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. 
SECTION 1. SHORT TITLE. 
This title may be cited as the ‘‘FHA Manufactured 
Housing Loan Modernization Act of 2006’’. 
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
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(1) manufactured housing plays a vital role in 
providing housing for low- and moderate-income fam-
ilies in the United States; 
(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 manufac-
tured home loans were insured under title I; 
(6) in 2004, fewer than 2,000 manufactured 
housing loans were insured under title I; 
(7) the loan limits for title I manufactured hous-
ing loans have not been adjusted for inflation since 
1992; and 
(8) these problems with the title I program have 
resulted in an atrophied market for manufactured 
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housing loans, leaving American families who have 
the most difficulty achieving homeownership without 
adequate financing options for home-only manufac-
tured home purchases. 
(b) PURPOSES.—The purposes of this Act are— 
(1) to provide adequate funding for FHA-insured 
manufactured housing loans for low- and moderate- 
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 par-
ticipation by Ginnie Mae and the private lending 
markets; and 
(3) to adjust the low loan limits for title I man-
ufactured home loan insurance to reflect the increase 
in costs since such limits were last increased in 1992 
and to index the limits to inflation. 
SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTITU-
TION PORTFOLIO. 
The second sentence of section 2(a) of the National 
Housing Act (12 U.S.C. 1703(a)) is amended— 
(1) by striking ‘‘In no case’’ and inserting 
‘‘Other than in connection with a manufactured home 
or a lot on which to place such a home (or both), in 
no case’’; and 
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(2) by striking ‘‘: Provided, That with’’ and in-
serting ‘‘. With’’. 
SEC. 4. INSURANCE BENEFITS. 
(a) IN GENERAL.—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) INSURANCE BENEFITS FOR MANUFACTURED 
HOUSING LOANS.—Any contract of insurance with re-
spect to loans, advances of credit, or purchases in con-
nection with a manufactured home or a lot on which 
to place a manufactured home (or both) for a finan-
cial institution that is executed under this title after 
the date of the enactment of the FHA Manufactured 
Housing Loan Modernization Act of 2006 by the Sec-
retary shall be conclusive evidence of the eligibility of 
such financial institution for insurance, and the va-
lidity of any contract of insurance so executed shall 
be incontestable in the hands of the bearer from the 
date of the execution of such contract, except for fraud 
or misrepresentation on the part of such institution.’’. 
(b) APPLICABILITY.—The amendment made by sub-
section (a) shall only apply to loans that are registered or 
endorsed for insurance after the date of the enactment of 
this Act. 
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SEC. 5. 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 sub-
paragraphs (A) and (B). 
(b) ANNUAL INDEXING.—Subsection (b) of section 2 of 
the National Housing Act (12 U.S.C. 1703(b)), as amended 
by the preceding provisions of this Act, is further amended 
by adding at the end the following new paragraph: 
‘‘(9) ANNUAL
INDEXING
OF
MANUFACTURED 
HOUSING
LOANS.—The Secretary shall develop a 
method of indexing in order to annually adjust the 
loan limits established in subparagraphs (A)(ii), (C), 
(D), and (E) of this subsection. Such index shall be 
based on the manufactured housing price data col-
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lected by the United States Census Bureau. The Sec-
retary shall establish such index no later than one 
year after the date of the enactment of the FHA Man-
ufactured Housing Loan Modernization Act of 2006.’’ 
(c) TECHNICAL AND CONFORMING CHANGES.—Para-
graph (1) of section 2(b) of the National Housing Act (12 
U.S.C. 1703(b)(1)) is amended— 
(1) by striking ‘‘No’’ and inserting ‘‘Except as 
provided in the last sentence of this paragraph, no’’; 
and 
(2) by adding after and below subparagraph (G) 
the following: 
‘‘The Secretary shall, by regulation, annually increase 
the dollar amount limitations in subparagraphs (A)(ii), 
(C), (D), and (E) (as such limiations may have been pre-
viously adjusted under this sentence) in accordance with the 
index established pursuant to paragraph (9).’’. 
SEC. 6. INSURANCE PREMIUMS. 
Subsection (f) of section 2 of the National Housing Act 
(12 U.S.C. 1703(f)) is amended— 
(1) by inserting ‘‘(1) PREMIUM CHARGES.—’’ 
after ‘‘(f)’’; and 
(2) by adding at the end the following new para-
graph: 
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‘‘(2) 
MANUFACTURED
HOME
LOANS.—Notwith-
standing paragraph (1), in the case of 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 premium charge for the insurance granted under this 
section shall be paid by the borrower under the loan or ad-
vance of credit, as follows: 
‘‘(A) At the time of the making of the loan, ad-
vance of credit, or purchase, a single premium pay-
ment in an amount not to exceed 2.25 percent of the 
amount of the original insured principal obligation. 
‘‘(B) In addition to the premium under subpara-
graph (A), annual premium payments during the 
term of the loan, advance, or obligation purchased in 
an amount not exceeding 1.0 percent of the remaining 
insured principal balance (excluding the portion of 
the remaining balance attributable to the premium 
collected under subparagraph (A) and without taking 
into account delinquent payments or prepayments). 
‘‘(C) Premium charges under this paragraph 
shall be established in amounts that are sufficient, but 
do not exceed the minimum amounts necessary, to 
maintain a negative credit subsidy for the program 
under this section for insurance of loans, advances of 
credit, or purchases in connection with a manufac-
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tured home or a lot on which to place such a home 
(or both), as determined based upon risk to the Fed-
eral Government under existing underwriting require-
ments. 
‘‘(D) The Secretary may increase the limitations 
on premium payments to percentages above those set 
forth in subparagraphs (A) and (B), but only if nec-
essary, and not in excess of the minimum increase 
necessary, to maintain a negative credit subsidy as 
described in subparagraph (C).’’. 
SEC. 7. TECHNICAL CORRECTIONS. 
(a) DATES.—Subsection (a) of section 2 of the Na-
tional Housing Act (12 U.S.C. 1703(a)) is amended— 
(1) by striking ‘‘on and after July 1, 1939,’’ each 
place such term appears; and 
(2) by striking ‘‘made after the effective date of 
the Housing Act of 1954’’. 
(b) AUTHORITY OF SECRETARY.—Subsection (c) of sec-
tion 2 of the National Housing Act (12 U.S.C. 1703(c)) is 
amended to read as follows: 
‘‘(c) HANDLING AND DISPOSAL OF PROPERTY.— 
‘‘(1) 
AUTHORITY
OF
SECRETARY.—Notwith-
standing any other provision of law, the Secretary 
may— 
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‘‘(A) deal with, complete, rent, renovate, 
modernize, insure, or assign or sell at public or 
private sale, or otherwise dispose of, for cash or 
credit in the Secretary’s discretion, and upon 
such terms and conditions and for such consider-
ation as the Secretary shall determine to be rea-
sonable, any real or personal property conveyed 
to or otherwise acquired by the Secretary, in 
connection with the payment of insurance here-
tofore or hereafter granted under this title, in-
cluding any evidence of debt, contract, claim, 
personal property, or security assigned to or held 
by him in connection with the payment of insur-
ance heretofore or hereafter granted under this 
section; and 
‘‘(B) pursue to final collection, by way of 
compromise or otherwise, all claims assigned to 
or held by the Secretary and all legal or equi-
table rights accruing to the Secretary in connec-
tion with the payment of such insurance, includ-
ing unpaid insurance premiums owed in connec-
tion with insurance made available by this title. 
‘‘(2) ADVERTISEMENTS
FOR
PROPOSALS.—Sec-
tion 3709 of the Revised Statutes shall not be con-
strued to apply to any contract of hazard insurance 
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or to any purchase or contract for services or supplies 
on account of such property if the amount thereof does 
not exceed $25,000. 
‘‘(3) DELEGATION OF AUTHORITY.—The power to 
convey and to execute in the name of the Secretary, 
deeds of conveyance, deeds of release, assignments and 
satisfactions of mortgages, and any other written in-
strument relating to real or personal property or any 
interest therein heretofore or hereafter acquired by the 
Secretary pursuant to the provisions of this title may 
be exercised by an officer appointed by the Secretary 
without the execution of any express delegation of 
power or power of attorney. Nothing in this sub-
section shall be construed to prevent the Secretary 
from delegating such power by order or by power of 
attorney, in the Secretary’s discretion, to any officer 
or agent the Secretary may appoint.’’. 
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 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 
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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 ob-
ligations purchased by financial institutions, as may 
be necessary to ensure that the program under this 
title for insurance for financial institutions against 
losses from such loans, advances of credit, and pur-
chases 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 Development 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. 
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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 insur-
ance program under title I of the National Hous-
ing Act. 
JULY 19, 2006 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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