IB 

Union Calendar No. 332 

109TH CONGRESS 

2D SESSION H. R. 4804 

[Report No. 109–580] 

To modernize the manufactured housing loan insurance program under title 

I of the National Housing Act. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 16, 2006 

Mr. TIBERI (for himself and Mr. FRANK of Massachusetts) introduced the 

following bill; which was referred to the Committee on Financial Services 

JULY 19, 2006 

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

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

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

[For text of introduced bill, see copy of bill as introduced on February 16, 2006] 

A BILL 

To modernize the manufactured housing loan insurance 

program under title I of the National Housing Act. 

1 SECTION 1. SHORT TITLE. 

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

3 Housing Loan Modernization Act of 2006’’. 

4 SEC. 2. FINDINGS AND PURPOSES. 

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


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1 (1) manufactured housing plays a vital role in 

2 providing housing for low- and moderate-income fam3 ilies in the United States; 

4 (2) the FHA title I insurance program for man5 ufactured home loans traditionally has been a major 

6 provider of mortgage insurance for home-only trans7 actions; 

8 (3) the manufactured housing market is in the 

9 midst of a prolonged downturn which has resulted in 

10 a severe contraction of traditional sources of private 

11 lending for manufactured home purchases; 

12 (4) during past downturns the FHA title I in13 surance program for manufactured homes has filled 

14 the lending void by providing stability until the pri15 vate markets could recover; 

16 (5) in 1992, during the manufactured housing 

17 industry’s last major recession, over 30,000 manufac18 tured home loans were insured under title I; 

19 (6) in 2004, fewer than 2,000 manufactured 

20 housing loans were insured under title I; 

21 (7) the loan limits for title I manufactured hous22 ing loans have not been adjusted for inflation since 

23 1992; and 

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

25 resulted in an atrophied market for manufactured 


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1 housing loans, leaving American families who have 

2 the most difficulty achieving homeownership without 

3 adequate financing options for home-only manufac4 tured home purchases. 

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

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

7 manufactured housing loans for low- and moderate8 income homebuyers during all economic cycles in the 

9 manufactured housing industry; 

10 (2) to modernize the FHA title I insurance pro11 gram for manufactured housing loans to enhance par12 ticipation by Ginnie Mae and the private lending 

13 markets; and 

14 (3) to adjust the low loan limits for title I man15 ufactured home loan insurance to reflect the increase 

16 in costs since such limits were last increased in 1992 

17 and to index the limits to inflation. 

18 SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTITU19 TION PORTFOLIO. 

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

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

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

23 ‘‘Other than in connection with a manufactured home 

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

25 no case’’; and 


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1 (2) by striking ‘‘: Provided, That with’’ and in2 serting ‘‘. With’’. 

3 SEC. 4. INSURANCE BENEFITS. 

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

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

6 adding at the end the following new paragraph: 

7 ‘‘(8) INSURANCE BENEFITS FOR MANUFACTURED

8 HOUSING LOANS.—Any contract of insurance with re9 spect to loans, advances of credit, or purchases in con10 nection with a manufactured home or a lot on which 

11 to place a manufactured home (or both) for a finan12 cial institution that is executed under this title after 

13 the date of the enactment of the FHA Manufactured 

14 Housing Loan Modernization Act of 2006 by the Sec15 retary shall be conclusive evidence of the eligibility of 

16 such financial institution for insurance, and the va17 lidity of any contract of insurance so executed shall 

18 be incontestable in the hands of the bearer from the 

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

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

21 (b) APPLICABILITY.—The amendment made by sub22 section (a) shall only apply to loans that are registered or 

23 endorsed for insurance after the date of the enactment of 

24 this Act. 


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1 SEC. 5. MAXIMUM LOAN LIMITS. 

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

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

4 amended— 

5 (1) in clause (ii) of subparagraph (A), by strik6 ing ‘‘$17,500’’ and inserting ‘‘$24,500’’; 

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

8 and inserting ‘‘$68,040’’; 

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

10 and inserting ‘‘$90,720’’; 

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

12 and inserting ‘‘$22,680’’; and 

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

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

15 subparagraphs are aligned with the margins of sub16 paragraphs (A) and (B). 

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

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

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

20 by adding at the end the following new paragraph: 

21 ‘‘(9) ANNUAL INDEXING OF MANUFACTURED

22 HOUSING LOANS.—The Secretary shall develop a 

23 method of indexing in order to annually adjust the 

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

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

26 based on the manufactured housing price data colVerDate Aug 31 2005 02:52 Jul 20, 2006 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H4804.RH H4804

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1 lected by the United States Census Bureau. The Sec2 retary shall establish such index no later than one 

3 year after the date of the enactment of the FHA Man4 ufactured Housing Loan Modernization Act of 2006.’’ 

5 (c) TECHNICAL AND CONFORMING CHANGES.—Para6 graph (1) of section 2(b) of the National Housing Act (12 

7 U.S.C. 1703(b)(1)) is amended— 

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

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

10 and 

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

12 the following: 

13 ‘‘The Secretary shall, by regulation, annually increase 

14 the dollar amount limitations in subparagraphs (A)(ii), 

15 (C), (D), and (E) (as such limiations may have been pre16 viously adjusted under this sentence) in accordance with the 

17 index established pursuant to paragraph (9).’’. 

18 SEC. 6. INSURANCE PREMIUMS. 

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

20 (12 U.S.C. 1703(f)) is amended— 

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

22 after ‘‘(f)’’; and 

23 (2) by adding at the end the following new para24 graph: 


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1 ‘‘(2) MANUFACTURED HOME LOANS.—Notwith2 standing paragraph (1), in the case of a loan, advance of 

3 credit, or purchase in connection with a manufactured 

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

5 the premium charge for the insurance granted under this 

6 section shall be paid by the borrower under the loan or ad7 vance of credit, as follows: 

8 ‘‘(A) At the time of the making of the loan, ad9 vance of credit, or purchase, a single premium pay10 ment in an amount not to exceed 2.25 percent of the 

11 amount of the original insured principal obligation. 

12 ‘‘(B) In addition to the premium under subpara13 graph (A), annual premium payments during the 

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

15 an amount not exceeding 1.0 percent of the remaining 

16 insured principal balance (excluding the portion of 

17 the remaining balance attributable to the premium 

18 collected under subparagraph (A) and without taking 

19 into account delinquent payments or prepayments). 

20 ‘‘(C) Premium charges under this paragraph 

21 shall be established in amounts that are sufficient, but 

22 do not exceed the minimum amounts necessary, to 

23 maintain a negative credit subsidy for the program 

24 under this section for insurance of loans, advances of 

25 credit, or purchases in connection with a manufacVerDate Aug 31 2005 02:52 Jul 20, 2006 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H4804.RH H4804

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1 tured home or a lot on which to place such a home 

2 (or both), as determined based upon risk to the Fed3 eral Government under existing underwriting require4 ments. 

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

6 on premium payments to percentages above those set 

7 forth in subparagraphs (A) and (B), but only if nec8 essary, and not in excess of the minimum increase 

9 necessary, to maintain a negative credit subsidy as 

10 described in subparagraph (C).’’. 

11 SEC. 7. TECHNICAL CORRECTIONS. 

12 (a) DATES.—Subsection (a) of section 2 of the Na13 tional Housing Act (12 U.S.C. 1703(a)) is amended— 

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

15 place such term appears; and 

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

17 the Housing Act of 1954’’. 

18 (b) AUTHORITY OF SECRETARY.—Subsection (c) of sec19 tion 2 of the National Housing Act (12 U.S.C. 1703(c)) is 

20 amended to read as follows: 

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

22 ‘‘(1) AUTHORITY OF SECRETARY.—Notwith23 standing any other provision of law, the Secretary 

24 may— 


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

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

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

4 credit in the Secretary’s discretion, and upon 

5 such terms and conditions and for such consider6 ation as the Secretary shall determine to be rea7 sonable, any real or personal property conveyed 

8 to or otherwise acquired by the Secretary, in 

9 connection with the payment of insurance here10 tofore or hereafter granted under this title, in11 cluding any evidence of debt, contract, claim, 

12 personal property, or security assigned to or held 

13 by him in connection with the payment of insur14 ance heretofore or hereafter granted under this 

15 section; and 

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

17 compromise or otherwise, all claims assigned to 

18 or held by the Secretary and all legal or equi19 table rights accruing to the Secretary in connec20 tion with the payment of such insurance, includ21 ing unpaid insurance premiums owed in connec22 tion with insurance made available by this title. 

23 ‘‘(2) ADVERTISEMENTS FOR PROPOSALS.—Sec24 tion 3709 of the Revised Statutes shall not be con25 strued to apply to any contract of hazard insurance 


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1 or to any purchase or contract for services or supplies 

2 on account of such property if the amount thereof does 

3 not exceed $25,000. 

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

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

6 deeds of conveyance, deeds of release, assignments and 

7 satisfactions of mortgages, and any other written in8 strument relating to real or personal property or any 

9 interest therein heretofore or hereafter acquired by the 

10 Secretary pursuant to the provisions of this title may 

11 be exercised by an officer appointed by the Secretary 

12 without the execution of any express delegation of 

13 power or power of attorney. Nothing in this sub14 section shall be construed to prevent the Secretary 

15 from delegating such power by order or by power of 

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

17 or agent the Secretary may appoint.’’. 

18 SEC. 8. REVISION OF UNDERWRITING CRITERIA. 

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

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

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

22 adding at the end the following new paragraph: 

23 ‘‘(10) FINANCIAL SOUNDNESS OF MANUFACTURED

24 HOUSING PROGRAM.—The Secretary shall establish 

25 such underwriting criteria for loans and advances of 


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1 credit in connection with a manufactured home or a 

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

3 including such loans and advances represented by ob4 ligations purchased by financial institutions, as may 

5 be necessary to ensure that the program under this 

6 title for insurance for financial institutions against 

7 losses from such loans, advances of credit, and pur8 chases is financially sound.’’. 

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

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

11 Act, the Secretary of Housing and Urban Development shall 

12 revise the existing underwriting criteria for the program 

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

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

15 in accordance with the requirements of such paragraph. 


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Union Calendar No. 332 

109TH CONGRESS 

2D SESSION H. R. 4804 

[Report No. 109

–580] 

A BILL 

To modernize the manufactured housing loan insuring Act. ance program under title I of the National HousJULY 19, 2006 Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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