Posts Tagged ‘housing’

Finance Expert Dick Ernst of FinmarkUSA: introduction at Tunica Manufactured Housing Show 2014

May 20th, 2014 No comments

Editor's note. This public introduction was videoed during the business building seminars held during the 2014 Tunica Manufactured Housing Show.

Note that the Speakers knew they were being filmed.


An exclusive interview with Dick Ernst is planned to be featured in our upcoming June issue. Dick moderated the finance panel at aDick-Ernst-Financial-Marketing-Associates-tony-kovach-mhpronews-com3 packed room of industry professionals at the 2014 Tunica Show. Dick Ernst also moderated MH home lending and commercial panels, in an overflow crowd during the 2014 Louisville Show.

Dick is a key figure in meetings with industry and public officials, including the CFPB, FHFA and more.


You'll get exclusive insights into the widely acknowledged top man in the manufactured home finance business, into industrymhpronews-interviews-with- finance issues, how to generate more profits and much more. Watch for it – and the. Watch it – in June!

More video Interviews available today are found at this link below.

Our thanks to Dick Ernst at for his profit-making and protecting leadership for businesses, associations and others, and my thanks too for his kind words shared in the video above. ##

(Image and video credits, in association with

Our experience with Resident Owned Communities – no BS

January 15th, 2014 No comments

The “No BS about Resident Owned Communities” article that appears on this site brings to mind President George W. Bush’s comment while visiting Canada in 2004:

I would like to thank all you Canadians for your warm welcome at the airport. Especially those of you who waved (pause) with all five fingers.”

I get it. We have a successful business model that is reshaping resident ownership and that invites reactions from competitors.

I stand by our record of performance to prove we have a lot of five-finger waves and cheers in the marketplace for ROC USA® as we’ve closed:

  • 13 resident-owned community (ROC) purchases in 2013;
  • 12 in 2012; and,
  • 11 in 2011.

In fact, we have closed a ROC transaction every 37 days on average since we launched in 2008.

We got there by being 100-percent focused on making resident ownership effective and efficient and successful. The marketplace is the true judge.

One of the keys to our success is that we don’t have to chase capital to finance resident purchases. We have already raised all the financing the resident corporation needs — including funds for deposits and due diligence — in a U.S. Department of Treasury-certified Community Development Financial Institution.

We have current liquidity to finance $40 million of resident purchases today. No one else in resident ownership services has raised capital in advance the way we have. We did it so we could create a different transaction experience for buyers and sellers.

We’re not simply brokers who get paid at closing and walk away — we equip homeowners with the tools and training they need to successfully manage their communities. The fact is that we care about each community’s long-term performance and we know every democratic association needs leadership development and cost-effective shared services to be competitive. ROC USA has a national leadership institute for ROC leaders, a national marketing program for ROCs, and an online and in-person training system to help ROCs and ROC leaders succeed.

At ROC USA, we use the limited equity co-op for simple reasons: It is the most effective and efficient, the fairest and the most affordable model for homeowners. We stand by our work of the last 30 years with more than 140 ROCs that we took from tenants to owners.

Not one of those communities has failed.

That 30-year track record demonstrates the competency and capacity of ROC members and leaders with whom we work.

Every one of these ROCs is real ownership where each homeowner can purchase one low-cost membership interest in the corporation that owns and controls the MHC. There are no outside parties with an ownership interest in the co-op or the MHC, only the homeowners can be member owners.

ROC USA is a nonprofit and thus must serve low- and moderate-income communities, but that doesn’t limit us to small communities. Our largest completed transaction was a two-MHC portfolio transaction worth $23 million for nearly 500 home-sites in 2012. Further, and not surprisingly, every MHC we’ve worked in has sufficient numbers of low- and moderate-income — that’s not an issue.

We don’t apologize for being well-funded or widely publicized. Getting things done attracts interest and attention. Every closed transaction gets a press release and we send postcards to announce purchases. Often we’ll quote the community owner or the broker. Here are two recent ones:

The business model that ROC USA has developed is superb. It was a different transaction in that you usually have to jump through a litany of different hoops in regard to banks and bank regulations. But that simply wasn’t the case here. I would certainly do it again, and I will.”

Joel Erlitz, Broker,
First Commercial Property Corp.


“It’s no different than a sale to any third-party.”

Phil Johnson,
Seller in Minnesota

ROC USA does not practice public policy. In fact, we eliminated the part-time policy position at ROC USA in 201l.

We’re out earning our way in the marketplace — just like you.

That’s how we ROC ‘n’ roll. ##

paul-bradley-rocusa-president-posted-industry-voices-manufactured-housing-pro-news-com-.jpgPaul Bradley, President
ROC USA, LLC / 603-856-0709

(Editor's Note: this article comes as a response by the Paul Bradley to the Featured Article entitled No BS about Resident Owned Communities.

Other perspectives on this topic or any that impact manufactured housing are welcome. Please put OpEd, Letter to the Editor or Industry Voices in your subject line and send proposed article to – and/or – thank you.

As an additional reminder, we welcome tips on topics and local/regional/national/international news that impacts factory built housing. Readers like you can be and are a part of the story here! )

Community Owners! MHC Lessons Learned

January 8th, 2014 No comments

Join your peers in the MHC world for an exciting hour to learn real life proven methods of how to improve your land lease communities Bottom Line Performance! Get tips from seasoned professionals who have profited in large, medium and small Manufactured Home Community (MHC) operations.

This is a program you will not want to miss.


The panel discussion will be moderated by Ross Kinzler, Executive Director of the Wisconsin Housing Alliance. Ross has over 25 years of experience in the Manufactured Housing Industry. He has been active at both the national and state levels. He is a founding member and past Chairman of the Manufactured Housing Educational Institute. Ross currently serves on the Executive Committee and Board of the RV/MH Hall of Fame. In addition, Ross has taken on many leadership roles industry wide and has served on numerous boards and committees dealing with issues facing MH communities.


Among those in our three person panel is Tammy Fonk, an Associate with the CBRE MH/RV National Group. Tammy was born and raised in the MH industry with two family owned communities. She operated the family owned company's sales and marketing business as well as having an active role in day to day community operations and resident relations. As a member of the MHRV Team, Tammy now works closely with public and private investors on building business relations and opportunities to enhance the Manufactured Housing Industry as well as the RV Resort and Marina properties in North America. Tammy works with owners and buyers of small, medium and larger communities in addition to representing large portfolio owners.


The panel also includes Don Westphal President of Don C. Westphal & Associates. Don has over 40 years of experience of working in; community conceptual planning, master site design and landscape architectural design for land lease communities. Don has represented developers and owners of communities from concept plan approval all the way through final construction. He also works with owners on Community Imaging and on Marketing Plans for communities. The communities have ranged in size from a small number of home sites to those with over 500 sites. Don was featured in this interview, A Cup of Coffee with…Don Westphal.


The third panel member is Richard (Rick) Rand, President of Great Value Homes, Inc. Rick has over 33 years of experience in the manufactured housing industry. GVH is an acquisition, development and property management firm specializing in multiple aspects of the Manufactured Housing Industry. The Company currently operates 6 Manufactured Housing Communities and is also a distributor of Manufactured Homes sold in the communities.

In addition, GVH acts as a broker for the resale of existing manufactured homes for residents who reside in the land lease communities the Company manages. Richard also acts as a consultant to institutional investment and private firms on various aspects of the Manufactured Home Industry.

Rick was founder and President of Asset Development Group, Inc. and its affiliate, Home Source One, LLC. From 1984 time until his departure in 2004, he grew the company to the 25th largest owner of manufactured housing communities in the country. During his tenure at Asset Development Group, Inc. Rick managed all aspects of the enterprise. He was responsible for all of the Company's property acquisitions and requisite financing. From the Company's inception, he oversaw the staffing and training of the ADG/HSO employees and management team. In addition, Rick was responsible for the planning and development of over 2,500 new manufactured homes sites that were both additions to existing communities and new green field development.

Rick is featured in this exclusive interview, A Cup of Coffee with…Rick Rand.

The Louisville Seminars are one of the most popular draws for attendees to the show.


Come Join us at the 2014 Louisville Manufactured Housing Show! The Show was the best attended event in all of Manufactured Housing in 2013. Most industry members can attend free, learn more at the link above, and learn more about the other valuable seminars available for industry members at this link. ##

rick-rand-great-value-homes-manufactured-home-pro-news-industry-voices-guest-blog-.pngRichard J. Rand
Great Value Homes, Inc.
9458 N. Fairway Drive
Milwaukee, WI 53217-1321
414-352-3631 (fax)
414-870-9000 (cell)

ObamaCare and Manufactured Housing, Take Two

December 19th, 2013 No comments

In Obamacare, a Different Perspective, a well meaning Texas retailer advances his speculation that through the wonder that is Obamacare, fewer of our housing prospects will be forced into medical bankruptcy and a typical manufactured home retailer or stick built homebuilder might enjoy an increase of five or six sales per year. I believe our Texas retailer is well meaning with his speculation but several factors are not included in observation.

First: Having Obamacare does not mean you will be free from a risk of medical bankruptcy. Given the higher premiums being forced onto unwilling buyers along with massive deductibles, the risk of bankruptcy has in all likelihood been increased. Although we encounter very few medial bankruptcies, most of the ones I have encountered are able to find a path to home ownership because the medical burdens of the past are behind them. Under Obamacare the misleading information that premiums would drop has proven to be one more burden on the current administration as it proves to be untrue.

Second: Employers have laid off workers, decided to cancel expansion plans that would have required new workers and cut back the hours of existing workers due to the regulatory burden of complying with Obamacare. I have lost far more sales in 2013 due to these factors than a hypothetical increase in sales might have brought about had Obamacare been in place at the first of the year. We can get the bankrupt prospect past that event in their life and onto a path to homeownership. I can’t say the same for a client whose hours have been significantly reduced to the point of not budgeting for a reasonable house payment or a client who has lost their job.

Third: This same client will now be forced to purchase a federally mandated level of coverage which is an even greater drain on his discretionary income. Lower discretionary income means a lower likelihood of qualifying for the loan.

Fewer jobs, lower income, part time jobs, higher outgo, lower discretionary income will most likely not add up to an increase in business for the housing sector whether it be site built or factory built. Off topic, but to this mix you can add the new Qualifying Mortgage and other Dodd-Frank rules that will further erode sales. We need to dig in and adapt the best we can to all the changing rules that are headed our way. I respectively suggest that Obamacare will not be a boon to sales as was suggested.

Doug Gorman
Home Mart
Tulsa, OK

MHI 2013 Annual Meeting Recap

October 10th, 2013 No comments

IMHA Executive Director Mark Bowersox attended the Manufactured Housing Institute’s (MHI) annual meeting held September 28 – October 1 in Carlsbad, CA. As with most recent industry meetings, speakers and conversations at the event were focused on the impact of the Dodd-Frank consumer protection legislation and reforming the CFPB’s upcoming regulations. MHI and other industry representatives continue to work with the CFBP on three key areas:

Exemption for manufactured housing appraisal requirements

Based on the most recent rules issued by the CFPB loans on all new manufactured homes, regardless of whether or not they included land, are exempt from the appraisal requirement. Loans on existing manufactured homes, not including land, are also exempt from the appraisal requirements. Additionally, all mobile homes (pre-HUD code) home loans are exempt. The CFPB’s rule solidifying these exemptions is still pending. When finalized the rule will go into effect in January.

Key rule clarifications and exclusions

Loan originator compensation guidelines issued by the CFPB this summer provide the industry with key exclusions from the points and fees calculation that lenders must perform and clarifies certain activities that retail sales staff can engage in without being defined as loan originators.

Manufactured home sales price is excluded from the points and fees definition and does not have to be included in calculations performed by lenders unless a creditor has knowledge that the sales price includes compensation for loan origination activities.


Retail sales commissions paid to employees is excluded from points and fees calculation requirements unless the salesperson is receiving compensation from a lender for loan origination activities.

According to MHI, activities that do not classify a retailer or its sales personnel as loan originators include:

  • Providing or making available general information about creditors and loan originators that may offer financing for manufactured housing
  • Gathering or collecting supporting information or documentation on behalf of a consumer for inclusion in a credit application
  • Providing general credit application instructions so that a consumer can complete it themselves
  • Financing the sale of no more than three homes in a year.

Activities that will make a retail employee be considered a loan originator include:

  • Filling out a credit application for a customer
  • Discussing particular credit terms with a customer
  • Directing or influencing a customer to select a particular lender or creditor

MHI continues to seek from the CFPB to provide further clarification on what activities retailers can engage in without being defined as loan originators.

MHI is still working with the CFPB and various consumer interest groups on the need to revise the upcoming High Cost Mortgage Loan triggers for manufactured home loans. IMHA will continue to be engaged on this issue, along with MHI and other interested parties. ## Bowersox
Executive Director
Indiana Manufactured Housing Association
Recreation Vehicle Indiana Council
3210 Rand Road
Indianapolis, IN  46241

(Editor's Note: You can find more info on the LO Comp Rule and HOEPA from DJ Pendelton's article published in the Industry In Focus Reports module, linked here.


You can also find Mark Bowersox's “It's Now or Never” featured article, linked here. )

Captive Finance Redux: Are you dealing with the Gestapo/NSA or Colonel Klink?

August 21st, 2013 No comments

I've been delighted with the self-financing articles and feedback you have gotten on the subject. I've never doubted self-finance can be done properly, but that said, I don't think most can or will do it properly. Instead I believed the industry would often take the course many are revealing in your discussions; non-compliance, "I'll take my chances."

Interesting, but hardly surprising.

As I've written in the past, the various recent lending laws, federal and state, will and are having a demonstrable effect on the industry, likely to put the finishing touches on what little remains of the industry, reducing it even further.

Does this mean total death? Oh, I doubt that. Remember companies still sell buggy whips, not many, but they are still sold. As long as the industry continues to put people in homes who are not good at putting themselves in homes, a segment will remain. As will homes going on to owned land by those who trotted down to their friendly Hometown Bank, sat with their hard working banker and earned a loan for a HUD going onto their land.

Not many homes you say? Well, yes I agree with that. But some will still sell. Captive Finance will do some, but risky, unprotected self-financing will sell most homes. Is it illegal to speed? Yes, if you get caught. Obviously the same holds true for non-compliant lending.

There are few if any reports of originators of non-compliant loans being called to the gallows, or of loans declared invalid, (big deal in an industry with innumerable invalid loans), but, and this is the big one, still few if any reports of fines and crowbar motel residency. I suspect until the crowbar alternative becomes far more common, as with your various admitters, non-compliance will grow and perhaps even prosper. This leaves open whether in 1935 Berlin, oops, 2013 America, the Gestapo/NSA is checking the papers, or like Sgt Schultz, will see nothing. So far, they see nothing.

I have no doubt many of these offensive laws were carefully crafted to include MH, which leaves the futility of trying to change these laws to not include us as somewhat pathetic, but as an industry we still seek the get-out-of-jail card, which is in the deck right beside Marvin Place. These are both hard to get, kiddes.

So's, we's takes our chances, the "buyer" gets his desired home, the retailer/park owner gets a down-payment, resident, a stream of income and everyone lives happily after, until "innocent buyer" defaults and Illegal Aid gets involved, and reports the non-compliance to the massive Inadequate Buyer Protective Society. Then, the soggy brown stuff could hit the fan with the strong arm of The Man going full force against TrailerBoy. Ouch!

Can or will that happen? Well, yes it can, but will it? My 40 year experience with destructive retailer fraud on buyers was that it was little noticed by the authorities, it had to be BIG.

It remains to be seen whether we now will be dealing with Col. Klink or Buford T. Justice on non-compliance with this panoply of laws. For the sake of the MH self-admitted "misdirected," lets hope Klinky is still doing reruns and too busy to notice the industry's escape attempts.

But if it turns out these Alphabet Laws are actually enforced by Henrich Himmler's heirs, I'm not sure it is wise to be "non-compliant." Sometimes you have to admit the cards dealt are a very bad hand. It seems that way for MH and the spate of new lending laws.

I know one park owner who simply rents the home to the buyer for three years or until early default, which ever comes first. Once the buyer demonstrates a pattern of payments, he conveys the home, takes a promissory note not secured by the home, and hasn't found a big difference over his past experience with home sale with mortgage, etc. But he sleeps well knowing he might get his azz rumpled by the  borrower in this process, (so what is new?) but says at least at night he can sleep without the overhang of Att'y Gen Eric Holder visiting him for non-compliance.

Holder can bring those Philly Bad Guys from the voting place with their iron pipes to assure compliance. There is a true, Ouch! ##

marty-lavin-posted-on-mhpronews(2).jpgMARTIN V. (Marty) LAVIN
attorney, consultant & expert witness
Practice only in factory built housing
350 Main Street  Suite 100
BURLINGTON, VT 05401-3413
802-238-7777 cell  802-660-8888 office
Forget what people are saying, especially politicians. Instead, watch what is happening.” – Marty Lavin


Editor's Note: Marty's column is in response to these keenly read, linked articles:

Publisher Tony Kovach will plan a comment on this topic on the Masthead blog, to be published later on 8.21.2013

Keeping Affordable Housing Affordable

June 7th, 2010 No comments

MHARR logoTo start with some good news, indications are that the twelve year decline in manufactured housing production and sales may be leveling-off and, hopefully, coming to a halt. Just as importantly, an MHARR analysis, including input from manufacturers and retailers, shows that as the first signs of a possible recovery begin to appear, positive indicators are strongest at the most affordable end of the price spectrum. Thus, confronted with unprecedented difficulty in obtaining and/or qualifying for purchase money financing, Americans are increasingly turning to the industry’s most affordable homes in order to meet their housing needs — providing just the latest vindication of MHARR’s founding vision and ongoing mission of maintaining the delicate balance between affordability and the proper protection of manufactured housing residents.

The basic underpinning of this philosophy and mission, is that of all segments of the housing industry, only manufactured housing has been recognized by Congress as providing inherently affordable home-ownership for all Americans, without the need for government subsidies. As the original manufactured housing bill was debated in Congress in 1974, a key sponsor warned against regulation that prices consumers out of the manufactured housing market by needlessly raising the purchase price of the home — “if these provisions become law, Congress will have the obligation to evaluate frequently their cost effect on mobile homes. If the cost effect is too great, it could price low income consumers out of the market….” This concern for purchase affordability was later written into law by the Manufactured Housing Improvement Act of 2000, which specifically requires HUD and the Manufactured Housing Consensus Committee (MHCC) to consider the cost impact of both new and revised standards and regulations on the cost of manufactured housing to consumers.

The latest trend toward affordability shown by MHARR’s analysis, thus underscores the importance of keeping the purchase price of HUD Code manufactured homes as stable as possible and ensuring that prices are not driven up by needless or unnecessarily costly standards and/or regulations. For the industry and consumers, this means insisting that proposed changes to existing standards and/or regulations include sufficient cost and justification information to properly and accurately evaluate purchase price impact. It also means rejecting guesswork and wishful thinking, and insisting that purchase price impact be fully considered by the MHCC, by HUD and by any other government agency considering action that could impact manufactured housing. Only by observing these guideposts can manufactured housing remain both safe & affordable for all Americans and continue to provide maximum freedom of choice for consumers to select the amenities they want, consistent with their means and ability to pay for a home. Indeed, with legislation pending in Congress (i.e., the “Restoring American Financial Stability Act of 2010”) that would require homebuyers to prove their ability to pay for a home, this will be more important than ever.

Unfortunately, despite the disproportionately negative impact of purchase price increases on lower-income consumers, there is constant pressure from regulators and others to impose new and more costly standards and regulations on HUD Code manufactured homes. Much of this has been — and is being — advanced by circumventing the major reforms of the 2000 law, and most particularly, as shown at the April 2010 meeting of the MHCC in Tulsa, Oklahoma, by downgrading the role, authority, functionality and independence of the MHCC, which was created by Congress with the specific mission of acting as a check and balance on the power of program regulators and not just as a run-of-the-mill “advisory committee.”

For those who missed the Tulsa MHCC meeting, or did not have an opportunity to review MHARR’s comprehensive meeting report, below are just a few examples of actions taken or advanced (albeit, like the meeting itself, based on decisions made by the prior HUD program management) without a legitimate basis or necessary cost and justification information:

  • Under a February 2010 “Interpretive Rule,” HUD has placed off-limits from MHCC review and comment, a myriad of agency interpretations and decisions affecting the standards and their enforcement. By reading “catchall” section 604(b)(6) out of the 2000 reform law, a provision designed by Congress to ensure that HUD would bring most standards and regulatory matters to the MHCC, the stage is now set for HUD to bypass the MHCC on major issues.
  • HUD has indicated that changes in reference codes that would relax or lower existing HUD standards will be ignored, leaving only upward revisions of reference standards to be considered. This one-direction-only policy for escalating the HUD standards surfaced during a recent MHCC task force debate regarding updated wind standards.
  • Sprinklers mandates. Existing federal standards already provide for the fire safety should be applied by HUD to preempt state or local sprinkler mandates. Instead, HUD is advancing a federal sprinkler standard under the guise that it is either “voluntary,” or triggered only “as needed” by a state or local sprinkler mandate. Experience shows, however, that there is no such thing as a “voluntary” standard and that this will end up as mandatory for all manufactured homes, unnecessarily raising the purchase price of those homes.
  • Proposed regulations to revamp the enforcement system, which failed to gain the consensus support of the MHCC because they were not supported with justification or cost-efficiency data are, apparently, still being pursued by HUD.
  • Ground anchor testing. HUD’s recent re-write of the anchor testing protocol developed by the MHCC is yet another example of wishful “life-cycle” thinking masquerading as cost analysis. The proposal, generated by a HUD contractor, states:… an accurate assessment of total costs cannot be determined at this time… However, the anticipated increase in cost is considered to be justified by the overall benefits achieved…” If total benefits cannot be determined, however, the relationship of benefits to costs cannot be determined.
  • Energy standards are being developed by the Department of Energy (DOE) and other energy mandates are being advanced simultaneously by special interests before the MHCC. The typical claim for energy proposals, without any actual cost data having been shown thus far, is that heightened standards will produce long term savings for consumers. To a consumer who cannot qualify to buy a home because of a higher purchase price, however, “life-cycle” savings mean absolutely nothing.

These proposals and actions represent just the tip of the iceberg that could undermine the affordability of manufactured housing without any corresponding benefit to consumers, and bring an abrupt halt to what appears to be a fragile recovery being led by the industry’s most affordable homes. More than ever, therefore, it is essential that the purchase affordability of manufactured housing be protected and defended by fully implementing all reform aspects of the 2000 law. With a new program leadership now in place at HUD, MHARR will work with the Department to focus on the importance of balancing purchase affordability and consumer protection as set out by Congress in the 2000 reform law – as should all program stakeholders, particularly the rest of the industry and consumers.

In MHARR’s view, manufactured housing is – and must remain – affordable housing for all Americans.

MHARR is a Washington D.C.-based national trade association representing the views and interests ofproducers of federally-regulated manufactured housing.

MHARR Letter to DOE – Energy Efficiency Standards for Manufactured Housing

March 29th, 2010 No comments

Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Avenue, NW a Suite 508
Washington, DC 20004

Fax 202-783-4075

March 5,2010


Ms. Brenda Edwards
U.S. Department of Energy
Building Technologies Program
6th Floor
950 L’Enfant Plaza, S. W.
Washington, D.C. 20024

    Re: Energy Efficiency Standards for Manufactured Housing
    Docket No. EERE-2009-BT-BC-0021

Dear Ms. Edwards:

The following comments are submitted on behalf of the Manufactured Housing Association for Regulatory Reform (MHARR). MHARR is a national trade association representing the views and interests of producers of manufactured housing regulated by the Department of Housing and Urban Development (HUD) pursuant to the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended, 42 U.S.C. 5401, et sec. (Act).


On February 22, 2010, the Department of Energy (DOE) published an Advance Notice of Proposed Rulemaking (ANPR) seeking public comments relevant to the development, by DOE, of energy efficiency standards for manufactured homes. Although the construction and safety of manufactured housing, since 1976, has been comprehensively regulated by HUD pursuant to federal standards that include energy conservation and efficiency criteria (see e.g., 24 C.F.R. 3280.501, et sec.), DOE, pursuant to section 413 of the Energy Independence and Security Act of 2007 (EISA), was directed by Congress to establish separate energy efficiency standards for manufactured housing within four years of the date of enactment of EISA. For the Preserving the American Dream of Home Ownership Through Regulatory Reform reasons set forth below, DOE should not proceed with the promulgation or implementation of any standards that are not identical to the existing HUD energy conservation standards until the production and availability of affordable, non-subsidized HUD Code manufactured housing for lower and moderate-income consumers recovers to levels at least comparable to those that existed prior to the enactment of EISA in 2007.


When Congress adopted EISA in 2007, it did not foresee the collapse of the HUD Code manufactured housing market that has occurred since that time and that continues today. Prior to EISA, in 2006, the HUD Code manufactured housing industry, which primarily serves lower and moderate-income American families, produced 117,373 homes. This figure represented a significant decline from 2001 production of 193,120 homes and an even greater decrease from 1998 production levels that approached 400,000 units, but was consistent with previous cyclical industry declines. Since 2007, however, manufactured housing production and sales have fallen dramatically, as a result of the near unavailability of either public or private consumer financing for manufactured home purchases, as well as the failure of the HUD manufactured housing program to fully implement reforms mandated by Congress in the Manufactured Housing Improvement Act of 2000.

During 2009, the condition of the manufactured housing industry continued to deteriorate, as production and sales of new HUD Code manufactured homes fell to 49,683 homes, the lowest production level in the industry’s history. This represents a nearly 90% decline in production over a period of ten years and reflects a catastrophic loss of affordable, non-subsidized housing opportunities for American consumers. It also reflects the closure of production facilities — from approximately 420 in 1998 to 120 today — with the resultant loss of thousands of manufacturing jobs and thousands more jobs lost in other sectors of the industry, including component suppliers, home installers, home transporters, retailers, manufactured housing communities, and finance and insurance providers.

In light of this unprecedented decline and the extreme hardship that it entails for both the industry and consumers, the federal government should not — at this time — impose costly new energy conservation mandates combined with a totally new DOE enforcement system that would parallel the existing HUD enforcement system. Such mandates would inevitably result in substantial increases in the purchase cost of manufactured housing for hard-pressed consumers who cannot obtain purchase financing now. This will exclude even more Americans from the dream of home ownership, in an economy where private mortgage insurance is currently not available for manufactured home transactions and many, if not most manufactured housing consumers, already cannot afford the minimum 20% down payment required by lenders and the Government Sponsored Enterprises (i.e., Fannie Mae and Freddie Mac) which securitize home loans.

Moreover, manufactured homes are already subject to HUD energy conservation standards that result in a relatively tight thermal envelope, consistent with overall affordability, and are carefully balanced against concerns related to air exchange and condensation within the home living space. Any change to the standards could potentially upset that balance, with unforeseen and unintended negative consequences given the unique environment and construction of manufactured homes.

Consequently, for all of these reasons and because Congress, in 2007, could not have foreseen the unprecedented decline of the manufactured housing market and resulting hardships for consumers and the industry, MHARR urges DOE to delay the development, implementation and enforcement of any new manufactured home energy conservation standards, that are not identical to the existing HUD Code energy standards, until such time as industry production levels and the availability of affordable, nonsubsidized manufactured housing for lower and moderate-income consumers return to pre-2007 levels. Such a delay would also benefit consumers by allowing additional time for the implementation of mandates in other laws – such as the “duty to serve underserved markets” and FHA Title I manufactured housing program improvements mandated by the Housing and Economic Recovery Act of 2008 (HERA) — that are designed to restore and expand the availability of consumer financing for manufactured homes.

Mark Weiss
Senior Vice President
Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Avenue, N. W.
Suite 508
Washington, D.C. 20004
(202) 783-4087 (Office)
(703) 509-9489 (Direct)
(202) 783-4075 (Fax) (Email)
cc: Mr. Danny Ghorbani, MHARR

MHARR Letter to FHFA – Enterprise Affordable Housing Goals

March 29th, 2010 No comments

Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Avenue, NW, Suite 508
Washington, DC 20004
Fax 202-783-4075

March 18,2010


Alfred M. Pollard, Esq.
General Counsel
Attn. Cornrnents/RIN 2590-AA26
Federal Housing Finance Agency
Fourth Floor
1700 G Street, N.W.
Washington, D.C. 20552

Re: RIN 2590-AA26
2010-2011 Enterprise Affordable Housing Goals

Dear Mr. Pollard:

The following comments are submitted on behalf of the Manufactured Housing Association for Regulatory Reform (MHARR). MHARR is a national trade association representing the views and interests of producers of manufactured housing regulated by the Department of Housing and Urban Development (HUD) pursuant to the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended, 42 U.S.C. 5401, et seq. (Act).


On February 26,2010, the Federal Housing Finance Agency (FHFA) published a proposed rule to establish 2010-2011 Enterprise ~ffordableH ousing Goals for the two Government Sponsored Enterprises (GSEs) currently operating under FHFA conservatorship. This proposed rule changes both the methodology and criteria for determining compliance with the affordable housing goals, as well as the structure of the goals themselves, based on various factors mandated by Congress.

While MHARR welcomes the express acknowledgment and reaffirmation by FHFA in the preamble to the proposed rule that the GSEs, notwithstanding conservatorship, must — (1) continue to fulfill their core statutory mission, including support for affordable housing; and (2) may not use the conservatorship as a justification for withdrawing support from such market segments. (See, 75 Federal Register No. 38, February 26, 2010) at 9035-9036), it is imperative that FHFA proceed, as expeditiously as possible, to adopt a separate final rule to implement the “Duty to Serve Underserved Markets” (DTS) provision of the Housing and economic Recovery Act of 2008 (HERA), as that duty specifically related to manufactured housing regulated by the Department of Housing and Urban Development.


The manufactured housing industry is today suffering from an unprecedented decline that is due, in significant part, to the virtual unavailability of private financing for manufactured home purchases. In 2006, the HUD Code manufactured housing industry produced 1 17,373 homes. This figure represented a significant decline from 2001 production of 193,120 homes and an even greater decrease from 1998 production levels that approached 400,000 units, but was consistent with previous cyclical industry declines. Since 2007, however, manufactured housing production and sales have fallen dramatically due, in substantial part, to the near unavailability of either public or private consumer financing for manufactured home purchases.

During 2009, the condition of the manufactured housing industry continued to deteriorate, as production and sales of new HUD Code manufactured homes fell to 49,683 homes, the lowest production level in the industry’s history. This represents a nearly 90% decline in production over a period of ten years and reflects a catastrophic loss of affordable, non-subsidized housing opportunities for American consumers. It also reflects the closure of production facilities — from approximately 420 in 1998 to 120 today – with the resultant loss of thousands of manufacturing jobs and thousands more jobs lost in other sectors of the industry, including component suppliers, home installers, home transporters, retailers, manufactured housing communities, and finance and insurance providers.

In large measure, the unavailability of private purchase-money financing that has fueled this unprecedented decline, is due to policy decisions implemented earlier this decade by the GSEs which effectively discriminate against HUD Code manufactured homes and manufactured housing consumers. As a consequence of these policies, manufactured housing obligations — which had long been a minimal component of the GSEs’ portfolios notwithstanding sustained growth in the broader housing economy — have now been drastically reduced to less than one percent of the total business portfolios of both GSEs. This has not only constricted the availability of liquidity necessary to support an economically viable level of private financing for manufactured home purchases, but is also relevant to the GSEs’ failure to meet affordable housing goals in prior years, as documented by FHFA.

Discrimination by the GSEs against manufactured housing and manufactured housing consumers is also inconsistent with federal housing policy as expressed by Congress in the Manufactured Housing Improvement Act of 2000. That legislation provides, in relevant part, that one of its primary goals is to “facilitate the availability of affordable manufactured homes and to increase home ownership for all Americans.” (See, 42 U.S.C. 5401(b)(2)). The promise of affordable manufactured housing for American families, however, means little if the private financing necessary to purchase a HUD Code home is either unavailable, or its availability is severely and unreasonably restricted.

Consequently, while MHARR acknowledges the challenging market conditions and related factors cited by FHFA in support of the proposed 2010-201 1 goals, the difficulties facing the entire housing market and the broader economy make proper GSE support for affordable housing even more important. With historically high foreclosure rates, significant unemployment and reductions in family income, more Americans, not fewer, will need and will be seeking home-ownership and housing opportunities — such as those provided by manufactured housing — that are inherently affordable. The GSEs were formed to — and statutorily charged with — providing such liquidity. That mission, in the current economic climate, is more important than ever.

More importantly, going forward, it is essential that FHFA distinguish between the broader affordable goals addressed by this proposed rule and the specific congressional DTS mandate. Under that provision, Congress, recognizing that the GSEs were not properly serving and not fulfilling their mission to HUD Code manufactured housing consumers, directed the GSEs to “develop loan products and flexible underwriting guidelines to facilitate a secondary market for mortgages on manufactured homes for very low-, low-, and moderate-income families.” (Emphasis added).

DTS thus represents a finding and declaration by Congress — independent of the broader affordable housing goals addressed by the present proposed rule — that the GSEs have not and are not doing enough to serve the manufactured housing market, as well as a remedy, directing the GSEs to do more. Given this specific congressional mandate and directive, any final DTS rule should go beyond the general Enterprise Affordable Housing Goals in mandating and evaluating the participation of the GSEs in the manufactured housing finance market. MHARR has previously documented its view regarding the substance of an appropriate DTS program in comments filed in 2009 pursuant to an FHFA Advance Notice of Proposed Rulemaking specifically regarding DTS. MHARR, accordingly, urges FHFA to act expeditiously to develop and publish a proposed regulation to implement DTS that will expand the role of the GSEs in providing necessary liquidity to support private financing for HUD Code manufactured housing purchases. This will assist the GSEs in meeting broader Enterprise Affordable Housing Goals, provide much needed relief for consumers who cannot currently obtain private financing, and help turn the industry (and the hundreds of thousands of Americans it employs) toward economic recovery.

We hope that these comments are helpful for purposes of the present docket and will help lead to the proper and expeditious implementation of separate DTS regulations.

Mark Weiss
Senior Vice President
Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Avenue, N. W.
Suite 508
Washington, D.C. 20004
(202) 783-4087 (Office)
(703) 509-9489 (Direct)
(202) 783-4075 (Fax) (Email)
cc: Mr. Danny Ghorbani, MHARR