RE: government Accountability Office Issues Report On Federal Manufactured Houing Program

The Government Accountability Office (GAO) has released its long-awaited report on the federal manufactured housing program (see, copy attached). 

By way of brief background, the report responds to an April 17, 2012 request by the Chairmen of the House Financial Services Committee and the House Insurance, Housing and Community Opportunity Subcommittee for a GAO analysis of HUD’s implementation of the Manufactured Housing Improvement Act of 2000 in the wake of Congress’ February 1, 2012 oversight hearing (sought and advanced by MHARR) on that issue.  Among other things, that request asked GAO to address hearing testimony by the former Chairman of the Manufactured Housing Consensus Committee (MHCC) that HUD had only taken action on “approximately 50” of “the over 185 recommendations … made by the MHCC” since 2004.

As part of the GAO inquiry process, MHARR staff and officials met four times with GAO analysts, including a two-hour May 22, 2013 meeting between GAO officials and a delegation of MHARR–member company executives stressing the absolute necessity of a properly-functioning federal manufactured housing program to ensure both the affordability and availability of manufactured housing for Americans and particularly lower and moderate-income homebuyers (see, MHARR June 10, 2013 News Release, “MHARR Manufacturer Executives Meet With GAO Officials”).

A very preliminary analysis of the 65-page GAO report and its conclusions (submitted to the current Chairman of the Insurance, Housing and Community Opportunity Subcommittee) indicates major findings as follows:

1. HUD has failed to fully and properly implement the 2000 reform law in key respects (as maintained by MHARR);

2. HUD has failed to process and implement MHCC standards recommendations (174 since 2003) as required by the 2000 reform law;

3. HUD has failed to “facilitate the availability of affordable manufactured homes” — a key goal of the 2000 reform law — by failing to address sharp volume declines in the Federal Housing Administration (FHA) Title I and II manufactured housing programs; and   

4. Significant “questions and uncertainties” exist regarding “HUD’s oversight of its [program] monitoring contract” and whether “data … not delivered” by the contractor “represents [a] significant noncompliance under the [monitoring] contract.” (An issue of potentially major significance to HUD Code manufactures and the future of the monitoring contract).

Other issues raised in the report, such as program funding and specifically a label fee increase, have been addressed by MHARR in the context of HUD’s pending rulemaking.  In its rulemaking comments, MHARR, among other things, calls for a re-distribution of program revenue to eliminate unnecessary and costly “make-work” contractor activity and increase funding for State Administrative Agencies (SAAs) that constitute the first line of protection and response for consumers, and are a key component of the federal-state partnership envisioned by the federal manufactured housing law.

MHARR, as always, will conduct a thorough review and analysis of this GAO document – addressing all relevant issues — and will provide a complete report to MHARR members prior to the Fall MHARR Board of Directors meeting for further consideration and action.