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IMPLEMENTATION OF THE MANUFACTURED 

HOUSING IMPROVEMENT ACT OF 2000 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INSURANCE, HOUSING AND 

COMMUNITY OPPORTUNITY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 1, 2012 

Printed for the use of the Committee on Financial Services 

Serial No. 112–96 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

SPENCER BACHUS, Alabama, Chairman 

JEB HENSARLING, Texas, Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, North Carolina 

JUDY BIGGERT, Illinois 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

NAN A. S. HAYWORTH, New York 

JAMES B. RENACCI, Ohio 

ROBERT HURT, Virginia 

ROBERT J. DOLD, Illinois 

DAVID SCHWEIKERT, Arizona 

MICHAEL G. GRIMM, New York 

FRANCISCO ‘‘QUICO’’ CANSECO, Texas 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

BARNEY FRANK, Massachusetts, Ranking 

Member 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

ANDRE ́ CARSON, Indiana 

JAMES A. HIMES, Connecticut 

GARY C. PETERS, Michigan 

JOHN C. CARNEY, JR., Delaware 

JAMES H. CLINGER, Staff Director and Chief Counsel 

(III) 

SUBCOMMITTEE ON INSURANCE, HOUSING AND COMMUNITY OPPORTUNITY

JUDY BIGGERT, Illinois, Chairman 

ROBERT HURT, Virginia, Vice Chairman 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

PATRICK T. MCHENRY, North Carolina 

LYNN A. WESTMORELAND, Georgia 

SEAN P. DUFFY, Wisconsin 

ROBERT J. DOLD, Illinois 

STEVE STIVERS, Ohio 

LUIS V. GUTIERREZ, Illinois, Ranking 

Member 

MAXINE WATERS, California 

NYDIA M. VELA ́ ZQUEZ, New York 

EMANUEL CLEAVER, Missouri 

WM. LACY CLAY, Missouri 

MELVIN L. WATT, North Carolina 

BRAD SHERMAN, California 

MICHAEL E. CAPUANO, Massachusetts 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

February 1, 2012 .............................................................................................. 1 

Appendix: 

February 1, 2012 .............................................................................................. 35 

WITNESSES 

WEDNESDAY, FEBRUARY 1, 2012 

Bostick, John, Chairman, Manufactured Housing Association for Regulatory 

Reform (MHARR) ................................................................................................. 8 

Czauski, Henry S., Acting Deputy Administrator, Office of Manufactured 

Housing Programs, U.S. Department of Housing and Urban Development 

(HUD) .................................................................................................................... 6 

Dickens, Ishbel, Executive Director, Manufactured Home Owners Association 

of America (MHOAA) ........................................................................................... 9 

Hussey, Edward, Immediate Past Chairman, Manufactured Housing Association for Regulatory Reform (MHARR) ................................................................ 12 

Roberts, Dana, Past Chairman, The Manufactured Housing Consensus Committee (MHCC) ..................................................................................................... 14 

Santana, Manuel, Director of Engineering, Cavco Industries, on behalf of 

the Manufactured Housing Institute (MHI) ...................................................... 16 

APPENDIX 

Prepared statements: 

Bostick, John (MHARR statement) ................................................................. 36 

Czauski, Henry S. ............................................................................................. 58 

Dickens, Ishbel .................................................................................................. 63 

Hussey, Edward (MHARR statement) ............................................................ 36 

Roberts, Dana ................................................................................................... 71 

Santana, Manuel .............................................................................................. 81 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Biggert, Hon. Judy: 

Written responses to questions submitted to Manuel Santana .................... 88 

Letter from Chairman Bachus and Chairwoman Biggert to Hon. Gene 

Dodaro, Comptroller General, GAO, dated November 29, 2011 ............... 92 

Letter to Representative Duffy from the Wisconsin Manufactured Home 

Owners Association (WIMHOA) .................................................................. 94 

Biggert, Hon. Judy, and Gutierrez, Hon. Luis: 

Letter from the Corporation for Enterprise Development (CFED) .............. 96 

Letter to Representative Garrett from the Manufactured Home Owners 

Association of New Jersey ............................................................................ 110 

Letter from the Mobile Homeowners Association of Illinois (MHOAI) ........ 113 

Letter from Tim Sheahan, Immediate Past President, Golden State Manufactured-home Owners League (GSMOL) ................................................. 115 

Miller, Hon. Gary: 

Text of H.R. 3849 .............................................................................................. 123 

Dickens, Ishbel: 

Written response to a question posed by Representative Sherman during 

the hearing .................................................................................................... 128 

Written response to a question posed by Representative Dold during 

the hearing .................................................................................................... 129 

(1) 

IMPLEMENTATION OF THE MANUFACTURED 

HOUSING IMPROVEMENT ACT OF 2000 

Wednesday, February 1, 2012 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON INSURANCE, HOUSING

AND COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 10:03 a.m., in room 

2128, Rayburn House Office Building, Hon. Judy Biggert [chairwoman of the subcommittee] presiding. 

Members present: Representatives Biggert, Hurt, Miller of California, Duffy, Dold, Stivers; Gutierrez, Velazquez, and Sherman. 

Also present: Representative Green. 

Chairwoman BIGGERT. This hearing of the Subcommittee on Insurance, Housing and Community Opportunity entitled, ‘‘Implementation of the Manufactured Housing Improvement Act of 2000,’’ 

will come to order. We will begin with opening statements, and I 

will yield myself 5 minutes. 

Good morning everyone, and I would like to welcome our panel 

of witnesses. The manufacturing housing sector has long been an 

important supplier of affordable housing as well as American jobs. 

This hearing will provide valuable insight into the forces that have 

weakened the manufacturing housing market, as well as the effectiveness of HUD’s response and its implementation of the Manufacturing Housing Improvement Act of 2000. 

We will examine issues including building codes, safety and installation standards, and Federal preemption. 

With that, I would like to insert into the record a November 29, 

2011, letter that Chairman Baucus and I sent to GAO requesting 

that they examine various aspects of HUD’s regulation of the manufacturing housing industry. We hope to have this report from 

GAO at some point this year. And without objection, I would like 

to submit the letter. 

I would also like to submit the following inserts for today’s hearing record. I ask unanimous consent to do so: a January 31, 2011, 

letter from the Corporation for Enterprise Development; a February 1, 2011, letter from the Manufactured Home Owners Association of America; a January 31, 2011, letter from the Mobile Homeowners Association of Illinois; a January 29, 2000, letter from the 

Manufactured Home Owners Association of New Jersey; and a January 31, 2011, letter from the Wisconsin Manufactured Home Owners Association. 

2 

Finally, as a member of the House Democracy Partnership Commission, I am honored to recognize 10 members of the Democracy 

Committee of Parliament from the Central Asian nation of 

Kyrgyzstan. If you wouldn’t mind standing so people can see who 

you are? 

Thank you very much. This week, they are visiting Washington, 

and particularly Congress, to observe and study our operations and 

identify practices that they could adopt for their parliament as they 

continue to transition to a parliamentary democracy, so welcome, 

welcome to all of you. 

And with that, I recognize the ranking member of the subcommittee, Mr. Gutierrez. 

Mr. GUTIERREZ. Thank you, Madam Chairwoman, and thank you 

to all of the witnesses for joining us this morning to discuss the ongoing implementation of the Manufactured Housing Improvement 

Act of 2000. This has a profound effect on housing equality and affordability for millions of families across the country. I think it is 

important that we hear different perspectives on these issues, so I 

am glad to see witnesses representing HUD, the manufactured 

housing industry, and homeowners here today. Although, I have to 

admit that the industry seems to have gotten more representatives 

than anyone else. But that is okay. 

We need to hear from them. From what I understand, industry 

groups are concerned about the Manufactured Housing Consensus 

Committee, which was created by the 2000 Act. They say it isn’t 

functioning the way that Congress intended it to function. They believe that HUD is ignoring the committee’s proposal in 

marginalizing it. They point to their recommendations per national 

standards and other reforms and wonder what is taking HUD so 

long. 

Consumer advocates might agree with some of these, but they 

seemed to see things from a different perspective. To them, the 

Consensus Committee is one of the few places where homeowners 

and the consumers have an equal voice, where the industry doesn’t 

always dominate. 

Consumer advocates also point out that some of the committee’s 

dysfunction is the industry’s own doing. Important safety and accessibility standards have language in the committee for a decade 

before coming up for a vote. Industry representatives constantly 

fall back on affordability as the reason to oppose more stringent 

standards, even when the benefits to consumers far outweigh the 

potential cost. 

I agree that HUD has important questions to answer today. I believe that HUD could do more to implement the reforms laid out 

in the 2000 Act. But as long as we are being honest, I think the 

industry also needs to take some responsibility. It isn’t serving its 

customers as well as it should. It offers a product that doesn’t work 

for many people as advertised. It seems to resist innovations and 

improvements in customer service if they don’t obviously improve 

as the bottom line. 

Personally, I am interested in reforms that the industry and consumer advocates agree on, things like access to good financing, better laws protecting manufactured homeowners who rent their land, 

better implementation of installation standards and dispute resoluVerDate Nov 24 2008 16:32 Aug 01, 2012 Jkt 075068 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 K:\DOCS\75068.TXT TERRIE
3 

tion, and more efficient HUD management. These are things that 

matter, and which as a homeowner can improve the quality of your 

life. These are things that we can start figuring out how to fix. 

I want to thank you once again, Madam Chairwoman, for calling 

this hearing. Before I yield back the balance of my time, I would 

like to ask unanimous consent to have four letters representing 

concerns of consumers entered into the record. 

Chairwoman BIGGERT. Without objection, it is so ordered. 

Mr. GUTIERREZ. Thank you, Madam Chairwoman. 

Chairwoman BIGGERT. We will now go to the vice chair of the 

subcommittee. The gentleman from Virginia, Mr. Hurt, is recognized for 2 minutes . 

Mr. HURT. Thank you for yielding, Madam Chairwoman. I appreciate your leadership and focus on the subject of manufactured 

housing, which is of great importance to my constituents, the citizens of Virginia’s Fifth District. 

Also, I want to thank you, Chairwoman Biggert, for allowing this 

subcommittee to conduct a field hearing in Danville, Virginia, last 

November on the state of the manufactured housing industry, 

which is not only a producer of affordable housing for thousands of 

central and south side Virginians but is also a critical source of 

jobs in manufacturing, retail, and related services in my district 

and throughout the country. 

I would like welcome Administrator Czauski and thank him for 

his appearance before our subcommittee today. Mr. Czauski was 

gracious enough to come to Danville for the subcommittee’s field 

hearing on manufactured housing policy. I appreciate the perspective you shared on the state of the industry at our previous hearing, and I look forward to continuing that dialogue today. Thank 

you for being here. 

As we learned in Danville at the field hearing, the manufactured 

housing industry’s ability to respond to the changing economic conditions is being hindered by the lack of financing available to those 

who wish to purchase these homes. 

We also have found that the one-size-fits-all provisions of the 

Dodd-Frank Act failed to account for the unique method of financing for manufactured homes, creating troubling, unintended consequences, namely decreased access to affordable housing choices 

for consumers and fewer jobs in the manufactured housing industry. 

Today’s hearing will focus on other aspects of the regulation of 

manufactured housing industry, the manner in which HUD administers the Manufactured Housing Improvement Act of 2000, and 

how these issues are impacting the industry and the consumers it 

serves. 

Again, I would like to thank the chairwoman for holding this important hearing today, and I look forward to hearing from our witnesses. I yield back the balance of my time. 

Chairwoman BIGGERT. Thank you, Mr. Hurt, and I thank you for 

having the field hearing earlier in Virginia. 

With that, I would like to recognize the gentleman from Texas, 

Mr. Green, for 2 minutes. 

Mr. GREEN. Thank you, Madam Chairwoman. I thank you and 

the ranking member for hosting the hearing also. I also thank you 

4 

for allowing me to be a part of the hearing, since I am on the Financial Services Committee but not on this subcommittee. So, I 

thank you. 

Chairwoman BIGGERT. But you have the best attendance. 

[laughter] 

Mr. GREEN. Well, thank you very much. 

I am honored to have the opportunity to hear the witnesses 

today, and I am interested in some of the things that happened 

when Hurricane Katrina hit the Gulf Coast. We have a lot of concerns with manufactured housing. After Katrina, we have the concerns with the formaldehyde and some of the safety issues associated with manufactured housing. 

Someone is going to give us a little bit of an update on how we 

have improved some of those standards such that persons, consumers can purchase a home and be assured that the home is 

going to provide shelter without a fear of some sort of harm from 

some of the things that may be contained within the actual product 

itself. 

With this, I thank you, and I yield back the balance of my time. 

Chairwoman BIGGERT. The gentleman yields back. 

The gentleman from California, Mr. Miller, is recognized for 2 

minutes. 

Mr. MILLER OF CALIFORNIA. Thank you, Madam Chairwoman. 

The manufactured housing industry has faced significant hurdles 

over the past decade. New manufactured home construction has 

fallen roughly 80 percent over the past decade which has accounted 

for more than 160 plant closures, more than 7,500 home center closures, and the loss of 200,000-plus jobs. 

In addition to current economic conditions, Federal regulations 

are contributing significantly to the decline and demand for manufactured housing. It is not that manufactured housing is less desirable for consumers but rather that Federal regulation has made it 

difficult for consumers to buy manufactured homes, for example, a 

significant decrease in finance availability for homebuyers, overly 

strict rules interpretations regarding loan origination, and the outdated HUD code. This is unacceptable. 

Congress must address the problem the Federal Government has 

caused that impedes the ability of consumers to obtain mortgage financing for manufactured homes. In conjunction with the Manufactured Housing Institute, my colleagues Representative Fincher and 

Donnelly and I have developed a bipartisan bill to address some of 

these concerns. 

Yesterday, Representatives Fincher, Donnelly, and I introduced 

the Preserving Access to Manufactured Housing Act, H.R. 3849. 

Chairwoman Biggert, I ask unanimous consent to introduce this 

into the record. 

Chairwoman BIGGERT. Without objection, it is so ordered. 

Mr. MILLER OF CALIFORNIA. The bill addresses two main issues 

facing the industry. This bill will make sure qualified homebuyers 

have access to financing for manufactured homes. Specifically, this 

provision would amend the definition of high-cost loans or recognize that small balance loans are fundamentally different than 

large balance loans and treat them accordingly. 

5 

The bill reduces unnecessary regulatory compliance and training 

costs by appropriately defining the loan origination process. Specifically, the bill would clarify that manufactured housing employees 

are not required to register and train as loan originators under the 

SAFE Act so long as they don’t engage in the business of loan origination. 

It is important to note that the actual loan originators would still 

be subject to the SAFE Act. I think it is something we need to do 

for the industry. We need to turn the process around and give the 

industry a chance to recoup after this downturn they faced. 

I yield back the balance of my time. 

Chairwoman BIGGERT. The gentleman yields back. 

The gentleman from Wisconsin, Mr. Duffy, is recognized for 2 

minutes. 

Mr. DUFFY. Thank you, Madam Chairwoman. I want to thank 

the panel for coming in today. Specifically, I want to thank Mr. 

Hussey for coming in. He is involved with Liberty Homes that 

manufactures housing not only around the country, but in my district, where Liberty Homes employs 80 people in Dorchester, Wisconsin. 

We are well aware that they are a great job creator but they also 

provide affordable, safe, low-cost housing to people in my district. 

That is a dual benefit that we have from Liberty Homes in Wisconsin’s Seventh Congressional District. 

I am well aware of the December 2000 law that passed Congress, 

the Manufactured Housing and Improvement Act of 2000. Its intent was to streamline the regulatory burdens and open up financing for homeowners. I am well aware that quite a few folks on this 

panel don’t believe that the intent of the law has come to pass, and 

I look forward to hearing the testimony of the panel about some of 

the issues that you face, and to pass on some of the solutions that 

we may address to resolve the problem. 

I yield back. 

Chairwoman BIGGERT. The gentleman yields back. 

The gentleman from Illinois, Mr. Dold, is recognized for 5 minutes. 

Mr. DOLD. Thank you, Madam Chairwoman and— 

Chairwoman BIGGERT. Sorry, 2 minutes. 

Mr. DOLD. Oh, she has already cut the time. Okay. I will take 

2 minutes, maybe even less. 

Certainly, Madam Chairwoman, thank you very much for holding this hearing, and I want to thank our panelists for being here 

today. I certainly look forward to your testimony. 

As you know, Congress has an ongoing obligation to review and 

monitor the laws that it passes to ensure that these very laws 

make sense in the real world, that they are having the intended 

effect, and that they have not caused unintended negative consequences as well. 

A very significant part of this ongoing congressional obligation 

includes oversight responsibility for the various Executive Branch 

agencies to ensure that they are correctly implementing and executing the laws passed by this body. 

In this case, it has been over a decade since Congress passed the 

Manufactured Housing Improvement Act of 2000. That 2000 law 

6 

was designed to reform the entire regulatory framework of the 

manufactured housing industry and was passed on a bipartisan 

basis after many years of study, negotiation, and compromise. 

However, in the 12 years since the 2000 law was enacted, many 

have alleged that HUD throughout both the Bush and Obama Administrations has systematically undermined and effectively invalidated the 2000 Manufactured Housing Law and wasted taxpayer 

dollars while doing so. 

Today, as part of our ongoing oversight responsibilities, we consider whether HUD has properly and responsibly implemented the 

2000 Manufactured Housing Improvement Law and if not, why not. 

What are the resulting consequences and what should Congress do 

about it? 

The manufactured housing industry has struggled with so many 

job losses and plant closings over the past 12 years while customers have found financing options extremely limited, unavailable 

or unaffordable. 

I look forward to hearing from our witnesses today to what extent HUD’s interpretation and implementation of the 2000 Manufactured Housing Law has contributed to these significant industry 

challenges. 

And with that, I yield back. 

Chairwoman BIGGERT. The gentleman yields back. Without objection, all Member’s opening statements will be made a part of the 

record. 

I will now introduce our panel of witnesses: Henry Czauski, Acting Deputy Administrator for the Office of Manufactured Housing 

Programs, U.S. Department of Housing and Urban Development; 

John Bostick, chairman, Manufactured Housing Association for 

Regulatory Reform; Ishbel Dickens, executive director, Manufactured Home Owners Association of America; Edward Hussey, immediate past chairman, Manufactured Housing Association for 

Regulatory Reform; Dana Roberts, past chairman, the Manufactured Housing Consensus Committee; and Manuel Santana, director of engineering for Cavco Industries, on behalf of the Manufactured Housing Institute. 

And with that, each panel witness will be recognized for 5 minutes for a summary of your testimony. 

We will start with Mr. Czauski. You are recognized for 5 minutes. 

STATEMENT OF HENRY S. CZAUSKI, ACTING DEPUTY ADMINISTRATOR, OFFICE OF MANUFACTURED HOUSING PROGRAMS, 

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

(HUD) 

Mr. CZAUSKI. Chairwoman Biggert, Ranking Member Gutierrez, 

and members of the subcommittee, thank you for the opportunity 

to testify today. 

My name is Henry Czauski, and I am the Acting Deputy Administrator for the Office of Manufactured Housing Programs at HUD. 

My remarks today will highlight key aspects of the Manufactured 

Housing Improvement Act of 2000 and will outline the actions undertaken by HUD since this legislation was enacted to demonstrate 

how it has and continues to implement the Act. 

7 

In 1974, Congress enacted the National Manufactured Housing 

Construction and Safety Standards Act, which was amended by the 

2000 Act. HUD was charged with administering this legislation. 

The key aspects of the 2000 Act included the creation of a Consensus Committee and an organizational infrastructure to support 

it, a process for revision of the construction and safety standards, 

enhanced preemption, establishment of installation standards, and 

a dispute resolution program and a label fee. 

A Consensus Committee known as the ‘‘Manufactured Housing 

Consensus Committee,’’ the MHCC, was created as a Federal Advisory Committee to provide recommendations to HUD to adopt and 

revise Federal manufactured housing construction and safety 

standards, as well as procedural and enforcement regulations. 

To assist the MHCC, the Act provided for HUD a contract with 

an administering organization. In 2001, HUD contracted with the 

organization and has continuously maintained a contract to this 

date. The makeup of the MHCC is determined by the 2000 Act, 

which provides for 21 voting members appointed by the Secretary 

that includes 7 producers, 7 users representing consumer interests, 

and 7 persons representing public officials and the general interest. 

HUD announced the initial 21 members of the committee in August 2002 and has continued this process for appointment of members to the committee to the current time. Since the creation of the 

committee, approximately 35 meetings have been held, an average 

of 3 meetings per year. 

The Federal standards are the subject of ongoing review and updating. Over the years, numerous standards were reviewed by the 

committee and submitted to the Secretary, including recommendations on ventilation, fire protection, carbon monoxide detection, 

anti-scald protection, and energy efficiency. 

In addition, HUD established installation standards and a dispute resolution program by regulation in 2007. Federal preemption 

is the key concept and provides that no State or political subdivision has authority to establish any standard which is not identical 

to the Federal standards. 

The 2000 Act provided preemption to be broadly and liberally 

construed to ensure that disparate State and local requirements or 

standards do not affect the uniformity and comprehensiveness of 

the Federal standards. HUD has been and continues to implement 

preemption. Jurisdictions attempting to enforce local standards 

have been notified that local laws are subject to Federal preemption. 

The 2000 Act also reaffirmed the authority of the Secretary to establish and collect the reasonable label fee to offset the expense of 

carrying out the Act. The label fee was set at $39 in 2002. Revenues generated from this fee are used in accordance with the 2000 

Act for conducting inspections and monitoring; providing funding to 

the States with approved plans; administering MHCC; and the administration of the enforcement of installation standards and a dispute resolution program. 

Although a fee increase of $60 was considered, that fee has not 

been increased, and the Department intends to consider the impact 

of an increase on the industry before implementing any change. 

8 

HUD also insures loans for the purchase of manufactured homes 

and Title I and Title II of the National Housing Act. 

These FHA loans are eligible for inclusion in mortgage-backed 

securities issued by the Government National Mortgage Corporation, Ginnie Mae. In June 2010, Ginnie Mae launched a new manufactured housing securitization program, and in 2011, securities 

from Ginnie Mae guaranteed nearly $100 million in mortgagebacked securities for manufactured housing loans. Together, FHA 

and Ginnie Mae have provided guarantee mechanisms which facilitate the availability of capital for manufactured housing. 

In closing, the Department has acted diligently to fully implement the 2000 Act, has a history of actively engaging with all the 

stakeholders, and will continue to do so. I want to thank you for 

the opportunity to provide testimony before the subcommittee 

today, and I would be pleased to answer any questions. 

[The prepared statement of Mr. Czauski can be found on page 58 

of the appendix.] 

Chairwoman BIGGERT. Thank you very much. 

Mr. Bostick, you are recognized for 5 minutes. 

STATEMENT OF JOHN BOSTICK, CHAIRMAN, MANUFACTURED 

HOUSING ASSOCIATION FOR REGULATORY REFORM (MHARR) 

Mr. BOSTICK. Good morning. My name is John Bostick. I am the 

chairman of the Manufactured Housing Association for Regulatory 

Reform (MHARR). I am also president of Sunshine Homes 

headquartered in Red Bay, Alabama, and I also live in a Sunshine 

manufactured home. 

Sunshine Homes is a producer of manufactured homes built in 

accordance with the Federal construction and safety standards enforced by the U.S. Department of Housing and Urban Development. 

MHARR is a national trade association founded in 1985 and 

based here in Washington, D.C., which represents the views and 

interests of mostly smaller independent producers of federally-regulated manufactured housing including Sunshine Homes. 

With me here today is Ed Hussey, my predecessor as the chairman of MHARR, who was chosen by Congress to serve on the National Commission on Manufactured Housing. 

Historically, manufactured homes have accounted for about 20 to 

25 percent of the new single-family homes sold in the United 

States. In 1998, our industry manufactured 373,000 homes. Since 

then, however, the industry has experienced a decline that is unprecedented in severity and length and has seen production and 

sales decline by nearly 90 percent. In 2010 and 2011, total industry 

production was approximately 50,000. 

The decade-plus decline of the industry is a result of entrenched 

discrimination against both the product and the market segment 

that it primarily serves, discrimination that has grown in recent 

years due to the intentional policy decisions by Federal regulators 

and as an unintended consequence of other decisions within the 

Federal buracracy; this discrimination was supposed to have been 

a thing of the past. 

More than a decade ago, Congress enacted the Manufactured 

Housing Improvement Act of 2000. That landmark Act, which 

amended the original National Manufactured Housing Act of 1974, 

9 

was designed based on 12 years of congressional study and the 

findings of a National Commission on Manufactured Housing to 

complete the transition of manufactured homes from the trailers of 

yesteryear to legitimate housing at full parity with other types of 

homes. 

Congress in that law not only acknowledged the importance of 

the affordability of manufactured homes, making the maintenance 

of that affordability an express purpose of the Act, but also enacted 

specific reforms to the HUD Manufactured Housing Programs designed to end past abuses and transform the program into a housing program that would ensure equal treatment in the role of manufactured housing for all purposes within HUD and elsewhere. 

The reality has been much different, as is detailed in MHARR’s 

comprehensive written testimony. HUD has failed to fully and 

properly implement the vast majority of the key programs that 

Congress deemed necessary in the 2000 law. After 12 years, Congress needs to send HUD a clear and unmistakable message that 

the 2000 law means what it says and that HUD must change 

course and implement the law in accordance with the expressed 

terms in its full intent and purpose. The 2000 law is not in need 

of change. It is HUD’s implementation of that law which has to 

change. 

Chairwoman Biggert and Ranking Member Gutierrez, I thank 

you for holding this hearing, and for the opportunity to appear here 

today and address the subcommittee. 

MHARR has already submitted comprehensive and detailed written testimony addressing all of these issues, and we would ask that 

it be included in the record for this hearing. 

We also look forward to answering any questions that you or 

your colleagues may have. Thank you. 

[The prepared statement of MHARR can be found on page 36 of 

the appendix.] 

Chairwoman BIGGERT. Thank you, and that material is included 

with your testimony which is included in the record. So, thank you. 

Ms. Dickens, you are recognized for 5 minutes. 

STATEMENT OF ISHBEL DICKENS, EXECUTIVE DIRECTOR, 

MANUFACTURED HOME OWNERS ASSOCIATION OF AMERICA 

(MHOAA) 

Ms. DICKENS. Good morning Chairwoman Biggert, Ranking 

Member Gutierrez, and members of the subcommittee. Thank you 

for the opportunity to share the Manufactured Home Owners Association’s perspective with you. 

My name is Ishbel Dickens, and I am the executive director of 

the Manufactured Home Owners Association of America. I have 

been working with manufactured home owners for more than 20 

years. I started out as a volunteer, collecting signatures to prevent 

a manufactured housing community in the vicinity of my church 

from being closed. I then became a community organizer and then 

went to law school specifically to get my law degree to advocate for 

people who own their homes and but not the land under them. In 

2010, I completed Harvard University’s Kennedy School Achieving 

Excellence Program, and I have been the executive director of 

MHOAA since November of 2010. 

10 

MHOAA is a national association of manufactured homeowners 

and represents the interests of 17 million people who live in manufactured homes. In fact, there are approximately 3,400,000 manufactured homeowners represented in the 12 States on this subcommittee. 

There are more than 50,000 manufactured housing communities 

throughout the United States, and they provide rental spaces for 

2.9 million households upon which to place their homes. 

There are a number of reasons why people choose to live in manufactured homes, including the fact that the homes tend to be less 

expensive and can often be purchased without a downpayment. 

They are often seen as attractive options for seniors and for young 

families just starting out on the homeownership ladder. 

Many people choose to live in manufactured housing communities because the preference is for the gated communities; safe 

places to live. However, manufactured homeowners, especially 

those living in land lease communities, soon begin to realize that 

their American dream of homeownership is turning into a nightmare as landlords impose higher and higher rents without any corresponding improvement in the community and most especially 

when landlords sell the land under their homes without compensating them for the result and displacement in the loss of their 

homes. 

Other negative aspects related to manufactured home living relate to the cost of buying a manufactured home. Most purchasers 

are steered towards chattel rather than real estate loans. This 

means they have to pay a higher interest rate over a shorter period 

of time resulting in double monthly payments. 

Besides the ever-increasing rent and the constant looming 

threats of the land under the home being sold, homeowners are 

also very worried about lack of security of tenure. Landlords provide only one-year rental agreements that may or may not be renewed and certainly don’t provide the homeowner with security of 

tenure. Why would they spend their life savings and take cash in 

an expensive chattel loan to purchase a manufactured home if they 

have no security of tenure. Thus, the current state of manufactured 

housing in this country is fraught with anxiety, inequality, and 

lack of predictability. 

I wanted to address some of the MHCC issues that have come 

up. I think the Manufactured Housing Consensus Committee plays 

a vital role for both consumers and the industry. The makeup of 

the Committee—seven members representing consumers, seven 

representing the industry and seven representing the general public—is the only place where manufactured homeowners will have 

an equal voice. 

When manufactured housing community landlords have the 

power to close the communities and displace all the homeowners, 

when they have the power to raise the rent to such an extent they 

cause economic eviction, and when the enforced rules which basically have absolved them of all the responsibility then the playing 

field is so uneven that manufactured homeowners begin to feel like 

prisoners in their own homes. 

At least on the MHCC, manufactured homeowners have an equal 

voice. They have a forum where their voice matters. They exercise 

11 

that voice, and they make sure that the homes that are built are 

durable and long-lasting. The MHCC is there to advise the Department on a range of issues related to construction and safety of 

manufactured homeowners. This quality oversight is vital for consumers. 

The MHCC is required to meet not less than once every 2 years. 

I have been to two in-person meetings in 2011 and an additional 

orientation meeting as a new member of the committee. 

The MHCC bylaws allow for public participation in both the general and all subcommittee meetings; therefore, the two main industry players, MHI and MHARR, are very well represented. In fact, 

I think the record will show that the public comment session is 

dominated by the industry. 

There are four subcommittees on the MHCC, and we meet by 

telephone between in-person meetings to discuss a variety of issue 

that are brought before us. A majority vote on the subcommittee 

is enough to bring those issues to the full committee, and a twothirds vote on the full committee is what takes the issue forward 

to the Department. It is a laborious process, but it works because 

it gives everyone a voice, and it is really worthwhile in the time 

it takes to get us to consensus. 

I think there are some solutions, and I think there are ways that 

the industry and the homeowners can work together, and I would 

like to address just a few of them. Both the homeowners and the 

producers want a quality product at an affordable price that will 

last, allowing homeowners to age in place. 

Manufactured homeowners also want to know that when they 

take out a loan, it is on a product where the financing will be affordable, and that the land upon which they place that home will 

be there for the long term. More homes would be sold if the industry worked with manufactured homeowners to guarantee long-term 

leases to ensure people were not displaced due to economic eviction 

and where manufactured home communities had security of tenure 

either through purchase of the land wherein the landlord wants to 

sell it or through zoning laws to preserve manufactured housing 

communities long term. 

The industry could also encourage more manufactured home 

sales if they supported a titling and had manufactured homes provided with the same financing tools that are available for site-built 

homes. 

I think the government also has a role to play, and I would like 

to point out that there are some 14 States where there are no protections for manufactured home owners. It would be great if the 

Federal Government could require HOME States to have manufactured housing protection laws in place before they were given 

HOME dollars for instance, or where the Federal Government 

could provide tax incentives to encourage community owners to sell 

to homeowners’ associations or to housing authorities. 

Also, I think before this community next week, there will be a 

hearing on the Affordable Housing Self-Sufficiency Improvement 

Act. It would be great if homeowners could use those vouchers not 

only to pay for the rental on the land but also to pay for the mortgage or the insurance on those homes. 

12 

I appreciate the opportunity to come here this morning, and I 

hope that MHOAA will continue to have conversations with both 

the industry and the government as together we ensure the longterm viability of the manufactured home industry and realize the 

potential for manufactured homes to play a large role in addressing 

the affordable housing crisis in this country today. 

Thank you for the opportunity, and I look forward to further dialogue on this important topic. 

[The prepared statement of Ms. Dickens can be found on page 63 

of the appendix.] 

Chairwoman BIGGERT. Thank you. 

Mr. Hussey, you are recognized for 5 minutes. 

STATEMENT OF EDWARD HUSSEY, IMMEDIATE PAST CHAIRMAN, MANUFACTURED HOUSING ASSOCIATION FOR REGULATORY REFORM (MHARR) 

Mr. HUSSEY. My name is Edward Hussey. I am appearing today 

in my capacity as immediate past chairman of the Manufactured 

Housing Association for Regulatory Reform. I am also vice president of Liberty Homes Inc., headquartered in Goshen, Indiana, a 

manufacturer of manufactured and modular homes. 

Over the course of more than 35 years, I have been involved in 

nearly every aspect of the production and marketing of manufactured homes and the Federal regulation of manufactured home construction and safety. I have had the privilege of testifying before 

Congress previously about the benefits and advantages that manufactured homes provide to families seeking the American dream, 

and I was honored to serve as a House of Representatives appointee to the National Commission on Manufactured Housing in 

the 1990s which developed a conceptual blueprint for reforms to 

the Federal Manufactured Housing Program at the U.S. Department of Housing and Urban Development that were ultimately enacted by Congress as part of the Manufactured Housing Improvement Act of 2000. The enactment of the 2000 law was a major watershed event for the manufactured housing industry. From humble origins nearly 80 years ago as a type of quasi vehicle, mobile 

homes in the 1960s and 1970s experienced a period of rapid growth 

of evolution that pointed to the need for Federal regulation to ensure quality and protect homeowners while ensuring the affordability and acceptance of manufactured homes nationwide. 

As a result, Congress adopted the Manufactured Housing Construction and Safety Standards Act of 1974, which established the 

current HUD Regulatory Program based on three interrelated principles: first, uniform performance-based Federal construction and 

safety standards to allow innovation and to take advantage of the 

efficiencies of factory built construction; second, robust Federal preemption to avoid a multitude of nonconforming State and local 

standards that would unnecessarily increase cost; and third, uniform, federally-based enforcement of the standards. 

While the original 1974 law fostered major technological advances that saw the trailers of the post-World War II era become 

legitimate housing that in almost all instances remained at the 

original home site once installed, the HUD program established by 

13 

that law was effectively a program for trailers complete with recall 

provisions. 

As the industry progressed, it became evident by the 1990s that 

both the Federal Manufactured Housing Law and the Federal program needed to change in order to keep pace with the industry, 

allow manufactured housing to reach its full potential, and remedy 

HUD program deficiencies that had become evident since the inception of the Federal regulation in 1976. 

Following 12 years of study and analysis including the recommendations of the National Commission, Congress enacted the 

2000 law making what were supposed to be major changes to the 

HUD Manufactured Housing Program. Those changes were designed in part to ensure the continuing affordability of manufactured housing and more importantly to complete the final transition of manufactured homes from the trailers of yesteryear to legitimate housing at parity with all other types of homes. 

Among the centerpiece reforms of the 2000 law were: one, the 

creation of a strong independent Consensus Committee similar to 

those used to develop other American building codes, to consider 

new and revised standards, enforcement regulations, interpretations, and changes to enforcement policies and practices; and two, 

an appointed noncareeer administrator for the HUD program to finally bring manufactured housing into the mainstream of HUD 

programs, policies, and initiatives. 

Unfortunately, it has not worked out the way that Congress had 

intended. Instead of fully implementing the 2000 law as Congress 

and the National Commission intended, HUD has done everything 

in its power to maintain the old status quo of pre-2000 and either 

ignore or materially alter the changes that Congress sought to 

bring about. 

The result is that manufactured housing, as far as HUD and 

other governmental and quasi governmental agencies are concerned, stands essentially where it did when Congress convened 

the National Commission in 1993, a semi-vehicular ‘‘trailer’’ in 

need of ‘‘improvement’’ through constantly expanding regulation 

and enforcement. This outdated and indefensible orientation has 

had a domino effect on the entire industry and its consumers, subjecting both to ever worsening discrimination that among other 

things has virtually eliminated public and private consumer financing for manufactured home purchases and has negatively impacted 

the placement and acceptance of manufactured housing. 

As detailed in our MHARR written statement, manufactured 

housing production since the enactment of the 2000 law has declined more than 86 percent from 374,000 homes in 1998 to 50,000 

homes in the last 2 years. Over the same period, nearly 75 percent 

of the industry’s production facilities have closed and more than 

7,500 retail centers have closed. 

This represents a devastating loss of affordable housing opportunities for lower- and moderate-income American families, and hundreds of thousands of jobs throughout the manufactured housing 

industry have simply disappeared. 

And this has occurred in no small part due to HUD’s refusal to 

embrace manufactured housing and the clear directives that Congress set out in the 2000 law. Manufactured housing can and 

14 

should be a private sector solution in conjunction with other programs to meet the housing needs of Americans on all rungs of the 

economic ladder without the need for subsidies that needlessly burden taxpayers and increase the Federal deficit and Federal debt. 

Manufactured housing can fulfill this role and provide the American dream— 

Chairwoman BIGGERT. Mr. Hussey, if you could wrap up please? 

Mr. HUSSEY. I am. Just to be clear, Madam Chairwoman, there 

is nothing wrong with the 2000 law. It does not need to be altered 

or amended. The issue is its implementation by HUD. 

Chairwoman Biggert, Ranking Member Gutierrez, we thank you 

for holding his hearing and for the opportunity to address the subcommittee. 

[The prepared statement of MHARR can be found on page 36 of 

the appendix.] 

Chairwoman BIGGERT. Thank you. 

Mr. Roberts, you are recognized for 5 minutes. 

STATEMENT OF DANA ROBERTS, PAST CHAIRMAN, THE 

MANUFACTURED HOUSING CONSENSUS COMMITTEE (MHCC) 

Mr. ROBERTS. Thank you, Chairwoman Biggert and Ranking 

Member Gutierrez. My name is Dana Roberts. I am here today because I was a member for over 6 years of the Manufactured Housing Consensus Committee, and its first chairman until my resignation from the committee in July of 2008. Until my retirement from 

the State of Oregon, I served as Oregon’s operation’s manager for 

the manufactured housing program. 

Among my responsibilities were Oregon’s implant inspections, 

Oregon’s Consumer Assistance Program that includes investigating 

concerns by homeowners involving dealers, retailers, manufacturers, and sellers and reaching resolution of those concerns under either Federal or State law. I also administered Oregon’s manufactured installation set-up standard and was the chairman of the 

committee that created that standard. 

Based upon my years of experience managing Oregon’s Manufactured Housing Program, I am of the opinion that the manufactured 

housing industry produces quality homes in the plant that are 

equal to site-built homes for the money. The number one problem 

facing the industry before the 2000 Act is not using the right type 

of foundation for the home’s use. The law allows the industry to 

use two different types of foundations: one, for houses that retain 

the ability to move from one piece of land to another; and two, one 

for houses that would be permanently attached to piece of land and 

considered just like any other site-built housing. 

Upon the passage of the Act and my experience as member and 

chairman of the Consensus Committee where we interpreted the 

Act and had to reach a two-thirds consensus before we made any 

recommendations to HUD—the opinion, the Act, legislation gives 

the Department all the tools needed to administer a National Manufactured Housing Program. 

The number one problem facing the industry today is HUD’s administration and interpretation of the Act. I would note that writing more statutory language, so HUD can misinterpret the language, doesn’t fix the problem. 

15 

HUD has declared major portions of work to build the house as 

not part of the home’s construction. They have declared building 

any part of the foundation, completing the end walls including siding, sealing around the windows, exterior painting, completing the 

joining of sections together, connecting to utility service, completing 

the roof between sections, installing any shipped loose items such 

as plumbing, electrical, appliances, laying down of the carpet, completing tape and texture is not part of the home’s construction. 

This interpretation has allowed HUD to make additional interpretations that deviate from the purposes of the Act. Utilizing this 

interpretation, HUD has interpreted the Act to not utilize the Consensus Committee to solicit consensus-based recommendations and 

program actions such as rules, regulations, policies, and interpretations. They are not considered construction standards according to 

HUD’s definition. 

As a result of that, the MHC has no responsibility to provide 

periodic recommendations regarding the installation standards for 

updating because they don’t view installation standards as construction standards. HUD has also rejected from the Consensus 

Committee’s recommendation for a national installation standard 

the distinguishment between the two types of foundations that I 

mentioned previously. 

We also tried to put in place a process according to the Act to 

update the standards on a regular basis like other construction 

standards do or site built for modular housing. We did get HUD 

to, in 2007, solicit public information on how to update the standards but they have done nothing with it. 

HUD viewed any recommendation on standard changes from the 

committee as not been formally in front of them until we put it in 

a rule format where they could file it in the Federal Register. The 

Consensus Committee does not have the expertise to complete a 

rule format as required by the Department for submittal in the 

Federal Register. We can show how to change a rule or we can’t 

add all but the departmental caveats that go to the Federal Register. 

In conclusion, the Act does not need to be changed. What needs 

to be changed is HUD’s interpretation of the Act and a need to 

clarify what type of installation and foundation is needed to permanently attach a home into a piece of land so that lenders and homeowners can have reliance that a manufactured home is just like 

other conventional housing and is equal to or as equal to site built 

or modular housing. 

You will find further information about these issues in my written testimony. I am asking you today to direct HUD to change 

their interpretations in keeping with your intent in the Act and to 

do three things. Consider installation as construction. The Congress intends to use the Consensus Committee to receive input 

from the industry and consumers before they take action, and Congress intends to use a consensus-based process for updating of the 

standards. 

Thank you for giving me the opportunity to appear. 

[The prepared statement of Mr. Roberts can be found on page 71 

of the appendix.] 

Chairwoman BIGGERT. Thank you, Mr. Roberts. 

16 

Mr. Santana, you are recognized for 5 minutes. 

STATEMENT OF MANUEL SANTANA, DIRECTOR OF ENGINEERING, CAVCO INDUSTRIES, ON BEHALF OF THE MANUFACTURED HOUSING INSTITUTE (MHI) 

Mr. SANTANA. Thank you, Chairwoman Biggert, Ranking Member Gutierrez, and members of the subcommittee for the opportunity to testify this morning. 

My name is Manuel Santana, and I am the director of engineering for Cavco Industries. I am appearing today on behalf of the 

Manufactured Housing Institute. I also serve on the HUD Manufactured Housing Consensus Committee. 

Today, I will focus on a few key aspects regarding HUD’s implementation of the Improvement Act of 2000. There is no question 

that an efficient streamlined system of building regulations is important to ensure a robust economy, the availability of financing, 

and enhanced acceptance from homebuyers and communities across 

the Nation. In spite of a number of regulatory challenges facing our 

industry, there is no shortage of consumers who want to purchase 

manufactured homes. The most significant impediment faced by 

manufactured housing and its 19 million residents remains the 

availability of an access to financing. 

MHI was pleased to testify last November during a hearing before this subcommittee on this important issue and we continue to 

work on a bipartisan basis to educate Members of Congress about 

the unique financing challenges present within our industry. We 

are grateful for the consideration and leadership the committee has 

provided in this area. 

The Improvement Act has made a number of important changes 

to streamline an update to HUD code and increase the availability 

of affordable housing. Of significance, it allowed for the creation of 

minimum Federal installation standards. While HUD’s implementation of this important component of building code regulation is 

not yet complete, it has gone a long way to enhance consumer satisfaction and improve the quality and durability of manufactured 

housing. 

There are other aspects of the Improvement Act that remained 

incomplete. MHI is committed to partnering with the professional 

and dedicated workforce at HUD to help achieve the goals of the 

Improvement Act. We look forward to addressing the challenges 

that remain. First, the efficiency of the rulemaking process. The 

Improvement Act requires HUD to take action and approve or reject proposed standards within 12 months after submittal by the 

Consensus Committee. 

Since its inception, the Consensus Committee has met numerous 

times and has recommended numerous revisions and updates to 

the HUD Code. Unfortunately, the vast majority of these recommendations have not reached completion. As a result, the HUD 

Code has not been able to keep pace with changing construction 

practices, standards, and new technologies. It has hindered industry’s ability to keep pace with consumer demand and expectation. 

More importantly, an outdated HUD Code has led to the development of additional regulations by a second Federal agency. 

17 

MHI is seriously concerned about new energy standards to be imposed by the Department of Energy. A lack of action by HUD to 

update energy standards now means that industry will be subjected to duplicative Federal building code regulations and enforcement. This will have the real impact of raising the cost of manufactured housing. 

The Improvement Act requires that changes to policies, practices 

or procedures affecting standard regulations and inspections or 

other enforcement activities must be submitted to the Consensus 

Committee for review. HUD has long hold the position that only 

construction and safety standards are subject to consider this committee purview. This has served to limit the influence and impact 

that the Improvement Act intended not preemption. 

The Improvement Act underscored the preeminent status of the 

HUD Code over all other State and local building code. Congress 

recognized the importance of Federal preemption as a key element 

to the production and distribution of manufactured housing. A single uniform code is essential to manufacture housing and that it 

preserves affordability. Unfortunately, HUD has not followed 

through our request from MHI and the Consensus Committee to 

update its policy and preemption so that it is more tuned to the 

Improvement Act. 

The Improvement Act specifically calls for the broad and liberal 

interpretation of the HUD Code. In practice, HUD’s interpretation 

has been narrow and conservative. This has led to an increase in 

State and local efforts to support the HUD Code with additional 

local and State regulations. 

Finally, the appointment of a noncareer administrator. Even 

though the Improvement Act does not mandate the appointment of 

a noncareer administrator, such an individual is key to an effective 

manufactured housing program in order to oversee the timely development of code and standards and to serve as a much needed 

advocate for manufactured housing and its consumers in HUD’s 

overall mission, policies, and programs. And considering the necessity of a fee increase, it is important to evaluate the current program and objectively determine if the agency is meeting program 

priorities within its existing budget. 

Appointing a noncareer administrator is an essential first step 

that should be taken prior to implementing any fee increase. The 

Improvement Act was intended to facilitate the availability of affordable manufactured housing and to increase homeownership to 

all Americans. MHI believes that the issues we have outlined today 

must be resolved in order to achieve these important goals and will 

remain committed to working with HUD, Congress, and other 

stakeholders. 

Chairwoman Biggert and members of the subcommittee, thank 

you for the opportunity to testify of this important issue. I welcome 

any questions. 

[The prepared statement of Mr. Santana can be found on page 

81 of the appendix.] 

Chairwoman BIGGERT. Thank you, Mr. Santana. 

We will now move to the questions from the members and I will 

yield myself 5 minutes. 

18 

My first question is for Mr. Santana. In your view, how could the 

HUD Manufactured Housing Program be improved to foster more 

innovation? Can you provide an example of how outdated building 

codes have impeded innovation and utilization of state-of-the-art 

building products and construction methods? 

Mr. SANTANA. In my view, the best way to improve the process 

is to help streamline the acceptance of new products and materials. 

Currently, the process is burdensome and it takes a long time to 

complete. Because of this, we are unable to get certain appliances 

approved in a timely fashion, for example, tankless water heat 

heaters which we install in modular homes. They are installed in 

residential stick-built construction and they are also installed in— 

we have to follow a lengthy process to get acceptance of this wellestablished appliance. 

Chairwoman BIGGERT. Thank you. 

Mr. Czauski, how often has the HUD Code been updated since 

the passage of the 2000 Act? Has the HUD Code kept up with 

building technology, and do you have any suggestions to improve 

the process for developing and updating the HUD Code? 

Mr. CZAUSKI. Updating the HUD Code has been an ongoing process since the 2000 Act. There have been a number of changes and 

I mentioned some of those in my testimony regarding ventilation 

and energy efficiency, and with regard to improving the process, I 

certainly applaud the Consensus Committee and support the efforts of the Consensus Committee in providing recommendations to 

the Department with regard to improvements and improving technology. They are what Congress believes to be experts and it is a 

group of manufacturers, users, State regulators, and others who 

make the Consensus Committee effective in what it does in making 

those recommendations to the Department. 

Chairwoman BIGGERT. We heard that HUD limits what the consensus group can take up. 

Mr. CZAUSKI. I did hear that comment, but to my knowledge, and 

I have been Acting Deputy Administrator since July of last year, 

I am not aware of and I certainly have no reason to believe that 

HUD would want to limit the input of the Consensus Committee 

on matters involving manufactured housing. I think it is—for the 

Secretary’s benefit, it is a second bite at the apple, so to speak, 

when we get input from the Consensus Committee and then we go 

out with the Federal Register notice for public comment. I think it 

is the best of both worlds. 

Chairwoman BIGGERT. All right. And my third question is for 

anyone who would like to answer it. 

There are existing organizations that develop codes for residential housing and commercial buildings, that develop codes and review and revise these codes. Do you know how long these groups 

take to revise it and review and issue a new code? And is this a 

method for updating regularly, updating building codes for your industry that you would prefer over HUD or consider as an alternative to HUD performing this function? 

Mr. Roberts, I thought you might want to take this question? 

Mr. ROBERTS. Thank you, Madam Chairwoman. Most site-built 

and modular construction codes are either on a 2- or 3-year cycle. 

19 

The 2000 Act choosing 2 years is in keeping with the other construction codes, so I don’t think you need to change the timeframe. 

The other codes used a consensus-based committee to make those 

recommendations. And they go into the code and they tell you what 

changes to specific language of the code need to occur. Once that 

happens, it goes to the governing bodies, be it a city or State depending on who adopts the codes or—and they actually go through 

their rulemaking process to enforce that code after it has been 

adopted. 

And I view the Consensus Committee’s responsibility for every 2 

years to make those recommendations to the Department as normal. Within 2 years of our enactment, by 2004, we gave the Department 185 changes to their construction standards. In 2005, 

they adopted about 50 of those. The other 135 changes have sat on 

their desk since 2005 and now are so outdated because some of the 

changes we made were based on codes that have been further 

changed. So now, they have to go back through the process. 

Chairwoman BIGGERT. So you think that there might be a better 

way to do that with an alternative? 

Mr. ROBERTS. I think the better way to do that is to remove 

HUD’s interpretation that they can’t act on a Consensus Committee proposed rule until it is in a format to be filed in the Federal Register. And until that happens, HUD says, ‘‘We haven’t officially received it.’’ 

Chairwoman BIGGERT. All right. Thank you. And my time has 

expired. 

The gentleman from Illinois, the ranking member of the subcommittee, is recognized for 5 minutes. 

Mr. GUTIERREZ. Thank you very much. Welcome to you all. 

So as I hear the testimony today, four of you believe that HUD 

is really the problem that the mobile home—modular home industry has, because that is what I have been hearing. It is HUD, 

HUD, HUD, HUD, and nobody else’s problem. You are not, any of 

you, responsible in your industry for any of the problems that you 

might be having. As a matter of fact, if HUD would just listen to 

you, all your problems would be resolved. And maybe that is the 

case. 

But just so that we are clear, I, when I was chairman of the 

housing committee in the City of Chicago, I had a demonstration 

project of modular pre-manufactured housing in my district. Six of 

those buildings have since been demolished. They are gone. The 

other two have never appreciated in value as much as the homes 

adjacent to them. 

I think there is a question of what are these people purchasing 

and the quality of the construction that people are purchasing. And 

I really enjoyed the scenes with my colleagues on the other side of 

the aisle as they continue to insist that Washington doesn’t have 

the answers, that the answers really are at the local level, that we 

should be listening to people at the local level and not the Washington inside-the-beltway answers. 

I agree with them. I think there are standards for housing, for 

codes that are developed across this country and I think those 

housing codes should be respected. If people want to come in and 

construct in the City of Chicago or in the City of Las Angeles or 

20 

in the City of Santa Fe or Seattle or any other city, they should 

respect those housing codes that exist there, because those housing 

codes are supported by the people and the localities that exist there 

by city councils, mayors, and State legislators who have created 

those laws. So I agree with my colleagues on the other side of the— 

they do know how to do it better at the local level, and Washington, D.C., doesn’t have all of the answers. 

I would like to say that as I look at this, because I heard testimony that the percentage of manufactured housing compared to 

new single family home sales and, let me say in 1990, it was 35 

percent of all the sales, in 1995, it went to 51 percent, that is the 

majority of sales of homes in the United States were manufactured. 

But then it went down and it just seems to me that it is kind of 

like the economy, right? People do better and people did better. In 

1997, 1998, 1999, and 2000, people did better. 

And if people did better, they are going up, I believe, for a more 

expensive home and one that is built on-site, because that is the 

home that does not depreciate in value, because many mobile 

homes and many pre-manufactured homes actually do once you 

take them out; they are like my car. Once I drive it off the lot, it 

is worth a lot less than when I looked at it all nice and shiny on 

the lot. And so, people will have a tendency of doing that. 

And the other thing is that we had an incredible bubble which 

you participated in. People bought more homes as a bubble, but if 

I can buy a—if I can buy a stick-built house or on-site house and 

I can get a no-doc mortgage and I can get a loan, I am going to 

go there instead of the difficulties that many of you would have. 

But I noticed that your percentage is actually, as the economy improves, it is actually improving also. So it seems like the bubble 

hit, and now you are getting a larger percentage. 

I would like to ask Ms. Dickens—your testimony reminds me of 

issues that we deal with in public housing in Section 8. We have 

laws that ensured that resident advisory boards have rights, that 

affordable housing units are preserved when private owners sold 

their properties and tenants are given some degree of choice. But 

it sounds like manufactured homeowners faced a unique set of 

problems in their community. They don’t have protection. Is this 

something that you hear a lot from your members, and what do 

you think we can do about it? 

Ms. DICKENS. Thank you, Mr. Gutierrez. Yes, the majority of the 

MHOAA members are incredibly fearful of economic eviction, of closure of their communities or the loss of their largest asset, their 

homes. And it seems to me that the industry could really help us 

there. I kind of feel like the industry wants both, because the members of MHI and the members of MHARR want to sell more homes, 

but there are also members who are raising the rents in these communities and you can’t have it both ways. 

If the industry would work with us to encourage community owners who may be their members to have long-term leases, to provide 

security of tenure, to encourage their members when they sell their 

communities, to sell to the resident’s associations and there are national models. ROC USA is a national model of a very well-run and 

organized program that helps homeowners form associations and 

21 

purchase the land under their homes as cooperatives, none of 

which have ever foreclosed on their loans. 

There are also housing authorities and other nonprofit agencies 

who can step in and have stepped in and purchased manufactured 

housing communities to preserve affordable homeownership opportunities as part of the continuum of affordable housing. 

Manufactured housing is the largest unsubsidized source of affordable homeownership in this country and I believe we need to 

continue to preserve and maintain that opportunity for seniors, and 

for young families just starting out on a homeownership ladder. Indeed, there are things we can do that would make purchasing a 

manufactured home actually an attractive option. 

I would like to share with you, I was once in a public hearing 

in Washington State where the attorney for the community owners 

was asked if he would encourage his mother to move into a manufactured-home community. His response was, ‘‘Not only would I not 

encourage my mother to move into a manufactured-housing community, I would not advise anybody to move into a manufacturedhousing community.’’ And this was the attorney for the landlords. 

So if they don’t want you to move in, why should the homeowners 

themselves ever consider it? 

Mr. MILLER OF CALIFORNIA [presiding]. Thank you. 

Mr. Hurt, you are recognized for 5 minutes. 

Mr. HURT. Thank you, Mr. Chairman. 

I thank each of you for appearing today. I had sort of two subjects that I want to cover and I was hoping to hear from Mr. 

Czauski as well as Mr. Bostick and Mr. Hussey in particular. 

The first deal is with the label fee. We discussed this in Danville 

at our hearing. I have a concern any time that we are going to impose additional fees, especially at the time when small businesses 

and manufacturers are having a hard enough time surviving, especially as it relates to this sector. Obviously, those costs will have 

to be borne by the ultimate customer and when you look at where 

we are with housing in this country and what has happened in the 

last 4 years since the crash in 2008, affordable housing is now 

more important than ever, and obviously we don’t want to be at 

cross purposes in making—in putting additional burdens on manufactured housing. 

So I understand the proposal to increase the fee from $39 to $60. 

I would like to hear from Mr. Czauski as well as Mr. Bostick and 

Mr. Hussey as to: first, how do you justify that; and second, how 

will that impact the manufacturers of manufactured housing and 

will that be an unreasonable cost? 

And in the second part, it has to do with financing. I think what 

we heard in Danville was that the financing was more and more 

difficult at a time again where we have, I think as Mr. Hussey 

said, ‘‘We have a private sector solution here for making housing 

more affordable for Americans,’’ and I wonder what can be done at 

HUD and what can be done by this committee as it relates to 

Dodd-Frank in the lending and appraisal standards. What can be 

done to address the lack of financing at the administrative level 

that is at the HUD level as well as at this committee level in terms 

of legislation and dealing with Dodd-Frank? 

22 

So Mr. Czauski, if you could address both of these issues briefly 

and then I would like to hear from Mr. Bostick and Mr. Hussey on 

these issues. 

Mr. CZAUSKI. Yes, sir. With regard to the first issue of the fee increase, the fee increase had been raised from $39 to $60 and that 

had been a number of years ago when I had entered into this position, we did review that proposal and tried to ascertain the justification for raising that fee. And after receiving feedback internally and from the meeting in Danville, the Department is currently in the process of evaluating the justification for raising that 

fee, the impact that fee would have on the industry, and any negative consequences. So with regard to the fee issue, we are reevaluating the decision or the proposal to raise the fee and to what extent it should be raised. 

With regard to the second question, I did—a representative from 

Ginnie Mae did join me today, and with your permission, I will 

defer to him and address— 

Mr. HURT. I would like to leave enough time for Mr. Bostick and 

Mr. Hussey so if it is very, very briefly—is the person with you 

there, is that the idea? 

Just if you could state your name and what you are doing and 

then if you could just very briefly try to answer the question. 

Mr. KEITH. Yes, sir. My name is Gregory Keith and I am the 

chief risk officer at Ginnie Mae. 

I don’t think I am really qualified to speculate on some of the 

issues that you are focused on related to Dodd-Frank. Obviously, 

our role is to facilitate the securitization of this product and create 

liquidity in the market place. So unfortunately, I don’t think I can 

address your question related to Dodd-Frank. 

Mr. HURT. All right. 

Mr. Bostick? 

Mr. BOSTICK. When you understand the need for or looking at 

the label increase, our question would be, what is HUD planning 

to do with the money? In my business, during the downturn of our 

industry, we downsized, laid off, did everything under the sun to 

survive. And my question is, is HUD going to use this money to 

get bigger in a time when the industry is getting smaller? That 

would be my response on the label fee. 

Mr. HURT. What about financing? 

Mr. BOSTICK. On financing, we have some good examples of discrimination against our industry. We are 20 percent at least or a 

minimum of 20 percent of the housing available in this country. At 

Fannie Mae, we are less than 1 percent of their portfolio, Freddie 

Mac less than 1 percent of their portfolio. 

Mr. HURT. So just very briefly, we are over time. Briefly, how we 

do we address that? What can we do? 

Mr. BOSTICK. They tell us that they don’t purchase manufactured 

housing loans, but in the turn around, they tell us that manufactured housing loan performance is way out or better than site built. 

Mr. HURT. Thank you, Mr. Bostick. And I think maybe if I get 

time at the end of the hearing, maybe we will get to you, Mr. 

Hussey. I apologize for going over. 

Mr. MILLER OF CALIFORNIA. Mr. Green, you are recognized for 5 

minutes. 

23 

Mr. GREEN. Thank you, Mr. Chairman. 

Again, I thank the witnesses for appearing and I apologize if this 

is slightly off topic, but it is something of concern to me. I represent a district in Houston, Texas, and as you can well imagine, 

when Katrina hit as well as Rita, we had some contact with persons in Louisiana and Mississippi and I want to harken back if we 

can to the Katrina trailers issue. 

As you know, we passed legislation to deal with formaldehyde in 

trailers and I understand as legislation interested in doing to what 

extent it has been properly implemented, because we had a January 1, 2013, deadline for promulgating the rules and regulations for 

implementation of the Formaldehyde Standards for Composite 

Wood Products Act. So, I am interested in this. 

But before we get to this, I would like to, if I may, ask about the 

Katrina trailers. We had over 100,000 of these, as I understand it. 

What happened ultimately to these Katrina trailers, many of which 

were thought to have levels of formaldehyde that produce some 

concerns, irritation of the throat, the eyes? What happened to these 

trailers? 

The representative from HUD, please? 

Mr. CZAUSKI. Thank you for your question. The trailers that you 

are referring to, for the mobile homes were sold to FEMA, I understand. And they were under the jurisdiction of FEMA. 

I know that there is an issue with regard to whether or not some 

of these homes were—as opposed to manufactured homes, HUD 

manufactured homes under the code. I understand that recently 

FEMA has issued a policy to the extent that it is their intention 

to use HUD manufactured homes with regard to any emergency 

housing in the future. 

With regard to the formaldehyde issue, HUD didn’t have formaldehyde guidelines with regard to the construction of manufactured housing. And— 

Mr. GREEN. Could you repeat that? I am sorry. I didn’t quite understand that last sentence. 

Mr. CZAUSKI. HUD didn’t have guidelines with regard to formaldehyde under legislation. I understand that EPA is otherwise 

overseeing the issue of formaldehyde limits and that HUD will 

comply with the rulemaking that EPA issues with regard to formaldehyde. 

Mr. GREEN. Can the public be assured that, as it related to HUD, 

we are doing all that we can to deal with the question of—the 

formaldehyde and the wood products that go into these mobile 

homes, manufactured homes? 

Mr. CZAUSKI. At the current time, I believe that Congress had 

delegated authority to the EPA to address the issues of formaldehyde. HUD did have its own limit with regard to formaldehyde 

emissions from wood products. And to the extent that is now required to comply with the EPA guidelines, we are deferring to 

them and the rulemaking process which I assume will include public comments or just add issue. 

Mr. GREEN. Thank you. I will continue this, I am sure, at another hearing. But I do appreciate your sharing with me. 

Let me ask one additional question. Ms. Dickens, you have spoken about mobile home security to a limited extent and how perVerDate Nov 24 2008 16:32 Aug 01, 2012 Jkt 075068 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 K:\DOCS\75068.TXT TERRIE
24 

sons buy into what they believe to be secured areas and how they 

find themselves being evicted by virtue of increases in the cost of 

actually maintaining the property. Is there something else you 

would like to add to this, because I know that in your statement 

you didn’t get quite through it? Would you like to add anything 

more? 

Ms. DICKENS. Thank you, Mr. Green. The main issues are where 

manufactured homeowners often feel like prisoners in their own 

homes. They really don’t have any other options. When the community owner continually raises the rent beyond what the homeowners can afford, it continually passes on to the homeowners costs 

that used to be absorbed by the community owner, for instance, the 

care of the trees on the their lots, repaving the driveways, and taking care of things that used to be the landlord’s responsibility. And 

the homeowners are just completely stuck. They cannot sell their 

homes, because no one else would want to move into that situation, 

and they can’t act like apartment dwellers who simply pack their 

bags and move on somewhere else. 

They really do feel like they have this millstone around their 

necks. And I think that when they do have security of tenure, 

when they do have the ownership of the land opportunity then you 

get very well maintained, very well organized communities where 

the homeowners really do work together to preserve the property 

for themselves. Right now, it is like share cropping. They improve 

the land for the benefit of the landlords and they get no return on 

that investment when the community closes it and the landlord 

sells it. 

And so, they really are stuck between a rock and a hard place, 

and they don’t get the same protection as single-family homeowners, the chattel mortgages are very expensive. You can’t deduct 

mortgage interest on a chattel loan the way you can in a real estate loan. So they are buying an expensive product or at least using 

expensive money to buy an affordable home, if you like. But then, 

there are big problems in situations in manufactured housing communities that they cannot easily get out of. When the community 

closes and they are displaced, they get no compensation for the loss 

of their largest asset, their home. They are just simply left to deal 

with that themselves. 

Mr. GREEN. Thank you. We have gone beyond my time. I yield 

back the time that I do not have. 

Mr. MILLER OF CALIFORNIA. Thank you. Now I give myself 5 minutes. 

I have been involved in the construction industry since my early 

20s as a builder/developer. And I have been through the 1970s recession, the 1980s recession, the 1990s recession, and this one is 

different, but they were all different. I remember prime in 1981, 

1982 going to 211⁄2 percent and nobody could get a loan at prime. 

But financing has impacted every aspect of the industry today. It 

seems like a few years ago, if you could read and sign your name, 

they would give you loan. Now, even if you are very qualified, you 

can’t get a loan. 

I guess my first question would be to either Mr. Bostick or Mr. 

Hussey—legislation that recognizes small business loans are fundamentally different than large bounce loans and they should be 

25 

treated appropriately by the Federal regulators. Our bill is to distinguish manufactured housing employees from loan originators. 

How important are these changes in the industry and how urgently 

should it be applied? 

Mr. Hussey? 

Mr. HUSSEY. I think they are very important to the industry and 

they should be applied as quickly as we possibly can. You talk 

about the last 2 years being a bust for the housing industry. Our 

industry has been in a bust since 1998 and has been going downhill ever since and has not recovered. And the main reason for that 

is the financing for the homes. Congress recognized that a couple 

of years ago when it passed in 2008, I think, a provision in that 

law which stated that the GSEs had a duty to serve manufactured 

housing, as well as other underserved markets and that provision 

would have provided additional funding and additional financing 

for manufactured housing if the GSEs had survived. 

I think one of the the points that needs to be made concerning 

the 2000 Act and your bill is that we still need that noncareer administrator there at HUD to champion these causes. Had that noncareer administrator been there from the year 2000 on, hopefully, 

we would have been included in a lot more financing programs, we 

would have qualified for a better financing programs for our homes, 

not only our chattel homes which comprise about 30 percent or 35 

percent of our market, but also real property loans that comprise 

65 to 70 percent of the market. 

If we had that individual there to champion those programs and 

the sense of Congress for the duty to serve, I think we would be 

in a lot better shape today, and if that individual was there after 

your law passes as quickly as possible— 

Mr. MILLER OF CALIFORNIA. I have a question. We were— 

Mr. HUSSEY. —we would have championed those— 

Mr. MILLER OF CALIFORNIA. —a little confused on the noncareer 

versus career that has been brought up repeatedly and has not 

really been defined so far. Why do you think there is a difference 

there? 

Mr. HUSSEY. I think if an individual is within the bureaucracy 

for an extended period of time, it has been our experience that they 

tend to lose the focus for the outside of the industry—they are not 

responsible to the Administration directly that appointed them. 

Mr. MILLER OF CALIFORNIA. Okay. 

Mr. HUSSEY. I think that—plus I believe we can get someone to 

take that position who has a good knowledge of manufactured 

housing, who doesn’t confuse manufactured housing with RVs and 

modular housing, and other forms of factory-built— 

Mr. MILLER OF CALIFORNIA. How would a noncareer be to your 

benefit then versus— 

Mr. HUSSEY. I think that individual is more responsive to the 

Administration that appoints him and would not be directly involved with the career individuals. Really, the career individuals at 

HUD who have run this program have been there for a long time. 

Mr. MILLER OF CALIFORNIA. Yes. 

Mr. HUSSEY. And it is their reluctance to— 

Mr. MILLER OF CALIFORNIA. Do you think it is ingrained within 

the bureaucracy that you are actually being discriminated against 

26 

in that fashion. I know today, there are adequate funds from multifamily housing, and they are doing very well; apartments, condos, 

townhomes, but you are being discriminated against in your reality 

or your perspective. Is that correct? 

Mr. HUSSEY. That is correct. 

Mr. MILLER OF CALIFORNIA. Is it because of the difficulty of convincing people that you are providing quality, readily available 

housing versus the nontraditional construction type house that has 

been developed? 

Mr. HUSSEY. It is difficult convincing even this panel of the differences between or the similarities between conventional housing 

and our housing, our factory-built housing and the differences between recreational vehicles. 

Mr. MILLER OF CALIFORNIA. I understand the similarities. I remember when you were—they came on pretty strong in the 1970s 

and you were out competing with the stick-and-brick builders out 

there, and you are providing very nice housing at a better price 

and quicker. I think there is a true benefit out there. I don’t see 

a major difference at all. 

Mr. HUSSEY. There is a tremendous cost advantage— 

Mr. MILLER OF CALIFORNIA. There is a cost advantage. 

Mr. HUSSEY. —to the factory built housing, yes. 

Mr. MILLER OF CALIFORNIA. Yes, and time. Time is money. And 

you can compete in a way they can’t. 

Mr. HUSSEY. Right. 

Mr. MILLER OF CALIFORNIA. I guess, Mr. Santana, could you expand on the effects of vague guidance from HUD and the State implementation of the SAFE Act on your industry? 

Mr. SANTANA. At its most basic, the SAFE Act has led to disservice to consumers who are trying to buy a manufactured home 

because the sales reps are hesitant to educate or provide any kind 

of assistance on the financing process due to a fear of violating portions of the SAFE Act that are unclear. 

And I think that might sum it up right there. If a consumer goes 

into a retail store to buy a house, and they select one and they say, 

‘‘Okay, where do I go from here?’’ The rep says, ‘‘I can’t help you 

because I am afraid to violate the SAFE Act.’’ 

I think it is very important to try to expand and explain what 

was actually intended by the SAFE Act and who it would apply to 

and who it does not. 

Mr. MILLER OF CALIFORNIA. I didn’t mean to cut you off, Mr. 

Hussey, but we are running out of time. You and I could have gone 

on for another half-hour, I think. 

Mr. Sherman, you are recognized for 5 minutes. 

Mr. SHERMAN. Ms. Dickens asked this question to my staff about 

once every 2 years for quite some time, what can we do to help 

those who live in manufactured housing? I will ask you—I have 

read your testimony. The one thing you suggest is the voucher program change, so I am aware of that idea. But I have a more specific question about home financing. 

Outside of home financing in this voucher program, is there anything for the Federal Government to do to help California mobile 

home owners? 

27 

Ms. DICKENS. Thank you, Mr. Sherman. I believe that supporting 

the MHCC is one thing that the Federal Government can do. The 

MHCC is a really important venue for manufactured homeowners 

where we have an equal voice. It is the only place— 

Mr. SHERMAN. I have read your testimony on that. From what 

I hear, and correct me if I am wrong, lenders are charging much 

higher interest rates on mobile homes and requiring much higher 

downpayments; that makes it hard to sell a mobile home, depresses 

the value of mobile homes in a particular park, and apart from that 

is because the lender is—why is it that the lenders charge so much 

interest? Is it because of the liability they might have if the mobile 

home isn’t up to spec? 

Ms. DICKENS. Yes, certainly, for lenders where the home is 

placed in a manufactured-housing community, the lender has no 

guarantee that the home is going to be there long term and neither 

does the homeowner have any guarantee that the home is going to 

be there long term. So yes— 

Mr. SHERMAN. So, one— 

Ms. DICKENS. —it is certainly— 

Mr. SHERMAN. —reason why the interest rate is high is the mobile home park may cease to exist. 

Ms. DICKENS. That is part of it. The other part may be that most 

likely, it is a chattel loan which has a much higher interest rate 

than a regular real estate mortgage loan. 

Mr. SHERMAN. Although the mobile home interest rates seem to 

be much higher than automobile interest rates these days. 

Ms. DICKENS. I have known of people buying manufactured 

homes with a personal credit— 

Mr. SHERMAN. Are Fannie and Freddie willing to buy these 

loans? 

Ms. DICKENS. I am sorry? 

Mr. SHERMAN. Will Fannie and Freddie buy mobile home loans, 

have they bought any significant number? 

Ms. DICKENS. I am sorry. I don’t know the answer to that, but 

I will get back to you on that one. 

[Ms. Dickens’ response can be found on page 128 of the appendix.] 

Mr. SHERMAN. Okay. What would you think of an idea that 

would say, if you have lived in your home for at least 3 years and 

you sell it, the lender does not have any vicarious liability for 

whether the home is up to spec at that point? 

Ms. DICKENS. That might help encourage the lenders to be more 

willing to loan on those homes, absolutely. 

Mr. SHERMAN. But as to the rest of the industry, focusing on 

somebody who has lived in their home for a few years, who now 

wants to sell to somebody who can get financing, what can we do 

to help them? 

Mr. HUSSEY. I think if I may respond, Mr. Sherman? 

Mr. SHERMAN. Okay. 

Mr. HUSSEY. I think, providing a reasonable secondary market 

for chattel loans, if someone has lived in their home for a couple 

of years, now they are going to sell just the home— 

28 

Mr. SHERMAN. We do have a secondary market for auto loans, so 

that is the secondary market for chattel loans. Does that market 

accommodate mobile home loans? 

Mr. HUSSEY. As I understand it, there is no secondary market for 

chattel manufactured home loans. 

Mr. SHERMAN. Okay. And do you know whether under California 

law, these are typically true to this chattel? 

Mr. HUSSEY. In California law, no. In the Indiana law, I can tell 

you that if the home is a home-only loan, it is treated as a chattel 

loan. 

Mr. SHERMAN. Okay. 

Mr. HUSSEY. If the home is combined with real property, it can 

be treated— 

Mr. SHERMAN. No, one advantage homebuyers have is Fannie 

and Freddie still exist, and they put in effect a Federal guarantee 

on these loans which is why the secondary market is very happy 

to buy loans secured by a single-family residences even at 4 percent 

interest rates. 

Does the industry or anybody here have any proposal for getting 

Fannie and Freddie to do for the mobile home buyer what it is 

doing for the stick and brick and mortar homebuyer? 

Mr. HUSSEY. I think that the industry has in the past asked both 

the GSEs for programs to provide secondary markets for chattel 

loans and for manufactured home loans. At one time, both the 

GSEs had about a 4 to 5 percent of their portfolio that consisted 

of manufactured homes. 

Of course, these are traditional mortgage-type loans. Today, that 

has less than 1 percent of their— 

Mr. SHERMAN. So, you had a proposal, you weren’t able to convince them at that time, and now they have a very, very small 

ownership of mobile home loans? 

Mr. HUSSEY. That is correct. 

Mr. SHERMAN. Okay. Do you want to get those proposals to my 

office? 

Mr. HUSSEY. Certainly. 

Mr. SHERMAN. We have a feather duster, and we will dust them 

off— 

Mr. HUSSEY. We will be happy to. 

Mr. SHERMAN. And whether we can prod them in the right direction. 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Mr. SHERMAN. I think my time has expired. 

Mr. MILLER OF CALIFORNIA. You could ask a question before it 

expires. 

Mr. Dold, you are recognized for 5 minutes. 

Mr. DOLD. Thank you, Mr. Chairman. I certainly appreciate, 

again, our witnesses taking the time to join us this morning. 

Mr. Hussey and Mr. Roberts, you both had expressed that the 

2000 law did not need to be changed, but instead focus on what is 

going on at HUD in terms of how it is being implemented. I think 

one of the roles that we have certainly here on this committee and 

in this body is to try to make sure again, on the oversight capacity, 

that those laws are being followed. And also trying to make sure 

that there are no unintended negative consequences. 

29 

And so, I guess my first question to you, to try to make sure that 

we are safeguarding the ability to have manufactured homes and 

that we have this alternative that oftentimes is at more of an affordable cost, is what can we be doing? What should we be doing? 

And what should HUD be doing differently in order to make sure 

that we are moving this process forward? 

Mr. ROBERTS. Yes, Congressman. I believe you need to direct 

HUD to change their interpretation of the Act. 

Mr. DOLD. Okay, specifically, if you can— 

Mr. ROBERTS. Specifically, they have said work done on-site, like 

the installation, like the joining of sections, is not part of the 

home’s construction. They don’t view that as being part of the construction of a home. When they make that decision, then they can 

say anything related to that activity is not part of the Consensus 

Committee. 

They further go on and say the work that is part of the Consensus Committee, which is how you build the home inside the 

plant, we won’t consider it until you put it in the form of a formal 

rule ready to be filed in the Federal Register, which means all of 

those recommendations we did in 2004 sat on the shelf for 7 or 8 

years not brought forth for consideration for public comment because they weren’t put in the form of a formal rule, which the Consensus Committee lacks the expertise to do. 

Mr. DOLD. If I can just stop you there for a second, because I 

would like HUD to have a chance to talk about that. We have 180 

recommendations that are sitting on the shelf, and why in the 

world is HUD not taking a more active role to try to adopt some 

of these recommendations or at least bring them to light? 

Mr. CZAUSKI. Let me explain the process just a little bit to help 

clarify. 

Mr. DOLD. Okay. 

Mr. CZAUSKI. Under the 2000 Act, an administering organization 

was to be under contract to provide assistance to the Consensus 

Committee in managing and operating that committee, which included maintaining a list of any recommendations that the Consensus Committee would submit to HUD. The Consensus Committee has not always reached a consensus, but to the extent that 

it has, it has forwarded recommendations to HUD. 

HUD has either acted or is in the process of acting on those, and 

I can provide you with a list of all of those recommendations that 

HUD has acted upon, but I am not aware of any delay, that HUD 

is intentionally not acting on any of the recommendations of the 

Consensus Committee. 

Mr. DOLD. Okay. Maybe I am misunderstanding, because what 

I am hearing from Mr. Roberts is the fact that the Consensus Committee has made recommendations as early as 2004 to the tune of 

about 180, is that correct Mr. Roberts? And what you are saying 

is that there is no delay that you know of. I consider between 2004 

and today to be a pretty significant delay. If you reviewed them 

and said, ‘‘We are not going to do them,’’ that is fine. But to say 

that there are 180 on the shelf, I think there is a significant problem. I would like to shift if I could— 

30 

Mr. ROBERTS. Just a point of clarification. Out of the 180 in 

2005, they have adopted about 50 of them. What has been on the 

shelf is the remaining 135. 

Mr. DOLD. Okay. That is certainly helpful. Ms. Dickens, you had 

made some opening comments with regard to some of the concerns 

that are out there for those individuals who have purchased manufactured homes, and I certainly would love to get your recommendations on how this body, the Federal Government, and 

again, I am concerned that we don’t want to be having a heavy 

hand if the Federal Government comes down to individual States 

and municipalities. But what do you think we ought to be doing 

to— 

Ms. DICKENS. Thank you. 

Mr. DOLD. —better enable homeowners? 

Ms. DICKENS. Thank you, Mr. Dold. Yes, you are absolutely right 

that for the most part, a lot of the relationship between the community owner and the homeowner rests at the State level. However, there are 14 States in the Union that do not have any State 

protections for manufactured homeowners, and the one thing that 

I think the Federal Government might want to consider so that at 

least the community, the homeowners in those 14 States have some 

fundamental freedom, some protection to exercise constitutional 

rights, would be to require those 14 States to have on their books 

some legislation that determines the real relationship between the 

community owners and the homeowners. 

And I know that you can’t impose a heavy hand as you say but 

perhaps, considering that there are some proposed regulations 

around HOME funds right now, that perhaps those HOME dollars 

could be withheld from States that do not have mobile home landlord-tenant acts in place until such time that they do have them 

in place. 

HOME dollars are to help provide affordable housing. If those 14 

States enacted the legislation to protect manufactured homeowners, then you wouldn’t need those HOME dollars to help displaced manufactured homeowners. Those HOME dollars could go 

and help other people who need assistance with affordable housing. 

That is one thing that is current and very pertinent to the Federal 

Government. 

Another idea would be ways to encourage community owners. 

When they choose to sell, again, not requiring them to sell, but if 

and when they choose to sell, provide them with some kind of Federal tax credit that would encourage them to sell to the resident 

homeowners association or to a local nonhousing authority or nonprofit affordable housing entity, in that way, we continue to boost 

our manufactured housing as part of the continuum of affordable 

housing. 

And then the third thing, a bill that will be coming before this 

committee next week, the Affordable Housing Improvement Act, allows manufactured homeowners to use vouchers to help pay towards the rental of their space. It would be wonderful if vouchers 

could also be used by manufactured homeowners to help pay towards the mortgage and insurance on their home. 

So, those are the three very specific things that the Federal Government could consider. Thank you. 

31 

Mr. DOLD. Thank you so much. Mr. Chairman, my time has expired. 

Mr. MILLER OF CALIFORNIA. Following up one question with what 

Mr. Dold was asking Mr. Czauski and it wasn’t responded to, out 

of 185 regulations, 50 were implemented, where the heck are the 

other 135 and why haven’t they have been implements? That was 

never responded to. 

Mr. CZAUSKI. Oh, I—with regard to the number, I cannot— 

Mr. MILLER OF CALIFORNIA. I believe that the 130— 

Mr. CZAUSKI. The number is— 

Mr. MILLER OF CALIFORNIA. Where are they? 

Mr. CZAUSKI. It is my understanding that probably the number 

was much higher with regard to the number of recommendations— 

Mr. MILLER OF CALIFORNIA. I would ask you, on behalf of the 

committee then to respond back to the committee in writing what 

regulations are out there that haven’t been implemented, where 

they are at, and why are they sitting there? With the consent of 

the committee, we ask that you respond back. What is the reasonable amount of time to do that? 

Mr. CZAUSKI. Certainly. 

Mr. MILLER OF CALIFORNIA. Thirty days? 

Mr. CZAUSKI. Let me check with our administering, within— 

Mr. MILLER OF CALIFORNIA. As soon as possible. 

Mr. CZAUSKI. As soon as possible. 

Mr. MILLER OF CALIFORNIA. We are just not telling you but 

that—based on the situation of the industry that seems, from 2004, 

I believe it is unreasonable. I am a member of the committee to accept the fact that of 185, let us say only 50 have been implemented 

and 135 were sitting there. 

Anyway, Mr. Stivers, you are recognized for 5 minutes. 

Mr. STIVERS. Thank you, Mr. Chairman. I appreciate it, and I appreciate the witnesses’ time. I have learned a lot about manufactured housing. I want to follow up on some questions asked by 

other members. It seems to me that the panel has really talked 

about some great positives of manufactured housing, the affordability, the fact that it can be manufactured for 10 to 35 percent 

less, but there are clearly some issues involving more expensive financing and some tenant issues. 

My first question is for Ms. Dickens, because it hasn’t really 

come up. What percent of folks in manufactured housing are tenants and rent the ground under their feet versus the people who 

actually purchase ground and pour a pad themselves and do all 

that? 

Ms. DICKENS. Thank you, Mr. Stivers. I believe that there are 

about 2.9 million households who rent the land under their homes 

in about 50,000 to 56,000 manufactured housing communities 

across the country, and there are probably—I am guessing, and 

maybe the industry can give you a better answer—3.8 million 

households who own their homes and a few simple situations 

where they also own the land. 

Mr. STIVERS. Go ahead, sir. 

Mr. SANTANA. According to a census data, it is more like 25 percent. 

Mr. STIVERS. I am sorry? 

32 

Mr. SANTANA. It is 25 percent. 

Mr. STIVERS. Twenty-five percent own and 75 percent rent. Is 

that what you are saying? 

Mr. SANTANA. No, it is the other way around. 

Mr. STIVERS. Other way around, 75 percent only. 

It does seem to me, and I am new at this, that the issues, the 

tenant issues and everything, and I know Mr. Gutierrez has talked 

about how home values didn’t keep up in some of the manufactured 

home communities. Some of that might be based on the fact of the 

folks who choose to purchase the home and rent the ground, and 

it is maybe a situation that is just not working. 

How many folks inside the industry have worked to try to change 

that, and I do want to talk to Mr. Czauski about the HUD regulation that probably make that more difficult but we talked about 

earlier that don’t consider foundation work, don’t consider work 

with windows or siding or ceiling or any of those things as part of 

the home loan process or part of the construction process. 

Is there any move away from the mobile home parks toward real 

ownership of land? Is that something you are seeing more of in the 

industry and in the marketplace? Anybody can answer. 

Mr. HUSSEY. Maybe I can give some guidance. Over the years, 

there has been a move away from chattel mortgages and away from 

communities. Not very many communities are currently being developed in the United States. That has been more of a zoning issue 

than anything else and the parks that are out there, the communities that are out there relatively full depending on which part of 

the country you are in. 

Our industry is building more and more sectional-style houses 

that are going on real property, that are being put on permanent 

foundations and being treated as real property. 

Mr. STIVERS. Sure. And like Mr. Sherman asked earlier, we do 

want to make sure we look out for the 2.9 million people who are 

already in these situations. With that, I do want to ask Mr. 

Czauski about this whole idea of site work. If you don’t have a 

foundation on a house, whether it is bricks and mortar or whether 

it is a manufactured home, it is not a sustainable situation. Why 

is that not considered part of the manufacturing process? 

Mr. CZAUSKI. Oh, it is part of the manufactured housing process, 

sir. In 2007, in accordance with the 2000 Act, HUD did issue model 

installation regulations, and there are 33 States that have—and 

those are minimum standards for installation. The Department 

works with States as— 

Mr. STIVERS. It is wrong when all these witnesses have said that 

any part of the foundation work including putting walls, stabilizing 

supports, anchoring it all, that is not considered part of the house 

as construction? 

They have just said something that is not true? 

Mr. CZAUSKI. I can only speak to the existing statute and the 

regulations which do provide installation standards that are published in the Federal Register in the 24 CFR. And in addition, by 

statute, it allows States to implement their own installation requirements. There are 33 States that have already done that, and 

we work with State regulators that review those installations according to the State’s standard. 

33 

Mr. STIVERS. And I am almost out of time so, I know a couple 

of people raised their hands, would you like to respond to that? 

Mr. SANTANA. Yes, I would. I am a little unclear on the issue 

here because the way that I understand it, although set up in foundation and site completion isn’t part of the construction of the 

home. It is part of the program. There is an installation standard 

that is out there that specifies a need for a way to set a home, a 

way to peer a home, a way to complete the home on site. 

Mr. STIVERS. Would one of the folks, and I am almost out of time, 

actually, I am out of time, if the chairman would allow me. Would 

one of the folks who brought up that point like to clarify what the 

issue is? 

Mr. ROBERTS. Yes, Mr. Chairman. Mr. Santana just said it. He 

said that is not part of the construction but there is a standard. 

The Federal Government doesn’t consider it part of the construction under the Act, then they don’t have to regulate it under the 

Act. All they have to do is adopt the minimum standard and that 

is it. And they have directed that it is not preempted then, under 

the Act. 

Further, they have directed that the Consensus Committee 

doesn’t treat it as a construction standard under the Act and have 

periodic updates to that. 

Mr. MILLER OF CALIFORNIA. Would anybody like to briefly answer that? 

Mr. ROBERTS. Excuse me, one point, and to further clarify that, 

they put it a separate section in their regulations for the construction standards so they can keep that clear distinction between 

what is the construction standard and what is an installation. 

Mr. SANTANA. If I may? 

Mr. MILLER OF CALIFORNIA. Yes, sir. 

Mr. SANTANA. I think what Mr. Roberts is getting at is that there 

are a lot of components to the HUD program. You have a set of 

standards, you have a set of regulations, and you have a set of installation standards. And I think what this comes back to is HUD’s 

interpretation on what is under the purview of the Consensus Committee. They have stated that only the standards are under the 

purview while the Act says that all the standards, regulations, and 

installation standards should be under or should be available for 

Consensus Committee review. 

Mr. MILLER OF CALIFORNIA. The time has expired, but there are 

a significant number of questions that have arisen and have yet to 

be answered. One of them would be construction standards, installation, etc. The most glaring would have to be the regulations and 

the lack of understanding and enforcement of those. I think that 

is an appropriate hearing in the future that should be considered 

by this subcommittee to deal specifically with those regulations. 

But I want to to thank the panel; you have been very informative. 

I wish we had more time to delve into your concerns and issues. 

34 

The Chair notes that some Members may have additional questions for the panel which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 30 days 

for Members to submit written questions to these witnesses and to 

place their responses in the record. 

This hearing is adjourned. 

[Whereupon, at 11:46 a.m., the hearing was adjourned.] 

(35) 

A P P E N D I X 

February 1, 2012 

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