HUD’s Exposed Plan for the Manufactured Housing Industry is Unacceptable

Posted by Danny Ghorbani, MHARR

As has previously been reported, a steadily expanding number of members of Congress have been making inquiries to senior officials at HUD regarding the declining state of the HUD Code manufactured housing industry, the continuing inability of consumers to access public and private financing to acquire affordable, non-subsidized manufactured homes, as well as the Department’s management of — and plans for — the unique HUD (Title VI) manufactured housing program and FHA manufactured home financing. Throughout 2009, these congressional inquiries became more urgent, more specific and more pointed, as industry production and sales fell below 50,000 homes (its lowest output since 1950), and members of Congress became more concerned about closures of manufactured housing businesses (particularly smaller concerns) and related job losses, as well as the unavailability of manufactured home consumer financing in their districts and states.

Although HUD officials responded to these inquiries anecdotally and in a fragmented manner at various meetings and as part of congressional hearings, an extraordinarily articulate and well-focused December 2, 2009 inquiry from Rep. Travis W. Childers (D-MS), has now elicited a January 11, 2010 written response from HUD that provides a bleak and shocking window into HUD’s views concerning — and plans for — the federal manufactured housing program, consumers financing, the HUD Code industry and consumers of manufactured housing that have not previously been exposed in such frank detail. The revelations in this response — both stated and implied — are remarkable and should spur all program stakeholders to take stock now and address their implications for an industry and consumers already facing unprecedented challenges and obstacles.

Enclosed with this communication are copies of Congressman Childers’ December 2, 2009 inquiry letter and HUD’s January 11, 2010 response, together with a complete paragraph-by-paragraph analysis of HUD’s response. This packet is a must-read for all those with an interest in manufactured housing, including industry members, consumers and elected officials.

Based on the information exposed by these documents, the following priorities need to be pursued and implemented:

Regarding the HUD manufactured housing program and public financing —

• The appointment of a non-career Administrator for the HUD manufactured housing program as provided by Congress in the Manufactured Housing Improvement Act of 2000 (2000 reform law). Based on the track record compiled while this position has been vacant for the past five years, without such an appointed Administrator, nothing else about the program will change.
• Issuance of final rules implementing improvements to the FHA manufactured housing program approved by Congress in the Housing and Economic Recovery Act of 2008 (HERA) and the removal of the existing Ginnie Mae moratorium on the securitization of FHA Title I loans.
• Full and proper implementation of all manufactured housing program reforms contained in the 2000 reform law.

And regarding private consumer financing, on a parallel track, with the Federal Housing Finance Agency (FHFA) —

• Full and expeditious implementation of the HERA-based “duty to serve underserved markets” mandate for the two Government Sponsored Enterprises (GSEs).

Each of these priorities is critical to the recovery of the manufactured housing industry and to the availability of affordable non-subsidized housing to millions of Americans and particularly lower and moderate-income families. Accordingly, their implementation should be vigorously pursued by all stakeholders in the HUD manufactured housing program, by Congress and by the Administration.

Click to download Analysis of HUD’s Response to Congress