IB 

Union Calendar No. 125 

110TH CONGRESS 

1ST SESSION H. R. 2139 

[Report No. 110–206] 

To modernize the manufactured housing loan insurance program under title 

I of the National Housing Act. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 3, 2007 

Mr. DONNELLY (for himself, Mr. FRANK of Massachusetts, Mr. FEENEY, and 

Mr. TIBERI) introduced the following bill; which was referred to the Committee on Financial Services 

JUNE 21, 2007 

Additional sponsors: Ms. CARSON, Mr. HINCHEY, Mr. SHERMAN, Mr. SCOTT

of Georgia, Mr. BOSWELL, Mr. BOYD of Florida, Mr. RAHALL, Mr. 

CLEAVER, Mr. CALVERT, Mr. DAVIS of Kentucky, Mr. MCHENRY, Mr. 

PEARCE, Mr. KIRK, Mr. LINCOLN DAVIS of Tennessee, Mr. MOORE of 

Kansas, Ms. MOORE of Wisconsin, Mr. CHANDLER, Mr. ELLSWORTH, Mr. 

WILSON of Ohio, Mr. GILLMOR, Mr. SIRES, Mr. ELLISON, Mr. KNOLLENBERG, Mr. SOUDER, Mr. JONES of North Carolina, and Mr. ETHERIDGE

JUNE 21, 2007 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on May 3, 2007] 

A BILL 

To modernize the manufactured housing loan insurance 

program under title I of the National Housing Act. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This title may be cited as the ‘‘FHA Manufactured 

5 Housing Loan Modernization Act of 2007’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—The Congress finds that— 

8 (1) manufactured housing plays a vital role in 

9 providing housing for low- and moderate-income fam10 ilies in the United States; 

11 (2) the FHA title I insurance program for man12 ufactured home loans traditionally has been a major 

13 provider of mortgage insurance for home-only trans14 actions; 

15 (3) the manufactured housing market is in the 

16 midst of a prolonged downturn which has resulted in 

17 a severe contraction of traditional sources of private 

18 lending for manufactured home purchases; 

19 (4) during past downturns the FHA title I in20 surance program for manufactured homes has filled 

21 the lending void by providing stability until the pri22 vate markets could recover; 

23 (5) in 1992, during the manufactured housing 

24 industry’s last major recession, over 30,000 manufac25 tured home loans were insured under title I; 


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1 (6) in 2006, fewer than 1,500 manufactured 

2 housing loans were insured under title I; 

3 (7) the loan limits for title I manufactured hous4 ing loans have not been adjusted for inflation since 

5 1992; and 

6 (8) these problems with the title I program have 

7 resulted in an atrophied market for manufactured 

8 housing loans, leaving American families who have 

9 the most difficulty achieving homeownership without 

10 adequate financing options for home-only manufac11 tured home purchases. 

12 (b) PURPOSES.—The purposes of this Act are— 

13 (1) to provide adequate funding for FHA-insured 

14 manufactured housing loans for low- and moderate15 income homebuyers during all economic cycles in the 

16 manufactured housing industry; 

17 (2) to modernize the FHA title I insurance pro18 gram for manufactured housing loans to enhance par19 ticipation by Ginnie Mae and the private lending 

20 markets; and 

21 (3) to adjust the low loan limits for title I man22 ufactured home loan insurance to reflect the increase 

23 in costs since such limits were last increased in 1992 

24 and to index the limits to inflation. 


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1 SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTITU2 TION PORTFOLIO. 

3 The second sentence of section 2(a) of the National 

4 Housing Act (12 U.S.C. 1703(a)) is amended— 

5 (1) by striking ‘‘In no case’’ and inserting 

6 ‘‘Other than in connection with a manufactured home 

7 or a lot on which to place such a home (or both), in 

8 no case’’; and 

9 (2) by striking ‘‘: Provided, That with’’ and in10 serting ‘‘. With’’. 

11 SEC. 4. INSURANCE BENEFITS. 

12 (a) IN GENERAL.—Subsection (b) of section 2 of the 

13 National Housing Act (12 U.S.C. 1703(b)), is amended by 

14 adding at the end the following new paragraph: 

15 ‘‘(8) INSURANCE BENEFITS FOR MANUFACTURED

16 HOUSING LOANS.—Any contract of insurance with re17 spect to loans, advances of credit, or purchases in con18 nection with a manufactured home or a lot on which 

19 to place a manufactured home (or both) for a finan20 cial institution that is executed under this title after 

21 the date of the enactment of the FHA Manufactured 

22 Housing Loan Modernization Act of 2007 by the Sec23 retary shall be conclusive evidence of the eligibility of 

24 such financial institution for insurance, and the va25 lidity of any contract of insurance so executed shall 

26 be incontestable in the hands of the bearer from the 


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1 date of the execution of such contract, except for fraud 

2 or misrepresentation on the part of such institution.’’. 

3 (b) APPLICABILITY.—The amendment made by sub4 section (a) shall only apply to loans that are registered or 

5 endorsed for insurance after the date of the enactment of 

6 this Act. 

7 SEC. 5. MAXIMUM LOAN LIMITS. 

8 (a) DOLLAR AMOUNTS.—Paragraph (1) of section 2(b) 

9 of the National Housing Act (12 U.S.C. 1703(b)(1)) is 

10 amended— 

11 (1) in clause (ii) of subparagraph (A), by strik12 ing ‘‘$17,500’’ and inserting ‘‘$25,090’’; 

13 (2) in subparagraph (C) by striking ‘‘$48,600’’ 

14 and inserting ‘‘$69,678’’; 

15 (3) in subparagraph (D) by striking ‘‘$64,800’’ 

16 and inserting ‘‘$92,904’’; 

17 (4) in subparagraph (E) by striking ‘‘$16,200’’ 

18 and inserting ‘‘$23,226’’; and 

19 (5) by realigning subparagraphs (C), (D), and 

20 (E) 2 ems to the left so that the left margins of such 

21 subparagraphs are aligned with the margins of sub22 paragraphs (A) and (B). 

23 (b) ANNUAL INDEXING.—Subsection (b) of section 2 of 

24 the National Housing Act (12 U.S.C. 1703(b)), as amended 


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1 by the preceding provisions of this Act, is further amended 

2 by adding at the end the following new paragraph: 

3 ‘‘(9) ANNUAL INDEXING OF MANUFACTURED

4 HOUSING LOANS.—The Secretary shall develop a 

5 method of indexing in order to annually adjust the 

6 loan limits established in subparagraphs (A)(ii), (C), 

7 (D), and (E) of this subsection. Such index shall be 

8 based on the manufactured housing price data col9 lected by the United States Census Bureau. The Sec10 retary shall establish such index no later than one 

11 year after the date of the enactment of the FHA Man12 ufactured Housing Loan Modernization Act of 2007.’’. 

13 (c) TECHNICAL AND CONFORMING CHANGES.—Para14 graph (1) of section 2(b) of the National Housing Act (12 

15 U.S.C. 1703(b)(1)) is amended— 

16 (1) by striking ‘‘No’’ and inserting ‘‘Except as 

17 provided in the last sentence of this paragraph, no’’; 

18 and 

19 (2) by adding after and below subparagraph (G) 

20 the following: 

21 ‘‘The Secretary shall, by regulation, annually increase the 

22 dollar amount limitations in subparagraphs (A)(ii), (C), 

23 (D), and (E) (as such limitations may have been previously 

24 adjusted under this sentence) in accordance with the index 

25 established pursuant to paragraph (9).’’. 


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1 SEC. 6. INSURANCE PREMIUMS. 

2 Subsection (f) of section 2 of the National Housing Act 

3 (12 U.S.C. 1703(f)) is amended— 

4 (1) by inserting ‘‘(1) PREMIUM CHARGES.—’’ 

5 after ‘‘(f)’’; and 

6 (2) by adding at the end the following new para7 graph:’’. 

8 ‘‘(2) MANUFACTURED HOME LOANS.—Notwith9 standing paragraph (1), in the case of a loan, advance of 

10 credit, or purchase in connection with a manufactured 

11 home or a lot on which to place such a home (or both), 

12 the premium charge for the insurance granted under this 

13 section shall be paid by the borrower under the loan or ad14 vance of credit, as follows: 

15 ‘‘(A) At the time of the making of the loan, ad16 vance of credit, or purchase, a single premium pay17 ment in an amount not to exceed 2.25 percent of the 

18 amount of the original insured principal obligation. 

19 ‘‘(B) In addition to the premium under subpara20 graph (A), annual premium payments during the 

21 term of the loan, advance, or obligation purchased in 

22 an amount not exceeding 1.0 percent of the remaining 

23 insured principal balance (excluding the portion of 

24 the remaining balance attributable to the premium 

25 collected under subparagraph (A) and without taking 

26 into account delinquent payments or prepayments). 


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1 ‘‘(C) Premium charges under this paragraph 

2 shall be established in amounts that are sufficient, but 

3 do not exceed the minimum amounts necessary, to 

4 maintain a negative credit subsidy for the program 

5 under this section for insurance of loans, advances of 

6 credit, or purchases in connection with a manufac7 tured home or a lot on which to place such a home 

8 (or both), as determined based upon risk to the Fed9 eral Government under existing underwriting require10 ments. 

11 ‘‘(D) The Secretary may increase the limitations 

12 on premium payments to percentages above those set 

13 forth in subparagraphs (A) and (B), but only if nec14 essary, and not in excess of the minimum increase 

15 necessary, to maintain a negative credit subsidy as 

16 described in subparagraph (C).’’. 

17 SEC. 7. TECHNICAL CORRECTIONS. 

18 (a) DATES.—Subsection (a) of section 2 of the Na19 tional Housing Act (12 U.S.C. 1703(a)) is amended— 

20 (1) by striking ‘‘on and after July 1, 1939,’’ each 

21 place such term appears; and 

22 (2) by striking ‘‘made after the effective date of 

23 the Housing Act of 1954’’. 


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1 (b) AUTHORITY OF SECRETARY.—Subsection (c) of sec2 tion 2 of the National Housing Act (12 U.S.C. 1703(c)) is 

3 amended to read as follows: 

4 ‘‘(c) HANDLING AND DISPOSAL OF PROPERTY.— 

5 ‘‘(1) AUTHORITY OF SECRETARY.—Notwith6 standing any other provision of law, the Secretary 

7 may— 

8 ‘‘(A) deal with, complete, rent, renovate, 

9 modernize, insure, or assign or sell at public or 

10 private sale, or otherwise dispose of, for cash or 

11 credit in the Secretary’s discretion, and upon 

12 such terms and conditions and for such consider13 ation as the Secretary shall determine to be rea14 sonable, any real or personal property conveyed 

15 to or otherwise acquired by the Secretary, in 

16 connection with the payment of insurance here17 tofore or hereafter granted under this title, in18 cluding any evidence of debt, contract, claim, 

19 personal property, or security assigned to or held 

20 by him in connection with the payment of insur21 ance heretofore or hereafter granted under this 

22 section; and 

23 ‘‘(B) pursue to final collection, by way of 

24 compromise or otherwise, all claims assigned to 

25 or held by the Secretary and all legal or equiVerDate Aug 31 2005 02:08 Jun 22, 2007 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H2139.RH H2139

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1 table rights accruing to the Secretary in connec2 tion with the payment of such insurance, includ3 ing unpaid insurance premiums owed in connec4 tion with insurance made available by this title. 

5 ‘‘(2) ADVERTISEMENTS FOR PROPOSALS.—Sec6 tion 3709 of the Revised Statutes shall not be con7 strued to apply to any contract of hazard insurance 

8 or to any purchase or contract for services or supplies 

9 on account of such property if the amount thereof does 

10 not exceed $25,000. 

11 ‘‘(3) DELEGATION OF AUTHORITY.—The power to 

12 convey and to execute in the name of the Secretary, 

13 deeds of conveyance, deeds of release, assignments and 

14 satisfactions of mortgages, and any other written in15 strument relating to real or personal property or any 

16 interest therein heretofore or hereafter acquired by the 

17 Secretary pursuant to the provisions of this title may 

18 be exercised by an officer appointed by the Secretary 

19 without the execution of any express delegation of 

20 power or power of attorney. Nothing in this sub21 section shall be construed to prevent the Secretary 

22 from delegating such power by order or by power of 

23 attorney, in the Secretary’s discretion, to any officer 

24 or agent the Secretary may appoint.’’. 


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1 SEC. 8. REVISION OF UNDERWRITING CRITERIA. 

2 (a) IN GENERAL.—Subsection (b) of section 2 of the 

3 National Housing Act (12 U.S.C. 1703(b)), as amended by 

4 the preceding provisions of this Act, is further amended by 

5 adding at the end the following new paragraph: 

6 ‘‘(10) FINANCIAL SOUNDNESS OF MANUFACTURED

7 HOUSING PROGRAM.—The Secretary shall establish 

8 such underwriting criteria for loans and advances of 

9 credit in connection with a manufactured home or a 

10 lot on which to place a manufactured home (or both), 

11 including such loans and advances represented by ob12 ligations purchased by financial institutions, as may 

13 be necessary to ensure that the program under this 

14 title for insurance for financial institutions against 

15 losses from such loans, advances of credit, and pur16 chases is financially sound.’’. 

17 (b) TIMING.—Not later than the expiration of the 6- 

18 month period beginning on the date of the enactment of this 

19 Act, the Secretary of Housing and Urban Development shall 

20 revise the existing underwriting criteria for the program 

21 referred to in paragraph (10) of section 2(b) of the National 

22 Housing Act (as added by subsection (a) of this section) 

23 in accordance with the requirements of such paragraph. 


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1 SEC. 9. REQUIREMENT OF SOCIAL SECURITY ACCOUNT 

2 NUMBER FOR ASSISTANCE. 

3 Section 2 of the National Housing Act (12 U.S.C. 

4 1703) is amended by adding at the end the following new 

5 subsection: 

6 ‘‘(j) REQUIREMENT OF SOCIAL SECURITY ACCOUNT

7 NUMBER FOR FINANCING.—No insurance shall be granted 

8 under this section with respect to any obligation rep9 resenting any loan, advance of credit, or purchase by a fi10 nancial institution unless the borrower to which the loan 

11 or advance of credit was made, and each member of the 

12 family of the borrower who is 18 years of age or older or 

13 is the spouse of the borrower, has a valid social security 

14 number.’’. 

15 SEC. 10. GAO STUDY OF MITIGATION OF TORNADO RISKS 

16 TO MANUFACTURED HOMES. 

17 The Comptroller General of the United States shall as18 sess how the Secretary of Housing and Urban Development 

19 utilizes the FHA manufactured housing loan insurance pro20 gram under title I of the National Housing Act, the commu21 nity development block grant program under title I of the 

22 Housing and Community Development Act of 1974, and 

23 other programs and resources available to the Secretary to 

24 mitigate the risks to manufactured housing residents and 

25 communities resulting from tornados. The Comptroller Gen26 eral shall submit to the Congress a report on the conclusions 


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1 and recommendations of the assessment conducted pursuant 

2 to this section not later than the expiration of the 12-month 

3 period beginning on the date of the enactment of this Act. 


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Union Calendar No. 125 

110TH CONGRESS 

1ST SESSION H. R. 2139 

[Report No. 110

–206] 

A BILL 

To modernize the manufactured housing loan insuring Act. ance program under title I of the National HousJUNE 21, 2007 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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