MHARR continued its final push for the complete implementation of the Manufactured Housing Improvement Act of 2000 with a positive hour-long meeting on April 10, 2014 with senior-level HUD officials, including HUD Assistant Secretary/Federal Housing Commissioner Carol Galante and newly-arrived HUD Manufactured Housing Program Administrator Pamela Danner.

This intensified MHARR focus on the federal Title VI manufactured housing program and the 2000 reform law follows a period of approximately one year during which the Association concentrated its efforts primarily on consumer financing and the full inclusion of all types of manufactured housing loans in legislation to reform the Government Sponsored Enterprises (GSEs). That same one-year also corresponded with a period of more limited federal program activity arising, in part, from the absence of a permanent program administrator.  However, with: (1) a permanent program administrator now in place and (2) the Association’s outreach on consumer financing showing that one of the main reasons for continuing discrimination against manufactured homes and  homebuyers is the lingering perception of manufactured homes as “trailers” – which the 2000 reform law was designed to end by completing the transition of manufactured homes to legitimate housing – it became evident that renewed and intensified MHARR engagement with HUD on completing implementation of the 2000 reform law is both warranted and necessary.

HUD participants in the April 10, 2014 meeting, in addition to the Commissioner and Program Administrator, included: Frank Vetrano, Deputy Assistant Secretary for Risk Management and Regulatory Affairs, and Cynthia Smith, Associate Deputy Assistant Secretary for Risk Management and Regulatory Affairs. Participants on behalf of MHARR were: MHARR Chairman John Bostick (Sunshine Homes, Inc.); Immediate-Past Chairman Edward J. Hussey (Liberty Homes, Inc.); Past Chairman James F. Shea (Fairmont Homes, Inc.); President Danny D. Ghorbani and Senior Vice President Mark Weiss.

After thanking Commissioner Galante for the placement of a permanent manufactured housing program administrator, and based largely on a detailed January 27, 2014 MHARR communication and package to Commissioner Galante (see your copy of MHARR’s January 29, 2014 memorandum, “Intensified and Expanded Effort on HUD Compliance with Federal Law”),  the points addressed by MHARR — and HUD’s response to each — are set forth below.

Implementation of the Full Status and Functionality of the Manufactured Housing Consensus Committee (MHCC):  One of the central pillars of the 2000 reform law, the MHCC has been dormant for an extended period, now approaching two years, and without an Administering Organization (AO) since mid-2013.  The MHARR delegation thus stressed: (1) the urgent need for HUD to end the AO contract impasse and select a new AO in full accordance with the strict qualification criteria of the 2000 reform law; and (2) the resumption of full and regular MHCC activity based on the role, status, independence and functionality mandated for the MHCC by the 2000 reform law.  In response, the HUD officials stated that the selection of a new AO and resumption of regular MHCC activity “as soon as possible” were a “high priority,” that the Department hoped to have resolved within the “next couple of months.”     

MHARR also addressed: (1) the composition of the MHCC, including –

(a)  Discriminatory exclusion of national collective industry voting representation, as contrasted with extensive collective consumer voting representation (including the Executive Director and members of the National Manufactured Home Owners Association – NMHOA). While MHARR fully supports collective consumer representation, the industry should be treated equally through the appointment of non-lobbyist representative(s) from MHARR (andMHI, if it wishes).  Current HUD policy denies the industry the benefit of the institutional knowledge and memory possessed by its national organizations, while excluding representatives with a specific responsibility to represent overall industry interests.

(b) Selective HUD application of the term limits enacted by the MHCC and the need to uniformly enforce those limits to ensure balanced representation and protect against entrenched single-issue advocates –

and; (2) unilateral HUD changes to MHCC recommendations without final MHCC review, which undermines the legitimacy and transparency of the consensus process.  In response, the HUD officials indicated that they would review these issues and consider the MHCC application previously submitted by MHARR’s candidate.

Implementation of the New/Revised Subpart I: MHARR addressed two primary issues: (1) again, unilateral HUD modifications to MHCC proposals without further MHCC consideration (e.g., a costly mandate for “monthly” IPIA reviews of manufacturer service records in the final Subpart I rule, as contrasted with “periodic” review as stated in the proposed rule; and (2) the need for an open and authoritative HUD forum for all program stakeholders regarding the latest Subpart I modifications, to ensure consistent interpretation of those new provisions and an even playing field for all regulated parties.  In response, the HUD officials stated there are “ongoing discussions” within the Department regarding the “best way” to inform stakeholders of the new provisions and “get feedback,” based on a “gradual implementation” of the new criteria.

 

Implementation of New Energy Standards:  MHARR stressed that both HUD and the MHCC should play a significant role (at a meaningful time, i.e., not after-the-fact) in the development of new energy conservation standards for manufactured homes – as authorized by the Energy Independence and Security Act of 2007 – and should be particularly vigilant regarding the cost impact of any such proposed standards, based on the cost-effectiveness, affordability and justification criteria of the 2000 reform law.  The delegation stressed that: (1) HUD, unlike DOE, is subject to a specific statutory mandate to consider the cost-impact of proposed standards under the 2000 reform law; and (2) in developing and evaluating any such proposed standards, HUD should consider that manufactured housing producers already provide a wide range of cost-effective energy packages, providing maximum freedom of choice for consumers to select features appropriate for their region and financial resources.  The HUD officials and specifically Commissioner Galante, acknowledged frustration with a lack of transparency and consultation by DOE, and indicated that they would seek further information regarding this matter from DOE.

Implementation of Enhanced Federal Preemption: The MHARR delegation emphasized that the enhanced federal preemption of the 2000 reform law is vital to the acceptance of manufactured homes – in consumer financing and other areas — as federally-regulated “housing,” rather than “trailers.”  Specifically, MHARR noted that the then-HUD program leadership, at the October 2010 MHCC meeting, had promised a full review and re-evaluation of HUD’s historically narrow approach to federal preemption based on the 2000 reform law, but that such a review and re-evaluation, to MHARR’s knowledge, had never been conducted.  MHARR also reiterated its long-standing opposition to any mandatory or “voluntary” fire sprinkler standard and called on called on HUD to reject the pending “voluntary” standard proposal based on the documented success of the existing HUD fire safety standards.  Again, the HUD officials indicated that they would consider both matters.

Implementation of Label Fee Increase: MHARR stressed that: (1) additional label fee revenues should be allocated in a way that strengthens the federal-state partnership that lies at the core of the 1974 federal law, but has been neglected in favor of make-work contractor functions. The delegation emphasized that the State Administrative Agencies (SAAs) that constitute the first-line of consumer protection are increasingly being pressured by shrinking state budgets and should be provided additional revenue through the federal program to maintain their crucial role. (2) In addition, the delegation noted that the 2015 HUD budget indicated the Department would seek to implement future fee changes solely by notice. MHARR stressed that the 2000 reform law requiresboth appropriations approval and rulemaking for any fee change; that both such elements are mandatory; and that any move to an administrative notice-only system would not only contravene the 2000 reform law, but would also eliminate any institutional means for program stakeholders – including those responsible for paying such fees – from having any input.

Implementation of Proper Status of MH Program at HUD:  MHARR also called for the transfer of the Title VI manufactured housing program from the Office of Risk Management to the Office of Single Family housing in accordance with the directive of the 2000 reform law for HUD to “facilitate the acceptance” of manufactured housing within the Department and to ensure the inclusion of manufactured housing in all federal housing programs administered by HUD.  The HUD officials noted that the manufactured housing program has historically been viewed as a regulatory program by the Department, and was thus included in the Office of Risk Management and Regulatory Affairs in the last HUD reorganization.  That said, the HUD officials acknowledged the broader scope of the 2000 reform law and did not rule out changes when this matter is considered again.

Based on the positive dialogue at this meeting, MHARR will continue to work with HUD leadership and the new program administrator to advance completion of the full and proper implementation of the 2000 reform law.  MHARR will continue to keep you apprised as new developments unfold.

cc: Other HUD Code Industry Manufacturers, Retailers, Communities and Finance Companies