I 
109TH CONGRESS 
2D SESSION 
H. R. 4804 
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 
A BILL 
To modernize the manufactured housing loan insurance 
program under title I of the National Housing Act. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘FHA Manufactured 
Housing Loan Modernization Act of 2006’’. 
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
(1) manufactured housing plays a vital role in 
providing housing for low- and moderate-income 
families in the United States; 
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(2) the FHA title I insurance program for man-
ufactured home loans traditionally has been a major 
provider of mortgage insurance for home-only trans-
actions; 
(3) the manufactured housing market is in the 
midst of a prolonged downturn which has resulted in 
a severe contraction of traditional sources of private 
lending for manufactured home purchases; 
(4) during past downturns the FHA title I in-
surance program for manufactured homes has filled 
the lending void by providing stability until the pri-
vate markets could recover; 
(5) in 1992, during the manufactured housing 
industry’s last major recession, over 30,000 manu-
factured home loans were insured under title I; 
(6) in 2004, fewer than 2,000 manufactured 
housing loans were insured under title I; 
(7) the dramatic reduction in the use of the 
title I program is due primarily to certain structural 
problems of the program, which have resulted in re-
fusal by the Government National Mortgage Associa-
tion (Ginnie Mae) to accept new participants into 
the program since 1989, contributing to higher loan 
costs and fewer loan originators; 
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(8) the loan limits for title I manufactured 
housing loans have not been adjusted for inflation 
since 1992; and 
(9) these problems with the title I program 
have resulted in an atrophied market for manufac-
tured housing loans, leaving American families who 
have the most difficulty achieving homeownership 
without adequate financing options for home-only 
manufactured home purchases. 
(b) PURPOSES.—The purposes of this Act are— 
(1) to provide adequate funding for FHA-in-
sured manufactured housing loans for low- and mod-
erate-income homebuyers during all economic cycles 
in the manufactured housing industry; 
(2) to modernize the FHA title I insurance pro-
gram for manufactured housing loans to enhance 
participation by Ginnie Mae and the private lending 
markets; 
(3) to adjust the artificially low loan limits for 
title I manufactured home loan insurance to reflect 
the increase in costs since such limits were last in-
creased in 1992 and to index the limits to inflation; 
and 
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(4) to ensure that the title I manufactured 
housing loan insurance program requires no credit 
subsidy from the Federal Government. 
SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTI-
TUTION PORTFOLIO. 
The second sentence of section 2(a) of the National 
Housing Act (12 U.S.C. 1703(a)) is amended by striking 
‘‘In no case’’ and inserting the following: ‘‘Other than in 
connection with a manufactured home or a lot on which 
to place such a home (or both), in no case’’. 
SEC. 4. LOAN-TO-VALUE RATIO AND DOWNPAYMENT RE-
QUIREMENT. 
Subsection (b) of section 2 of the National Housing 
Act (12 U.S.C. 1703(b)) is amended by adding at the end 
the following new paragraph: 
‘‘(8) LOAN-TO-VALUE AND DOWNPAYMENT LIMITA-
TIONS ON MANUFACTURED HOUSING LOANS.—No insur-
ance may be granted under this section to any such finan-
cial institution with respect to any obligation representing 
any such loan, advance of credit, or purchase by it in con-
nection with a manufactured home or a lot on which to 
place a manufactured home (or both) unless such loan or 
advance of credit, or any loan or advance of credit rep-
resented by such an obligation— 
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‘‘(A) involves a principal obligation not exceed-
ing the sum of— 
‘‘(i) the amount of the mortgage insurance 
premium paid by the borrower at the time that 
the loan, advance of credit, or purchase is 
made; and 
‘‘(ii) 95 percent of the appraised value of 
the manufactured home or lot on which to place 
a manufactured home (or both) for which the 
loan or advance of credit is made; and 
‘‘(B) such loan or advance of credit is made to 
a borrower who has paid in cash or its equivalent, 
on account of the manufactured home or lot on 
which to place a manufactured home (or both) for 
which the loan or advance of credit is made, at least 
3 percent of the Secretary’s estimate of the costs of 
acquisition, alteration, improvements, lot prepara-
tion, or other eligible activity for which the loan or 
advance of credit was made (excluding the amount 
of the mortgage insurance premium paid by the bor-
rower at the time that the loan or advance of credit 
is made).’’. 
SEC. 5. INSURANCE BENEFITS. 
Subsection (b) of section 2 of the National Housing 
Act (12 U.S.C. 1703(b)), as amended by section 4 of this 
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Act, is further amended by adding at the end the following 
new paragraph: 
‘‘(9) INSURANCE BENEFITS
FOR MANUFACTURED 
HOUSING LOANS.—Any contract of insurance with respect 
to loans, advances of credit, or purchases in connection 
with a manufactured home or a lot on which to place a 
manufactured home (or both) for a financial institution 
that is executed under this title before or after the date 
of the enactment of this Act by the Secretary shall be con-
clusive evidence of the eligibility of such financial institu-
tion for insurance, and the validity of any contract of in-
surance so executed shall be incontestable in the hands 
of the bearer from the date of the execution of such con-
tract, except for fraud or misrepresentation on the part 
of such institution. With respect only to a loan, advance 
of credit, or purchase in connection with a manufactured 
home or a lot on which to place such a home (or both), 
the Secretary shall otherwise provide for the payment of 
insurance benefits under the provisions of this section for 
losses on such loans, advances, or purchases according to 
the same terms, conditions, procedures, and requirements 
applicable under section 204 to a mortgage insured under 
section 203 covering a manufactured home (and the site 
on which it is located).’’. 
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SEC. 6. MAXIMUM LOAN LIMITS. 
(a) DOLLAR AMOUNTS.—Paragraph (1) of section 
2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) 
is amended— 
(1) in clause (ii) of subparagraph (A), by strik-
ing ‘‘$17,500’’ and inserting ‘‘$24,500’’; 
(2) in subparagraph (C) by striking ‘‘$48,600’’ 
and inserting ‘‘$68,040’’; 
(3) in subparagraph (D) by striking ‘‘$64,800’’ 
and inserting ‘‘$90,720’’; 
(4) in subparagraph (E) by striking ‘‘$16,200’’ 
and inserting ‘‘$22,680’’; and 
(5) by realigning subparagraphs (C), (D), and 
(E) 2 ems to the left so that the left margins of 
such subparagraphs are aligned with the margins of 
subparagraphs (A) and (B). 
(b) ANNUAL INDEXING.— 
(1) METHOD OF INDEXING.—Section 206A of 
the National Housing Act (12 U.S.C. 1712a) is 
amended— 
(A) in subsection (a)— 
(i) by redesignating paragraphs (1) 
through (7) as paragraphs (2) through (8), 
respectively; and 
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(ii) by inserting before paragraph (2) 
(as so redesignated) the following new 
paragraph: 
‘‘(1) subparagraphs (A)(ii), (C), (D), and (E) 
of section 2(b)(1) (12 U.S.C. 1703(b)(1));’’. 
(2) ADJUSTMENTS FOR 2004 THROUGH 2006.— 
Not later than 30 days after the date of the enact-
ment of this Act, the Federal Reserve Board shall 
calculate the adjustments for 2004, 2005, and 2006 
pursuant to paragraph (1) of section 206A(a) of the 
National Housing Act (12 U.S.C. 1712a(a)(1)), as 
added by the amendment made by paragraph (1) of 
this subsection, and shall notify the Secretary of 
Housing and Urban Development pursuant to sub-
section (b) of such section 206A. Such adjustments 
shall take effect upon the date of such notification. 
(3) TECHNICAL AND CONFORMING CHANGES.— 
Paragraph (1) of section 2(b) of the National Hous-
ing Act (12 U.S.C. 1703(b)(1)) is amended— 
(A) by striking ‘‘No’’ and inserting ‘‘Ex-
cept as provided in the last sentence of this 
paragraph and in paragraph (8), no’’; and 
(B) by adding after and below subpara-
graph (G) the following: 
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‘‘The Secretary shall, by regulation, increase the dol-
lar amount limitations in subparagraphs (A)(ii), (C), 
(D), and (E) (as such limitations may have been ad-
justed in accordance with section 206A of this 
Act).’’. 
SEC. 7. INSURANCE PREMIUMS. 
Subsection (f) of section 2 of the National Housing 
Act (12 U.S.C. 1703(f)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(f)’’; 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) MANUFACTURED HOME LOANS.—Notwith-
standing paragraph (1), in the case of a loan, ad-
vance of credit, or purchase in connection with a 
manufactured home or a lot on which to place such 
a home (or both), the premium charge for the insur-
ance granted under this section shall be paid by the 
borrower under the loan or advance of credit, as fol-
lows: 
‘‘(A) At the time of the making of the 
loan, advance of credit, or purchase, a single 
premium payment in an amount not to exceed 
2.25 percent of the amount of the original in-
sured principal obligation. 
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‘‘(B) In addition to the premium under 
subparagraph (A), annual premium payments 
during the term of the loan, advance, or obliga-
tion purchased in an amount not exceeding 1.0 
percent of the remaining insured principal bal-
ance (excluding the portion of the remaining 
balance attributable to the premium collected 
under subparagraph (A) and without taking 
into account delinquent payments or prepay-
ments). 
‘‘(C) Premium charges under this para-
graph shall be established in amounts that are 
sufficient, but do not exceed the minimum 
amounts necessary, to maintain a negative cred-
it subsidy for the program under this section 
for insurance of loans, advances of credit, or 
purchases in connection with a manufactured 
home or a lot on which to place such a home 
(or both), as determined based upon risk to the 
Federal Government under existing under-
writing requirements.’’. 
SEC. 8. REVISION OF UNDERWRITING CRITERIA. 
(a) IN GENERAL.—Subsection (b) of section 2 of the 
National Housing Act (12 U.S.C. 1703(b)), as amended 
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by the preceding provisions of this Act, is further amended 
by adding at the end the following new paragraph: 
‘‘(10) FINANCIAL SOUNDNESS OF MANUFACTURED 
HOUSING PROGRAM.—The Secretary shall establish such 
underwriting criteria for loans and advances of credit in 
connection with a manufactured home or a lot on which 
to place a manufactured home (or both), including such 
loans and advances represented by obligations purchased 
by financial institutions, as may be necessary to ensure 
that the program under this title for insurance for finan-
cial institutions against losses from such loans, advances 
of credit, and purchases is financially sound.’’. 
(b) TIMING.—Not later than the expiration of the 6- 
month period beginning on the date of the enactment of 
this Act, the Secretary of Housing and Urban Develop-
ment shall revise the existing underwriting criteria for the 
program referred to in paragraph (10) of section 2(b) of 
the National Housing Act (as added by subsection (a) of 
this section) in accordance with the requirements of such 
paragraph. 
Æ 
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