14582 Federal Register / Vol. 89, No. 40 / Wednesday, February 28, 2024 / Rules and Regulations 

1Public Law 110–289, section 2117, 122 Stat. 

2654, 2844–45 (2008). 2See generally, U.S. Commerce Department, 

Census Bureau data on manufactured homes, 

available at: https://www.census.gov/programssurveys/mhs.html. 3 ‘‘Increased Maximum Loan Limits for Title I 

Manufactured Home Loans,’’ https://

portal.hud.gov/hudportal/HUD?src=/program_

offices/administration/hudclips/letters/title1. 

Accordingly, 20 CFR part 651 is 

corrected by making the following 

correcting amendments: 

PART 651—GENERAL PROVISIONS 

GOVERNING THE WAGNER–PEYSER 

ACT EMPLOYMENT SERVICE 

■ 1. The authority citation for part 651 

continues to read as follows: 

Authority: 29 U.S.C. 49a and 49k; 38 

U.S.C. 101, chapters 41 and 42; Secs. 3, 189 

and 503, Pub. L. 113–128, 128 Stat. 1425 (Jul. 

22, 2014). 

■ 2. Amend § 651.10 by adding in 

alphabetical order the definition of State 

Workforce Agency (SWA) official to read 

as follows: 

§ 651.10 Definitions of terms used in this 

part and parts 652, 653, 654, and 658 of this 

chapter. 

* * * * * 

State Workforce Agency (SWA) 

official means an individual employed 

by the State Workforce Agency or any of 

its subdivisions. 

* * * * * 

Laura P. Watson, 

Deputy Assistant Secretary for Employment 

and Training, Labor. 

[FR Doc. 2024–03871 Filed 2–27–24; 8:45 am] 

BILLING CODE 4510–FN–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 201 

[Docket No. FR–6207–F–02] 

RIN 2502–AJ52 

Indexing Methodology for Title I 

Manufactured Home Loan Limits 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, Department of Housing 

and Urban Development (HUD). 

ACTION: Final rule. 

SUMMARY: Section 2145 of the Housing 

and Economic Recovery Act of 2008 

(HERA) amended the maximum loan 

limits for manufactured home loans 

insured under Title I of the National 

Housing Act and required regulations to 

implement future indexing of the loan 

limit amounts for manufactured homes 

originated under the Manufactured 

Home Loan program. This rule 

establishes indexing methodologies 

using data from the United States 

Census Bureau (‘‘Census’’) to annually 

calculate the loan limits for 

Manufactured Home Loans, 

Manufactured Home Lot Loans, and 

Manufactured Home and Lot 

Combination Loans (‘‘Combination 

Loans’’) insured under Title I of the 

National Housing Act for the 

Manufactured Home Loan program. 

This final rule adopts HUD’s October 

18, 2022, proposed rule with changes. 

DATES: Effective March 29, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Mary Jo Houton, Acting Director, 

Department of Housing and Urban 

Development, 451 7th St. SW, Room 

9266, Washington, DC 20410–4000; 

telephone number 202–402–2378 (this 

is not a toll-free number). HUD 

welcomes and is prepared to receive 

calls from individuals who are deaf or 

hard of hearing, as well as individuals 

with speech or communication 

disabilities. To learn more about how to 

make an accessible telephone call, 

please visit https://www.fcc.gov/ 

consumers/guides/telecommunicationsrelay-service-trs. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Title I of the National Housing Act 

authorizes the Secretary of HUD to 

insure, through the Federal Housing 

Administration (FHA), loans made by 

FHA-approved lenders to eligible 

borrowers to finance property 

improvement and purchase, or 

refinance, of a manufactured home, with 

or without the lot. HUD insures these 

loans under HUD’s Property 

Improvement Loan program and HUD’s 

Manufactured Home Loan program. 

FHA insures the lender against loss if 

the borrower defaults. A Title I 

Manufactured Home Loan may be used 

for the purchase or refinancing of a 

manufactured home, a lot on which to 

place a manufactured home, or a 

manufactured home and lot in 

combination. The manufactured home 

must be used as the principal residence 

of the borrower. Applicable loan limits 

and requirements are codified in 24 CFR 

part 201. 

Section 2117 of HERA1 added the 

definition of real estate to include all 

natural resources and structures 

permanently affixed to the land, 

amended the maximum loan limits for 

manufactured home loans and certain 

property improvement loans insured 

under Title I of the National Housing 

Act, and required future changes to the 

amounts for manufactured home loans 

to be made through regulation. HERA 

also stipulated that the Secretary 

develop a metric that uses U.S. Census 

Bureau (‘‘Census’’) data 2 on 

manufactured home prices to calculate 

an index for adjusting loan limits in the 

future. 

In compliance with HERA, on March 

3, 2009, HUD published Title I Letter 

TI–480 3 notifying lenders of the new 

statutory loan limits. HUD also noted in 

that Title I Letter the need for the 

Secretary to develop an indexing 

method that would determine future 

loan limits. HUD regulations still reflect 

the outdated, pre-HERA Loan Limits. 

Initially after HERA’s enactment, 

Census data showed a decline in home 

prices. However, for compliance with 

HERA, HUD did not lower loan limits 

and the limits were kept at the threshold 

set under HERA. The outdated Loan 

Limits, and the 2008 Loan Limits 

currently in effect for manufactured 

homes as described in the Title I letter 

are outlined below: 

TABLE 1—LOAN LIMITS UNDER HERA COMPARED TO PRE-HERA LOAN LIMITS

Title I loan program name Eligible loan name for property type Loan limits prior to 

HERA 

2008 loan limit basis 

per HERA currently 

in effect 

Property Improvement Loan Program ............... Manufactured Home Improvement Loan for 

units classified as real estate.

$7,500 ....................... $25,090. 

Manufactured Home Loan Program .................. Manufactured Home Loan (unit only) ............... $48,600 ..................... $69,678. 

Manufactured Home Lot Loan (lot only) ........... $16,200 ..................... $23,226. 


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4For an example of the latest data according to 

Census, see ‘‘MHS Latest Data,’’ https://

www.census.gov/data/tables/time-series/econ/mhs/ 

latest-data.html. 

5The New Residential Sales data come from 

Census’s Survey of Construction. More information 

can be found here: https://www.census.gov/ 

construction/nrs/index.html. 

6Available at https://www.whitehouse.gov/omb/ 

budget/mid-session-review/. 

TABLE 1—LOAN LIMITS UNDER HERA COMPARED TO PRE-HERA LOAN LIMITS—Continued 

Title I loan program name Eligible loan name for property type Loan limits prior to 

HERA 

2008 loan limit basis 

per HERA currently 

in effect 

Manufactured Home and Lot (Combination 

Loan).

$64,800 ($48,600 + 

$16,200).

$92,904 ($69,678 + 

$23,226). 

II. The Proposed Rule 

On October 18, 2022, as required by 

HERA, HUD published for public 

comment a proposed rule (87 FR 63018) 

(‘‘the proposed rule’’) to update the loan 

limits in § 201.10 and to establish an 

index for which future loan limits 

would be revised through notice. HUD 

also proposed to amend the definition of 

‘‘manufactured home’’ in § 201.2 to 

conform to the loan limit change. HUD 

proposed to index loan limits based on 

sale prices, unit sizes, and property data 

collected by the Census Bureau. 

HUD proposed to establish separate 

indexing methodologies to annually 

calculate future loan limits for 

manufactured home loans, 

manufactured home lot loans, and 

manufactured home and lot 

combination loans under the 

Manufactured Home Loan program. 

HUD proposed to create a dual index 

based on purchase prices of 

manufactured homes, which are 

collected by the US Census Bureau 

(Census): an index for single-section 

manufactured homes using only singlesection home sale data and a separate 

index for multi-section manufactured 

homes using only double-section home 

sale data.4

HUD also proposed to adjust loan 

limits for single-section and double or 

greater-section manufactured home 

loans annually based on changes to 

indexes for the average price of singlesection and double-section 

manufactured homes, respectively. HUD 

proposed to set each loan limit at the 

average price data for the most recent 12 

months available at the time HUD 

calculates the adjustment, weighted 

according to the number of 

manufactured units shipped during that 

same period. 

HUD also proposed creating an index 

for Manufactured Home Lot Loans based 

on median home prices in Census’s New 

Residential Sales data.5

Finally, HUD proposed that the loan 

limit for manufactured home and lot 

Combination Loans would be 

determined by adding the manufactured 

home lot loan limit to either the singleor double-section loan limit, depending 

on the home. 

III. This Final Rule 

HUD adopts the proposed rule with 

changes to the indices and changes to 

the regulatory text. 

Changes to the Indexing Methodology 

As further discussed in the public 

comment summary, HUD received 

several comments suggesting that the 

loan limits set by the proposed indexing 

methodology would be too low to 

accurately reflect current manufactured 

housing prices and that, if adopted, the 

proposed indexing methodology would 

frustrate the purpose of section 2145 of 

HERA which is to make FHA housing 

programs more widely available for lowincome homebuyers. 

In consideration of these comments, 

HUD has decided to adjust the proposed 

indexing methodology to more 

accurately reflect real-world 

manufactured housing costs, improving 

the viability of the Title I Manufactured 

Housing program and fulfilling HERA’s 

purpose of making FHA housing 

programs available to more homebuyers. 

In addition to using the average 

manufactured housing prices for singleand multi-section homes, HUD will use 

two additional factors in calculating the 

manufactured home loan limits. First, 

HUD will set loan limits at 15% above 

the average home price according to the 

Census data for the given type of loan. 

This is consistent with the initial loan 

limits set by HERA, which were set to 

about 15% over the average 

manufactured home price at the time. 

This is also consistent with how HUD 

calculates loan limits under Title II, 

where FHA limits loans to 115% of the 

median home price. 

Second, to account for the time 

between when the Manufactured 

Housing Survey data was collected and 

when the limits will be effective, HUD 

will utilize an inflation factor. To 

calculate this inflation factor, HUD will 

use an inflation forecast such as the 

CPI–U forecast in the President’s 

Economic Assumptions 6 to increase 

loan limits to account for inflation that 

has occurred since the relevant Census 

data were collected. This will address 

the maintenance or increase of the sales 

price from year-to-year according to the 

Census data and intends to more 

accurately represent current prices for 

manufactured homes. 

HUD’s updated indexing methodology 

is demonstrated in the below chart: 

TABLE 2—PROPOSED INDEX METHODOLOGIES FOR TITLE I MANUFACTURED HOME LOAN LIMITS

Eligible loan types Proposed methodology/index 

1. Manufactured Home Loan (Home only) ......... • For single-section homes, the loan limit will be set each year at 115% of the average singlesection home price with an adjustment for inflation. 

• For homes composed of two or more sections (multi-section homes), the loan limit will be 

set each year at 115% of the average double-section home price with an adjustment for inflation.* 

2. Manufactured Home Lot Loan (Lot only) ........ Manufactured Home Lot Loan limit established by HERA, indexed using changes in the median new home price.*** 


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TABLE 2—PROPOSED INDEX METHODOLOGIES FOR TITLE I MANUFACTURED HOME LOAN LIMITS—Continued 

Eligible loan types Proposed methodology/index 

3. Manufactured Home and Lot Loan (Combination Loan).The indexed Manufactured Home Lot Loan limit, plus the applicable Manufactured Home Loan 

limit. 

* Utilizing single- and double-section price averages based on the most recent data from the Manufactured Housing Survey from the Census 

Bureau, adjusted for the effective year of the limit using an inflation forecast (such as the CPI–U forecast in the President’s Economic Assumptions or similar replacement data set or report as may be specified by the Secretary). See MHS Latest Data Average Sales Price by Region and 

by Size of Home https://www2.census.gov/programs-surveys/mhs/tables/time-series/mhstabavgsls.xlsx. 

** Utilizing median new home price based on the most recent data from the Survey of Construction from the Census Bureau. See Median and 

Average Sales Price of Homes Sold https://www.census.gov/construction/nrs/xls/usprice_cust.xls. 

HUD will make changes to the 

indexing methodology through notice 

where HUD determines that revisions 

are necessary to enhance or maintain 

the accuracy of the index. HUD 

anticipates any such change(s) would 

likely be technical in nature, but if a 

change were more than technical, HUD 

would provide notice to the public with 

the opportunity for comment prior to 

changing the index. 

Table 3 below shows examples of the 

loan limits, based on recent data from 

Census. 

TABLE 3—EXAMPLE LOAN LIMITS

Description of property Loan limit 

methodology 

Current limits 

(per HERA) 

Example 2024 

loan limits 

(based on 

2022 Census data) 

Single-section Manufactured Home (unit only) Set to average of 115% of single-section home 

prices. Note 1.

$69,678 ..................... $106,405. 

Multi-section Manufactured Home (unit only) .... Set to 115% of average double-section home 

prices. Note 1.

$69,678 ..................... $195,322. 

Manufactured Home Lot (lot only) ..................... Set to median sales price for new single-family 

homes. Note 2.

$23,226 ..................... $43,377. 

Single-section Manufactured Home and Lot 

(Combination Loan).

Limit for Single-Section + Limit for Lot Loan .... $92,904 (69,678 + 

23,226).

$149,782 (106,405 + 

43,377). 

Multi-section Manufactured Home and Lot 

(Combination Loan).

Limit for Multi-Section + Limit for Lot Loan ....... $92,904 (69,678 + 

23,226).

$238,699 (195,322 + 

43,377). 

Table 3 Notes: 

1. Indexing to occur at the beginning of each year, based on the weighted average price data for the most recent 12 months available from the 

Manufactured Housing Survey. 

2. Indexing to occur at the beginning of each year, based on the median sales price of the most recent 12 months available from the New 

Residential Sales data. 

Changes to the Regulatory Text 

HUD is making only technical 

changes at the final rule stage. HUD is 

removing references to ‘‘double-section’’ 

homes as they are already covered by 

‘‘multi-section’’ homes. HUD is also 

revising § 201.10(h)(1) and (2) to remove 

the reference to changes to the 

‘‘average’’ price of single-section 

manufactured home sales as 

superfluous. HUD is also revising 

§ 201.10(h)(2) to change a reference to 

data published by HUD because the data 

HUD will be using is published by the 

Census Bureau. HUD is also revising 

§ 201.10(h)(1) through (3) to clarify that 

HUD will not lower loan limits from 

previous years. 

IV. Summary of Public Comments 

The public comment period for the 

proposed rule closed on December 19, 

2022. HUD received five distinct 

comments relating to the proposed rule. 

Comments were submitted by an 

individual, associations representing 

housing industry stakeholders (i.e., 

community banks, manufactured 

housing, realtors), a lender, and 

anonymously. The full text of each 

public comment can be found at: 

https://www.regulations.gov/document/ 

HUD-2022-0078-0001. 

A. Support for the Proposed Rule 

Multiple commenters expressed their 

support for the proposed rule. One 

commenter said they support the 

proposed rule because of the significant 

cost increase in modular homes since 

2008 and because the Housing and 

Economic Recovery Act of 2008’s 

(HERA) current limits are too low to 

allow low-income Americans to afford 

housing. Commenters expressed support 

for the proposed rule because they said 

updated loan limits would help address 

the declining trend in loans that qualify 

for the Title I loan program. Another 

commenter expressed support for the 

proposed rule because it would 

establish separate loan limits for singlesection and multi-section manufactured 

homes. The commenter stated that home 

size has a significant impact on home 

cost and separate loan limits help 

account for the different cost 

components between single- and multisection homes. 

A commenter expressed their support 

for the proposed rule, stating it would 

benefit low to moderate-income and 

first-time home buyers to take advantage 

of financing through the Federal 

Housing Administration (FHA) and 

begin to build wealth through 

homeownership. Another commenter 

said the proposed rule would create 

opportunities for creditworthy 

borrowers to access manufactured 

homes, and this is a crucial bridge to 

address the housing supply gap 

allowing low to moderate-income 

Americans to afford a home. 

A commenter stated that the proposed 

rule creates a unique indexing 

methodology that increases loan limits 

through annual adjustments that would 

ensure the limits remain current with 

the housing market. Another commenter 

stated that they are encouraged by the 

potential effect of the proposed rule’s 

indexing methodology because it will 

update statutory loan limits established 


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in 2008 and allow for annual 

adjustments. 

HUD Response: HUD appreciates 

these comments and the broad support 

for this rule; these commenters 

identified many of the reasons why 

HUD undertook this effort. HUD agrees 

that increased loan limits will provide 

additional opportunities for low-tomoderate income borrowers to access 

homeownership now and in the future. 

B. Suggested Revision to the Proposed 

Rule’s Loan Cap and the 130 Percent 

Home Invoice Limitation 

A commenter stated they are 

supportive of the proposed rule’s 

attempt at increasing loan limits for 

FHA’s Title I program and believed that 

the index would capture the movement 

of manufactured home pricing. 

However, the commenter believes that 

loan limits should be increased further 

than described in the proposed rule. 

The commenter stated that community 

banks typically choose to portfolio loans 

that may otherwise be eligible for FHA’s 

Title I program because the maximum 

FHA loan amounts often fail to cover 

the cost of the unit. The commenter, a 

lender, calculated the percentage of its 

own loans in 2022 that would have 

qualified under the proposed rule’s 

example loan limits for 2022 to be 22.7 

percent of all single-section loans; 47 

percent of all multi-section loans; 46 

percent of all single-section, land loans; 

and 54.6 percent of all multi-section, 

land loans. 

The commenter encouraged HUD to 

further increase the proposed loan 

limits because the commenter was 

discouraged that a higher percentage of 

its loans would not have qualified for 

the Title I program. 

The commenter also stated that its 

figures do not account for the advance 

structure limitations that accompany the 

Title I loan limits, such as the 130 

percent of home invoice limitation 

(including itemized options and freight). 

The commenter estimated that only 3.4 

percent of its originated new home only 

loans in the last 12 months had a home 

sales price under the 130 percent 

limitation. 

The commenter stated that, in the 

commenter’s experience, most 

manufactured home retailers sell homes 

significantly above 130 percent of the 

manufactured home invoice. To address 

this, the commenter suggested that HUD 

either improve or remove the limitation 

altogether. The commenter stated that 

annually adjusted loan limits can be a 

sufficient ‘‘check’’ to ensure that home 

prices stay true to recent market trends 

and, therefore, the 130 percent cap is an 

unnecessary limitation that undercuts 

the effectiveness of the increased loan 

limits. The commenter stated that, as an 

alternative to eliminating the 130 

percent cap, HUD could increase the 

limitation to 160 percent. The 

commenter stated that the 160 percent 

adjustment would represent a more 

practical and realistic percentage that 

would not require retailers to 

significantly cut sales prices for a home 

to qualify for a Title I loan. The 

commenter stated that over the last 12 

months, 44 percent of its loans have 

involved homes sold under the 160 

percent cap, compared to only 3.4 

percent under the 130 percent cap. 

HUD Response: HUD appreciates the 

comment that the proposed limits 

should be further increased. Section 

2145 of the Housing and Economic 

Recovery Act (HERA) of 2008 amended 

Title I, Section 2 of the National 

Housing Act (12 U.S.C. 1703) to increase 

the maximum loan limits for 

manufactured home loans insured 

under Title I and requires the Secretary 

to develop an index to annually adjust 

the loan limits based on U.S. Census 

Bureau (Census) data on manufactured 

home prices. The indices adopted by the 

Secretary for manufactured homes in 

this rulemaking to annually adjust the 

loan limits are based on the average of 

the year-over-year changes in the allunits price series published by Census, 

at the national level, and for a defined 

look-back period. These indices are 

based on data from Census-collected 

surveys of firms that sell new 

manufactured housing to individuals for 

residential use. HUD will also adjust the 

average sales price, as determined by 

the Census Bureau data, by 115% and 

apply an inflation factor, which more 

accurately reflects the prices of 

manufactured homes since the 

publication of the most recent Census 

Bureau report. 

HUD includes the 130 percent cap on 

new manufactured homes to protect 

FHA borrowers and in keeping with 

FHA’s fiduciary responsibility to 

taxpayers. The 130 percent cap is not 

the focus of this rulemaking. 

Nevertheless, HUD will continue to 

consider this issue in regard to the Title 

I manufactured housing program. 

C. Alternate Method of Calculating the 

Lot Loan Index 

A commenter stated that the proposed 

indexing methodology is not sufficient 

to capture the reality of land and 

improvements costs for manufactured 

homes. The commenter stated that the 

National Housing Act requires HUD to 

base the index on manufactured housing 

price data collected by the Census 

Bureau; however, the proposed rule 

seeks to create an index based on 

median home prices in the Census 

Bureau’s New Residential Sales data. 

The commenter stated that the average 

total costs of options (e.g., well, septic, 

driveway) is $30,000 across all of its 

funded loans. When considering the 

example loan limit of $37,205 for 2022, 

the commenter stated that there is 

essentially no additional room to 

purchase a parcel of property under the 

FHA Title I program after the cost of 

options alone. Similarly, the commenter 

stated that the average appraisal value 

for a parcel of real estate is roughly 

$34,028, which leaves virtually no room 

for improvements to the land. 

The commenter stated that 

improvements on purchased land are 

usually vital with the purchase of a 

manufactured home with land because 

each land site is typically developed 

individually, unlike single-family 

homes built by a developer with the 

appropriate infrastructure scaled across 

hundreds of lots. 

To more accurately reflect the actual 

costs of purchasing a manufactured 

housing lot, the commenter suggested 

the use of Census Bureau MHS Annual 

Data, Cost & Size Comparison: New 

Manufactured Homes and New SingleFamily Site Build Homes that derives 

the average land price for site-built 

homes, which, while not connected to 

manufactured housing pricing data, at 

least accounts for the actual cost of land, 

according to the commenter. The 

commenter stated that the derived 

average land price in the Census Bureau 

data vastly exceeds the example 2022 

loan limit and is directly related to the 

cost of land alone. 

HUD Response: HUD appreciates the 

comment and the commenter’s opinion 

that the proposed limits should be 

further increased. HUD’s loan limits and 

indexing are dictated by the Housing 

and Economic Recovery Act of 2008 

(HERA). Section 2145 of the Housing 

and Economic Recovery Act (HERA) of 

2008 amended the maximum loan limits 

for manufactured home loans insured 

under Title I and stipulated that the 

Secretary develop a metric that uses 

U.S. Census Bureau (Census) data on 

average manufactured home prices to 

calculate an index for adjusting loan 

limits in the future. The index is based 

on data from the Census’ site, which is 

derived from surveys that were 

collected from firms that sell new 

manufactured homes to individuals for 

residential use. HUD has determined 

that the New Residential Sales index 

provides an accurate assessment of the 

manufactured housing market. This 

index is defined as the average of the 

year-over-year changes in the all-units 


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(total) price series published by Census, 

at the national level, and for a defined 

look-back period. Furthermore, HUD 

has determined that it is appropriate to 

include additional factors to the 

indexing methodology, accounting for 

inflation and resulting in adjustments 

that more closely reflect current 

manufactured home loan values. 

D. Establish New Loan Base Limits 

Using Current Data 

A commenter suggested that loan 

limits be initially brought up to the 

following values, which the commenter 

stated were based on the commenter’s 

current origination volume for 

manufactured home lending: home only 

loans, single-section homes to $200,000, 

multi-section homes to $300,000; loans 

secured by land, single-section homes to 

$325,000, multi-section homes to 

$350,000. The commenter suggested 

that the new manufactured homes sales 

price data then be used as the index for 

year-over-year loan limit adjustments to 

this new baseline. The commenter 

stated that if the loan limits were 

adjusted in the described manner, 

nearly all manufactured home loans 

could qualify for the Title I program, 

making the program truly viable. 

HUD Response: HUD appreciates the 

comment that the proposed baseline 

loan limits be further increased and the 

commenter’s interest in improving the 

viability of the Title I Manufactured 

Home loan program. Section 2145 of the 

Housing and Economic Recovery Act 

(HERA) of 2008, established the baseline 

loan limits and amended the maximum 

loan limits for manufactured home 

loans insured under Title I. HERA 

stipulated that the Secretary develop a 

metric that uses U.S. Census Bureau 

(Census) data on average manufactured 

home prices to calculate an index for 

adjusting loan limits in the future. 

E. Additional Suggested Revisions to 

FHA’s Title I Program 

A commenter provided the following 

suggestions for changes to FHA’s Title I 

program: (1) The origination cap fee 

should be updated from 2 percent to the 

greater of $2,000 or 2 percent because 

the cost to originate a lower balance 

Title I loan is effectively the same as 

that to originate a larger mortgage; (2) 

Permit Title I closing-related fees and 

other customary home loan fees (e.g., 

closing fee, title insurance, title search) 

to be financed in the loan because 

customers currently have to contribute 

an additional $3,000–$6,000 to cover 

these fees and costs; (3) Allow the seller 

to pay closing costs up to 6 percent, like 

the Title II program; (4) Revise the 

collections policy to match the Title II 

policies applicable to medical 

collections, bankruptcies and 

judgments—currently the Title I 

program has a blanket limit on 

collections of $1000; (5) Adjust the debt 

ratio guidelines in Title I to match that 

available for Title II; and (6) Do not 

require a park/community agreement for 

3 years because it has a negative impact 

on adoptions as community owners 

already have their own rental 

agreements, the current length of 

commitment is too long for some 

owners, and a timeline of six months 

should be acceptable if the community 

is being shut down. 

Another commenter recommended 

that FHA update its fee structure to 

incentivize lenders to offer loans 

through the Title I program. 

Another commenter stated that a 

significant reason that community banks 

are not FHA-approved lenders is 

because the FHA lender approval 

process is overly complicated and 

burdensome. The commenter 

recommended that HUD work with 

community bank stakeholders to 

determine the best way to simplify the 

FHA lender approval process, thus 

expanding community bank 

participation in FHA’s Title I program. 

This commenter also recommended that 

HUD create a secondary market facility 

that allowed community banks to sell 

manufactured home loans, which the 

commenter stated would incentivize 

lenders to make these loans because it 

would allow lenders to quickly free up 

capital to further invest in the lenders’ 

communities. 

HUD Response: HUD appreciates 

these suggestions, which the commenter 

believes would improve lender 

participation in the Title I program. 

These suggestions are outside the scope 

of this rulemaking which is focused on 

establishing an indexing methodology 

for calculating Title I manufactured 

home loans. HUD will consider these 

suggestions for future rulemaking or 

policy changes. 

F. Other Comments 

A commenter stated that they found 

the proposed rule to be an interesting 

proposal to address rising home prices 

and that using indexing methodology 

and census data on manufactured 

homes may create a fair or unfair 

opportunity to take out loans on 

manufactured homes due to the 

potential limitation on loan amounts 

based on this methodology. 

HUD Response: HUD appreciates this 

comment. HUD believes the changes in 

this rule will provide additional 

opportunities for low-to moderate 

income borrowers to participate in the 

Title I Manufactured Housing program. 

V. Findings and Certifications 

Regulatory Review—Executive Orders 

12866, 13563 and 14094 

Pursuant to Executive Order 12866 

(Regulatory Planning and Review), a 

determination must be made whether a 

regulatory action is significant and 

therefore, subject to review by the Office 

of Management and Budget (OMB) in 

accordance with the requirements of the 

order. Executive Order 13563 

(Improving Regulations and Regulatory 

Review) directs executive agencies to 

analyze regulations that are ‘‘outmoded, 

ineffective, insufficient, or excessively 

burdensome, and to modify, streamline, 

expand, or repeal them in accordance 

with what has been learned.’’ Executive 

Order 13563 also directs that, where 

relevant, feasible, and consistent with 

regulatory objectives, and to the extent 

permitted by law, agencies are to 

identify and consider regulatory 

approaches that reduce burdens and 

maintain flexibility and freedom of 

choice for the public. Executive Order 

14094 (Modernizing Regulatory Review) 

amends section 3(f) of Executive Order 

12866 (Regulatory Planning and 

Review), among other things. 

This rule has been determined to be 

a ‘‘significant regulatory action,’’ as 

defined in section 3(f) of Executive 

Order 12866, as amended by Executive 

Order 14094, and therefore was 

reviewed by OMB. However, this final 

rule was not deemed to be significant 

under section 3(f)(1) of the Order. The 

docket file is available for public 

inspection in the Regulations Division, 

Office of General Counsel, Department 

of Housing and Urban Development, 

451 7th Street SW, Room 10276, 

Washington, DC 20410–0500. Due to 

security measures at the HUD 

Headquarters building, please schedule 

an appointment to review the docket file 

by calling the Regulations Division at 

202–402–3055 (this is not a toll-free 

number). HUD welcomes and is 

prepared to receive calls from 

individuals who are deaf or hard of 

hearing, as well as individuals with 

speech or communication disabilities. 

To learn more about how to make an 

accessible telephone call, please visit: 

https://www.fcc.gov/consumers/guides/ 

telecommunications-relay-service-trs. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601 et seq.) generally requires 

an agency to conduct a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 


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Federal Register / Vol. 89, No. 40 / Wednesday, February 28, 2024 / Rules and Regulations 14587 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Accordingly, 

the undersigned certifies that this rule 

does not have a significant economic 

impact on a substantial number of small 

entities. 

Environmental Impact 

This rule establishes and reviews loan 

limits. Accordingly, under 24 CFR 

50.19(c)(6) this rule is categorically 

excluded from environmental review 

under the National Environmental 

Policy Act of 1969 (42 U.S.C. 4321). 

Executive Order 13132, Federalism 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits an agency from 

publishing any rule that has federalism 

implications if the rule either: (i) 

imposes substantial direct compliance 

costs on state and local governments 

and is not required by statute, or (ii) 

preempts state law, unless the agency 

meets the consultation and funding 

requirements of section 6 of the 

Executive order. This rule does not have 

federalism implications and does not 

impose substantial direct compliance 

costs on state and local governments or 

preempt state law within the meaning of 

the Executive order. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (2 U.S.C. 1531– 

1538) (UMRA) establishes requirements 

for federal agencies to assess the effects 

of their regulatory actions on state, 

local, and tribal governments, and on 

the private sector. This rule does not 

impose any federal mandates on any 

state, local, or tribal governments, or on 

the private sector, within the meaning of 

the UMRA. 

List of Subjects in 24 CFR Part 201 

Claims, Health facilities, Historic 

preservation, Home improvement, Loan 

programs—housing and community 

development, Manufactured homes, 

Mortgage insurance, Reporting and 

recordkeeping requirements. 

For the reasons discussed in the 

preamble, HUD amends 24 CFR part 201 

as follows: 

PART 201—TITLE I PROPERTY 

IMPROVEMENT AND MANUFACTURED 

HOME LOANS 

■ 1. The authority for 24 CFR part 201 

continues to read as follows: 

Authority: 12 U.S.C. 1703; 15 U.S.C. 1639c; 

42 U.S.C. 3535(d). 

■ 2. Amend § 201.2 by revising the 

definition of ‘‘Manufactured Home’’ to 

read as follows: 

§ 201.2 Definitions. 

* * * * * 

Manufactured home means a 

transportable structure, comprised of 

one or more modules, each built on a 

permanent chassis, with or without a 

permanent foundation, designed for 

occupancy as a principal residence by a 

single family. For purposes of the 

annual adjustments to loan limits under 

this part, a manufactured home may be 

a single-section home comprised of one 

module or a multi-section home 

comprised of two or more modules. A 

new manufactured home shall comply 

with the minimum property standards 

prescribed by the Secretary to assure its 

livability and durability that are 

published as the Manufactured Home 

Construction and Safety Standards 

implementing the National 

Manufactured Housing Construction 

and Safety Standards Act of 1974, 42 

U.S.C. 5401–5426, at 24 CFR part 3280. 

To qualify for a manufactured home 

loan insured under this part, an existing 

manufactured home must have been 

constructed in accordance with 

standards published at 24 CFR part 3280 

and must meet standards similar to the 

minimum property standards applicable 

to existing homes insured under title II 

of the Act, as prescribed by the 

Secretary. 

* * * * * 

■ 3. Amend § 201.10 by revising the 

introductory texts of paragraphs (b)(1) 

and (2), paragraph (c), and paragraphs 

(d)(1) and (2), and adding paragraph (h) 

to read as follows: 

§ 201.10 Loan amounts. 

(b) * * * 

(1) The total principal obligation for a 

loan to purchase a new manufactured 

home shall not exceed the sum of the 

following itemized amounts, up to a 

maximum set according to an index 

established by HUD in paragraph (h)(1) 

of this section and updated through 

notice which shall establish separate 

loan limits for single-section homes and 

multi-section homes: 

* * * * * 

(2) The total principal obligation for a 

loan to purchase an existing 

manufactured home shall not exceed the 

lesser of the following amounts, up to a 

maximum set according to an index 

established by HUD in paragraph (h)(1) 

of this section and updated through 

notice which shall establish separate 

loan limits for single-section homes and 

multi-section homes: 

* * * * * 

(c) Manufactured home lot loans. The 

total principal obligation for a loan to 

purchase and, if necessary, develop a lot 

suitable for a manufactured home, 

including on-site water and utility 

connections, sanitary facilities, site 

improvements and landscaping, shall 

not exceed 95 percent of either the 

appraised value of the developed lot (as 

determined by a HUD-approved 

appraisal) or the total of the purchase 

price and development costs, whichever 

is less, up to a maximum set according 

to an index established by HUD in 

paragraph (h)(2) of this section and 

updated through notice. 

(d) * * * 

(1) The total principal obligation for a 

loan to purchase a new manufactured 

home and a lot on which to place the 

home shall not exceed the sum of the 

following itemized amounts, up to a 

maximum set according to an index 

established by HUD in paragraph (h)(3) 

of this section and updated through 

notice which shall establish separate 

loan limits for single-section homes and 

multi-section homes: 

(2) The total principal obligation for a 

Combination Loan, to purchase an 

existing manufactured home and lot, 

shall not exceed the lesser of the 

following amounts, up to a maximum 

set according to an index established by 

HUD in paragraph (h)(3) of this section 

and updated through notice which shall 

establish separate loan limits for singlesection homes and multi-section homes: 

* * * * * 

(h) Annual Adjustments. HUD shall 

adjust the following loan limits 

annually through notice: 

(1) In paragraphs (b)(1) and (2) of this 

section, the single-section manufactured 

home loan limit shall be adjusted to 

reflect changes in single-section 

manufactured home sales prices and the 

multi-section manufactured home loan 

limit shall be increased to reflect 

changes in double-section manufactured 

home sales prices, according to data 

published by the Census Bureau, except 

that the loan limits shall not be lowered. 

(2) In paragraph (c) of this section, the 

manufactured home lot loan limit shall 

be increased to reflect changes in singlefamily home sales prices according to 

data published by the Census Bureau, 

except that the loan limit shall not be 

lowered. 

(3) In paragraphs (d)(1) and (2) of this 

section, the combination manufactured 

home and lot loan limits shall be 

increased to be the sum of the 

applicable loan limit for the 


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14588 Federal Register / Vol. 89, No. 40 / Wednesday, February 28, 2024 / Rules and Regulations 

manufactured home loan in paragraph 

(b)(1) and the lot loan limit in paragraph 

(c) of this section, except that the loan 

limit shall not be lowered. 

Julia R. Gordon, 

Assistant Secretary for Housing—FHA 

Commissioner. 

[FR Doc. 2024–04138 Filed 2–27–24; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 401 

[Docket No. FR–6122–F–02] 

RIN 2502–AJ48 

Rent Adjustments in the Mark-toMarket Program 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Final rule. 

SUMMARY: The Mark-to-Market program 

preserves affordability and availability 

of affordable rental multifamily 

properties with federally insured 

mortgages, reducing rents to market 

levels by restructuring existing debt to 

levels supportable by these rents. This 

final rule revises the Mark-to-Market 

program regulations to clarify that 

annual adjustment of restructured rents 

under the program will be based on an 

operating cost adjustment factor 

determined by HUD and to further 

clarify when HUD may approve rent 

adjustments on a budget basis. This 

final rule will bring greater clarity to the 

Mark-to-Market program and will align 

HUD’s regulations with recent 

legislative changes that specifically 

allow budget-based rent adjustments for 

the program. 

DATES: Effective: March 29, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Thomas R. Davis, Director, Office of 

Recapitalization, Office of Multifamily 

Housing Programs, Department of 

Housing and Urban Development, 451 

Seventh Street SW, Room 6106, 

Washington, DC 20410; telephone 

number 202–402–7549. HUD welcomes 

and is prepared to receive calls from 

individuals who are deaf or hard of 

hearing, as well as individuals with 

speech or communication disabilities. 

To learn more about how to make an 

accessible telephone call please visit 

https://www.fcc.gov/consumers/guides/ 

telecommunications-relay-service-trs. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Multifamily Assisted Housing 

Reform and Affordability Act of 1997 

(Title V of Pub. L. 105–65, approved 

October 27, 1997, and codified at 42 

U.S.C. 1437f note) (MAHRA) authorizes 

the Mark-to-Market program, which is 

designed to preserve low-income rental 

housing affordability while reducing the 

long-term costs of federal rental 

assistance. Under the program, 

multifamily housing projects with 

above-market rents that are subject to an 

expiring contract under section 8 of the 

United States Housing Act of 1937 (42 

U.S.C. 1437f) (Section 8) undergo both 

a restructuring of the project’s HUDinsured or HUD-held debt and an initial 

renewal of its Section 8 Housing 

Assistance Payments (HAP) contract so 

that a new first loan is serviceable based 

on modified rents. 

On July 16, 2020, HUD issued a 

proposed rule in the Federal Register, at 

85 FR 43165, which proposed to revise 

the Mark-to-Market program regulations 

to clarify that all annual rent 

adjustments for projects subject to a 

restructuring plan are solely by 

application of an operating cost 

adjustment factor (OCAF) established by 

HUD. The current regulations, at 24 CFR 

401.412(b), authorize HUD to approve a 

request for a budget-based rent 

adjustment in lieu of an OCAF. HUD 

proposed to remove the budget-based 

rent adjustment provision as discussed 

in detail in the proposed rule at 85 FR 

43166–43167. 

In addition, HUD in the proposed rule 

sought to revise § 401.554 to remove the 

statement that HUD will ‘‘extend’’ 

Section 8 contracts in order to comport 

with HUD’s standard programmatic 

practice of renewing contracts rather 

than extending them and also to remove 

a parenthetical reference in § 401.554 to 

multiple renewal authorities for 

contracts subject to a Restructuring 

Plan. 

Subsequent to the publication of the 

proposed rule, Public Law 117–328, 

Consolidated Appropriations Act, 2023, 

approved on December 29, 2022, 

amended MAHRA section 515 to add a 

new subsection specifically authorizing 

budget-based rent adjustments for Markto-Market projects. As amended, the 

statute provides that HUD may, not 

more than once every 10 years, adjust 

rents in an amount equal to the lesser 

of budget-based rents or comparable 

market rents for the market area upon 

request of an owner or purchaser who 

meet certain criteria. 

This final rule implements the 

statutory change enacted by the 

Consolidated Appropriations Act, 2023, 

as well as the revisions to § 401.554 

contemplated in the proposed rule. 

II. The Public Comments 

The public comment period for the 

proposed rule closed on September 14, 

2020. HUD received five comments. The 

commenters included members of the 

public, public officials, and the assisted 

housing industry. Commenters were 

generally opposed to the contemplated 

regulatory changes removing the budgetbased rent adjustment provision; 

however, this issue has been superseded 

and obviated by the statutory change 

enacted by the Consolidated 

Appropriations Act, 2023. The statutory 

change is generally aligned with the 

views expressed by commenters on the 

rent adjustment provisions. Commenters 

expressed no opinions with respect to 

the proposed revisions to § 401.554. 

Discretion To Allow Budget-Based Rent 

Adjustments 

Commenters stated that HUD does 

retain the discretion to use a budgetbased rent adjustment at the request of 

the property owner regardless of 

whether § 401.412(b) is revised. One 

commenter noted that in enacting 

MAHRA, Congress did not prohibit the 

Secretary’s exercise of reasonable 

discretion to address extraordinary 

circumstances affecting the viability and 

condition of restructured projects over a 

30-year period. Additionally, the 

commenter stated that under section 

514(e) of MAHRA, the use of the 

mandatory ‘‘shall’’ with the permissive 

‘‘allow’’ refutes any presumption that 

Congress intended rent adjustments by 

application of an OCAF to be exclusive. 

Congress did not provide that it must be 

the only option regardless of all 

potential circumstances at the property. 

In this same vein, another commenter 

stated that although Section 514 and 

Section 515 when read together make 

clear that the Restructuring Plan must 

‘‘allow for’’ an OCAF as a required 

element of the Restructuring Plan, and 

an owner must agree to an OCAF 

renewal if offered by HUD, there is 

nothing that either prevents HUD from 

offering or an owner from accepting an 

alternate renewal option. The 

commenter noted that MAHRA at 514(e) 

uses the term ‘‘allow’’ when describing 

inclusion of an OCAF rent adjustment 

in the Restructuring Plan without the 

qualifying term ‘‘only,’’ and uses the 

term ‘‘require’’ for other aspects of the 

Restructuring Plan. One commenter 

stated that since the publication of the 

Final Rule in 2000, HUD has made a 

‘‘determination’’ that Section 515(b) is 

the appropriate legal authority for 

subsequent renewal of HAP Contracts 


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