HUD, in conference calls with State Administrative Agencies (SAAs) on August 10 and 11, 2015, has seemingly backed-away from a proposal – opposed by MHARR — that would have drastically cut funding for a substantial number of SAAs, and has put forward a new “alternative” proposal that would guarantee SAA funding at no less than 2014 levels.
As initially reported by MHARR on July 28, 2015, HUD, in a memorandum from the manufactured housing program Administrator to all SAAs, had proposed changes to the SAA funding structure that would have increased per section payments from current levels, but would have reduced total SAA funding for many states by basing payments on current shipment levels rather than the much higher shipment levels that existed at the end of 2000, as is required by the Manufactured Housing Improvement Act of 2000.
Specifically, the original HUD proposal – which MHARR immediately opposed – would have: (1) eliminated the current distinction between full-approved and conditionally-approved SAAs; (2) increased per-section SAA compensation from $2.50 per section manufactured in-state and $9.00 per section shipped in-state to $20.00 and $10.00 respectively (or $30.00 per floor for homes built and sited in the same state); (3) based total SAA compensation on 2014 production rather than 2000 production; and (4) eliminated “supplemental” SAA payments designed to maintain funding at 2000 levels for states that subsequently fell below 2000 base level funding.
As was emphasized by MHARR in subsequent communications with HUD — and as was confirmed to MHARR by a number of individual SAAs and reiterated again during the August 10 and 11, 2015 conference calls – this initial proposal and resulting deep cuts in SAA funding would have driven a substantial number of SAAs out of the HUD program, undermining the federal-state partnership that lies at the heart of the program as devised by Congress, while further empowering HUD’s revenue-driven “monitoring” contractor (which performs SAA functions in non-SAA states) and expanding its already substantial chokehold on the program and the industry.
With its new “alternative” proposal, that would pay SAAs $14.00 per manufactured section and $9.00 per sited section, with a guarantee of total funding levels no lower than those paid in 2014 (which should be equal to or higher than total funding levels for each state in 2000, by virtue of the supplemental payments made in 2014), HUD appears to have come full circle, to a proposal that would maintain current funding levels as a “floor” for SAA payments.
However, HUD’s failure to detail all aspects of this “alternative” proposal in writing prior to the first SAA conference call, has generated substantial confusion as to its exact terms and impact that still need to be fully assessed and evaluated – especially ensuring that the 2014 base-level funding for each SAA equals or exceeds funding based on 2000 production, as would be required by the 2000 reform law.
Consequently, MHARR (upon a commitment by HUD that no current SAA state, under this “alternative” proposal, will fall below 2000 funding levels), will carefully analyze this proposal and: (1) make an independent determination whether it complies with the 2000 reform law and would preserve the federal-state character of the program; while (2) reserving its rights to take further steps as appropriate to protect funding levels for every current SAA at or above 2000 levels as mandated by the 2000 reform law.
