109TH CONGRESS 
2D SESSION 
H. R. 4804
AN ACT 
To modernize the manufactured housing loan insur-
ance program under title I of the National Hous-
ing Act.
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.
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 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—
(1) manufactured housing plays a vital role in 
providing housing for low- and moderate-income 
families 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 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 loan limits for title I manufactured 
housing 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 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; 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 INSTI-
TUTION 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 
(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
MANUFAC-
TURED HOUSING LOANS.—Any contract of insurance 
with respect to loans, advances of credit, or pur-
chases 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 after the date of the enactment of 
the FHA Manufactured Housing Loan Moderniza-
tion Act of 2006 by the Secretary shall be conclusive 
evidence of the eligibility of such financial institution 
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 contract, except for fraud or misrepresenta-
tion 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. 
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 
subparagraphs (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 para-
graph: 
‘‘(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-
lected by the United States Census Bureau. The 
Secretary shall establish such index no later than 
one year after the date of the enactment of the FHA 
Manufactured 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 limitations 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 
paragraph: 
‘‘(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 
advance 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 sub-
paragraph (A), annual premium payments during 
the term of the loan, advance, or obligation pur-
chased 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 pro-
gram under this section for insurance of loans, ad-
vances 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 underwriting 
requirements. 
‘‘(D) The Secretary may increase the limita-
tions on premium payments to percentages above 
those set forth in subparagraphs (A) and (B), but 
only if necessary, 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 
section 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—
‘‘(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 consid-
eration as the Secretary shall determine to be 
reasonable, any real or personal property con-
veyed to or otherwise acquired by the Secretary, 
in connection with the payment of insurance 
heretofore or hereafter granted under this title, 
including any evidence of debt, contract, claim, 
personal property, or security assigned to or 
held by him in connection with the payment of 
insurance 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 con-
nection with the payment of such insurance, in-
cluding unpaid insurance premiums owed in 
connection 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 
or to any purchase or contract for services or sup-
plies 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 Sec-
retary, deeds of conveyance, deeds of release, assign-
ments and satisfactions of mortgages, and any other 
written instrument relating to real or personal prop-
erty 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 ex-
press delegation of power or power of attorney. 
Nothing in this subsection shall be construed to pre-
vent the Secretary from delegating such power by 
order or by power of attorney, in the Secretary’s dis-
cretion, 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
MANUFAC-
TURED HOUSING PROGRAM.—The Secretary shall es-
tablish such underwriting criteria for loans and ad-
vances 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 in-
stitutions, 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 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.
Passed the House of Representatives July 25, 2006. 
Attest:
Clerk.