufactured homes to individuals for residential use. HUD has
determined that the New Residential Sales index provides an accurate
assessment of the manufactured housing market. This index is defined as
the average of the year-over-year changes in the all-units
[[Page 14586]]
(total) price series published by Census, at the national level, and
for a defined look-back period. Furthermore, HUD has determined that it
is appropriate to include additional factors to the indexing
methodology, accounting for inflation and resulting in adjustments that
more closely reflect current manufactured home loan values.
D. Establish New Loan Base Limits Using Current Data
A commenter suggested that loan limits be initially brought up to
the following values, which the commenter stated were based on the
commenter's current origination volume for manufactured home lending:
home only loans, single-section homes to $200,000, multi-section homes
to $300,000; loans secured by land, single-section homes to $325,000,
multi-section homes to $350,000. The commenter suggested that the new
manufactured homes sales price data then be used as the index for year-
over-year loan limit adjustments to this new baseline. The commenter
stated that if the loan limits were adjusted in the described manner,
nearly all manufactured home loans could qualify for the Title I
program, making the program truly viable.
HUD Response: HUD appreciates the comment that the proposed
baseline loan limits be further increased and the commenter's interest
in improving the viability of the Title I Manufactured Home loan
program. Section 2145 of the Housing and Economic Recovery Act (HERA)
of 2008, established the baseline loan limits and amended the maximum
loan limits for manufactured home loans insured under Title I. HERA
stipulated that the Secretary develop a metric that uses U.S. Census
Bureau (Census) data on average manufactured home prices to calculate
an index for adjusting loan limits in the future.
E. Additional Suggested Revisions to FHA's Title I Program
A commenter provided the following suggestions for changes to FHA's
Title I program: (1) The origination cap fee should be updated from 2
percent to the greater of $2,000 or 2 percent because the cost to
originate a lower balance Title I loan is effectively the same as that
to originate a larger mortgage; (2) Permit Title I closing-related fees
and other customary home loan fees (e.g., closing fee, title insurance,
title search) to be financed in the loan because customers currently
have to contribute an additional $3,000-$6,000 to cover these fees and
costs; (3) Allow the seller to pay closing costs up to 6 percent, like
the Title II program; (4) Revise the collections policy to match the
Title II policies applicable to medical collections, bankruptcies and
judgments--currently the Title I program has a blanket limit on
collections of $1000; (5) Adjust the debt ratio guidelines in Title I
to match that available for Title II; and (6) Do not require a park/
community agreement for 3 years because it has a negative impact on
adoptions as community owners already have their own rental agreements,
the current length of commitment is too long for some owners, and a
timeline of six months should be acceptable if the community is being
shut down.
Another commenter recommended that FHA update its fee structure to
incentivize lenders to offer loans through the Title I program.
Another commenter stated that a significant reason that community
banks are not FHA-approved lenders is because the FHA lender approval
process is overly complicated and burdensome. The commenter recommended
that HUD work with community bank stakeholders to determine the best
way to simplify the FHA lender approval process, thus expanding
community bank participation in FHA's Title I program. This commenter
also recommended that HUD create a secondary market facility that
allowed community banks to sell manufactured home loans, which the
commenter stated would incentivize lenders to make these loans because
it would allow lenders to quickly free up capital to further invest in
the lenders' communities.
HUD Response: HUD appreciates these suggestions, which the
commenter believes would improve lender participation in the Title I
program. These suggestions are outside the scope of this rulemaking
which is focused on establishing an indexing methodology for
calculating Title I manufactured home loans. HUD will consider these
suggestions for future rulemaking or policy changes.
F. Other Comments
A commenter stated that they found the proposed rule to be an
interesting proposal to address rising home prices and that using
indexing methodology and census data on manufactured homes may create a
fair or unfair opportunity to take out loans on manufactured homes due
to the potential limitation on loan amounts based on this methodology.
HUD Response: HUD appreciates this comment. HUD believes the
changes in this rule will provide additional opportunities for low-to
moderate income borrowers to participate in the Title I Manufactured
Housing program.
V. Findings and Certifications
Regulatory Review--Executive Orders 12866, 13563 and 14094
Pursuant to Executive Order 12866 (Regulatory Planning and Review),
a determination must be made whether a regulatory action is significant
and therefore, subject to review by the Office of Management and Budget
(OMB) in accordance with the requirements of the order. Executive Order
13563 (Improving Regulations and Regulatory Review) directs executive
agencies to analyze regulations that are ``outmoded, ineffective,
insufficient, or excessively burdensome, and to modify, streamline,
expand, or repeal them in accordance with what has been learned.''
Executive Order 13563 also directs that, where relevant, feasible, and
consistent with regulatory objectives, and to the extent permitted by
law, agencies are to identify and consider regulatory approaches that
reduce burdens and maintain flexibility and freedom of choice for the
public. Executive Order 14094 (Modernizing Regulatory Review) amends
section 3(f) of Executive Order 12866 (Regulatory Planning and Review),
among other things.
This rule has been determined to be a ``significant regulatory
action,'' as defined in section 3(f) of Executive Order 12866, as
amended by Executive Order 14094, and therefore was reviewed by OMB.
However, this final rule was not deemed to be significant under section
3(f)(1) of the Order. The docket file is available for public
inspection in the Regulations Division, Office of General Counsel,
Department of Housing and Urban Development, 451 7th Street SW, Room
10276, Washington, DC 20410-0500. Due to security measures at the HUD
Headquarters building, please schedule an appointment to review the
docket file by calling the Regulations Division at 202-402-3055 (this
is not a toll-free number). HUD welcomes and is prepared to receive
calls from individuals who are deaf or hard of hearing, as well as
individuals with speech or communication disabilities. To learn more
about how to make an accessible telephone call, please visit: <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
[[Page 14587]]
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Accordingly, the undersigned certifies that this rule does not have a
significant economic impact on a substantial number of small entities.
Environmental Impact
This rule establishes and reviews loan limits. Accordingly, under
24 CFR 50.19(c)(6) this rule is categorically excluded from
environmental review under the National Environmental Policy Act of
1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either: (i) imposes substantial direct compliance costs on state and
local governments and is not required by statute, or (ii) preempts
state law, unless the agency meets the consultation and funding
requirements of section 6 of the Executive order. This rule does not
have federalism implications and does not impose substantial direct
compliance costs on state and local governments or preempt state law
within the meaning of the Executive order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments, and on the private sector. This rule does not
impose any federal mandates on any state, local, or tribal governments,
or on the private sector, within the meaning of the UMRA.
List of Subjects in 24 CFR Part 201
Claims, Health facilities, Historic preservation, Home improvement,
Loan programs--housing and community development, Manufactured homes,
Mortgage insurance, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, HUD amends 24 CFR part
201 as follows:
PART 201--TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS
0
1. The authority for 24 CFR part 201 continues to read as follows:
Authority: 12 U.S.C. 1703; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).
0
2. Amend Sec. 201.2 by revising the definition of ``Manufactured
Home'' to read as follows:
Sec. 201.2 Definitions.
* * * * *
Manufactured home means a transportable structure, comprised of one
or more modules, each built on a permanent chassis, with or without a
permanent foundation, designed for occupancy as a principal residence
by a single family. For purposes of the annual adjustments to loan
limits under this part, a manufactured home may be a single-section
home comprised of one module or a multi-section home comprised of two
or more modules. A new manufactured home shall comply with the minimum
property standards prescribed by the Secretary to assure its livability
and durability that are published as the Manufactured Home Construction
and Safety Standards implementing the National Manufactured Housing
Construction and Safety Standards Act of 1974, 42 U.S.C. 5401-5426, at
24 CFR part 3280. To qualify for a manufactured home loan insured under
this part, an existing manufactured home must have been constructed in
accordance with standards published at 24 CFR part 3280 and must meet
standards similar to the minimum property standards applicable to
existing homes insured under title II of the Act, as prescribed by the
Secretary.
* * * * *
0
3. Amend Sec. 201.10 by revising the introductory texts of paragraphs
(b)(1) and (2), paragraph (c), and paragraphs (d)(1) and (2), and
adding paragraph (h) to read as follows:
Sec. 201.10 Loan amounts.
(b) * * *
(1) The total principal obligation for a loan to purchase a new
manufactured home shall not exceed the sum of the following itemized
amounts, up to a maximum set according to an index established by HUD
in paragraph (h)(1) of this section and updated through notice which
shall establish separate loan limits for single-section homes and
multi-section homes:
* * * * *
(2) The total principal obligation for a loan to purchase an
existing manufactured home shall not exceed the lesser of the following
amounts, up to a maximum set according to an index established by HUD
in paragraph (h)(1) of this section and updated through notice which
shall establish separate loan limits for single-section homes and
multi-section homes:
* * * * *
(c) Manufactured home lot loans. The total principal obligation for
a loan to purchase and, if necessary, develop a lot suitable for a
manufactured home, including on-site water and utility connections,
sanitary facilities, site improvements and landscaping, shall not
exceed 95 percent of either the appraised value of the developed lot
(as determined by a HUD-approved appraisal) or the total of the
purchase price and development costs, whichever is less, up to a
maximum set according to an index established by HUD in paragraph
(h)(2) of this section and updated through notice.
(d) * * *
(1) The total principal obligation for a loan to purchase a new
manufactured home and a lot on which to place the home shall not exceed
the sum of the following itemized amounts, up to a maximum set
according to an index established by HUD in paragraph (h)(3) of this
section and updated through notice which shall establish separate loan
limits for single-section homes and multi-section homes:
(2) The total principal obligation for a Combination Loan, to
purchase an existing manufactured home and lot, shall not exceed the
lesser of the following amounts, up to a maximum set according to an
index established by HUD in paragraph (h)(3) of this section and
updated through notice which shall establish separate loan limits for
single-section homes and multi-section homes:
* * * * *
(h) Annual Adjustments. HUD shall adjust the following loan limits
annually through notice:
(1) In paragraphs (b)(1) and (2) of this section, the single-
section manufactured home loan limit shall be adjusted to reflect
changes in single-section manufactured home sales prices and the multi-
section manufactured home loan limit shall be increased to reflect
changes in double-section manufactured home sales prices, according to
data published by the Census Bureau, except that the loan limits shall
not be lowered.
(2) In paragraph (c) of this section, the manufactured home lot
loan limit shall be increased to reflect changes in single-family home
sales prices according to data published by the Census Bureau, except
that the loan limit shall not be lowered.
(3) In paragraphs (d)(1) and (2) of this section, the combination
manufactured home and lot loan limits shall be increased to be the sum
of the applicable loan limit for the
[[Page 14588]]
manufactured home loan in paragraph (b)(1) and the lot loan limit in
paragraph (c) of this section, except that the loan limit shall not be
lowered.
Julia R. Gordon,
Assistant Secretary for Housing--FHA Commissioner.
[FR Doc. 2024-04138 Filed 2-27-24; 8:45 am]
BILLING CODE 4210-67-P
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</html>Indexed from Federal Register on February 28, 2024.
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