109TH CONGRESS 

2D SESSION H. R. 4804

AN ACT

To modernize the manufactured housing loan insuring Act. ance program under title I of the National Hous-

109TH CONGRESS 

2D SESSION H. R. 4804

AN ACT

To modernize the manufactured housing loan insurance 

program under title I of the National Housing Act.

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

6 (1) manufactured housing plays a vital role in 

7 providing housing for low- and moderate-income 

8 families in the United States; 

9 (2) the FHA title I insurance program for man10 ufactured home loans traditionally has been a major 

11 provider of mortgage insurance for home-only trans12 actions; 

13 (3) the manufactured housing market is in the 

14 midst of a prolonged downturn which has resulted in 

15 a severe contraction of traditional sources of private 

16 lending for manufactured home purchases; 

17 (4) during past downturns the FHA title I in18 surance program for manufactured homes has filled 

19 the lending void by providing stability until the pri20 vate markets could recover; 

21 (5) in 1992, during the manufactured housing 

22 industry’s last major recession, over 30,000 manu23 factured home loans were insured under title I; 

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

25 housing loans were insured under title I; 
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1 (7) the loan limits for title I manufactured 

2 housing loans have not been adjusted for inflation 

3 since 1992; and 

4 (8) these problems with the title I program 

5 have resulted in an atrophied market for manufac6 tured housing loans, leaving American families who 

7 have the most difficulty achieving homeownership 

8 without adequate financing options for home-only 

9 manufactured home purchases. 

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

11 (1) to provide adequate funding for FHA-in12 sured manufactured housing loans for low- and mod13 erate-income homebuyers during all economic cycles 

14 in the manufactured housing industry; 

15 (2) to modernize the FHA title I insurance pro16 gram for manufactured housing loans to enhance 

17 participation by Ginnie Mae and the private lending 

18 markets; and 

19 (3) to adjust the low loan limits for title I man20 ufactured home loan insurance to reflect the increase 

21 in costs since such limits were last increased in 1992 

22 and to index the limits to inflation. 
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1 SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTI2 TUTION PORTFOLIO. 

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

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

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

6 ‘‘Other than in connection with a manufactured 

7 home or a lot on which to place such a home (or 

8 both), in no case’’; and 

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

11 SEC. 4. INSURANCE BENEFITS. 

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

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

14 by adding at the end the following new paragraph: 

15 ‘‘(8) INSURANCE BENEFITS FOR MANUFAC16 TURED HOUSING LOANS.—Any contract of insurance 

17 with respect to loans, advances of credit, or pur18 chases in connection with a manufactured home or 

19 a lot on which to place a manufactured home (or 

20 both) for a financial institution that is executed 

21 under this title after the date of the enactment of 

22 the FHA Manufactured Housing Loan Moderniza23 tion Act of 2006 by the Secretary shall be conclusive 

24 evidence of the eligibility of such financial institution 

25 for insurance, and the validity of any contract of in26 surance so executed shall be incontestable in the 
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1 hands of the bearer from the date of the execution 

2 of such contract, except for fraud or misrepresenta3 tion on the part of such institution.’’.

4 (b) APPLICABILITY.—The amendment made by sub5 section (a) shall only apply to loans that are registered 

6 or endorsed for insurance after the date of the enactment 

7 of this Act. 

8 SEC. 5. MAXIMUM LOAN LIMITS. 

9 (a) DOLLAR AMOUNTS.—Paragraph (1) of section 

10 2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) 

11 is amended—

12 (1) in clause (ii) of subparagraph (A), by strik13 ing ‘‘$17,500’’ and inserting ‘‘$24,500’’; 

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

15 and inserting ‘‘$68,040’’; 

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

17 and inserting ‘‘$90,720’’; 

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

19 and inserting ‘‘$22,680’’; and 

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

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

22 such subparagraphs are aligned with the margins of 

23 subparagraphs (A) and (B). 

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

25 of the National Housing Act (12 U.S.C. 1703(b)), as 
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1 amended by the preceding provisions of this Act, is further 

2 amended by adding at the end the following new para3 graph: 

4 ‘‘(9) ANNUAL INDEXING OF MANUFACTURED

5 HOUSING LOANS.—The Secretary shall develop a 

6 method of indexing in order to annually adjust the 

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

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

9 based on the manufactured housing price data col10 lected by the United States Census Bureau. The 

11 Secretary shall establish such index no later than 

12 one year after the date of the enactment of the FHA 

13 Manufactured Housing Loan Modernization Act of 

14 2006.’’

15 (c) TECHNICAL AND CONFORMING CHANGES.—Para16 graph (1) of section 2(b) of the National Housing Act (12 

17 U.S.C. 1703(b)(1)) is amended—

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

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

20 and 

21 (2) by adding after and below subparagraph 

22 (G) the following: 

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

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

25 (C), (D), and (E) (as such limitations may have been pre-
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1 viously adjusted under this sentence) in accordance with 

2 the index established pursuant to paragraph (9).’’.

3 SEC. 6. INSURANCE PREMIUMS. 

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

5 Act (12 U.S.C. 1703(f)) is amended—

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

7 after ‘‘(f)’’; and 

8 (2) by adding at the end the following new 

9 paragraph: 

10 ‘‘(2) MANUFACTURED HOME LOANS.—Notwith11 standing paragraph (1), in the case of a loan, advance of 

12 credit, or purchase in connection with a manufactured 

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

14 the premium charge for the insurance granted under this 

15 section shall be paid by the borrower under the loan or 

16 advance of credit, as follows: 

17 ‘‘(A) At the time of the making of the loan, ad18 vance of credit, or purchase, a single premium pay19 ment in an amount not to exceed 2.25 percent of the 

20 amount of the original insured principal obligation. 

21 ‘‘(B) In addition to the premium under sub22 paragraph (A), annual premium payments during 

23 the term of the loan, advance, or obligation pur24 chased in an amount not exceeding 1.0 percent of 

25 the remaining insured principal balance (excluding 
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1 the portion of the remaining balance attributable to 

2 the premium collected under subparagraph (A) and 

3 without taking into account delinquent payments or 

4 prepayments). 

5 ‘‘(C) Premium charges under this paragraph 

6 shall be established in amounts that are sufficient, 

7 but do not exceed the minimum amounts necessary, 

8 to maintain a negative credit subsidy for the pro9 gram under this section for insurance of loans, ad10 vances of credit, or purchases in connection with a 

11 manufactured home or a lot on which to place such 

12 a home (or both), as determined based upon risk to 

13 the Federal Government under existing underwriting 

14 requirements. 

15 ‘‘(D) The Secretary may increase the limita16 tions on premium payments to percentages above 

17 those set forth in subparagraphs (A) and (B), but 

18 only if necessary, and not in excess of the minimum 

19 increase necessary, to maintain a negative credit 

20 subsidy as described in subparagraph (C).’’.

21 SEC. 7. TECHNICAL CORRECTIONS. 

22 (a) DATES.—Subsection (a) of section 2 of the Na23 tional Housing Act (12 U.S.C. 1703(a)) is amended—

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

25 each place such term appears; and 
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1 (2) by striking ‘‘made after the effective date of 

2 the Housing Act of 1954’’. 

3 (b) AUTHORITY OF SECRETARY.—Subsection (c) of 

4 section 2 of the National Housing Act (12 U.S.C. 1703(c)) 

5 is amended to read as follows: 

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

7 ‘‘(1) AUTHORITY OF SECRETARY.—Notwith8 standing any other provision of law, the Secretary 

9 may—

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

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

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

13 credit in the Secretary’s discretion, and upon 

14 such terms and conditions and for such consid15 eration as the Secretary shall determine to be 

16 reasonable, any real or personal property con17 veyed to or otherwise acquired by the Secretary, 

18 in connection with the payment of insurance 

19 heretofore or hereafter granted under this title, 

20 including any evidence of debt, contract, claim, 

21 personal property, or security assigned to or 

22 held by him in connection with the payment of 

23 insurance heretofore or hereafter granted under 

24 this section; and 
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1 ‘‘(B) pursue to final collection, by way of 

2 compromise or otherwise, all claims assigned to 

3 or held by the Secretary and all legal or equi4 table rights accruing to the Secretary in con5 nection with the payment of such insurance, in6 cluding unpaid insurance premiums owed in 

7 connection with insurance made available by 

8 this title. 

9 ‘‘(2) ADVERTISEMENTS FOR PROPOSALS.—Sec10 tion 3709 of the Revised Statutes shall not be con11 strued to apply to any contract of hazard insurance 

12 or to any purchase or contract for services or sup13 plies on account of such property if the amount 

14 thereof does not exceed $25,000. 

15 ‘‘(3) DELEGATION OF AUTHORITY.—The power 

16 to convey and to execute in the name of the Sec17 retary, deeds of conveyance, deeds of release, assign18 ments and satisfactions of mortgages, and any other 

19 written instrument relating to real or personal prop20 erty or any interest therein heretofore or hereafter 

21 acquired by the Secretary pursuant to the provisions 

22 of this title may be exercised by an officer appointed 

23 by the Secretary without the execution of any ex24 press delegation of power or power of attorney. 

25 Nothing in this subsection shall be construed to pre-
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1 vent the Secretary from delegating such power by 

2 order or by power of attorney, in the Secretary’s dis3 cretion, to any officer or agent the Secretary may 

4 appoint.’’.

5 SEC. 8. REVISION OF UNDERWRITING CRITERIA. 

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

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

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

9 by adding at the end the following new paragraph: 

10 ‘‘(10) FINANCIAL SOUNDNESS OF MANUFAC11 TURED HOUSING PROGRAM.—The Secretary shall es12 tablish such underwriting criteria for loans and ad13 vances of credit in connection with a manufactured 

14 home or a lot on which to place a manufactured 

15 home (or both), including such loans and advances 

16 represented by obligations purchased by financial in17 stitutions, as may be necessary to ensure that the 

18 program under this title for insurance for financial 

19 institutions against losses from such loans, advances 

20 of credit, and purchases is financially sound.’’.

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

22 month period beginning on the date of the enactment of 

23 this Act, the Secretary of Housing and Urban Develop24 ment shall revise the existing underwriting criteria for the 

25 program referred to in paragraph (10) of section 2(b) of 
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1 the National Housing Act (as added by subsection (a) of 

2 this section) in accordance with the requirements of such 

3 paragraph.

Passed the House of Representatives July 25, 2006. 

Attest:

Clerk.