II 

110TH CONGRESS 

1ST SESSION S. 1741 

To modernize the manufactured housing loan insurance program under title 

I of the National Housing Act. 

IN THE SENATE OF THE UNITED STATES 

JUNE 28, 2007 

Mr. BAYH (for himself and Mr. ALLARD) introduced the following bill; which 

was read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

A BILL 

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, 

3 SECTION 1. SHORT TITLE. 

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

5 Housing Loan Modernization Act of 2007’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

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

8 (1) manufactured housing plays a vital role in 

9 providing housing for low- and moderate-income 

10 families in the United States; 


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1 (2) the FHA title I insurance program for man2 ufactured home loans traditionally has been a major 

3 provider of mortgage insurance for home-only trans4 actions; 

5 (3) the manufactured housing market is in the 

6 midst of a prolonged downturn which has resulted in 

7 a severe contraction of traditional sources of private 

8 lending for manufactured home purchases; 

9 (4) during past downturns the FHA title I in10 surance program for manufactured homes has filled 

11 the lending void by providing stability until the pri12 vate markets could recover; 

13 (5) in 1992, during the manufactured housing 

14 industry’s last major recession, over 30,000 manu15 factured home loans were insured under title I; 

16 (6) in 2006, fewer than 1,500 manufactured 

17 housing loans were insured under title I; 

18 (7) the loan limits for title I manufactured 

19 housing loans have not been adjusted for inflation 

20 since 1992; and 

21 (8) these problems with the title I program 

22 have resulted in an atrophied market for manufac23 tured housing loans, leaving American families who 

24 have the most difficulty achieving homeownership 


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1 without adequate financing options for home-only 

2 manufactured home purchases. 

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

4 (1) to provide adequate funding for FHA-in5 sured manufactured housing loans for low- and mod6 erate-income homebuyers during all economic cycles 

7 in the manufactured housing industry; 

8 (2) to modernize the FHA title I insurance pro9 gram for manufactured housing loans to enhance 

10 participation by Ginnie Mae and the private lending 

11 markets; and 

12 (3) to adjust the low loan limits for title I man13 ufactured home loan insurance to reflect the increase 

14 in costs since such limits were last increased in 1992 

15 and to index the limits to inflation. 

16 SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTI17 TUTION PORTFOLIO. 

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

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

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

21 ‘‘Other than in connection with a manufactured 

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

23 both), in no case’’; and 

24 (2) by striking ‘‘: Provided, That with’’ and in25 serting ‘‘. With’’. 


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1 SEC. 4. INSURANCE BENEFITS. 

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

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

4 by adding at the end the following new paragraph: 

5 ‘‘(8) INSURANCE BENEFITS FOR MANUFAC6 TURED HOUSING LOANS.—Any contract of insurance 

7 with respect to loans, advances of credit, or pur8 chases in connection with a manufactured home or 

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

10 both) for a financial institution that is executed 

11 under this title after the date of the enactment of 

12 the FHA Manufactured Housing Loan Moderniza13 tion Act of 2007 by the Secretary shall be conclusive 

14 evidence of the eligibility of such financial institution 

15 for insurance, and the validity of any contract of in16 surance so executed shall be incontestable in the 

17 hands of the bearer from the date of the execution 

18 of such contract, except for fraud or misrepresenta19 tion on the part of such institution.’’. 

20 (b) APPLICABILITY.—The amendment made by sub21 section (a) shall only apply to loans that are registered 

22 or endorsed for insurance after the date of the enactment 

23 of this Act. 


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1 SEC. 5. MAXIMUM LOAN LIMITS. 

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

3 2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) 

4 is amended— 

5 (1) in clause (ii) of subparagraph (A), by strik6 ing ‘‘$17,500’’ and inserting ‘‘$25,090’’; 

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

8 and inserting ‘‘$69,678’’; 

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

10 and inserting ‘‘$92,904’’; 

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

12 and inserting ‘‘$23,226’’; and 

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

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

15 such subparagraphs are aligned with the margins of 

16 subparagraphs (A) and (B). 

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

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

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

20 amended by adding at the end the following new para21 graph: 

22 ‘‘(9) ANNUAL INDEXING OF MANUFACTURED

23 HOUSING LOANS.—The Secretary shall develop a 

24 method of indexing in order to annually adjust the 

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

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


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1 based on the manufactured housing price data col2 lected by the United States Census Bureau. The 

3 Secretary shall establish such index no later than 

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

5 Manufactured Housing Loan Modernization Act of 

6 2007.’’ 

7 (c) TECHNICAL AND CONFORMING CHANGES.—Para8 graph (1) of section 2(b) of the National Housing Act (12 

9 U.S.C. 1703(b)(1)) is amended— 

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

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

12 and 

13 (2) by adding after and below subparagraph 

14 (G) the following: 

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

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

17 (C), (D), and (E) (as such limitations may have been pre18 viously adjusted under this sentence) in accordance with 

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

20 SEC. 6. INSURANCE PREMIUMS. 

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

22 Act (12 U.S.C. 1703(f)) is amended— 

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

24 after ‘‘(f)’’; and 


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

2 paragraph: 

3 ‘‘(2) MANUFACTURED HOME LOANS.—Notwith4 standing paragraph (1), in the case of a loan, advance of 

5 credit, or purchase in connection with a manufactured 

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

7 the premium charge for the insurance granted under this 

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

9 advance of credit, as follows: 

10 ‘‘(A) At the time of the making of the loan, ad11 vance of credit, or purchase, a single premium pay12 ment in an amount not to exceed 2.25 percent of the 

13 amount of the original insured principal obligation. 

14 ‘‘(B) In addition to the premium under sub15 paragraph (A), annual premium payments during 

16 the term of the loan, advance, or obligation pur17 chased in an amount not exceeding 1.0 percent of 

18 the remaining insured principal balance (excluding 

19 the portion of the remaining balance attributable to 

20 the premium collected under subparagraph (A) and 

21 without taking into account delinquent payments or 

22 prepayments). 

23 ‘‘(C) Premium charges under this paragraph 

24 shall be established in amounts that are sufficient, 

25 but do not exceed the minimum amounts necessary, 


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1 to maintain a negative credit subsidy for the pro2 gram under this section for insurance of loans, ad3 vances of credit, or purchases in connection with a 

4 manufactured home or a lot on which to place such 

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

6 the Federal Government under existing underwriting 

7 requirements. 

8 ‘‘(D) The Secretary may increase the limita9 tions on premium payments to percentages above 

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

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

12 increase necessary, to maintain a negative credit 

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

14 SEC. 7. TECHNICAL CORRECTIONS. 

15 (a) DATES.—Subsection (a) of section 2 of the Na16 tional Housing Act (12 U.S.C. 1703(a)) is amended— 

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

18 each place such term appears; and 

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

20 the Housing Act of 1954’’. 

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

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

23 is amended to read as follows: 

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


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1 ‘‘(1) AUTHORITY OF SECRETARY.—Notwith2 standing any other provision of law, the Secretary 

3 may— 

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

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

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

7 credit in the Secretary’s discretion, and upon 

8 such terms and conditions and for such consid9 eration as the Secretary shall determine to be 

10 reasonable, any real or personal property con11 veyed to or otherwise acquired by the Secretary, 

12 in connection with the payment of insurance 

13 heretofore or hereafter granted under this title, 

14 including any evidence of debt, contract, claim, 

15 personal property, or security assigned to or 

16 held by him in connection with the payment of 

17 insurance heretofore or hereafter granted under 

18 this section; and 

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

20 compromise or otherwise, all claims assigned to 

21 or held by the Secretary and all legal or equi22 table rights accruing to the Secretary in con23 nection with the payment of such insurance, in24 cluding unpaid insurance premiums owed in 


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1 connection with insurance made available by 

2 this title. 

3 ‘‘(2) ADVERTISEMENTS FOR PROPOSALS.—Sec4 tion 3709 of the Revised Statutes shall not be con5 strued to apply to any contract of hazard insurance 

6 or to any purchase or contract for services or sup7 plies on account of such property if the amount 

8 thereof does not exceed $25,000. 

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

10 to convey and to execute in the name of the Sec11 retary, deeds of conveyance, deeds of release, assign12 ments and satisfactions of mortgages, and any other 

13 written instrument relating to real or personal prop14 erty or any interest therein heretofore or hereafter 

15 acquired by the Secretary pursuant to the provisions 

16 of this title may be exercised by an officer appointed 

17 by the Secretary without the execution of any ex18 press delegation of power or power of attorney. 

19 Nothing in this subsection shall be construed to pre20 vent the Secretary from delegating such power by 

21 order or by power of attorney, in the Secretary’s dis22 cretion, to any officer or agent the Secretary may 

23 appoint.’’. 


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1 SEC. 8. REVISION OF UNDERWRITING CRITERIA. 

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

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

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

5 by adding at the end the following new paragraph: 

6 ‘‘(10) FINANCIAL SOUNDNESS OF MANUFAC7 TURED HOUSING PROGRAM.—The Secretary shall es8 tablish such underwriting criteria for loans and ad9 vances of credit in connection with a manufactured 

10 home or a lot on which to place a manufactured 

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

12 represented by obligations purchased by financial in13 stitutions, as may be necessary to ensure that the 

14 program under this title for insurance for financial 

15 institutions against losses from such loans, advances 

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

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

18 month period beginning on the date of the enactment of 

19 this Act, the Secretary of Housing and Urban Develop20 ment shall revise the existing underwriting criteria for the 

21 program referred to in paragraph (10) of section 2(b) of 

22 the National Housing Act (as added by subsection (a) of 

23 this section) in accordance with the requirements of such 

24 paragraph. 

Æ 


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