I 
109TH CONGRESS 
1ST SESSION H. R. 2803 
To modernize the manufactured housing loan insurance program under title 
I of the National Housing Act. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 8, 2005 
Mr. FEENEY (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 2005’’. 
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 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;
(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 
program 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
(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—
‘‘(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
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).’’.