53346 Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Proposed Rules 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 201 and 203 

[Doc. No. FR–5075–P–01] 

RIN 2502–AI45 

Federal Housing Administration: 

Insurance for Manufactured Housing 

AGENCY: Office of the Assistant 

Secretary for Housing—Federal Housing 

Commissioner, HUD. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

amend HUD’s regulations governing 

manufactured homes that are to be the 

security for Federal Housing 

Administration (FHA) Title I loans and 

Title II insured mortgages. The proposed 

rule would permit, as eligible for FHA 

insurance, mortgages on manufactured 

homes to be installed in accordance 

with the Model Installation Standards, 

which were the subject of notice and 

rulemaking that resulted in a final rule 

published on October 19, 2007. 

Acceptance of mortgages on these 

manufactured homes for FHA insurance 

will provide for greater flexibility of 

design, thereby permitting additional 

options for affordable housing. This 

proposed rule would apply to all newly 

installed manufactured homes that are 

to be security for Title I and Title II 

loans and any manufactured home that 

has been previously set up and erected 

at another location and that is to be 

security for a Title I loan. An existing 

manufactured home that secures a Title 

I loan and that has been installed or 

erected on a homesite in compliance 

with the manufacturer’s requirements 

for anchoring, support, stability, and 

maintenance would be exempt from 

compliance with this proposed rule, 

unless it is relocated from the site of its 

original installation after the effective 

date of this proposed rule. 

DATES: Comment Due Date: November 

14, 2008. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed rule to the Regulations 

Division, Office of General Counsel, 

Department of Housing and Urban 

Development, 451 Seventh Street, SW., 

Room 10276, Washington, DC 20410– 

0500. Communications must refer to the 

above docket number and title. There 

are two methods for submitting public 

comments. All submissions must refer 

to the above docket number and title. 

1. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Room 10276, 

Washington, DC 20410–0001. 

2. Electronic Submission of 

Comments. Interested persons may 

submit comments electronically through 

the Federal eRulemaking Portal at 

http://www.regulations.gov. HUD 

strongly encourages commenters to 

submit comments electronically. 

Electronic submission of comments 

allows the commenter maximum time to 

prepare and submit a comment, ensures 

timely receipt by HUD, and enables 

HUD to make them immediately 

available. Comments submitted 

electronically through the 

www.regulations.gov Web site can be 

viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Note: To receive consideration as public 

comments, comments must be submitted 

through one of the two methods specified 

above. Again, all submissions must refer to 

the docket number and title of the rule. No 

Facsimile Comments. Facsimile (FAX) 

comments are not acceptable. 

Public Inspection of Public 

Comments. All properly submitted 

comments and communications 

submitted to HUD will be available for 

public inspection and copying between 

8 a.m. and 5 p.m. weekdays at the above 

address. Due to security measures at the 

HUD Headquarters building, an advance 

appointment to review the public 

comments must be scheduled by calling 

the Regulations Division at (202) 708– 

3055 (this is not a toll-free number). 

Individuals with speech or hearing 

impairments may access this number 

via TTY by calling the Federal 

Information Relay Service at (800) 877– 

8339. Copies of all comments submitted 

are available for inspection and 

downloading at http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Peter Gillispie, Home Valuation Policy 

Division, Office of Housing, Department 

of Housing and Urban Development, 

451 Seventh Street, SW., Room 9270, 

Washington, DC 20410–8000, telephone 

number (202) 708–2121 (this is not a 

toll-free number). Individuals with 

speech or hearing impairments may 

access this number through TTY by 

calling the toll-free Federal Information 

Relay Service at (800) 877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 2 of the National Housing Act 

(12 U.S.C. 1703) (the NHA) authorizes 

the Secretary to insure approved lenders 

against losses sustained as a result of 

borrower default on, among other 

things, manufactured home loans. The 

regulations implementing the Title I 

programs are found in 24 CFR part 201. 

Section 201.21 establishes the eligibility 

requirements for manufactured home 

loans. Section 201.21(c)(3) provides, in 

part, that any permanent foundation 

shall be constructed in accordance with 

the current edition of HUD’s Permanent 

Foundations Guide for Manufactured 

Housing (HUD Handbook 4930.3). 

Under Title II of the NHA, section 203 

authorizes the Secretary to insure 

mortgages used to finance the purchase 

of single-family homes. HUD’s 

regulations implementing section 203 of 

the Act are located at 24 CFR part 203 

(entitled ‘‘Single Family Mortgage 

Insurance’’). Section 203.43f contains 

the eligibility criteria for FHA-insured 

mortgages covering manufactured 

homes, describing the physical 

characteristics the home and foundation 

must possess, as well as required terms 

and conditions of the mortgage. 

Specifically, the requirements 

currently contained in § 203.43f(c)(i) 

and (ii) provide that a manufactured 

home must be erected on a site-built 

permanent foundation that meets or 

exceeds the applicable requirements of 

the Minimum Property Standards (MPS) 

for One- and Two-Family Dwellings (24 

CFR 200.929(b)(1)), among other 

requirements, and that the space 

beneath a manufactured home be 

enclosed by continuous foundation-type 

construction designed to resist all forces 

to which it is subjected without 

transmitting forces to the building 

superstructure. HUD has determined 

that satisfying the requirements of these 

regulations is not the only means of 

protecting the Mutual Mortgage 

Insurance Fund (MMIF) and that the 

regulations should reflect current 

developments in the installation of 

manufactured homes. 

The Manufactured Housing 

Improvements Act of 2000 (the Act), 

which amended the National 

Manufactured Housing Construction 

and Safety Act of 1974 (42 U.S.C. 5401– 

5426), established new requirements 

pertaining to the installation of 

manufactured homes. One of the 

provisions requires HUD to establish 

Model Manufactured Home Installation 

Standards. 

On October 19, 2007 (72 FR 59338), 

HUD published its Model Manufactured 

Home Installation Standards final rule. 

HUD’s final rule codified the Model 

Manufactured Home Installation 

Standards (Model Installation 

Standards) in a new part 3285 of Title 

24 of the Code of Federal Regulations 


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Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Proposed Rules 53347 

(CFR). The Model Installation Standards 

contain both minimum acceptable 

nationwide standards for the 

installation and set-up of manufactured 

homes and detailed methods for the 

design and construction of foundations, 

based on site conditions and home 

design features that support 

manufactured housing. The Model 

Installation Standards also allow 

alternative foundation systems or 

designs that meet or exceed the 

requirements of the Model Installation 

Standards, provided the methods are 

approved by a professional engineer or 

a registered architect in accordance with 

acceptable engineering practice. 

On June 20, 2008 (73 FR 35270), HUD 

published a final rule entitled, 

‘‘Manufactured Home Installation 

Program,’’ which established a federal 

manufactured home installation 

program in accordance with the 

National Manufactured Housing 

Construction and Safety Standards Act 

of 1974, as amended by the 

Manufactured Housing Act of 2000. The 

installation program final rule is a 

companion rule to the Model 

Installation Standards final rule. The 

installation program sets out 

manufactured home installation 

requirements that are applicable in all 

states, requirements that are applicable 

in only those states in which HUD is 

administering the installation program, 

and requirements for states that choose 

to administer their own installation 

programs in lieu of the HUD program. 

The new elements required by the 

Manufactured Housing Improvement 

Act of 2000 to be integrated into an 

acceptable manufactured home 

installation program are the 

establishment of qualified installation 

standards, licensing and training of 

installers, and inspection of the 

installation of manufactured homes. The 

June 20, 2008, final rule established the 

HUD-administered installation program 

that operates in a state, unless that state 

certifies that it has its own qualifying 

program. 

II. This Proposed Rule 

This proposed rule would revise the 

existing requirements contained in 24 

CFR parts 201 and 203, which pertain 

to eligibility of mortgages on 

manufactured homes for FHA 

insurance, by removing all requirements 

for site-built permanent foundations and 

perimeter enclosures designed in 

compliance with the Permanent 

Foundations Guide for Manufactured 

Housing (HUD Handbook 4930.3G). In 

place of the current requirements, the 

proposed rule would allow FHA 

insurance for mortgages on 

manufactured homes that are installed 

in a manner that meets or exceeds the 

requirements set forth in the Model 

Installation Standards, which HUD has 

codified at 24 CFR part 3285. 

This proposed rule would prevent 

HUD from having two different 

foundation standards for the installation 

of manufactured homes that are security 

for FHA-insured mortgages. The Model 

Installation Standards will establish the 

minimum acceptable standards 

nationwide for the installation and set 

up of new manufactured homes and also 

serve as the basis for qualifying a state’s 

installation program under the 

Manufactured Home Installation 

Program. HUD believes that the benefits 

of this proposed rule significantly 

outweigh its costs, especially in light of 

the recently adopted Model Installation 

Standards and the Manufactured Home 

Installation Program. 

The Model Installation Standards will 

protect FHA’s interest in manufactured 

homes financed with HUD-insured 

loans, and the MMIF will not be 

exposed to any additional risk by the 

Department’s adoption of these 

standards as the eligibility requirements 

for FHA-insured financing. In 

developing the Model Installation 

Standards, the Department was required 

to consider proposed standards 

recommended by a consensus 

committee. Both the consensus 

committee and the Department were 

required to consider relevant data, 

including research, development, and 

testing activities by private and 

government organizations, to determine 

how to protect the interests of the 

public, as well as the Department. The 

resulting Model Installation Standards 

provide greater clarity, precision, and 

objectivity for requirements that apply 

to the set-up of manufactured homes. 

They require that foundations for 

manufactured home installations be 

based on site conditions, home design 

features, and the loads the home was 

designed to withstand as evidenced on 

the home’s data plate. The standards 

have been evaluated by HUD and have 

been determined to provide adequate 

resistance to the design loads 

established by the Manufactured Home 

Construction and Safety Standards. 

With these uniform, minimum 

standards, supported by a rigorous 

program of licensing and training of 

installers and inspections of 

manufactured home installations, HUD 

believes the result will be a more 

reliable set of benchmarks and that risk 

to the MMIF would be reduced, not 

increased. 

Similarly, HUD believes the benefits 

for homebuyers will also outweigh any 

increased costs they face. On June 14, 

2006, HUD published estimated costs of 

compliance with installation program 

requirements for states in which HUD 

administers an installation program, as 

well as for states that choose to 

administer their own installation 

programs. (See 71 FR 34483, left 

column.) The cost of complying with 

the installation program in states that 

administer their own programs was 

estimated at $17 per manufactured 

home. In states where HUD administers 

the installation program, the cost was 

estimated at $1,126 per single-wide 

manufactured home and $1,176 per 

double-wide manufactured home. HUD 

assumes that a portion of these costs 

would be passed on to the consumer. 

Nonetheless, by making manufactured 

homes installed in compliance with the 

Model Installation Standards eligible for 

FHA financing, HUD will provide 

financing alternatives for homeowners 

whose options might otherwise be 

limited to the subprime market. 

Homeowners will also benefit by 

knowing that their homes have been 

installed by trained, licensed installers 

and that installations are subject to 

inspection. By replacing FHA’s current 

foundation requirements with the 

Model Installation Standards, HUD 

would promote affordable housing by 

reducing set-up costs. Through the same 

measure, HUD would provide for the 

quality and safety of manufactured 

homes by applying minimum 

nationwide standards and deferring to 

the states for establishment of additional 

requirements for the set-up and 

installation of manufactured homes by 

licensed installers overseen by 

inspectors who meet HUD 

qualifications. 

This proposed rule would require all 

new and existing manufactured homes 

that are to be security for Title II FHAinsured mortgages and all new 

manufactured homes that are to be 

security for Title I loans to be in 

compliance with the Model Installation 

Standards. A manufactured home that is 

to be security for a Title I loan and that 

has been relocated from the original 

homesite upon which it had been 

installed and set-up must be in 

compliance with the Model Installation 

Standards. A manufactured home that 

has been installed or erected on a 

homesite in compliance with the 

manufacturer’s requirements for 

anchoring, support, stability, and 

maintenance would be exempt from 

compliance with this rule, unless it is 

relocated from the site of its original 

installation after the effective date of 

this proposed rule. 


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53348 Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Proposed Rules 

Even with the changes proposed by 

this rule, in order to qualify for FHA 

mortgage insurance, manufactured 

homes in some states may have to be 

installed or erected in accordance with 

requirements beyond those in the Model 

Installation Standards. FHA is 

authorized to insure loans under Title II 

of the National Housing Act only if the 

loan is secured by ‘‘real estate.’’ If a 

manufactured home installed in 

accordance with the Model Installation 

Standards would be classified and taxed 

as personal property under state or local 

law, then the installation or erection 

would have to meet such additional 

requirements as necessary for it to be 

classified as real property. The 

determination whether a manufactured 

home is classified and taxed as real 

property, and therefore eligible for 

insurance under Title II, may depend on 

the foundation and the manner of 

attachment of the home to the 

foundation. 

Additionally, this proposed rule 

would revise the eligibility 

requirements for Title II manufactured 

homes that are located in areas 

designated by the Federal Emergency 

Management Agency (FEMA) as 

floodplain areas having special flood 

hazards. Specifically, this proposed rule 

would require that the elevation of the 

lowest floor of the manufactured home 

must be at or above the FEMAdesignated base flood elevation and 

eliminate the requirement that the 

finished grade level beneath the 

manufactured home be at or above the 

base flood elevation. This change will 

align the flood hazard requirements for 

manufactured homes with that of stickbuilt homes. 

HUD expects and invites comments in 

response to this proposed rule on the 

suitability of using the Model 

Installation Standards for FHA 

insurance eligibility purposes. With the 

Model Installation Standards having 

now been issued in final form (with an 

effective date of October 20, 2008), the 

public has an opportunity to submit 

comments in response to this proposed 

rule for HUD’s consideration that may 

result in appropriate changes to the 

final, effective version of this rule. 

However, extensive comments on the 

technical aspects of the Model 

Installation Standards have already been 

received and were considered by HUD 

in the development of the final rule on 

Model Installation Standards, and such 

comments do not need to be 

resubmitted in response to this 

proposed rule. Comments submitted to 

HUD on the Model Installation 

Standards also recommended that any 

references by HUD in any housing 

program only use the Model Installation 

Standards adopted under part 3285 or a 

state equivalent, and this proposed rule 

would be responsive to such comments. 

III. Findings and Certifications 

Executive Order 12866 

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 economically significant, 

as provided in 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 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). Hearing-or speechimpaired individuals may access this 

number through TTY by calling the tollfree Federal Information Relay Service 

at (800) 877–8339. 

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 the 

private sector. This proposed rule does 

not impose any federal mandates on any 

state, local, or tribal government, or the 

private sector within the meaning of 

UMRA. 

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. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 605(b)) generally requires an 

agency to conduct regulatory flexibility 

analysis of any rule subject to notice 

and comment rulemaking requirements, 

unless the agency certifies that the rule 

will not have a significant economic 

impact on a substantial number of small 

entities, which are the FHA-approved 

lenders that are directly affected by this 

rule. This rule will not have a 

significant economic impact on a 

substantial number of small entities for 

the following reasons. This rule would 

remove, from its regulations governing 

mortgages on manufactured homes that 

are eligible for FHA insurance, those 

prescriptive foundation requirements 

for manufactured homes and would 

establish the minimum acceptable 

standards nationwide for the 

installation and set-up of manufactured 

homes. The removal of prescriptive 

requirements eases the burden on FHAapproved lenders of having to ensure 

that manufactured homes for which 

homebuyers are seeking FHA insurance 

for their mortgages meet standards 

different from the more widely used 

Model Installation Standards. Therefore, 

the undersigned certifies that this 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities, and an initial 

regulatory flexibility analysis is not 

required. 

Notwithstanding HUD’s 

determination that this rule will not 

have a significant economic impact on 

a substantial number of small entities, 

HUD specifically invites comments 

regarding any less burdensome 

alternatives to this rule that will meet 

HUD’s objectives as described in this 

preamble. 

Environmental Impact 

A Finding of No Significant Impact 

with respect to the environment has 

been made in accordance with HUD 

regulations at 24 CFR part 50, which 

implement section 102(2)(C) of the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4332(2)(C)). The 

Finding of No Significant Impact is 

available for public inspection between 

the hours of 8 a.m. and 5 p.m. weekdays 

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, an advance 

appointment to review the finding must 

be scheduled by calling the Regulations 

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

a toll-free number). Individuals with 

speech or hearing impairments may 

access this number through TTY by 

calling the toll-free Federal Information 

Relay Service at (800) 877–8339. 


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Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Proposed Rules 53349 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance Number (CFDA) for 

Manufactured Home Loan Insurance is 

14.110, and the CFDA for Mortgage 

Insurance (Homes) is 14.117. 

List of Subjects 

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. 

24 CFR Part 203 

Hawaiian Natives, Home 

improvement, Indians-lands, Loan 

programs-housing and community 

development, Mortgage insurance, 

Reporting and recordkeeping 

requirements, Solar energy. 

Accordingly, HUD proposes to amend 

24 CFR parts 201 and 203, as follows: 

PART 201—TITLE I PROPERTY 

IMPROVEMENT AND MANUFACTURED 

HOME LOANS 

1. The authority citation for part 201 

continues to read as follows: 

Authority: 12 U.S.C. 1703 and 3535(d). 

2. Revise § 201.21(c)(3), to read as 

follows: 

§ 201.21 Manufactured home loan 

eligibility. 

* * * * * 

(c) * * * 

(3) Except for an existing 

manufactured home that has not been 

relocated from the homesite upon which 

it was originally erected or installed, the 

installation or erection of a 

manufactured home on the homesite 

must meet or exceed the requirements 

set forth in 24 CFR part 3285, the Model 

Manufactured Home Installation 

Standards, and all applicable state and 

local requirements governing the 

installation and construction of the 

manufactured home foundation system. 

An existing manufactured home that has 

not been relocated from the homesite 

upon which it was originally erected 

must have been installed in compliance 

with the manufacturer’s requirements 

for anchoring, support, stability, and 

maintenance. 

* * * * * 

3. Revise § 201.26(b)(4)(iii), to read as 

follows: 

§ 201.26 Conditions for loan 

disbursement. 

* * * * * 

(b) * * * 

(4) * * * 

(iii) Except for an existing 

manufactured home that has not been 

relocated from the homesite upon which 

it was originally erected or installed, the 

installation or erection of a 

manufactured home on the homesite 

meets or exceeds the requirements set 

forth in 24 CFR part 3285, the Model 

Installation Standards, and all 

applicable state and local requirements 

governing the installation and 

construction of the manufactured home 

foundation system. An existing 

manufactured home that has not been 

relocated from the homesite upon which 

it was originally erected has been 

installed in compliance with the 

manufacturer’s requirements for 

anchoring, support, stability, and 

maintenance. 

* * * * * 

PART 203—SINGLE FAMILY 

MORTGAGE INSURANCE 

1. The authority citation for 24 CFR 

part 203 continues to read as follows: 

Authority: 42 U.S.C. 3535(d) and 5301– 

5320. 

2. Amend § 203.43f as follows: 

a. Remove paragraph (c)(ii); 

b. Redesignate paragraph (b) as 

paragraph (b)(1) and add paragraph 

(b)(2), 

c. Redesignate paragraph (c)(i) as 

paragraph (c)(1) and paragraphs (c)(iii) 

through (vi) as (c)(2) through (5), and 

d. Revise paragraph (a) and newly 

redesignated paragraphs (c)(1) and 

(c)(5), and paragraph (d). 

The amendments read as follows: 

§ 203.43f Eligibility of mortgages covering 

manufactured homes. 

* * * * * 

(a) The manufactured home, when 

erected on site, shall have floor space 

area of not less than 400 square feet and 

shall have been constructed in 

conformance with the National 

Manufactured Home Construction and 

Safety Standards, as evidenced by a 

certification label affixed thereto in 

accordance with 24 CFR 3280.8. A 

manufactured home that has been 

moved from the site upon which it was 

originally installed is not eligible for 

insurance. 

(b) * * * 

(2) In jurisdictions where compliance 

with the Model Manufactured Home 

Installation Standards, as set forth at 24 

CFR part 3285, does not result in the 

classification and taxation of the 

manufactured home as real estate, the 

foundation of the home and the manner 

of its attachment to the foundation must 

be adapted in such a manner as to cause 

the home to be classified and taxed as 

real estate, as well as meet or exceed the 

requirements of 24 CFR part 3285, in 

order for the home to be eligible for 

mortgage insurance. 

(c) * * * 

(1) The installation or erection of a 

manufactured home on the homesite 

must meet or exceed the requirements 

set forth in 24 CFR part 3285 and all 

applicable state and local requirements 

governing the installation and 

construction of the manufactured home 

foundation system, as determined by an 

inspection performed in accordance 

with 24 CFR part 3286. The requirement 

for an inspection performed in 

accordance with 24 CFR part 3286 does 

not apply to FHA-to-FHA refinancing 

transactions. The towing hitch or 

running gear, which includes axles, 

brakes, wheels, and other parts of the 

chassis that operate only during 

transportation, shall have been 

removed. The elevation of the lowest 

floor in structures with basements shall 

be at or above the Federal Emergency 

Management Agency (FEMA) 

designated base flood elevation (as 

defined in 44 CFR 59.1) and meet or 

exceed the requirements set forth in 44 

CFR 60.3(a) through (e). The elevation of 

the lowest floor structures without 

basements shall be at or above the 

FEMA-designated base flood elevation 

and meet or exceed the requirements set 

forth in 44 CFR 60.3(a) through (e). 

Basements or any permanent enclosure 

of space below the lowest floor of a 

structure are prohibited for 

manufactured homes located in FEMAdesignated ‘‘coastal high hazard areas.’’ 

For purposes of this rule, the term 

‘‘coastal high hazard area’’ has the 

meaning set forth in FEMA regulations 

at 44 CFR 59.1. The site, site 

improvements, and all other features of 

the mortgaged property not addressed 

by the Manufactured Home 

Construction and Safety Standards or 

the Model Installation Standards shall 

meet or exceed the Minimum Property 

Standards (see 24 CFR 200.926 through 

200.926d) and applicable state and local 

government requirements governing the 

installation and construction of the 

manufactured home supporting 

foundation. 

* * * * * 

(5) Section 203.14 of this subpart is 

modified to the extent provided in this 

paragraph. Applications relating to 

insurance of mortgages under this 

paragraph (c) must be accompanied by 

an agreement in form satisfactory to the 

Commissioner executed by the seller or 

builder or such other person as the 

Commissioner may require agreeing that 


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in the event of any sale or conveyance 

of the dwelling within a period of one 

year beginning with the date of initial 

occupancy, the seller, builder, or such 

other person will at the time of such 

sale or conveyance deliver to the 

purchaser or owner of such property the 

manufacturer’s warranty on a form 

prescribed by the Commissioner, which 

shall provide that the manufacturer’s 

warranty is in addition to and not in 

derogation of all other rights and 

remedies the purchaser or owner may 

have, and a warranty in form 

satisfactory to the Commissioner 

warranting that the manufactured home, 

installation, and all site improvements 

are constructed in substantial 

conformity with the plans and 

specifications (including amendments 

thereof or changes and variations 

therein that have been approved in 

writing by the Commissioner) on which 

the Commissioner has based his 

valuation of the dwelling. The warranty 

shall also include provisions that the 

manufactured home sustained no 

hidden damage during transportation, 

and if the manufactured home is a 

double-wide, that the sections were 

properly joined and sealed. Such 

agreement must provide that upon the 

sale or conveyance of the dwelling and 

delivery of the warranty, the seller, 

builder or such other person will 

promptly furnish the Commissioner 

with a conformed copy of the warranty 

establishing by the purchaser’s receipt 

thereon that the original warranty has 

been delivered to the purchaser in 

accordance with this section. 

(d) In the case of a manufactured 

home that has been permanently erected 

on a site for more than one year prior 

to the date of the application for 

mortgage insurance: 

(1) The foundation shall meet or 

exceed the standards set forth in 24 CFR 

part 3285 and all applicable state and 

local government requirements. 

(2) The site, site improvements, and 

all other features of the mortgaged 

property not addressed by the 

Manufactured Home Construction and 

Safety Standards or the Model 

Installation Standards shall meet or 

exceed applicable requirements of the 

Requirements for Existing Housing— 

One to Four Family Living Units (HUD 

Handbook 4905.1). The elevation of the 

lowest floor in structures with 

basements as defined in FEMA 

regulations at 44 CFR 59.1 shall be at or 

above the FEMA-designated base flood 

elevation and meet or exceed the 

requirements set forth in 44 CFR 60.3(a) 

through (e). The elevation of the lowest 

floor in structures without basements 

shall be at or above the FEMAdesignated base flood elevation and 

meet or exceed the requirements set 

forth in 44 CFR 60.3(a) through (e). 

Basements or any permanent enclosure 

of space below the lowest floor of a 

structure are prohibited for 

manufactured homes located in FEMAdesignated ‘‘coastal high hazard areas.’’ 

(3) The manufactured home shall 

have been occupied only at the location 

subject to the mortgage sought to be 

insured. 

Dated: August 14, 2008. 

Brian D. Montgomery, 

Assistant Secretary for Housing—Federal 

Housing Commissioner. 

[FR Doc. E8–20787 Filed 9–12–08; 8:45 am] 

BILLING CODE 4210–67–P 


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