27222 Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Rules and Regulations 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 3280, 3282, and 3288 

[Docket No. FR–4813–F–03] 

RIN 2502–AH98 

Manufactured Home Dispute 

Resolution Program 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Final rule. 

SUMMARY: This rule establishes a federal 

manufactured home dispute resolution 

program and guidelines for the creation 

of state-administered dispute resolution 

programs. Under the National 

Manufactured Housing Construction 

and Safety Standards Act of 1974, as 

amended by the Manufactured Housing 

Improvement Act of 2000, HUD is 

required to establish a program for the 

timely resolution of disputes among 

manufacturers, retailers, and installers 

of manufactured homes regarding 

responsibility, and the issuance of 

appropriate orders, for the correction or 

repair of defects in manufactured homes 

that are reported during the 1-year 

period beginning on the date of 

installation. 

DATES: Effective Date: February 8, 2008. 

FOR FURTHER INFORMATION CONTACT: 

William W. Matchneer III, Associate 

Deputy Assistant Secretary for 

Regulatory Affairs and Manufactured 

Housing, Department of Housing and 

Urban Development, 451 Seventh Street, 

SW., Room 9164, Washington, DC 

20410, telephone (202) 708–6401 (this is 

not a toll-free number). Persons with 

hearing or speech impairments may 

access this number via TTY by calling 

the toll-free Federal Information Relay 

Service at (800) 877–8389. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Requirement for a Dispute Resolution 

Program 

The National Manufactured Housing 

Construction and Safety Standards Act 

of 1974 (the Act) (42 U.S.C. 5401–5426) 

is intended, in part, to protect the 

quality, safety, durability, and 

affordability of manufactured homes. 

The Act was amended on December 27, 

2000, by the Manufactured Housing 

Improvement Act of 2000, Public Law 

106–569, to require HUD, among other 

things, to establish and implement a 

new manufactured home dispute 

resolution program for states that choose 

not to operate their own dispute 

resolution programs and to establish 

guidelines for the creation of stateadministered dispute resolution 

programs. 

Specifically, section 623(c)(12) of the 

Act (42 U.S.C. 5422(c)(12)) calls for the 

implementation of ‘‘a dispute resolution 

program for the timely resolution of 

disputes between manufacturers, 

retailers, and installers of manufactured 

homes regarding responsibility, and for 

the issuance of appropriate orders, for 

the correction or repair of defects in 

manufactured homes that are reported 

during the 1-year period beginning on 

the date of installation.’’ A state is not 

required to be a State Administrative 

Agency under HUD’s manufactured 

home program to administer its own 

dispute resolution program. However, 

any state submitting a state plan to 

change its status from a 

nonparticipating state to a conditionally 

or fully approved State Administrative 

Agency after the effective date must 

provide for a dispute resolution program 

as part of its plan. Any state that was 

conditionally or fully approved before 

the effective date will not be required to 

include a dispute resolution program in 

its state plan, as long as the state 

maintains conditionally or fully 

approved status. Section 623(g)(2) of the 

Act requires HUD to implement a HUD 

Manufactured Home Dispute Resolution 

Program that will meet the above 

requirements in any state that has not 

established a program that complies 

with the Act. The state where the home 

is sited determines whether the HUD 

Manufactured Home Dispute Resolution 

Program or the state program applies. 

Proposed Rule 

On October 20, 2005, HUD published 

the Manufactured Home Dispute 

Resolution Program Proposed Rule (70 

FR 61178) with a comment due date of 

December 19, 2005. HUD received 

responses from 20 commenters during 

the comment period. The commenters 

included two state agencies, several 

statewide and national manufactured 

housing associations, individuals, the 

Manufactured Housing Consensus 

Committee (MHCC), and one lowincome housing organization. 

II. Particular Areas of Interest to 

Commenters 

This section of the preamble discusses 

particular areas of interest to 

commenters in addition to the 

discussions of public comments that 

appear throughout the preamble in 

conjunction with the description of the 

dispute resolution program adopted in 

this final rule. 

General 

As previously discussed, HUD was 

charged with implementing a system to 

resolve disputes among manufacturers, 

retailers, and installers. As several 

commenters noted, the proposed rule 

did not include a definition of 

‘‘installer.’’ In response to this 

comment, this rule defines the term 

‘‘installer.’’ Additional information 

regarding installers may be found in the 

Manufactured Home Installation 

Program Proposed Rule published June 

14, 2006 (71 FR 34476). 

Even though the Act does not require 

their participation in the HUD Dispute 

Resolution Program, HUD views the 

participation of homeowners as a 

crucial element to a viable program. 

Under Section 625 of the Act, HUD has 

the broad authority to involve 

homeowners in the dispute resolution 

program. Consistent with the proposed 

rule, this final rule gives homeowners 

the right to participate in the HUD 

Dispute Resolution Program by 

initiating the Mediation and Arbitration 

Process and by acting as observers of the 

process. This final rule does not 

recognize homeowners as parties. 

HUD and the MHCC, in its meetings, 

recognized that it may have been 

possible under the proposed rule for the 

parties to argue that there is no dispute 

between them when in fact there is a 

defect that needs correction. In this final 

rule, HUD has ensured that the HUD 

Manufactured Home Dispute Resolution 

Program results in a proper 

determination of defect and culpability. 

Funding 

The MHCC and commenters have 

continued to recommend that parties 

that use and receive the benefits of the 

dispute resolution process pay at least a 

portion of the direct costs associated 

with the program. HUD agrees with this 

‘‘fees for service’’ approach and is 

currently seeking statutory authority to 

assess users of the program a fee for 

costs associated with the program. 

Absent such authority, the Department 

will absorb the cost of running the 

program in HUD-administered states as 

general program expenses. It is 

anticipated that such fees for service 

would not be used to cover the purely 

administrative costs to HUD of 

implementing the program, but would 

include a filing fee to initiate a dispute 

resolution process, a fee to initiate 

arbitration, and the assessment of 

arbitration costs to a losing party. Other 

administrative costs of the program in 

HUD-administered states would be 

funded as general program expenses. 


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Several commenters stated it is unfair 

to consumers in states with their own 

dispute resolution programs both to pay 

for their state’s program and subsidize 

the administration of HUD’s program in 

states that are not offering programs. 

The Department is sensitive to this 

issue. However, because fees for service 

are not currently authorized, the 

financing of the HUD Manufactured 

Home Dispute Program will be absorbed 

as a general Office of Manufactured 

Housing program expense as described 

above. 

As discussed in the proposed rule, 

HUD will use mediation and arbitration, 

two widely accepted methods of dispute 

resolution, as well as an alternative 

process that will allow manufacturers, 

retailers, and installers an opportunity 

to resolve disputes outside of the HUD 

Mediation and Arbitration Process 

established by this rule. The addition of 

an alternate process to the HUD 

Manufactured Home Dispute Resolution 

Program is based on comments received 

from the MHCC. In its comments to the 

proposed rule, the MHCC recommended 

that a term other than ‘‘Commercial OptOut Option’’ be used for the alternate 

process. In its place, HUD has 

substituted the term ‘‘Alternative 

Process.’’

The HUD Manufactured Home 

Dispute Resolution Program reflects the 

Executive Branch’s emphasis on 

utilizing dispute resolution processes to 

resolve conflicts in a cost-effective and 

expeditious manner, and on fostering 

good government by giving parties the 

opportunity to resolve disputes 

amicably and creatively through 

alternative dispute resolution. It also 

dovetails with Congress’ active 

promotion of alternative dispute 

resolution as set forth in the 

Administrative Dispute Resolution Act 

of 1996 (5 U.S.C. 571 et seq.). 

There were several comments to the 

proposed rule about the relationship 

between the HUD Dispute Resolution 

Program and subpart I of 24 CFR part 

3282 (Subpart I). This final dispute 

resolution rule is not inconsistent with 

other requirements of the Act. 

Specifically, nothing in this final rule 

absolves the manufacturer of its 

notification and correction 

responsibilities or other obligations 

under Subpart I. The dispute resolution 

program provides an additional 

homeowner protection mechanism and 

does not toll or replace the 

manufacturer’s responsibilities under 

Subpart I. Furthermore, the HUD 

Dispute Resolution Program does not 

replace any manufacturer’s warranty 

program. 

III. Program Administration for the 

HUD-Administered Program 

HUD interprets the language set forth 

in section 623(g)(3) of the Act (42 U.S.C. 

5422(g)(3)) as permitting the use of 

contractors in the implementation of the 

dispute resolution program in HUDadministered states. HUD will likely use 

contractors as screening neutrals, 

mediators, and arbitrators, and they will 

be required to become familiar with 

HUD’s manufactured home program. 

HUD acknowledges, however, that 

dispute resolution experts emphasize 

that a primary consideration for 

selecting neutrals, mediators, and 

arbitrators should be their background 

and experience in dispute resolution. 

The HUD Manufactured Home 

Dispute Resolution Program is governed 

by the Administrative Dispute 

Resolution Act, 5 U.S.C. 571 et seq. The 

HUD Manufactured Home Dispute 

Resolution Program consists of a 

Mediation and Arbitration Process 

comprised of six parts, in addition to 

the Alternative Process. The six parts of 

the Mediation and Arbitration Process 

are: Initial Reporting of an Alleged 

Defect, Initiating Dispute Resolution, 

Intake and Screening, Mediation, 

Nonbinding Arbitration, and HUD 

Review. When the manufacturer, 

retailer, and installer agree that the 

homeowner is not responsible for 

causing the defect, they may elect to use 

the Alternative Process instead of the 

HUD Mediation and Arbitration Process. 

The parties would then engage in a 

neutral evaluation process of their own 

design. However, if the defect is not 

corrected or repaired, the homeowner 

has the right to invoke the HUD 

Mediation and Arbitration Process after 

30 days have elapsed from the initiation 

of the Alternative Process. 

IV. HUD Manufactured Home Dispute 

Resolution Program in HUDAdministered States 

As noted previously, HUD will 

administer its dispute resolution 

program only in states that choose not 

to operate their own dispute resolution 

programs. The following discussion of 

the HUD-administered program will not 

apply in any state that provides 

satisfactory assurances that it has 

implemented its own qualifying dispute 

resolution program, and that certifies its 

program to HUD, as described in 

Section VI of this preamble. 

A. Initial Reporting of an Alleged Defect 

Under the Act, alleged defects that 

can be referred to the dispute resolution 

program must be reported within the 

first year after the date of home 

installation. It is only alleged defects 

reported in the first year after the first 

installation that are covered under the 

HUD Manufactured Home Dispute 

Resolution Program. As used in HUD’s 

Manufactured Home Dispute Resolution 

Program and this new part 3288, the 

term ‘‘defect’’ is defined to parallel its 

definition in the Act. Accordingly, the 

rule also makes clear that for the HUD 

Manufactured Home Dispute Resolution 

Program, the term ‘‘defect’’ includes 

each defect in the installation, 

construction, or safety of the home. 

Persons familiar with HUD’s longestablished program for manufactured 

home construction and safety standards 

are likely to be accustomed to using the 

term ‘‘defect’’ in a narrower way. In 

regulations implementing the historical 

aspects of HUD’s manufactured home 

program, the term has been defined to 

encompass only construction and safety 

standards, and to exclude matters that 

involve significant health and safety 

issues. See the definition in § 3282.7(j). 

For purposes of the HUD Manufactured 

Home Dispute Resolution Program, 

however, a defect is any problem in the 

performance, construction, components, 

or material of the home that renders the 

home or any part of it not fit for the 

ordinary use for which it was intended, 

including, but not limited to, a defect in 

the construction, safety, or installation 

of the home. The broader use of the term 

as it applies to rights and 

responsibilities established under this 

new part 3288, is distinguished from the 

term’s historical use in part 3282. 

As previously discussed, alleged 

defects must be reported within 1 year 

of the date of home installation to be 

eligible for the HUD Manufactured 

Home Dispute Resolution Program. The 

Department strongly encourages the 

parties and homeowners to seek to 

resolve disputes directly with the party 

or parties that they believe to be 

responsible for causing the alleged 

defect before invoking the HUD 

Manufactured Home Dispute Resolution 

Program. Nevertheless, any of the 

parties, and the homeowners, must 

report the existence of possible defects 

within the 1-year period in order to 

preserve the option of initiating the 

HUD Manufactured Home Dispute 

Resolution Program. The report may be 

made to the Department, any of the 

parties, or a State Administrative 

Agency. To be more flexible, the 

Department is permitting reports to be 

made to State Administrative Agencies 

in addition to the Department and the 

parties. The Department recommends 

that reports of alleged defects be made 

in writing, including, but not limited to, 


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e-mail, written letter, certified mail, or 

fax. Reports are also permitted by 

telephone. A report of an alleged defect 

must, at a minimum, include a 

description of the alleged defect, the 

name of the homeowner, and the 

address of the home. Parties alleging 

defects are encouraged to send any 

written correspondence via certified 

mail, fax, e-mail or other method, so 

that there will be proof of date of 

delivery. After reporting an alleged 

defect, the reporting party or 

homeowner is encouraged to allow time 

for a satisfactory response before 

initiating the HUD Manufactured Home 

Dispute Resolution Program. 

B. Initiating the Process 

Any party or a homeowner may 

initiate the HUD Mediation and 

Arbitration Process in a HUDadministered state by submitting a 

request for dispute resolution to the 

dispute resolution provider or by calling 

a toll-free number. 

C. Intake and Screening 

When the request for dispute 

resolution has been received by the 

dispute resolution provider, the 

screening neutral will review the 

sufficiency of the information provided 

with the request. Although there is no 

specified time period established for the 

screening neutral to review the request 

for dispute resolution, as recommended 

by the MHCC and other commenters, it 

is HUD’s intention to perform this task 

in a timely manner. If a defect is 

properly alleged and timely reported, 

notice of the request will be forwarded 

to the manufacturer, retailer, and 

installer by the screening neutral to the 

extent the appropriate parties can be 

identified based on the information in 

the request. If the screening neutral 

determines there is sufficient 

documentation of an alleged defect 

presenting an unreasonable risk of 

injury or death, a copy of the request 

will be sent to HUD. If a request is 

lacking any of the required information, 

the screening neutral will contact the 

requester or the parties to supplement 

the initial request. If information 

necessary to qualify the matter for the 

HUD Manufactured Home Dispute 

Resolution Program is not received 

within a reasonable time established by 

the screening neutral, the request for 

dispute resolution will be considered 

withdrawn. The Department anticipates 

establishing additional specific time 

periods for intake and screening as part 

of the contracting process with the 

third-party dispute resolution provider 

and publicizing these time periods on 

HUD’s Web site http://www.hud.gov. 

D. Mandatory Mediation 

The second stage in the process is 

mandatory mediation. The dispute 

resolution provider will select a 

mediator, who will be a different 

individual from the screening neutral 

used during the intake and screening 

process. The mediator will mediate the 

dispute and attempt to facilitate a 

settlement. The parties will be given 30 

days from the commencement of the 

mediation to reach a settlement. For 

cases involving defects presenting an 

unreasonable risk of injury, death, or 

significant loss or damage to valuable 

personal property, the parties will have 

a maximum of 10 days from the 

commencement of the mediation to 

reach an agreement. The dispute 

resolution provider will notify the 

parties and the homeowner in writing of 

the date of the commencement of the 

mediation. Sample agreements will be 

made available to the parties as drafting 

guidance. Upon the parties reaching and 

signing an agreement, the mediator will 

forward copies of any settlements 

reached to the parties, the homeowner, 

and HUD. Except for the report of an 

alleged defect, any request for dispute 

resolution, and any written settlement 

agreement, all other documents and 

communications provided in confidence 

and used in the mediation will be 

confidential, in accordance with the 

Administrative Dispute Resolution Act 

of 1996 (5 U.S.C. 571 et seq.). Once the 

settlement agreement is signed, the 

corrective repairs must be completed 

within 30 days, unless a longer period 

is agreed to by the homeowner and the 

parties. 

E. Nonbinding Arbitration 

The third stage that may be invoked 

is nonbinding arbitration. If the parties 

fail to reach a settlement during 

mediation, a party or the homeowner 

may, within 15 days of the expiration of 

the time allowed for reaching a 

settlement, request nonbinding 

arbitration. The party or the homeowner 

requesting nonbinding arbitration will 

be required to submit a written request 

for arbitration to the dispute resolution 

provider. The dispute resolution 

provider will determine how an 

arbitrator will be selected for each case. 

The parties may request an in-person 

hearing, to be held at the discretion of 

the arbitrator, after considering factors 

such as cost. If such a request is not 

made by all parties within 5 days of the 

dispute resolution provider’s receipt of 

the request for arbitration, the arbitrator 

may conduct either a record review or 

a telephonic hearing. The dispute 

resolution provider will issue a notice to 

the parties and the homeowner setting 

forth the date, place, and time the 

arbitration is to be held. If a party 

chooses not to participate in the 

arbitration, the process will continue 

without input from that party. The 

arbitrator will have the authority to 

issue requests for documentation and 

information necessary to complete the 

record, conduct on-site inspections, 

dismiss frivolous allegations, and set 

hearing dates and deadlines. The 

arbitrator will be required to complete 

the arbitration within 21 days of receipt 

of the request for arbitration, unless 

good cause is found by HUD. After 

conducting a hearing, the arbitrator will 

provide the parties and HUD with a 

written nonbinding recommendation as 

to who the responsible party or parties 

are and what actions should be taken. 

Several commenters, including the 

MHCC, proposed that the contents of 

the recommendation be made available 

to HUD and the parties simultaneously. 

The Department agrees and has 

restructured the Mediation and 

Arbitration Process accordingly. Several 

commenters, including the MHCC, 

stated that the parties should have the 

ability to enter into binding agreements 

of their choosing at any point in the 

process. Taking this into consideration, 

HUD has modified the procedures set 

out in the proposed rule. Under the final 

rule, at any time before HUD issues a 

final order, the parties may submit an 

offer of settlement to HUD that HUD 

may, at its discretion, incorporate into 

the order. 

F. HUD Review 

The final stage of the process is HUD 

Review. After the arbitrator makes a 

recommendation, he or she will forward 

it to HUD. HUD will review the 

arbitrator’s recommendation, the record, 

and any settlement offers. HUD will 

accept, modify, or reject the 

recommendation. Several commenters, 

including the MHCC, were opposed to 

HUD having the option to accept, 

modify, or reject the arbitrator’s 

recommendation. HUD considers it 

appropriate for HUD to issue final 

enforceable orders and that this inherent 

governmental function cannot be 

delegated to a private party. It is HUD’s 

obligation to issue an order that under 

the Administrative Procedure Act can 

withstand the arbitrary and capricious 

standard. When a defect is determined 

to be present, HUD will issue an 

appropriate order that assigns 

responsibility for correction of the 

defect. In the order for correction, HUD 

will include a date by which the 

correction of all defects must be 

completed, taking into consideration the 


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seriousness of the defect. A party’s 

failure to comply with an order of HUD 

will be considered a violation of section 

610(a)(5) of the Act (42 U.S.C. 

5409(a)(5)). 

The responsible party or parties will 

be required to pay for or provide any 

repair of the home. HUD may apportion 

the costs for correction and repair if 

culpability rests with more than one 

party. 

G. Alternative Process When 

Homeowners Are Not Responsible for 

the Defect 

Manufacturers, retailers, and 

installers who have been unable to 

resolve a dispute involving a defect 

among themselves and who certify that 

the homeowner is not responsible for 

the defect will have the option of 

electing to use an Alternative Process 

under the HUD Manufactured Home 

Dispute Resolution Program. The 

Alternative Process permits the parties 

to seek neutral evaluation outside of the 

procedures established by the HUD 

Mediation and Arbitration Process. To 

participate in the Alternative Process, at 

least one of the parties must submit a 

written notification to the dispute 

resolution provider after it has reported 

an alleged defect or has been informed 

that an alleged defect has been reported 

to another party. Parties must elect to 

use the Alternative Process no more 

than 7 days after notification of a 

request for dispute resolution has been 

delivered by overnight delivery, or 

commercial carrier, or by fax, to the 

screening neutral. Parties who elect to 

use the Alternative Process must agree 

to engage a neutral of their own 

selection. The selected neutral will 

evaluate the dispute and make an 

assignment of responsibility for 

correction and repair. The actual 

process followed will be designed and 

agreed to by the parties; there are no 

particular procedural requirements, 

such as witnesses or formal evidence. 

The parties may elect to memorialize 

the assignment of responsibility in 

writing and should agree to act upon the 

neutral’s assignment of responsibility 

for correction and repair. The 

participants must agree to allow the 

homeowner or the homeowner’s 

representative to be present at any 

meetings and to be informed of the 

outcome. The parties may inform the 

Department of the outcome. At any time 

after 30 days of the Alternative Process 

notification, any party or the 

homeowner may invoke the HUD 

Mediation and Arbitration Process and 

proceed to mediation by following the 

established procedures. 

V. Informing Homeowners About 

Manufactured Home Dispute 

Resolution 

One key component of the HUD 

Manufactured Home Dispute Resolution 

Program is notifying homeowners about 

the availability of dispute resolution in 

HUD-administered states through the 

HUD Manufactured Home Dispute 

Resolution Program, and in all other 

states through state dispute resolution 

programs. Homeowners will be advised 

of the availability of the HUD 

Manufactured Home Dispute Resolution 

Program from retailers when purchasing 

a manufactured home. The rule requires 

retailers to provide each homeowner 

with a standard notice at the time of 

signing of a contract for the sale or lease 

of a manufactured home. This is 

consistent with numerous comments 

received from the MHCC and others 

opposed to the posting of a notice in 

each home, but favoring a standard 

notice to be provided at or before the 

signing of the sales contract. 

The Department will notify the public 

about the HUD Manufactured Home 

Dispute Resolution Program through the 

Consumer Manual that 42 U.S.C. 5416 

and 24 CFR 3282.207 currently require 

be provided with each manufactured 

home. The manufacturer will be 

required to include in the Consumer 

Manual the specific language that is set 

out in the revised § 3282.207 in this 

rule. The language gives detailed 

information about the HUD program. 

VI. State Dispute Resolution Programs 

in Non-HUD-Administered States 

The HUD Manufactured Home 

Dispute Resolution Program will not be 

implemented in states that are certified 

by HUD and have dispute resolution 

programs that comply with the 

minimum requirements set out in these 

regulations. These states will administer 

their own dispute resolution programs. 

A state dispute resolution program will 

be required to meet criteria listed in a 

certification form. However, the final 

rule does not specify how the criteria 

are to be met. Comments from the 

MHCC and others strongly supported 

redefining HUD’s proposed state 

requirements for certification. Those 

commenters were in favor of having the 

state requirements parallel the statutory 

requirements. Additionally, those 

commenters noted that some states have 

already implemented programs that 

closely model the statutory 

requirements. The proposed rule 

included six requirements for full 

certification and five for conditional 

approval. In response to the comments, 

HUD has reduced the minimum 

requirements for full certification to 

four, and to three for conditional 

approval. The proposed rule also 

required that states allow homeowners 

to initiate complaints. Comments from 

the MHCC and others recommended 

that this requirement be removed. HUD 

has changed the certification form to 

allow states flexibility when operating 

their own programs and to give them the 

ability to design programs that closely 

model the statutory requirements. The 

minimum requirements for certification 

are set forth in Part II of the Dispute 

Resolution Certification attached as an 

appendix, and include provisions for: 

(1) The timely resolution of disputes 

regarding responsibility for correction 

and repair of defects in manufactured 

homes involving manufacturers, 

retailers, or installers; (2) provisions for 

issuance of appropriate orders for 

correction and repairs of defects in the 

homes; (3) a coverage period for 

disputes involving defects that are 

reported within a minimum of 1 year 

from the date beginning on the date of 

first installation; and (4) adequate 

funding and personnel. Any state that 

certifies that its program meets these 

four minimum requirements will be 

accepted and permitted to implement its 

own program. A state that meets three 

of the four minimum requirements 

under § 3288.205(a)(1) through (4) will 

be conditionally approved by HUD. 

HUD recognizes that some states may 

have a different definition of ‘‘defect’’ or 

use a different threshold for its program 

than the one set forth in these 

regulations for the HUD program. For 

purposes of state certification, this rule 

provides for state approval if the 

threshold for the program is 

functionally equivalent to the federal 

definition of ‘‘defect.’’

VII. Role of the Manufactured Housing 

Consensus Committee in Future 

Revisions of This Regulation 

Several commenters expressed a 

desire to have the Department work 

closely with the MHCC in future 

rulemaking for the dispute resolution 

program. Such involvement is not 

specifically provided for in the Act. 

However, HUD provides in this rule for 

the MHCC’s input prior to publication 

of any new dispute resolution 

rulemaking initiated by HUD. This rule 

also provides that the MHCC may 

initiate its own recommendations for 

HUD regarding dispute resolution 

regulations, and that HUD will explain 

to the MHCC any modification or 

rejection by HUD of the MHCC 

recommendations. 


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VIII. Conforming Amendments 

As stated in the October 20, 2005, 

proposed rule, since HUD is using the 

term ‘‘manufactured home’’ in this rule, 

it is taking this opportunity to correct 

the definition in 24 CFR 3280.2 by 

adding the reference to self-propelled 

vehicles found in section 603(6) of the 

Act (42 U.S.C. 5402(6)). HUD is also 

clarifying the methodology for the 

calculation of square footage that is 

included in the current regulatory 

definition. This action will result in 

consistent usage of the term for all parts 

of the manufactured home program. The 

definition in this final rule is unchanged 

from the definition that appeared in the 

proposed rule. 

IX. Changes to the Proposed Rule in 

This Final Rule 

The following changes to the October 

20, 2005, proposed rule are made by this 

final rule, consistent with the 

discussion of public comments in this 

preamble and as further explained 

below: 

1. To provide consistency in this rule 

with the terminology used in other HUD 

regulations, the term ‘‘manufactured 

home’’ rather than ‘‘manufactured 

housing’’ is used, and references to 

‘‘HUD’’ have been substituted for 

references to ‘‘the Secretary.’’

2. While this final rule gives 

homeowners the right to participate in 

the HUD Dispute Resolution Program by 

initiating the Mediation and Arbitration 

Process and by acting as observers of the 

process, it does not recognize 

homeowners as parties. 

3. A statement has been added to the 

dispute resolution language required in 

the consumer manual by § 3280.2(e) that 

the HUD Dispute Resolution Program 

does not replace any manufacturer’s 

warranty program. 

4. A definition of the term ‘‘installer’’

has been added to the list of definitions 

at § 3288.3. 

5. The rule at § 3288.5 requires 

retailers to provide each homeowner 

with a standard notice at the time of 

signing of a contract for the sale or lease 

of a manufactured home, rather than the 

posting of a notice in each home. 

6. The rule at § 3288.15(b) now 

permits reports of defects to be made to 

State Administrative Agencies in 

addition to the Department and the 

parties. 

7. A provision is added at § 3288.30(c) 

that denial of a dispute by all of the 

parties that there is a dispute does not 

preclude the dispute resolution process 

from going forward to mediation. A 

provision is also added at § 3288.35(c) 

that, during mediation, denial of a 

dispute by all parties without 

acceptance of responsibility will result 

in the mediator referring the matter to 

arbitration for determination of the 

defect and responsibility for the defect. 

A similar provision is added at 

§ 3288.40(d), that if the parties deny a 

dispute exists and the arbitrator 

determines there is a defect, the 

arbitrator will make a determination of 

responsibility for the defect. These 

additions protect the homeowner’s right 

to have the existence of, and 

responsibility for, any alleged defect 

determined through the HUD 

Manufactured Home Dispute Resolution 

Program in HUD-administered states in 

the event existence of a dispute is 

denied by all of the parties without 

determination of the defect and of 

responsibility for the defect. 

8. A procedure cited in the preamble 

of the proposed rule (at 70 FR 61180), 

that if the screening neutral determines 

there is sufficient documentation of an 

alleged defect presenting an 

unreasonable risk of injury or death, a 

copy of the request will be sent to HUD, 

is explicitly added to this rule at 

§ 3288.30(d). Similarly, a procedure 

cited in the preamble of the proposed 

rule (at 70 FR 61180), to make sample 

agreements available to the mediation 

parties as drafting guidance, is included 

in the final rule at § 3288.35(d)(2). 

9. Section 3288.40(c) makes explicit 

the arbitrator’s authority to make 

proposed findings of the presence of a 

defect and culpability. 

10. An extension of the 21-day time 

period by which the arbitrator is 

required to complete the arbitration is 

now permitted for good cause under 

§ 3288.40(h). 

11. Under § 3288.40(h), the contents 

of the arbitrator’s recommendation are 

to be made available to HUD and the 

parties simultaneously, rather than only 

to HUD as was stated in the proposed 

rule. 

12. The final rule, at § 3288.40(i), 

allows the parties to submit an offer of 

settlement to HUD at any time before a 

final order is issued that HUD may, at 

HUD’s discretion, incorporate into the 

order. 

13. For the alternate dispute 

resolution procedure of subpart C, the 

term ‘‘Alternative Process’’ has been 

substituted for ‘‘Commercial Opt-Out 

Option.’’

14. In § 3288.205(a), the final rule has 

reduced the minimum requirements for 

full certification from six to four, and 

from five to three for conditional 

approval. The proposed requirements 

dealing with homeowner initiation of 

the process and conflict of interest have 

been removed. 

15. A new subpart E has been added 

to address the role of the MHCC in 

Dispute Resolution Program rulemaking 

procedures. 

X. Findings and Certifications 

Regulatory Planning and Review 

The Office of Management and Budget 

(OMB) reviewed this rule under 

Executive Order 12866 (entitled 

‘‘Regulatory Planning and Review’’). 

OMB determined that this rule is a 

‘‘significant regulatory action’’ as 

defined in section 3(f) of the Order 

(although not an economically 

significant regulatory action under the 

Order). The docket file is available for 

public inspection in the Regulations 

Division, Office of General Counsel, 

Department of Housing and Urban 

Development, 451 Seventh Street, SW., 

Room 10276, Washington, DC 20410–

0500. Due to security measures at the 

HUD Headquarters building, please 

schedule an appointment to review the 

docket file by calling the Regulations 

Division at (202) 708–3055 (this is not 

a toll-free number). 

Paperwork Reduction Act 

The information collection 

requirements contained in this rule have 

been approved by OMB under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3520) and assigned OMB 

control number 2502–0562. In 

accordance with the Paperwork 

Reduction Act, HUD may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information, 

unless the collection displays a 

currently valid OMB control number. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (2 U.S.C. 1531–

1538) establishes requirements for 

federal agencies to assess the effects of 

their regulatory actions on state, local, 

and tribal governments and the private 

sector. This rule, which implements a 

statutory mandate to establish a program 

for the resolution of a narrow category 

of disputes, will not impose any federal 

mandates on any state, local, or tribal 

government or the private sector within 

the meaning of the Unfunded Mandates 

Reform Act of 1995. 

Environmental Review 

This final rule does not direct, 

provide for assistance or loan and 

mortgage insurance for, or otherwise 

govern or regulate, real property 

acquisition, disposition, leasing, 

rehabilitation, alteration, demolition, or 

new construction, or establish, revise, or 

provide for standards for construction or 

construction materials, manufactured 


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housing, or occupancy. Accordingly, 

under 24 CFR 50.19(c)(1), this final rule 

is categorically excluded from 

environmental review under the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4321). 

Impact on Small Entities 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires that a 

regulation that has a significant 

economic impact on a substantial 

number of small entities, small 

businesses, or small organizations 

include an initial regulatory flexibility 

analysis describing the regulation’s 

impact on small entities. Such an 

analysis need not be undertaken if the 

agency has certified that the regulation 

will not have a significant economic 

impact on a substantial number of small 

entities. 

HUD has conducted a labor and travel 

cost impact analysis for this rule. The 

cost analysis determines the cost 

difference between a typical dispute 

resolution process (the process) 

involving manufactured housing and 

the civil litigation costs between one or 

more parties involved in a 

manufactured housing dispute. A 

typical dispute resolution method is a 

two-step process: mediation and, for a 

small percent of unsuccessful mediation 

cases, arbitration. 

The potential cost impact of the 

mediation step for manufacturers would 

be approximately $1,550 per dispute, 

$237 for retailers, and $177 for 

installers. HUD anticipates that it may 

be administering the dispute resolution 

process in 26 states where 

approximately 37,800 homes are 

expected to be installed annually. 

Currently, 45 manufacturing corporate 

entities ship into those states, while 

1,719 retailers sell homes and 

approximately 5,000 individuals or 

businesses install manufactured homes 

in those states. 

Based on the preceding data, HUD 

anticipates taking action on 1,890 

complaints under the federal 

manufactured home dispute resolution 

process during an average year. 

Presuming that the average cost of this 

action ($1,964) will be incorporated into 

the home price or related service fees of 

every installed home in the 26 states 

(37,800), the cost impact to each 

installed home would be $98. 

If all 1,890 cases were settled through 

litigation rather than dispute resolution, 

the cost of litigating 1,890 cases would 

total $18.9 million. Averaged across 

37,800 homes, the average cost of 

litigation incorporated into each home 

price would be $500 per home, 

compared to the average cost of dispute 

resolution of $98 per home. Dispute 

resolution would, therefore, provide an 

average savings of $402 per home. 

Several commenters claimed that the 

number of complaints was not properly 

substantiated and was unrealistically 

low. However, these numbers were 

developed by carefully sampling 12 

current state dispute resolution 

programs. Furthermore, the Small 

Business Administration has accepted 

these estimates while none of the 

commenters supplied any numbers of 

their own. Some commenters also 

complained that the cost estimate 

provided by HUD runs only through the 

mediation phase. While this is true, 

HUD’s research, which was again based 

on current state program experience, 

determined that the number of disputes 

requiring arbitration would be minimal. 

The small increase in total cost 

associated with this final rule would not 

impose a significant burden for a small 

business. The rule would regulate 

establishments primarily engaged in the 

production of manufactured homes 

(NAICS 32991) and the sale of 

manufactured homes (NAICS 453930). 

In addition, manufactured home set-up 

and tie-down establishments (installers) 

would be included within the definition 

of all other special trade contractors 

(NAICS 23599). Of the 222 firms 

included under the NAICS 32991 

definition, 198 are small manufacturers, 

which fall below the small business 

threshold of 500 employees. There are 

10,691 retailers included under NAICS 

453930; all of the firms fall below the 

$11 million annual income rate. Of the 

31,320 firms included under NAICS 

23599 definitions, only 53 firms exceed 

the small business threshold of 500 

employees and none of these is 

primarily a manufactured home set-up 

and tie-down establishment. The rule, 

therefore, would affect a substantial 

number of small entities. However, the 

home manufacturers, retailers, and 

installers would be subject only to an 

associated labor cost and travel expense 

necessary to attend the mediation 

process and labor costs to participate in 

the expected record review and possible 

telephonic or face-to-face meeting for 

arbitration. Moreover, because the great 

majority of manufacturers, retailers, and 

installers are considered small entities, 

there would not be any disproportionate 

impact on them. Therefore, although 

this rule would affect a substantial 

number of small entities, it would not 

have a significant economic impact on 

them. In addition, the speedier and 

more certain resolution of disputes 

should help the affected businesses. 

Accordingly, the undersigned certifies 

that this final rule would not have a 

significant economic impact on a 

substantial number of small entities. 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits, to the extent 

practicable and permitted by law, an 

agency from promulgating a regulation 

that has federalism implications and 

either imposes substantial direct 

compliance costs on state and local 

governments and is not required by 

statute, or preempts state law, unless the 

relevant requirements of section 6 of the 

Executive Order are met. This rule does 

not have federalism implications and 

does not impose substantial direct 

compliance costs on state and local 

governments or preempt state law 

within the meaning of the Executive 

Order. State and local governments are 

not required to establish dispute 

resolution programs, but the rule 

provides a mechanism to recognize state 

programs that meet the statutory 

elements of a dispute resolution 

program to operate in lieu of the federal 

manufactured home dispute resolution 

program. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance number for Manufactured 

Housing is 14.171. 

List of Subjects 

24 CFR Part 3280 

Housing standards, Incorporation by 

reference, Manufactured homes. 

24 CFR Part 3282 

Administrative practice and 

procedure, Consumer protection, 

Intergovernmental relations, 

Investigations, Manufactured homes, 

Reporting and recordkeeping 

requirements, Warranties. 

24 CFR Part 3288 

Administrative practice and 

procedure, Consumer protection, 

Intergovernmental relations, 

Manufactured homes, Reporting and 

recordkeeping requirements. 

■ Accordingly, HUD amends parts 3280 

and 3282 and adds a new part 3288 in 

chapter XX of title 24 of the Code of 

Federal Regulations to read as follows: 

PART 3280—MANUFACTURED HOME 

CONSTRUCTION AND SAFETY 

STANDARDS 

■ 1. The authority citation for part 3280 

continues to read as follows: 

Authority: 42 U.S.C. 3535(d), 5403, and 

5424. 


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■ 2. In § 3280.2, the definition of 

‘‘manufactured home’’ is revised to read 

as follows: 

§ 3280.2 Definitions. 

* * * * * 

Manufactured home means a 

structure, transportable in one or more 

sections, which in the traveling mode is 

8 body feet or more in width or 40 body 

feet or more in length or which when 

erected on-site is 320 or more square 

feet, and which is built on a permanent 

chassis and designed to be used as a 

dwelling with or without a permanent 

foundation when connected to the 

required utilities, and includes the 

plumbing, heating, air-conditioning, and 

electrical systems contained in the 

structure. This term includes all 

structures that meet the above 

requirements except the size 

requirements and with respect to which 

the manufacturer voluntarily files a 

certification pursuant to § 3282.13 of 

this chapter and complies with the 

construction and safety standards set 

forth in this part 3280. The term does 

not include any self-propelled 

recreational vehicle. Calculations used 

to determine the number of square feet 

in a structure will include the total of 

square feet for each transportable 

section comprising the completed 

structure and will be based on the 

structure’s exterior dimensions 

measured at the largest horizontal 

projections when erected on site. These 

dimensions will include all expandable 

rooms, cabinets, and other projections 

containing interior space, but do not 

include bay windows. Nothing in this 

definition should be interpreted to mean 

that a manufactured home necessarily 

meets the requirements of HUD’s 

Minimum Property Standards (HUD 

Handbook 4900.1) or that it is 

automatically eligible for financing 

under 12 U.S.C. 1709(b). 

* * * * * 

PART 3282—MANUFACTURED HOME 

PROCEDURAL AND ENFORCEMENT 

REGULATIONS 

■ 3. The authority citation for part 3282 

is revised to read as follows: 

Authority: 28 U.S.C. 2461 note; 42 U.S.C. 

3535(d) and 5424. 

■ 4. In § 3282.207, redesignate 

paragraph (e) as paragraph (f), add a 

new paragraph (e), and revise the 

second sentence of paragraph (f) as 

redesignated, to read as follows: 

§ 3282.207 Manufactured home consumer 

manual requirements. 

* * * * * 

(e) Dispute resolution information. (1) 

The manufacturer must include the 

following language under a heading of 

‘‘Dispute Resolution Process’’ in the 

consumer manual: 

Many states have a consumer assistance or 

dispute resolution program that homeowners 

may use to resolve problems with 

manufacturers, retailers, or installers 

concerning defects in their manufactured 

homes that render part of the home unfit for 

its intended use. Such state programs may 

include a process to resolve a dispute among 

a manufacturer, a retailer, and an installer 

about who will correct the defect. In states 

where there is not a dispute resolution 

program that meets the federal requirements, 

the HUD Manufactured Home Dispute 

Resolution Program will operate. These are 

‘‘HUD-administered states.’’ The HUD 

Manufactured Home Dispute Resolution 

Program is not for cosmetic or minor 

problems in the home. You may contact the 

HUD Manufactured Housing Program Office 

at (202) 708–6423 or (800) 927–2891, or visit 

the HUD website at www.hud.gov to 

determine whether your state has a state 

program or whether you should use the HUD 

Manufactured Home Dispute Resolution 

Program. Contact information for state 

programs is also available on the HUD 

website. If your state has a state program, 

please contact the state for information about 

the program, how it operates, and what steps 

to take to request dispute resolution. When 

there is no state dispute resolution program, 

a homeowner may use the HUD 

Manufactured Home Dispute Resolution 

Program to resolve disputes among the 

manufacturer, retailer, and installer about 

responsibility for the correction or repair of 

defects in the manufactured home that were 

reported during the 1-year period starting on 

the date of installation. Even after the 1-year 

period, manufacturers have continuing 

responsibility to review certain problems that 

affect the intended use of the manufactured 

home or its parts, but for which correction 

may no longer be required under federal law. 

(2) The manufacturer must include 

the following language under a heading 

of ‘‘Additional Information ‘‘ HUD 

Manufactured Home Dispute Resolution 

Program’’ in the consumer manual: 

The steps and information outlined below 

apply only to the HUD Manufactured Home 

Dispute Resolution Program that operates in 

HUD-administered states, as described under 

the heading ‘‘Dispute Resolution 

Information’’ in this manual. Under the HUD 

Manufactured Home Dispute Resolution 

Program, homeowners must report defects to 

the manufacturer, retailer, installer, a State 

Administrative Agency, or HUD within 1 

year after the date of the first installation. 

Homeowners are encouraged to report defects 

in writing, including, but not limited to, 

email, written letter, certified mail, or fax, 

but they may also make a report by 

telephone. To demonstrate that the report 

was made within 1 year after the date of 

installation, homeowners should report 

defects in a manner that will create a dated 

record of the report: for example, by certified 

mail, by fax, or by email. When making a 

report by telephone, homeowners are 

encouraged to make a note of the phone call, 

including names of conversants, date, and 

time. No particular format is required to 

submit a report of an alleged defect, but any 

such report should at a minimum include a 

description of the alleged defect, the name of 

the homeowner, and the address of the home. 

Homeowners are encouraged to send 

reports of an alleged defect first to the 

manufacturer, retailer, or installer of the 

manufactured home, or a State 

Administrative Agency. Reports of alleged 

defects may also be sent to HUD at: HUD, 

Office of Regulatory Affairs and 

Manufactured Housing, Attn: Dispute 

Resolution, 451 Seventh Street, SW., 

Washington, DC 20410–8000; faxed to (202) 

708–4213; e-mailed to mhs@hud.gov, or 

reported telephonically at (202) 708–6423 or 

(800) 927–2891. 

If, after taking the steps outlined above, the 

homeowner does not receive a satisfactory 

response from the manufacturer, retailer, or 

installer, the homeowner may file a dispute 

resolution request with the dispute 

resolution provider in writing, or by making 

a request by phone. No particular format is 

required to make a request for dispute 

resolution, but the request should generally 

include the following information: 

(1) The name, address, and contact 

information of the homeowner; 

(2) The name and contact information of 

the manufacturer, retailer, and installer of the 

manufactured home; 

(3) The date or dates the report of the 

alleged defect was made; 

(4) Identification of the entities or persons 

to whom each report of the alleged defect 

was made and the method that was used to 

make the report; 

(5) The date of installation of the 

manufactured home affected by the alleged 

defect; and 

(6) A description of the alleged defect. 

Information about the dispute resolution 

provider and how to make a request for 

dispute resolution is available at http:// 

www.hud.gov or by contacting the Office of 

Manufactured Housing Programs at (202) 

708–6423 or (800) 927–2891. 

A screening agent will review the request 

and, as appropriate, forward the request to 

the manufacturer, retailer, installer, and 

mediator. The mediator will mediate the 

dispute and attempt to facilitate a settlement. 

The parties to a settlement include, as 

applicable, the manufacturer, retailer, and 

installer. If the parties are unable to reach a 

settlement that results in correction or repair 

of the alleged defect, any party or the 

homeowner may request nonbinding 

arbitration. Should any party refuse to 

participate, the arbitration shall proceed 

without that party’s input. Once the 

arbitrator makes a non-binding 

recommendation, the arbitrator will forward 

it to the parties and HUD. HUD will have the 

option of adopting, modifying, or rejecting 

the recommendation when issuing an order 

requiring the responsible party or parties to 

make any corrections or repairs in the home. 

At any time before HUD issues a final order, 

the parties may submit an offer of settlement 


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to HUD that may, at HUD’s discretion, be 

incorporated into the order. 

In circumstances where the parties agree 

that one or more of them, and not the 

homeowner, is responsible for the alleged 

defect, the parties will have the opportunity 

to resolve the dispute outside of the HUD 

Mediation and Arbitration process by using 

the Alternative Process. Homeowners will 

maintain the right to be informed in writing 

of the outcome when the Alternative Process 

is used, within 5 days of the outcome. At any 

time after 30 days of the Alternative Process 

notification, any participant or the 

homeowner may invoke the HUD 

Manufactured Home Dispute Resolution 

Program and proceed to mediation. 

The HUD Manufactured Home Dispute 

Resolution Program is not a warranty 

program and does not replace the 

manufacturer’s or any other warranty 

program. 

(f) * * * A manual substantially 

complies with the guidelines if it 

includes the language in paragraph (e) 

of this section and presents current 

material on each of the subjects covered 

in the guidelines in sufficient detail to 

inform consumers about the operation, 

maintenance, and repair of 

manufactured homes.* * * 

■ 5. In chapter XX, add a new part 3288, 

to read as follows: 

PART 3288—MANUFACTURED HOME 

DISPUTE RESOLUTION PROGRAM 

Subpart A—General 

Sec. 

3288.1 Purpose and scope. 

3288.3 Definitions. 

3288.5 Retailer notification at sale. 

Subpart B—HUD Manufactured Home 

Dispute Resolution Program in HUDAdministered States 

3288.10 Applicability. 

3288.15 Eligibility for dispute resolution. 

3288.20 Reporting a defect. 

3288.25 Initiation of dispute resolution. 

3288.30 Screening of dispute resolution 

request. 

3288.33 Notice of dispute resolution. 

3288.35 Mediation. 

3288.40 Nonbinding arbitration. 

3288.45 HUD review and order. 

Subpart C—Alternative Process in HUDAdministered States 

3288.100 Scope and applicability. 

3288.105 Time when Alternative Process is 

available. 

3288.110 Alternative Process agreements. 

Subpart D—State Dispute Resolution 

Programs in Non-HUD-Administered States 

3288.200 Applicability. 

3288.205 Minimum requirements. 

3288.210 Acceptance and recertification 

process. 

3288.215 Effect on other manufactured 

home program requirements. 

Subpart E—Dispute Resolution Program 

Rulemaking Procedures 

3288.300 Applicability. 

3288.305 Consultation with the 

Manufactured Housing Consensus 

Committee. 

Authority: 42 U.S.C. 3535(d), 5422 and 

5424. 

Subpart A—General 

§ 3288.1 Purpose and scope. 

(a) Purpose. The Act is intended, in 

part, to protect the quality, safety, 

durability, and affordability of 

manufactured homes. Section 623(c)(12) 

of the Act (42 U.S.C. 5422 (c)(12)) 

requires the implementation of ‘‘a 

dispute resolution program for the 

timely resolution of disputes between 

manufacturers, retailers, and installers 

of manufactured homes regarding 

responsibility, and for the issuance of 

appropriate orders, for the correction or 

repair of defects in manufactured homes 

that are reported during the 1-year 

period beginning on the date of 

installation.’’ The purpose of this part is 

to provide a dispute resolution program 

for the timely resolution of disputes 

among manufacturers, retailers, and 

installers regarding the responsibility 

for correction or repair of defects 

reported by the homeowner or others 

and reported in the 1-year period after 

the first installation of the manufactured 

home. 

(b) Scope— (1) Applicability. In 

carrying out this purpose, it is presumed 

that if a manufactured home contains an 

alleged defect that is reported in the first 

year after installation and was not 

caused by the homeowner, then the 

manufacturer, retailer, or installer is 

responsible for the alleged defect and 

the dispute resolution process 

recognized in this part is an appropriate 

means for resolving disputes about 

responsibility for correction and repair 

of the alleged defect. For purposes of the 

dispute resolution process recognized in 

this part, only alleged defects reported 

in the first year after the first installation 

are covered by the process. The state 

where the home is sited determines 

whether the HUD Manufactured Home 

Dispute Resolution Program or a state 

program applies. Subpart A of this part 

establishes general provisions 

applicable to HUD’s implementation of 

a dispute resolution program as required 

by the Act. Subpart B of this part 

establishes the HUD Manufactured 

Home Dispute Resolution Program that 

HUD will administer in any state that 

does not establish a program that 

complies with the Act and been 

accepted by HUD as provided in subpart 

D of this part. Subpart C of this part 

provides an Alternative Process for 

manufacturers, retailers, and installers 

who agree that a homeowner is not 

responsible for the alleged defect to 

resolve their disputes about 

responsibility for correction or repair 

outside of the HUD Mediation and 

Arbitration Process under subpart B. 

Subpart D of this part establishes the 

minimum requirements that must be 

met by a state applying to implement its 

own dispute resolution program that 

complies with the Act, and the 

procedure for determining whether the 

requirements for complying have been 

met. Subpart E of this part establishes 

special rulemaking procedures that 

apply to the issuance of new regulations 

that implement the dispute resolution 

requirements set forth in section 623 of 

the Act (42 U.S.C. 5422). 

(2) Warranties not affected. This part 

is not a warranty program and the 

requirements established in this part do 

not replace the manufacturer’s or any 

other warranty program. Such warranty 

program may have its own 

requirements. 

§ 3288.3 Definitions. 

The following definitions apply in 

this part: 

Act means the National Manufactured 

Housing Construction and Safety 

Standards Act of 1974, 42 U.S.C. 5401–

5426. 

Appropriate order means an order 

issued by HUD or an order that is 

enforceable under state law. 

Date of installation means the date all 

utilities are connected and the 

manufactured home is ready for 

occupancy as established, if applicable, 

by a certificate of occupancy, except as 

follows: if the manufactured home has 

not been sold to the first person 

purchasing the home in good faith for 

purposes other than resale by the date 

the home is ready for occupancy, the 

date of installation is the date of closing 

under the purchase agreement or sales 

contract for the manufactured home. 

Day means a calendar day. 

Defect means any defect in the 

performance, construction, components, 

or material of a manufactured home that 

renders the home or any part of the 

home not fit for the ordinary use for 

which it was intended, including, but 

not limited to, a defect in the 

construction, safety, or installation of 

the home. For purposes of state 

certification under § 3288.205, HUD will 

find it acceptable if the threshold for the 

state’s program is functionally 

equivalent to this definition. 

Dispute resolution provider means a 

person or entity providing dispute 

resolution services for HUD. 


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Homeowner means a person who 

purchased or leased the manufactured 

home in good faith for purposes other 

than resale. 

HUD means the U.S. Department of 

Housing and Urban Development. 

Installer means the person who is 

retained to engage in, or who engages in, 

the business of directing, supervising, 

controlling, or correcting the initial 

installation of a manufactured home. 

Manufactured home has the same 

meaning as the term ‘‘manufactured 

home’’ as defined in 24 CFR 3280.2. 

Manufactured Housing Consensus 

Committee or MHCC means the 

consensus committee established 

pursuant to section 604(a)(3) of the Act, 

42 U.S.C. 5403(a)(3). 

Party or parties means, individually 

or collectively, the manufacturer, 

retailer, or installer of a manufactured 

home in which a defect has been 

reported in accordance with § 3288.20. 

State Administrative Agency means 

an agency of a state that has been 

approved or conditionally approved to 

carry out the state plan for enforcement 

of the standards pursuant to section 623 

of the Act, 42 U.S.C. 5422. 

Timely reporting means the reporting 

of an alleged defect within 1 year after 

the date of installation of a 

manufactured home in accordance with 

§ 3288.20. 

Timely resolution means the 

resolution of disputes among 

manufacturers, retailers, and installers 

within 120 days of the time a request for 

dispute resolution is made, except that 

if the defect presents an unreasonable 

risk of injury, death, or significant loss 

or damage to valuable personal 

property, the resolution must be within 

60 days of the time a request for dispute 

resolution is made. 

§ 3288.5 Retailer notification at sale. 

Retailer notice at the time of signing. 

At the time of signing a contract for sale 

or lease for a manufactured home, the 

retailer must provide the purchaser with 

a retailer notice. This notice may be in 

a separate document from the sales 

contract or may be incorporated clearly 

in a separate section on consumer 

dispute resolution information at the 

top of the sales contract. The notice 

must include the following language: 

The U.S. Department of Housing and 

Urban Development (HUD) Manufactured 

Home Dispute Resolution Program is 

available to resolve disputes among 

manufacturers, retailers, or installers 

concerning defects in manufactured homes. 

Many states also have a consumer assistance 

or dispute resolution program. For additional 

information about these programs, see 

sections titled ‘‘Dispute Resolution Process’’

and ‘‘Additional Information—HUD 

Manufactured Home Dispute Resolution 

Program’’ in the Consumer Manual required 

to be provided to the purchaser. These 

programs are not warranty programs and do 

not replace the manufacturer’s, or any other 

person’s, warranty program. 

Subpart B—HUD Manufactured Home 

Dispute Resolution Program in HUDAdministered States 

§ 3288.10 Applicability. 

The requirements of the HUD 

Manufactured Home Dispute Resolution 

Program established in this subpart B 

apply in each state that does not 

establish a state dispute resolution 

program that complies with the Act and 

has been accepted by HUD as provided 

in subpart D of this part. 

§ 3288.15 Eligibility for dispute resolution. 

(a) Initiation of actions. 

Manufacturers, retailers, and installers 

of manufactured homes are eligible to 

initiate and participate in the HUD 

Manufactured Home Dispute Resolution 

Program. Homeowners may initiate 

action under, and be observers to, the 

HUD Manufactured Home Dispute 

Resolution Program. 

(b) Eligible disputes. Only disputes 

concerning alleged defects that have 

been reported to the manufacturer, 

retailer, installer, HUD, or a State 

Administrative Agency within 1 year 

after the date of the first installation of 

the manufactured home are eligible for 

resolution through the HUD 

Manufactured Home Dispute Resolution 

Program. The eligible dispute includes 

the defect alleged in a timely report and 

any related issues. 

§ 3288.20 Reporting a defect. 

(a) Making a report. To preserve the 

right to request dispute resolution 

through HUD, alleged defects must be 

reported to the manufacturer, retailer, 

installer, HUD, or a State Administrative 

Agency. An alleged defect may be 

reported by a homeowner, 

manufacturer, retailer, or installer. 

(b) Form of report. It is recommended 

that alleged defects be reported in 

writing, including, but not limited to, email, written letter, certified mail, or 

fax. The existence of an alleged defect 

may also be reported by telephone. 

(c) Content of report. No particular 

form or format is required to report an 

alleged defect, but any such report must, 

at a minimum, include a description of 

the alleged defect, the name of 

homeowner, and the address of the 

home. 

(d) Record of report—(1) To evidence 

timeliness. To establish timely 

reporting, the report of an alleged defect 

that is made to the manufacturer, 

retailer, installer, or a State 

Administrative Agency of the 

manufactured home should be done in 

a manner that will create a dated record 

of the report that demonstrates that the 

report was made within 1 year after the 

date of installation; for example, by 

certified mail, fax, or email. Persons 

who report an alleged defect by 

telephone should make a 

contemporaneous note of the telephone 

call, including date, time, the name of 

the person who received the report, the 

name of the business contacted, and the 

telephone number called. If the matter 

goes to arbitration, the arbitrator and 

HUD will review whether there is 

sufficient evidence to believe the report 

was made on a timely basis. 

(2) Obligation to retain. Each report of 

a defect, including logs of telephonic 

complaints, received by a manufacturer, 

retailer, a State Administrative Agency 

or installer, must be maintained for 3 

years from the date of receipt. 

(e) Reports made to a State 

Administrative Agency. Reports of 

defects in the manufactured home that 

are made in the first year after its 

installation can be sent to the 

appropriate State Administrative 

Agency. Contact information about a 

State Administrative Agency is available 

at http://www.hud.gov. Contact the 

appropriate State Administrative 

Agency to determine the method for 

making the report. 

(f) Reports made to HUD. Reports of 

alleged defects in the manufactured 

home that are made in the first year after 

its installation can be sent to HUD. The 

report to HUD may be made using any 

of the following methods: 

(1) In writing at: HUD, Office of 

Regulatory Affairs and Manufactured 

Housing, Attn: Dispute Resolution, 451 

Seventh Street, SW., Washington, DC 

20410–8000; 

(2) By telephone at: (202) 708–6423 or 

(800) 927–2891; 

(3) By fax at: (202) 708–4213; or 

(4) By e-mail at mhs@hud.gov. 

(g) Effect of report. The reporting of an 

alleged defect does not initiate the HUD 

Manufactured Home Dispute Resolution 

Program, but only establishes whether 

the requirement of timely reporting in 

accordance with § 3288.15(b) has been 

met. The HUD Manufactured Home 

Dispute Resolution Process is initiated 

when a request for dispute resolution is 

submitted to HUD in accordance with 

§ 3288.25. 

§ 3288.25 Initiation of dispute resolution. 

(a) Preliminary effort. HUD strongly 

encourages the homeowner or party 

reporting an alleged defect to seek to 


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resolve the dispute directly with any 

manufacturer, retailer, or installer that 

the person reporting the defect believes 

to be responsible before initiating the 

HUD dispute resolution process. 

(b) Request for dispute resolution. 

Any of the parties or the homeowner 

may initiate the HUD Manufactured 

Home Dispute Resolution Program at 

any time after an alleged defect has been 

reported, by requesting dispute 

resolution, as follows: 

(1) By mailing, e-mailing, or otherwise 

delivering a written request for dispute 

resolution to the dispute resolution 

provider at the address or e-mail 

address provided either at http:// 

www.hud.gov, or by contacting HUD’s 

Office of Regulatory Affairs and 

Manufactured Housing at (202) 708–

6423 or (800) 927–2891; 

(2) By faxing a request for dispute 

resolution to the fax number provided 

either at http://www.hud.gov, or by 

contacting HUD’s Office of Regulatory 

Affairs and Manufactured Housing at 

(202) 708–6423 or (800) 927–2891; or 

(3) By telephoning a request for 

dispute resolution to the number 

provided either at http://www.hud.gov, 

or by contacting HUD’s Office of 

Regulatory Affairs and Manufactured 

Housing at (202) 708–6423 or (800) 927–

2891. 

(c) Requested information. The 

dispute resolution provider will request 

at least the following information when 

a person seeks to initiate dispute 

resolution under the HUD Manufactured 

Home Dispute Resolution Program: 

(1) The name, address, and contact 

information of the homeowner; 

(2) The name and contact information 

of the manufacturer, retailer, and 

installer of the manufactured home, to 

the extent available; 

(3) The date the report of the alleged 

defect was made; 

(4) The name and contact information 

of the recipient or recipients of the 

report of the alleged defect; 

(5) The date of installation of the 

manufactured home affected by the 

alleged defect; and 

(6) A description of the alleged defect. 

§ 3288.30 Screening of dispute resolution 

request. 

(a) Review for sufficiency. When the 

request for dispute resolution has been 

received by the dispute resolution 

provider, a screening neutral will 

review the sufficiency of the 

information provided in the request for 

dispute resolution and determine if the 

dispute resolution process should 

proceed. If the screening neutral 

determines that a defect is properly 

alleged and timely reported, notice of 

the request will be forwarded, as 

provided in § 3288.33, to the 

manufacturer, retailer, and installer, as 

appropriate and to the extent the 

appropriate parties can be identified 

based on the information in the request. 

(b) Insufficient information. If a 

request for dispute resolution is lacking 

any information necessary to determine 

if the dispute resolution process should 

proceed, the screening neutral will 

contact the requester or the parties 

about supplementing the initial request. 

If information necessary to qualify the 

matter for the HUD Manufactured Home 

Dispute Resolution Program is not 

received within a reasonable time 

established by the screening neutral, the 

request for dispute resolution will be 

considered withdrawn. 

(c) Denial of a dispute. Denial by all 

of the parties that there is a dispute does 

not preclude the dispute resolution 

process from going forward to 

mediation. A screening neutral’s 

determination that a defect is properly 

alleged is prima facie evidence of a 

dispute. If the defect has not been 

corrected or repaired, the matter will be 

referred to mediation. 

(d) Determination of unreasonable 

risk. If the screening neutral determines 

there is sufficient documentation of an 

alleged defect presenting an 

unreasonable risk of injury or death, he 

or she will send a copy of the request 

to HUD. 

§ 3288.33 Notice of dispute resolution. 

(a) Once the screening neutral 

determines that a defect is properly 

alleged and timely reported, notice 

about the request will be forwarded to 

the parties by overnight delivery, 

commercial carrier, or fax. 

(b) If the parties have not initiated the 

Alternative Process in accordance with 

§ 3288.105 of this part within 7 days of 

the screening neutral’s notification, the 

screening neutral will refer the matter to 

mediation. 

§ 3288.35 Mediation. 

(a) Mediator. The dispute resolution 

provider will provide for the selection 

of a mediator. The selected mediator 

will not be the person who screened the 

dispute resolution request. The selected 

mediator will mediate the dispute and 

attempt to facilitate a settlement. If a 

party identifies any other party that 

should be included in the mediation, 

the mediator will contact the other party 

and provide information about the 

scheduled mediation meetings. 

(b) Time—(1) For reaching settlement. 

Except as provided in paragraph (b)(2) 

of this section, the parties are allowed 

30 days from the commencement of the 

mediation to reach a mediated 

settlement. In every case, the dispute 

resolution provider will notify the 

parties and the homeowner, in writing, 

of the date of the commencement of the 

mediation. 

(2) Alleged defects presenting an 

unreasonable risk of injury, death, or 

significant loss or damage to valuable 

personal property. For mediations 

involving alleged defects that appear to 

present an unreasonable risk of injury, 

death, or significant loss or damage to 

valuable personal property as 

determined by the screening neutral, the 

parties have a maximum 10 days from 

the commencement of the mediation to 

reach a settlement. 

(3) For corrective repairs. Unless a 

longer period is agreed to in writing by 

the parties to the mediated settlement 

and the homeowner, corrective repairs 

must be completed no later than 30 days 

after the date the settlement agreement 

is signed by the applicable parties. 

(c) Denial of dispute. During 

mediation, denial of a dispute by all 

parties without acceptance of 

responsibility will result in the mediator 

referring the matter to arbitration for 

determination of the defect and 

responsibility for the defect. 

(d) Written settlement agreement. 

(1) Upon reaching an agreement, the 

parties will sign a written settlement 

agreement. The dispute resolution 

provider will forward copies of the 

agreements with the original signatures 

of the parties to the parties, the 

homeowner, and to HUD. 

(2) Sample agreements will be made 

available to the parties as drafting 

guidance by the dispute resolution 

provider. 

(e) Failure of mediation. If mediation 

is not successful, parties or the 

homeowner may proceed to nonbinding 

arbitration, as provided in § 3288.40 of 

this part. 

(f) Confidentiality. Except for the 

report of an alleged defect, any request 

for dispute resolution, and any written 

settlement agreement, all other 

documents and communications 

provided in confidence and used in the 

mediation will be confidential, in 

accordance with the Administrative 

Dispute Resolution Act of 1996 (5 U.S.C. 

571 et seq.). 

§ 3288.40 Nonbinding arbitration. 

(a) When initiated. (1) If, following 

mediation under § 3288.35, the parties 

fail to reach a settlement, any party or 

the homeowner may, within 15 days of 

the expiration of the deadline applicable 

under § 3288.35(b), initiate nonbinding 

arbitration. 


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(2) In addition, arbitration may be 

initiated upon referral by the mediator 

pursuant to § 3288.35(c). 

(b) Written request—(1) Submission to 

HUD. A written request for arbitration 

must be submitted to the dispute 

resolution provider. Information about 

the dispute resolution provider and how 

to make a request for dispute resolution 

will be available at http://www.hud.gov 

or by contacting HUD’s Office of 

Manufactured Housing Programs at 

(202) 708–6423 or (800) 927–2891. 

(2) Contents of request. The written 

request for arbitration must include: 

(i) The name and address of the party 

making the request; 

(ii) A brief description of the alleged 

defect or a copy of the report of the 

alleged defect; and 

(iii) A copy of the request for dispute 

resolution. 

(c) Appointment and authority of 

arbitrator. Upon receipt of the request, 

the dispute resolution provider will 

select an arbitrator. The arbitrator will 

have the authority to: 

(1) Set hearing dates and deadlines; 

(2) Conduct on-site inspections; 

(3) Issue requests for documentation 

and information necessary to complete 

the record; 

(4) Dismiss frivolous allegations; 

(5) Make proposed findings, including 

findings of defect and culpability and a 

disposition recommendation to HUD; 

and 

(6) Recommend apportionment of the 

responsibility of paying for or providing 

any correction or repair of the home 

when recommending that culpability be 

assessed to more than one party. 

(d) Denial of dispute. If the parties 

deny a dispute exists and the arbitrator 

determines there is a defect, the 

arbitrator will make a determination of 

responsibility for the defect. 

(e) Notice to parties. The dispute 

resolution provider will provide the 

parties and the homeowner with a 

notice setting forth the date, place, and 

time an arbitration is to be held. 

(f) Proceedings. (1) If all parties do not 

request an in-person hearing under 

paragraph (f)(2) of this section within 5 

days of the dispute resolution provider’s 

receipt of the request for arbitration, or 

if the arbitrator rejects the request for an 

in-person hearing, the arbitrator may 

conduct either a record review or a 

telephonic hearing. 

(2) If any party wants to request an inperson hearing, in which the parties or 

their representatives may personally 

appear before the arbitrator, the 

arbitrator will consider such a request if 

it is made by all of the parties that are 

participating in the arbitration. Such an 

in-person hearing will be held at the 

discretion of the arbitrator, after 

considering appropriate factors, such as 

cost. 

(g) Effect on nonparticipating parties. 

If a party chooses not to participate in 

the arbitration, the process will 

continue without further input from that 

party. In such a case, the arbitrator may 

rely on the record developed through 

the arbitration to find a nonparticipating 

party responsible for correction or repair 

of a defect. 

(h) Completion of arbitration. (1) 

Unless an extension is granted for good 

cause by HUD, the arbitrator, within 21 

days of the dispute resolution provider’s 

receipt of the request for arbitration, the 

arbitrator will complete the arbitration 

process and provide HUD with all 

background information used during the 

arbitration and with a written, 

nonbinding recommendation as to 

which party or parties are responsible 

for the defect, and what corrective 

actions should be taken. 

(2) Unless an extension is granted for 

good cause by HUD, the arbitrator, 

within 21 days of the dispute resolution 

provider’s receipt of the request for 

arbitration, will provide the parties with 

a copy of the nonbinding 

recommendation that was delivered to 

HUD, in accordance with 

§ 3288.40(h)(1). 

(i) Settlement offers. At any time 

before HUD issues a final order, the 

parties may submit to HUD a proposal 

to resolve the dispute. 

§ 3288.45 HUD review and order. 

(a) Appropriate order. HUD will 

review the arbitrator’s recommendation 

provided in accordance with 

§ 3288.40(h), any settlement offers 

presented by the parties in accordance 

with § 3288.40(i), and the information 

gathered during the arbitration, and will 

issue an appropriate order in which 

HUD may accept, modify, or reject the 

recommendations. HUD will forward a 

copy of the order to the arbitrator and 

to each of the parties and the 

homeowner, whether or not a party 

chose to participate in the arbitration. 

(b) Contents of order. If HUD finds 

that a defect exists, the order will 

include the following: 

(1) Assignment of responsibility for 

the correction and repair of all defects 

and associated costs; and 

(2) If the manufacturer, retailer, or 

installer is responsible for corrective 

action, a date by which the correction 

and repair of each defect must be 

completed, taking into consideration the 

seriousness of the defect. 

(c) Failure to comply. Failure to 

comply with an order issued by HUD is 

a violation of section 610(a)(5) of the 

Act (42 U.S.C. 5409(a)(5)). 

Subpart C—Alternative Process in 

HUD-Administered States 

§ 3288.100 Scope and applicability. 

The requirements of this subpart C 

may be followed in lieu of the 

requirements of subpart B of this part to 

resolve disputes among manufacturers, 

retailers, and installers of manufactured 

homes in any state where subpart B of 

this part would otherwise apply. In 

limited circumstances, this subpart C 

permits manufacturers, retailers, and 

installers of manufactured homes to use 

neutrals of their choosing to resolve 

disputes concerning alleged defects in 

manufactured homes. 

§ 3288.105 Time when Alternative Process 

is available. 

(a) The Alternative Process may be 

invoked after an alleged defect has been 

reported, pursuant to § 3288.15(b). 

However, the Alternative Process may 

not be invoked more than 7 days after 

notification of a request for dispute 

resolution has been received by all of 

the parties. The notification must be 

delivered by overnight delivery, 

commercial carrier, or fax by the 

screening neutral, in accordance with 

§ 3288.30. If within 7 days of the receipt 

of notification, the Alternative Process 

is not initiated, the screening neutral 

will refer the matter to the mediator. 

Once the Alternative Process is invoked, 

neither the parties nor the homeowner 

may invoke the Mediation and 

Arbitration Process in the HUD 

Manufactured Home Dispute Resolution 

Program for 30 days. 

(b) No particular form or format is 

required to provide notification for the 

Alternative Process, but the party or 

parties submitting the notification must 

include a statement from the parties 

participating in the Alternative Process 

stating that the homeowner is not 

responsible for the alleged defect and 

that one or more of the parties will 

correct or repair the defect. All required 

agreements are set forth in § 3288.110 of 

this part. The parties must also make 

reasonable efforts to include the 

following information in the 

notification: 

(1) Identification of the case; and 

(2) Identification of the parties 

participating in the Alternative Process. 

(c) The screening neutral will notify 

the parties if the case is referred to the 

Alternative Process for resolution. 

§ 3288.110 Alternative Process 

agreements. 

(a) Required agreement. To use the 

Alternative Process, the manufacturer, 


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retailer, and installer of the 

manufactured home at issue, as 

appropriate, must agree: 

(1) That there is a defect in the 

manufactured home; 

(2) That the manufacturer, retailer, or 

installer is responsible for the defect; 

(3) That the homeowner is not 

responsible for the defect; 

(4) To engage a neutral to evaluate the 

dispute and make an assignment of 

responsibility for correction and repair; 

and 

(5) To notify the homeowner of, and 

allow the homeowner to be present at, 

any meetings and to inform the 

homeowner of the outcome. 

(b) Additional element of agreement. 

In addition, the parties should agree to 

act upon the neutral’s assignment of 

responsibility for correction and repair. 

Subpart D—State Dispute Resolution 

Programs in Non-HUD Administered 

States 

§ 3288.200 Applicability. 

This subpart D establishes the 

minimum requirements that must be 

met by a state to implement its own 

dispute resolution program and 

therefore not be covered by the HUD 

Manufactured Home Dispute Resolution 

Program established in accordance with 

subpart B. The subpart also establishes 

the procedure for determining whether 

the state dispute resolution program 

meets the requirements of the Act for 

operating in lieu of the HUD 

Manufactured Home Dispute Resolution 

Program. 

§ 3288.205 Minimum requirements. 

(a) List of requirements. The HUD 

Manufactured Home Dispute Resolution 

Program will not be implemented in any 

state that complies with the procedures 

of this subpart D and that has a dispute 

resolution program that provides for the 

following minimum requirements: 

(1) The timely resolution of disputes 

among manufacturers, retailers, or 

installers regarding responsibility for 

correction and repair of defects in 

manufactured homes; 

(2) The issuance of appropriate orders 

for correction and repair of defects in 

such homes; 

(3) A coverage period for disputes that 

includes at least defects that are 

reported within 1 year after the date of 

first installation; and 

(4) Adequate funding and personnel. 

(b) Applicability to programs in state 

plans. (1) In order to include a dispute 

resolution program in a state plan that 

on February 8, 2008 is fully or 

conditionally approved under 

§ 3282.302 of this chapter, a state must 

amend its state plan to provide for the 

requirements of paragraphs (a)(1) 

through (3) of this section. 

(2) After February 8, 2008, a state that 

submits a state plan for approval in 

accordance with § 3282.302 of this 

chapter must provide for the 

requirements of paragraphs (a)(1) 

through (3) of this section in its state 

plan. 

§ 3288.210 Acceptance and recertification 

process. 

(a) Submission of certification. A state 

seeking HUD acceptance of its state 

dispute resolution program under this 

subpart must submit to HUD a 

completed Dispute Resolution 

Certification Form, which is available 

by contacting HUD by telephone at (202) 

708–6423 or by e-mail at mhs@hud.gov. 

The certification may be submitted as a 

part of, or independent of, a state plan 

under § 3282.302 of this chapter. If 

included as part of a state plan, the state 

does not have to separately certify that 

it meets the requirements of 

§ 3288.205(a)(4). 

(b) HUD review and action. (1) HUD 

will review the Dispute Resolution 

Certification Form submitted by a state 

and may contact the state to request 

additional clarification or information 

as necessary. Upon completing its 

review, HUD will provide the state with 

notice of acceptance, conditional 

acceptance, or rejection of its dispute 

resolution program. 

(2) A notice of acceptance will 

include the date of acceptance. 

(3) If HUD rejects a state’s dispute 

resolution program, HUD will provide 

an explanation of what is necessary to 

obtain full acceptance. A revised 

Dispute Resolution Certification Form 

may be submitted within 30 days of 

receipt of such notification. If the 

revised Dispute Resolution Certification 

Form is inadequate or if the state fails 

to resubmit within the 30-day period or 

otherwise indicates that it does not 

intend to change its Dispute Resolution 

Certification Form, HUD will notify the 

state that its dispute resolution program 

is not accepted and that it has a right to 

a hearing on the rejection using the 

procedures set forth under subpart D of 

part 3282 of this chapter. 

(c) Conditional acceptance. A state 

meeting three of the four minimum 

requirements set forth under 

§ 3288.205(a)(1) through (4) will be 

conditionally accepted by HUD. If HUD 

conditionally accepts a state’s dispute 

resolution program, HUD will provide 

an explanation of what is necessary to 

obtain full acceptance. A revised 

Dispute Resolution Certification Form 

may be submitted within 30 days of 

receipt of such notification. Any state 

conditionally accepted will be 

permitted to implement its own dispute 

resolution program for a period of not 

more than 3 years, absent extension of 

this period by HUD. 

(d) Revocation. If HUD becomes aware 

at any time that a state no longer meets 

the minimum requirements set forth 

under § 3288.205, HUD may revoke 

acceptance of the state’s certification 

after an opportunity for a hearing, using 

the procedures set forth under subpart 

D of part 3282. 

(e) Recertification of a program not 

included in state plan. Except as 

provided in paragraph (f), to maintain 

its accepted status, a state whose 

program is not included in an approved 

or conditionally approved state plan 

must submit a current Dispute 

Resolution Certification Form to HUD 

for review and acceptance as follows: 

(1) Every 3 years within 90 days of the 

day and month of the most recent date 

of HUD’s acceptance of the state’s 

program or 

(2) Whenever there is a significant 

change to the program. 

(f) Inclusion in state plan. If a state 

dispute resolution program is part of a 

state plan, it will be reviewed annually 

as part of the state plan and separate 

recertification of the state’s dispute 

resolution program is not required. 

§ 3288.215 Effect on other manufactured 

home program requirements. 

A state with an accepted dispute 

resolution program will operate in lieu 

of HUD’s Manufactured Home Dispute 

Resolution Program established under 

subpart B of this part 3288. A state 

dispute resolution program, even if it is 

an accepted dispute resolution program 

under this part, does not supersede the 

requirements applicable to any other 

aspect of HUD’s manufactured home 

program. Any responsibilities, rights, 

and remedies applicable under the 

Manufactured Home Construction and 

Safety Standards in part 3280 of this 

chapter and the Manufactured Home 

Procedural and Enforcement 

Regulations in part 3282 of this chapter 

continue to apply as provided in those 

parts in all states. 

Subpart E—Dispute Resolution 

Program Rulemaking Procedures 

§ 3288.300 Applicability. 

This subpart establishes special 

regulatory procedures for issuing or 

revising dispute resolution program 

regulations as codified in this part. 


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§ 3288.305 Consultation with the 

Manufactured Housing Consensus 

Committee. 

HUD will seek input from the MHCC 

when revising the HUD Manufactured 

Home Dispute Resolution Program 

regulations in this part 3288. Before 

publication of a proposed rule to revise 

these regulations, HUD will provide the 

MHCC with an opportunity to comment 

on such revision. The MHCC may send 

to HUD any of the MHCC’s own 

recommendations to adopt new dispute 

resolution program regulations or to 

modify or repeal any of the regulations 

in this part. Along with each 

recommendation, the MHCC must set 

forth pertinent data and arguments in 

support of the action sought. HUD will 

either: accept or modify the 

recommendation and publish it for 

public comment in accordance with 

section 553 of the Administrative 

Procedure Act (5 U.S.C. 553), along with 

an explanation of the reasons for any 

such modification; or reject the 

recommendation entirely, and provide 

to the MHCC a written explanation of 

the reasons for the rejection. This 

section does not supersede section 605 

of the National Manufactured Housing 

Construction and Safety Standards Act 

of 1974 (42 U.S.C. 5404). 

Dated: May 7, 2007. 

Brian D. Montgomery, 

Assistant Secretary for Housing—Federal 

Housing Commissioner. 

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[FR Doc. 07–2363 Filed 5–11–07; 8:45 am] 

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