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MISSION OF MHI
The Manufactured Housing Institute (MHI) is the only national trade association representing the interests of manufacturers, land-lease community owners and operators, lenders and financial service providers, home retailers, and suppliers. MHI serves by being an effective advocate for its members and the industry before the U.S. Congress, federal regulatory agencies, the media, and the general public.
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2010 LEGISLATIVE AND REGULATORY HIGHLIGHTS AND PRIORITIES:
The Top Ten Member Benefits
Boehlert Departing MHI, Search Underway for New Head of Government Affairs
Effective next month, Senior Vice President of Government Affairs Jason Boehlert will be departing MHI to begin a new position as Executive Director of the National Association of Local Housing Finance Agencies (NALHFA) and National Association for County Community and Economic Development (NACCED). Boehlert moves on after more than four years at the helm of MHI's government affairs department. During this time, he helped oversee legislative and regulatory activities to:
provide industry relief from the Dodd-Frank Act and CFPB rules regulating mortgage markets in the wake of the housing crash;
develop legislation reforming Fannie Mae and Freddie Mac that, for the first time, would ensure manufactured home personal property loans had access to the secondary market and push for the regulatory implementation of Duty to Serve requirements for manufactured housing;
enact legislative provisions that mandated HUD hiring of the first full-time Manufactured Home Program Administrator in roughly a decade;
extend critical tax credit programs for builders of energy efficient manufactured and modular housing, and
prevent dual enforcement of construction and energy efficiency standards by DOE and HUD over manufactured housing.
MHI has already begun the search for a full-time replacement. In the meantime, MHI is well represented in its legislative and regulatory activities by its internal and external lobbying team of:
Dick Jennison, President and CEO
Lois Starkey, Vice President, Regulatory Affairs
Rick Robinson, Vice President and General Counsel, Government Affairs
Porterfield, Lowenthal, Fettig & Sears which serves as MHI's external lobbying firm
MHI CFPB and Financial Services Updates
CFPB Updates Mortgage Rules for Small Entities
The CFPB updated its Small Entity Compliance Guides for the Ability-to-Repay and Qualified Mortgage Rule and the RESPA and TILA Mortgage Servicing Rules. The adjustments include two changes that will help certain nonprofit organizations continue to provide mortgage credit and servicing to underserved populations. Other changes lay out limited circumstances where lenders that exceed the points and fees cap can pay a refund of the excess amount plus interest to consumers and still have the loan be considered a Qualified Mortgage. These updates incorporate adjustments that became effective on November 2, 2014. To view the guide,click here.
FHA Refinance of Borrowers in Negative Equity Positions: Program Extension
On November 16th, the Department of Housing and Urban Development (HUD) published Mortgagee Letter (ML) 2014-23, FHA Refinance of Borrowers in Negative Equity Positions (Short Refi): Program Extension, which extends the expiration date of the program through December 31, 2016, and reiterates the permitted use of proceeds from government entities and instrumentalities of government to extinguish a portion of a borrower's negative equity. FHA's Short Refi program supports refinances for borrowers who owe more than the current value of their home. For more information, click here.
HUD Reaffirms Administration Stance on Fannie Freddie Overhaul
On November 17th, HUD Secretary Julian Castro said that overhauling the mortgage finance system remains a top priority for the final two years of the Obama administration. Castro suggested that the next Congress consider legislation that would wind down and eventually eliminate mortgage giants Fannie Mae and Freddie Mac as part of the effort to boost the housing market's recovery. Earlier this year, the Senate Banking Committee approved legislation (S. 1217) that would have replaced Fannie Mae and Freddie Mac with a new Federal Mortgage Insurance Corporation (FMIC). The legislation contained provisions supported by MHI requiring FMIC to provide secondary market access to manufactured home loans secured by personal property. With Republicans assuming majority control of the Senate for the 114th Congress, it is expected the Senate Banking Committee, under the chairmanship of Sen. Richard Shelby (R-AL), will take a different approach to reforming the nation's secondary housing finance system.
The HUD MHCC will Meet for the First Time in Two Years
The HUD Manufactured Housing Consensus Committee (MHCC) is slated to meet December 2-4 in Arlington, Virginia. It will be the first in-person meeting since October 2012 and the MHCC is expected to meet for a full three days rather than the 2 1/2 in previous years. MHI and its eight member representatives will participate during the meeting. MHIplans to provide public comments on the business before the committee, and will make a number of recommendations to HUD and the MHCC, including the following:
A recommendation to changes in the HUD regulations to further clarify that RV/Park Models are not manufactured homes and should not be regulated as such.
A recommendation that the MHCC thoroughly and seriously review the consensus recommendations of the DOE ASRAC Working Group on Manufactured Housing to ensure that the energy efficiency standards proposed take into consideration the affordability of manufactured homes to consumers.
A recommendation that DOE utilize HUD's framework under the HUD Procedural and Enforcement regulations for compliance and enforcement of any new energy efficiency standards.
A recommendation that HUD reverse or substantially modify its current policy requiring costly, time consuming and unnecessary alternative construction approvals for attached garages, including retroactive Subpart I investigation and correction of homes previously sold with attached garages.
Greater flexibility for HUD Code homes to be utilized for certain multifamily purposes such as offices for retailers, certain types of farmworker housing and housing used by workers in the oil and gas industries.
Several proposed changes and updates to the HUD Code and procedural and enforcement regulations which will provide for more flexible, less costly, and more innovative design and construction methodologies.
The MHCC has a new Administering Organization, Home Innovations Research Labs, formerly known as the NAHB (National Association of Homebuilders Research) foundation. Home Innovations was the sole bidder for the HUD RFP issued last year. The Systems Building Research Alliance (SBRA) submitted a bid but withdrew because of prohibitive costs associated becoming a certified organization by the American National Standards Institute (ANSI), as required by the Manufactured Home Improvement Act of 2000.
Manufactured Housing Fire Safety Report Reveals Good News
The National Fire Protection Association (NFPA) has updated its 2011 report on manufactured home fires, and the news continues to be positive.
According to the report, manufactured homes had a 2007-2011 fire death rate per 100,000 units that that was roughly the same as the rate for other one-or-two single family homes. Manufactured homes built after the introduction of the HUD Code in 1976 have lower rates of civilian deaths per hundred reported deaths than pre HUD-Code homes. The 2007-2011 death rate was 57% lower than for post standard homes for pre-standard manufactured homes.
According to the report "If all pre-HUD standard manufactured homes were removed from the inventory, the fire death rate per 100,000 occupied manufactured homes would be estimated at 1.9, or well below the range estimated for the rate for other one- or two-family homes."
The report found a disturbingly high rate of smoke alarm removal by occupants of manufactured homes. Smoke alarms reportedly are missing in half (51%) of all manufactured home fires where smoke alarm status was reported. Smoke alarms are required by the HUD Code.
Click here to view the 2013 NFPA report.
Government and Political News from Around the Nation
All 50 States - For state-by-state budget reviews, click herefor the analysis by MultiState Associates.
Alaska - Bill Walker (I) unveiled a bipartisan transition team to help him hit the ground running, before he declared election victory. Click here to read more.
Indiana - The state Supreme Court unanimously decided Indiana's Right to Work law is constitutional, overturning a lower court's finding. Unions are considering taking their case to the U.S. Supreme Court. Passed in 2012, the bill bars unions from forcing nonmembers to pay dues. Click here to read more.
Kansas - New fiscal estimates reveal that Kansas will collect $1 billion less in revenue over the next two years than previously projected by state budget officials. Click here to read more.
Maryland - According to newly released budget figures, Gov.-elect Larry Hogan (R) will inherit a $600 million budget deficit when he takes the oath in January. Hogan said the deficit was not a surprise and he intends to honor campaign pledges and cut spending rather than raise taxes to meet the fiscal challenge. Click here to read more.
New Mexico - State Rep. Don Tripp (R) was selected to be the Speaker of the House when the 2015 session convenes in January. Tripp will be the first Republican to hold the position since 1954. Click here to read more.
Pennsylvania - Senate Republicans ousted Majority Leader Dominic Pileggi (R) and replaced him with the more conservative Sen. Jake Corman (R) for the upper chamber's top job. Upon his selection, Corman threw down the gauntlet and said that the natural gas extraction tax supported by Gov.-elect Tom Wolf (D) is dead on arrival in the Senate. Click here to read more.
Virginia - The House and Senate convened in a special session to pass legislation requested by state bond officials fixing a potential problem in the budget bill passed in September. Lawmakers also adopted a measure allowing health insurance companies to renew non-ACA compliant health plans. Click here to read more.
Wisconsin - Gov. Scott Walker (R) wants to speed up the budget approval process next session, but legislative leaders are pushing back by pointing to the numerous steps involved in getting a budget enacted. Lawmakers sent the two-year budget in 2013 to the Governor on June 21st of that year, and say they will aim to get the next budget on his desk "in June." Click here to read more.
All 50 States - Bill prefiling deadlines have been added to MultiState's 2015 Legislative Session Deadlines chart. The chart also contains bill introduction and crossover deadlines, as well as session start and end dates. Click here to read more.
Top National News
The Federal Housing Administration (FHA) has notified Capitol Hill lawmakers that it has shored up its finances and will not need to go to the American taxpayers for additional assistance. According to housing officials, the agency had nearly $40 billion on hand as of the end of the third quarter, including $4.8 billion in cash reserves. However, it is not completely out of jeopardy. By law, the FHA is required to maintain a cash cushion equivalent to 2 percent of all the loans backed by the agency. The $4.8 billion cushion announced Monday to Congress equals only 0.41 percent. The FHA has not reached the required 2 percent level since 2009, and a recent audit projects that it will not hit that target until 2016.
From "FHA Is Back in the Black — But Not Out of the Woods"
Washington Post (11/18/14) P. A15 ElBoghdady, Dina
HUD Secretary Says Housing Finance Reform Remains a Top Priority for the Obama Administration
In a Nov. 17th interview with Bloomberg Television, HUD Secretary Julian Castro said the Obama administration will continue to work for the remainder of its term on a revamp of the U.S. mortgage finance system. "Introducing more private capital into the market and taking the taxpayers off the hook if we ever do experience what we just went through as part of the housing crisis in 2007, 2008, 2009, that is a priority [for] this administration and for HUD," he declared. Castro recommended that the next Congress consider legislation to phase out Fannie Mae and Freddie Mac. Although two Senate bills won committee approval in the spring, little more has been done on this front since then. "This could be, I believe, a good victory either in the lame-duck session or, more realistically, perhaps in the next term of Congress where there is bipartisan support for housing finance reform, for doing away with Fannie and Freddie as we've known them, creating a backstop," the HUD official stated.
From "HUD Secretary Says Housing Finance Reform Remains a Top Priority for the Obama Administration"
The Hill (11/17/14) Needham, Vicki
Home Affordability Fell Slightly in the Third Quarter
The median U.S. home price jumped to $221,000 in the third quarter, which the National Association of Home Builders said drove housing affordability down a bit. Based on the NAHB/Wells Fargo Housing Opportunity Index, 61.8 percent of new and resale properties were within financial reach of households earning the national median income of $63,900. The reading is down from 62.6 percent for the second quarter, but NAHB chief economist David Crowe projects that affordability will improve again in 2015 as a result of increased employment and wages, continued favorable interest rates, and built-up demand. The most affordable major housing market for the third quarter was Youngstown-Warren-Boardman, OH-PA, which was joined by Syracuse, NY; Indianapolis-Carmel, IN; Harrisburg-Carlisle, PA; and Dayton, OH. The least affordable major housing markets in the nation, led by San Francisco-San Mateo-Redwood City, were clustered in California, with New York-White Plains-Wayne, NY-NJ, rounding out the top five.
From "Home Affordability Fell Slightly in the Third Quarter"
The Hill (11/13/14) Needham, Vicki
Housing, Construction Advocates Score in Midterms
Pro-housing groups such as the National Association of Realtors and the National Association of Home Builders counted many victories in the recent mid-term elections. Eleven of 13 U.S. House and Senate candidates backed by NAR won their races, and 77 percent of the so-called Realtor Party's candidates were successful in local and state contests. NAR made more than $10 million in independent expenditures in this election cycle -- mostly in support of Republican incumbents -- up from $3.6 million in 2012. Continued home buyer access to the mortgage interest deduction and to FHA-backed mortgages are key issues for the organization. At this time, NAR also opposes a shutdown of Fannie Mae and Freddie Mac. NAHB -- which forked out more than $2.4 million to support 371 candidates running for the House and Senate -- sees housing finance reform, credit availability, construction labor shortage and regulatory policies as hot-button issues.
From "Housing, Construction Advocates Score in Midterms"
Construction Dive (11/10/14) O'Malley, Sharon
Champion Homes produced the 40 or so modular units that were stacked together to create Comfort Cove Senior Care in Bradenton, FL, which is in the finishing stages. The project is hailed by developer BSV Holdings as the first facility of its kind in the nation and a potential model for quickly meeting the needs of a graying population. The estimated start-to-finish time for Comfort Cove is about seven months, at least two months ahead of the timetable for a comparable stick-built facility. "If you need a project built in a timely fashion, why wouldn't you use modular?" asks BSV Chairman Brent Crego, who expects the 28-bed elder care home to be completely full by the middle of next year. He notes that the company's approach will prove popular due not only to the abbreviated construction schedule but also the build quality and the ability to re-scale the size of the project as needed. BSV has plans to build more than a dozen modular senior care facilities across Florida. It will own and operate the properties but also will offer a "turnkey" version for sale to other investors.
From "Modular Bradenton Senior Care Facility Could Be Model for Industry in U.S."
Bradenton Herald (FL) (11/15/14) Johnson, Matt M.
Manufactured Housing Donations Kickstart Hall Debt Elimination Effort
With Clayton Homes President and CEO Kevin Clayton leading the charge, manufactured housing industry insiders are digging into their own pockets in an effort to help the RV/MH Hall of Fame eliminate $2.4 million in debt. In a nod to Clayton's annual commitment of $40,000 for five years, the fundraising campaign is flying under the banner of the Kevin Clayton Debt Elimination Program. Other big contributors so far include Cavco Industries' Joe Stegmayer and Gary McDaniel of YES! Communities. "We want to encourage other people in manufactured housing to step up and add their support to the debt elimination plan," said Hall of Fame President Darryl Searer. Once the Hall of Fame has wiped out its debt, it can break ground on a planned 5,000-square-foot manufactured housing museum just east of the facility, similar to the existing recreational vehicle museum already contained within the building.
From "Manufactured Housing Donations Kickstart Hall Debt Elimination Effort"
Elkhart Truth Online (11/10/14) Parrott, Jeff
3 Phoenix Businesses Make 'Forbes' Best Small Companies List
Cavco Industries, a maker of factory-built homes, was included in Forbes magazine's recent compilation of "America's Best Small Companies 2014." The Phoenix-based company ranked high on the list, coming in at No. 13. It earned $539 million for the 12 months ended Oct. 1 and has increased its earnings per share by 88 percent over the last five years.
From "3 Phoenix Businesses Make 'Forbes' Best Small Companies List"
Phoenix Business Journal (11/10/14) Brown, Brandon
Carefree Communities Becomes the Nation's Fifth Largest Manufactured Home and RV Community Owner With Acquisition of Vedder Communities in California
Carefree Communities Inc. is now the fifth-biggest owner of manufactured home and RV parks in the country, as a result of its recent purchase of Vedder Communities. The addition of Vedder's 18 properties with 4,530 home sites in California increases Carefree's holdings to 101 communities and more than 27,000 sites across North America. "The Vedder portfolio is widely considered to be the best privately owned manufactured home community portfolio in California and one of the best in the country," said David Napp, CEO of Scottsdale, Ariz.-based Carefree. "This is an important strategic acquisition for Carefree, as we look to continue to grow our company in highly sought after retirement and vacation destinations in coastal markets." Three of the Vedder assets have earned Community of the Year recognition from the Manufactured Housing Institute.
From "Carefree Communities Becomes the Nation's Fifth Largest Manufactured Home and RV Community Owner With Acquisition of Vedder Communities in California"
IT Business Net (11/10/14)
Oil and Gas Industry Helps Drive Increasing Housing Demands
Wisdom Homes of America is stepping up to meet the growing demand for housing in Tyler, Texas, whose population expands by more than 3,000 residents annually. The city has benefited from the booming oil and gas industry, which has prompted many workers to relocate to the area with their employers. While man-camps have popped up previously as a solution for the high housing demand, Wisdom Homes is offering an alternative. Its latest project involves 15 homes on a 12-acre lot in Tyler -- the latest development under its plan to bring 200 houses to East Texas by next year. According to Wisdom Homes President Brent Nelms, the company's homes are about 1,200 to 2,600 square feet in size and run between $40,000 and $100,000 in price.
From "Oil and Gas Industry Helps Drive Increasing Housing Demands"
KETK NBC (Texas) (11/03/14) Chapman, Kristen
Cavco Industries (CVCO) Announces Quarterly Earnings Results, Meets Expectations
Manufactured home builder Cavco Industries posted its latest quarterly financial results, which met or exceeded consensus estimates. With $139.30 million in revenue for the three months, the company outperformed projections of $136.40 million. It also reported quarterly earnings per share (EPS) of $0.61, topping EPS of $0.50 a year earlier and matching the current estimate.
From "Cavco Industries (CVCO) Announces Quarterly Earnings Results, Meets Expectations"
WKRB-TV (10/30/14) Barnet, Seth
Equity LifeStyle Beats Analysts Estimates
Equity LifeStyle Properties, an owner of manufactured home communities, posted better-than-anticipated financial results for its third quarter. The Chicago firm reported $63.1 million, or 69 cents a share, in funds from operations, topping analysts' expectations of 66 cents per share.
From "Equity LifeStyle Beats Analysts Estimates"
Chicago Business (10/21/2014)
California Investor Buys Tulsa-Area Manufactured Home Community
California-based Park Street Partners has acquired its third manufactured home community in Oklahoma. Founding partner Jefferson Lilly said Park Street will change the name of the property to Tulsa Estates and fill its vacant pads with about 20 newer homes. "Our goal is to help deserving families get out of the game of paying rent forever in apartments, and into affordable housing they’ll actually own,” he remarked, noting that a three-bedroom manufactured home in Tulsa Estates will rent-to-own for just $600 per month compared to $844 per month for a typical three-bedroom apartment locally. Park Street Partners, a private equity firm, already owns Noble Estates in Slaughterville and Tuttle Estates in Tuttle, and it also has a fourth property under contract.
From "California Investor Buys Tulsa-Area Manufactured Home Community"
In September 2014, 5,874 new manufactured homes were shipped, an increase of 8.1 percent from September 2013. The trend varied by housing type, with shipments of single-section homes down by 0.2 percent compared with the same month last year, and shipments of multi-section homes up 16.4 percent. A total of 9,122 floors were shipped, an increase of 10.9 percent over September 2013.
Compared with the prior year, 2014 has recorded shipment increases in every month. For the first nine months, shipments totaled 48,159 homes compared with 45,189 homes in 2013, a net increase of 6.6 percent.
The seasonally adjusted annual rate (SAAR) of shipments was 65,830 in September 2014, up 7.3 percent from the adjusted rate of 61,373 in August 2014. The SAAR corrects for normal seasonal variations and projects annual shipments based on the current monthly total.
The number of plants reporting production in September 2014 was 123 and the number of active corporations was 46, both unchanged from the numbers in August 2014.
2014 Election Recap and Financial Services Outlook for the 114th Congress
by Lendell Porterfield, CEO, Porterfield, Lowenthal, Fettig & Sears, LLC
Note about the Author: Lendell Porterfield is CEO of Porterfield, Lowenthal, Fettig and Sears LLC, which serves as MHI's external lobbying firm. He previously served as Senator Shelby's Banking Committee adviser from 1995 - 2001. He was the lead Republican Committee staffer on the Manufactured Housing Improvement Act of 2000.
The Midterm elections confirmed what pollsters have been telling us for months: a negative political environment for Democrats, coupled with economic and national security concerns, translated to historic gains for Republicans and devastating losses for Democrats in both the Senate and the House. With Louisiana headed to a runoff, Republicans have won the majority for the 114th Congress. This means Republicans will drive the Senate agenda for the next two years and, given the results, will be emboldened to move legislation and force President Obama to sign or veto legislation. As a general theme, we expect the Republican House and Senate to push back hard against what many perceive as President Obama's overly aggressive and burdensome regulatory agenda. An overview of the election results include:
Topline Takeaway: Republicans have taken control of the Senate and strengthened control of the House. By controlling both chambers for the first time since 2005-2006, Republicans will be better positioned to push back on regulatory initiatives as well as pass somesubstantive Dodd-Frank changes. We expect more oversight and investigative hearings into industry activities and agency actions.
Republicans Take Senate Majority: Senate Republicans gained at least eight Senate seats, two more than needed to win the majority. Louisiana will go to a runoff December 6th. Virginia and Alaska may endure recounts. Republicans exceeded most everyone's expectations. It was a wave.
Republicans Maintain House Majority: At the moment, it appears Republicans gained a net of 14 seats and counting to maintain the House majority with 246 seats, its largest majority since World War II.
Lame Duck: Expected action: CR, TRIA reauthorization, insurance capital standards, tax extenders, Defense Authorization Act and judicial nominations.
click here to read more
MHI Leadership Yields Positive Results for Industry in Energy Efficiency Standards
Concluding a three month, intensive negotiation process, the Department of Energy (DOE) ASRAC (Appliance Standard Rulemaking Advisory Council) Working Group on Manufactured Housing successfully reached a consensus recommendation for updated energy efficiency standards for manufactured housing. In an almost unanimous (20-to-1) vote, the working group developed a recommendation to meet a mandate outlined in the 2007 Energy Independence and Security Act (EISA) for DOE to establish energy efficiency standards for manufactured housing based on the most recent version of the International Energy Conservation Code (IECC).
DOE undertook a consensus approach to develop standards after an unsuccessful attempt to publish its own proposed rule that was strongly opposed by MHI as being too costly, technically deficient and lacking industry input. DOE was further motivated to take action when Congressional Appropriators passed a directive, supported by MHI, that DOE consult with HUD, the MHCC and the industry in setting new energy standards for manufactured housing. Lastly, several energy conservation groups were threatening DOE with a lawsuit if it did not take action to propose a rule.
Throughout the negotiations, MHI members serving on the committee tenaciously argued for an approach that equitably balanced reduced energy costs against added first cost. Industry representatives made a strong case for basing economic decisions on the perspective of buyers with an average ownership term of ten years, rather than a thirty-year life cycle; the latter approach would have resulted in greater efficiency but at a much higher home cost.
Additionally, MHI with technical support from the Systems Building Research Alliance (SBRA), successfully argued for maintaining three climate zones as opposed to the seven in the IECC (the 2015 IECC was the starting point for negotiations). Further, the zones proposed are divided mainly along state lines as opposed to the county boundaries used in the IECC-manufacturers often do not have specific site information prior to home construction.
When negotiations on the rulemaking began in August, it became evident that the representative from the Manufactured Housing Association for Regulatory Reform (MHARR) would not provide any substantive feedback, opposed the law and, while present at the meetings, would not actively participate in consensus negotiations. While they criticized data provided by MHI, MHARR was repeatedly asked by DOE and ASRAC participants to provide cost data, but failed to provide anything other than anecdotal and unsubstantiated information.
It is critical to note that had MHI not worked collaboratively with regulators and energy advocates to reach a consensus, DOE would have been obligated to promulgate a standard that would have had a dramatic cost impact without regard to industry or consumer concerns. MHI's ability to productively contribute to the process meant that it was able to most effectively ameliorate the impact of a potentially debilitating rulemaking.
MHI members and SBRA staff developed data, conducted analysis and promoted outcomes that would be most beneficial to the overall industry and homebuyers. The final result is recommendations that are reasoned, substantiated, fair, equitable and forward looking.
Another positive outcome is an offer by DOE to work with industry to develop software that facilitates the process of designing new homes and checking for code compliance (similar to ResCheck software used by many modular and site builders). The software would combine in a single application a range of functionality formerly available only from separate procedures and methods.
While the new proposed energy efficiency standards will increase first costs, consumers will realize significant energy cost savings. The impact will be lower monthly net costs and improved affordability, a win-win for our homebuyers and the environment. Increased construction costs will vary by region, manufacturer and home design.
The Working Group's recommendation will be presented to the Secretary of Energy who will very likely endorse it as proposed. The recommendations will then be developed into a proposed rule which will go to the White House Office of Management and Budget for a 90-day review. The proposed rule will then be published in the Federal Register in early 2015 and be subject to public comment. It is anticipated that a final rule will not go into effect until 2016.
A key next step is for DOE to develop a process for enforcement and monitoring. In order to prevent duplicative enforcement mechanisms, MHI will be urging the agency to utilize the existing HUD inspection and enforcement framework.
Highlights of the Working Group's recommendations are below. Note, these recommendations must still be approved by DOE, OMB and are subject to public comment.
Two compliance options, prescriptive or performance
Three new thermal zones, closer to the current HUD zones than the IECC zones
Minimum window U-values and SHGC values
Lower U-values (higher thermal requirements) which are different for single-section and multi-sections.
Duct tightness testing required on each house
No blower door tests, visual inspections allowed.
All penetrations are to be sealed (windows, doors, walls, floor and ceiling)
MHI CFPB and Financial Services Updates
November 18th: CFPB and Fed to Host TILA-RESPA Disclosure
On November 18th, the CFPB and the Federal Reserve will
co-host the fourth in a series of FREE webinars on the TILA-RESPA integrated mortgage loan disclosures rule. The webinar will focus on how to complete the new closing disclosure form. Click here to register.
Click here to read more MHI CFPB and Financial Services Updates.
Government and Political News from Around the Nation
All 50 States - For state-by-state budget reviews, click hereto view the analysis by MultiState Associates.
Alabama - House Speaker Mike Hubbard (R) faces up to 20 years in jail after being indicted on 23 felony corruption charges. Prosecutors allege Hubbard solicited gifts from lobbyists and used his office for personal gain. Hubbard claims innocence and says he is the victim of a political witch hunt. Click here to read more.
Colorado - Gov. John Hickenlooper (D) unveiled his 2015 budget proposal. The $26.8 billion budget increases current spending levels 7 percent. Click here to read more.
North Carolina - Gov. Pat McCrory (R) is reassessing his position on an expanded Medicaid program. Former Speaker and current U.S. Senate candidate Thom Tillis (R) agrees that lawmakers should take the issue up in 2015, but Senate President Phil Berger (R) remains staunchly opposed. Click here to read more.
Pennsylvania - The House and Senate both wrapped up work for the year. Both chambers reconvene on Nov. 12th to organize for 2015. Click here to read more.
South Carolina - Currently suspended House Speaker Bobby Harrell (R) is expected to plead guilty to corruption charges and resign from the House. Harrell served 21 years in the House. Click here to read more.
All 50 States - Bill prefiling deadlines have been added to MultiState's 2015 Legislative Session Deadlines chart. The chart also contains bill introduction and crossover deadlines, as well as session start and end dates. Click here to read more. ##
Based on current results, the GOP will hold at a minimum (with three races still to be officially called) a 52-seat majority in the Senate when the 114th Congress is seated in January 2015. The majority could grow over the coming weeks. Alaska Republican Dan Sullivan leads incumbent Democrat Mark Begich. Current Louisiana Senator Mary Landrieu will face a runoff in December against Republican challenger Bill Cassidy-both failed to secure a 50 percent majority in the primary. In addition, Virginia Senate incumbent Mark Warner (D) holds a slim, yet steady margin, over former Republican National Committee head Ed Gillespie. In January, Republicans may actually hold a 54-seat majority in the Senate.
The GOP successfully picked up Senate seats, currently held by Democrats, in Arkansas, Colorado, Iowa, Montana, North Carolina, South Dakota and West Virginia. They also retained seats in Georgia, Kansas and Kentucky.
In the House of Representatives, as predicted, Republicans solidified their position by adding 12 seats to their current majority, so far. The makeup of the chamber will stand at 243-180, with a dozen races still to be officially declared.
It is anticipated that Senator Richard Shelby (R-AL) will assert his seniority and move into the Chairmanship of the Banking Committee, next year. Senator Sherrod Brown (D-OH) is expected to assume the Ranking Minority Member position.
Shelby is expected to target the Consumer Financial Protection Bureau (CFPB) for reforms, but it is unrealistic to expect that any measure that entirely repeals the Dodd-Frank Act will move. However, many are predicting Congress will enact targeted regulatory relief provisions. In addition, Shelby has historically been critical of large banks and has worked, in the past, with Democrats to shrink bank sizes and limit their operations.
Longtime industry supporter Senator Thad Cochran (R-MS) is expected to become Chairman of the Senate Appropriations Committee. Cochran has supported past industry efforts to install a dedicated administrator for the manufactured housing program at HUD and ensure that DOE consulted with industry in establishing energy efficiency standards for manufactured housing.
On the House side, Rep. Jeb Hensarling (R-TX) is expected to remain as Chairman of the Financial Services Committee. However, there will be jockeying among Republicans for Subcommittee Chairmanships. In particular, with Rep. Shelley Moore Capito (R-WV) winning election to the Senate there will be a vacancy atop the Financial Institutions Subcommittee-which has jurisdiction over CFPB issues.
Congress is set to return to Washington, DC on November 12 for a lame-duck session. However, many expect that it will be an abbreviated session and only long enough to allow Congress to consider the fiscal year 2015 spending bills and tax extenders. Republicans may choose to bide their time, and new majority firepower, until next year when it is expected a number of key Obama administration policy victories will be reopened to Republican legislative scrutiny including Dodd-Frank and Affordable Care Acts.
MHI is urging Congress to move key industry policy priorities during the lame-duck session. Industry stakeholders are asked to contact their Members of Congress on the following issues:
New Energy Efficient Home Credit (IRC 45L) - Click here to take action.
Preserving Access to Manufactured Housing Act (H.R. 1779/S.1828) - Click here to take action. ##
Bureau's findings show potentially significant loss of credit available to consumers and disparate impact of regulations on manufactured housing over site-built counterparts
Washington, DC-On September 30, the Consumer Financial Protection Bureau (CFPB) released its report Manufactured-housing consumer finance in the United States to provide "a comprehensive understanding of manufactured housing and its financing." The report highlights differences in costs and financing available between the site-built and manufactured housing markets, as well as information on the current regulatory environment for manufactured housing, consumer composition and other economic dynamics.
The Manufactured Housing Institute (MHI) is pleased the CFPB's report underscores the valuable role manufactured homes play as a key form of affordable housing, particularly in rural and underserved communities. More importantly, the CFPB has finally acknowledged that the Dodd-Frank Act mortgage lending rules have had a disparate impact on manufactured housing compared to the larger site-built housing market. The report specifically states:
The Bureau has recognized that certain provisions of the Dodd-Frank Act the Bureau implemented through rules that took effect in January, 2014, may affect the market for smaller-size mortgages and, more specifically, the manufactured housing segment of the market, in ways that differ from the rules' effect on other market segments. (1)
CFPB Loan Originator Compensation rules and the Home Ownership and Equity Protection Act (HOEPA) High-Cost Mortgage (HCM) triggers are reducing the amount of credit available to consumers seeking to purchase affordable manufactured housing. The rules are serving to eliminate access to credit and denying many worthy low- and moderate-income families from the chance to purchase an affordable manufactured home.
The smaller size of manufactured home loans, absence of GSE support, lack of lenders offering manufactured home loans, and affordable nature of manufactured homes will cause many manufactured home loans to be unfairly classified as High-Cost under CFPB rules. Because of these factors, CFPB's own findings indicate that HOEPA's High-Cost thresholds disproportionately impact manufactured home loans. According to the CFPB, of the loans made in 2012 with rates that that exceed the regulation's APR limits, more than 94 percent were loans on manufactured homes. (2)
Additionally, we agree with the Bureau's assessment that consumers might not be fully aware of financing options, and other relevant information, that would be critical to their housing choice. We believe this potentially stems from the lack of clarity in the CFPB Loan Originator rules which prevents manufactured home retailers from providing consumers with essential information relative to making informed housing choices. Retailers and their sales staff receive no compensation from lenders for loan origination activity - compensation only comes from the sale of the home. It is essential that manufactured home retailers remain able to provide information on the forms of financing available to consumers, so that prospective homebuyers are able to make the most informed choice possible.
MHI Chairman Nathan Smith stated "CFPB's own analysis of manufactured home lending shows that nearly 20 percent (one out of five) of all manufactured home-purchase loans made in 2012 - and potentially more - would have been classified as High-Cost under the current rules. (3) What the CFPB fails to make clear to consumers in this report is that due to their onerous levels of liability, lenders have already ceased to offer any mortgages that could potentially be considered High-Cost and many worthy buyers will be denied the credit needed to purchase a home. For example, most manufactured home lenders have ceased to offer any loan under $25,000 regardless of the consumer's credit worthiness."
"In this regulatory environment, low- and moderate-income families are being denied the chance and information needed to own affordable manufactured housing. Preserving access to responsible credit must also be seen as a key consumer protection and the CFPB should be working to increase affordable housing options in this market, not eliminate them," added Smith.
Manufactured home mortgages, including those secured by personal property (aka, chattel), played no role in the housing market collapse and do not possess any of the characteristics of those that caused the housing downturn. Manufactured home lenders comply with all federal and state mortgage lending and consumer protection laws.
"Despite their own recognition of the impact rules are having on consumer access to manufactured housing, the CFPB is choosing to continue its study of the market and the regulatory impact on it. We are concerned that any further delays by the Bureau to utilize their considerable ability to provide relief will only serve to further erode the already limited financing options that exist for manufactured homeowners. In addition, we welcome the chance to meet with the Bureau to clarify inconsistencies in the report regarding manufactured housing," said Smith (Click here to read Just the Facts: Setting the Record Straight on Manufactured Housing).
MHI urges Congress to pass the Preserving Access to Manufactured Housing Act (H.R. 1779/S. 1828) that would ensure manufactured home loans, by virtue of their small size and higher costs, are not unfairly categorized as High-Cost. This toxic categorization makes High-Cost Mortgages unmarketable and lenders are unwilling to originate them. Consumers are then left without an option to finance a manufactured home, which often serves as the most affordable and readily available housing choice for families in rural and underserved areas. The legislation does not expand or enhance the lending options available prior to the misapplication of HOEPA rules on manufactured housing loans that have led to a reduction in consumer access to credit. The legislation merely ensures the limited financing options that existed in the marketplace are not entirely eliminated, which ultimately harms consumers.
The Manufactured Housing Institute (MHI) is the national trade and industry organization representing all segments of the factory-built housing industry. MHI members include home builders, lenders, home retailers, community owners, suppliers and others affiliated with the industry. MHI's membership includes 50 affiliated state organizations.
(1) Manufactured-housing consumer finance in the United States, Consumer Financial Protection Bureau (CFPB), September 2014, Pg. 7
(2) IBID, Pg. 34
(3) IBID, Pgs. 32-35
Top National News
HUD and the Agriculture Department have announced plans to designate another eight "promise zones" in U.S. urban, rural, and tribal communities. The goal is to foster economic opportunity and employment gains in poverty-stricken areas through grants and tax incentives to promote jobs, education, and housing in targeted communities. President Obama pledged last year to designate 20 such promise zones. There are currently only five.
From "More 'Promise Zones' Coming Soon"
San Antonio Express-News (Texas) (09/19/14) Hagen, Lisa
Homebuilders Grow Bullish
The National Association of Home Builders/Wells Fargo builder sentiment index shows that industry confidence in the market for new, single-family houses has soared in September to the highest level in almost nine years. The more positive outlook reflects growing optimism that sales will gain steam over the next six months, which could stimulate growth in residential construction. The index climbed four points this month to 59, its fourth consecutive monthly increase and the highest reading since 61 in November 2005. Any reading above 50 indicates that more builders view sales conditions as favorable rather than unfavorable. The current optimism is in spite of a steady slowdown in new-home sales this summer. Sales dipped from a seasonally adjusted annual rate of 454,000 in May to a rate of 412,000 in July. At the same time, though, the volume is ahead of the 2013 pace.
From "Homebuilders Grow Bullish"
Associated Press (09/18/14) Veiga, Alex
What HUD Secretary Julian Castro Says Needs to be Done to Boost Homeownership, and Cut Down on Rental Costs
New HUD Secretary Julian Castro has cited increased homeownership for all Americans -- including those with damaged credit -- as one of his main priorities. "It's time to remove the stigma associated with promoting homeownership," he declared in his first public policy speech, Sept. 16 at the Bipartisan Policy Center's housing summit in Washington. Castro also noted that lenders have been reluctant to widen access to credit since the mortgage crisis. "The truth is that the dream of homeownership is out of reach for too many Americans," he said, and pledged to work to preserve existing affordable housing. He also said he would strive to alleviate the affordability crunch in the rental sector. Castro additionally used his speech to show support for stalled legislation from Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho) that would overhaul the nation's housing-finance system. The bill would dedicate billions of dollars every year to producing affordable housing, according to Castro.
From "What HUD Secretary Julian Castro Says Needs to be Done to Boost Homeownership, and Cut Down on Rental Costs"
Washington Post (09/16/14) ElBoghdady, Dina
Here's Why Multifamily Growth Rules Housing
Freddie Mac's latest forecast shows that the country's multifamily housing sector is staging a strong rebound as single-family home building struggles to gain traction. Construction of buildings with at least five apartments hit the highest monthly construction pace since early 2006, according to the report. Additionally, all of the growth in net household formation over the last 12 months has come from renters. Researchers say the trend is also evident in the latest HUD and Census Bureau statistics. Almost all of the recent increase in housing permits was due to multifamily unit construction, which soared 24 percent to 382,000. Freddie Mac chief economist Frank Nothaft observes, "The apartment market has been vibrant, reflecting the desire of many Millennials to live in an urban setting and retain locational flexibility." Freddie Mac further notes that the decline in owner-occupancy has been mostly focused among younger households, with the homeownership rate of those 35 years and younger falling from 43.6 percent to 35.9 percent during the last 10 years. Nothaft concludes, "Unfortunately, if Millennials are looking to live in the larger cities, that's where rents are rising the fastest, especially in the West or Northeast regions of the United States, places like Los Angeles and New York City. In the South region, areas like Miami and the Washington-Baltimore metro have seen real rents exceed the U.S. average." In the Midwest, only metro Chicago has topped the national average.
From "Freddie Mac: Here's Why Multifamily Growth Rules Housing"
Housing Wire (09/15/14) Swanson, Brena
An affiliate of Glen Allen, Va.-based Capital Square Realty Advisors is the new owner of three Midwest manufactured housing communities. The acquisition of Timberbrook in Bristol, Ind.; Byrne Hill in Toledo, Ohio; and Woodlake-Sommerdale in Yoder, Ind., includes 1,141 rentable lots in all. "Manufactured housing communities are an attractive investment opportunity, with increasing demand a tight market given barriers to new construction across much of the U.S.," noted Capital Square CEO Louis Rogers. "There are a number of Americans that are either searching for a manufactured vacation home, or are seeking a new housing opportunity as traditional homeownership becomes economically unfeasible for a growing percentage of the population. Today, manufactured housing offers an affordable and high quality alternative." The company's vice president of acquisitions, Yogi Singh, disclosed that the portfolio was purchased in an "off-market deal with a publicly traded REIT" and hinted that similar deals could be in the pipeline.
From "Capital Square Acquires 1,000+ Midwest Units"
GlobeSt.com (09/03/14) Rogal, Brian J.
Prototype Super-Efficient Manufactured Home Built in Bothell
In Bothell, Wash., Puget Sound Energy, Habitat for Humanity Seattle-King-County, and Bonneville Power Administration (BPA) have built a high-performance manufactured home. One of four prototypes in Washington State and Oregon, it features energy-saving technology including a ductless heat pump, heat pump water heater, efficient lighting, triple-glazed windows, and foam sheathing for exterior walls. "Manufactured homes built to this new high-performance spec have durability and performance features that could change opinions about factory-built homes and be an integral part of our super-efficient 21st century utility system," said Christopher Dymond of Northwest Energy Efficiency Alliance (NEEA). BPA, NEEA, regional electric utilities, and other partners are working with a number of Northwest-based manufacturers to demonstrate the advantages of high-performance factory-built homes. Compared to traditional manufactured homes, those constructed to advanced-performance specifications can save as much as 50 percent on heating and cooling expenses. "Beyond more affordable electric bills for the homeowner, the goal is to establish a new minimum building standard for manufactured homes," said Bob Stolarski of Puget Sound Energy. "Which means buyers will get a higher quality, more comfortable and more energy efficient home." There are roughly 500,000 manufactured homes in the Northwest. However, because many were made before current construction standards were implemented, having a more energy-efficient option could help area utilities meet upcoming energy conservation targets.
From "Prototype Super-Efficient Manufactured Home Built in Bothell"
Bothell Reporter (09/05/14) Kehoe, Sarah
W&D Originates First Freddie Mac Manufactured Housing Loan
Freddie Mac's new manufactured housing finance program, just announced in the second quarter, has already pushed through its first loan. Walker & Dunlop originated the $10.5 million loan for Longhaven Estates, a manufactured housing community in Phoenix. The financing was put together on behalf of Oak Brook, Ill.-based Cobblestone Real Estate LLC and Toronto-based Tricon Capital Group. "The fact that Freddie Mac's very first MHC loan was underwritten, rate-locked and funded within the same time-frame [less than 45 days] of a typical multifamily loan displays Freddie Mac's commitment to this program," said W&D senior vice president Will Baker, who headed the team that structured the loan. Freddie Mac multifamily executive John Cannon, meanwhile, said the mortgage financier is targeting manufactured homes because they represent a key solution for affordable housing.
From "W&D Originates First Freddie Mac Manufactured Housing Loan"
GlobeSt.com (08/28/14) Morphy, Erika
Crye Purchases Leahy's, Says Manufactured Housing in Demand
Real estate mogul Harold Crye, who helped to establish the largest property brokerage in Tennessee, has snapped up the Leahy's manufactured home community in Memphis. He paid $290,000 for the 80 lots on 12 acres, a solid investment considering what he says is strong demand for affordable manufactured housing. While local homes and apartments are renting for more than $1,000 per month typically, Crye reports that it costs only about $600 a month to rent a home at Leahy's and about half of that to rent a pad if a tenant has his or her own home. The Crye-Leike Realtors co-founder plans to make improvements to the property.
From "Crye Purchases Leahy's, Says Manufactured Housing in Demand"
Memphis Commercial Appeal (09/05/14) Bailey Jr., Thomas
Contracts: Origen Financial Inc.
Southfield, Mich.-based Origen Financial Inc. has announced that it will dissolve and liquidate after selling its assets. The real estate investment trust, which manages interests in securitized loan portfolios backed by manufactured housing, has already found a buyer for its assets. An affiliate of GoldenTree Asset Management LP in New York City will pay $47 million.
From "Contracts: Origen Financial Inc."
Crain's Detroit Business (09/21/14)
Centerline Capital Group Officially Renamed Hunt Mortgage Group
As part of its acquisition by Hunt Companies Inc. last year, Centerline Capital Group -- which offers real estate mortgage services for affordable and conventional multifamily housing -- has changed its moniker to Hunt Mortgage Group. Hunt provides financing for manufactured housing, student housing, co-ops, and affordable rental homes. "The acquisition of Centerline was extremely beneficial to Hunt as it enabled us to add a national mortgage-banking platform and significantly expand our affordable housing asset management business at the same time," said Hunt Cos. Chairman and CEO Woody Hunt.
From "Centerline Capital Group Officially Renamed Hunt Mortgage Group"
New York Real Estate Journal (09/23/14)
MHI Working with Agency Officials to Open Secondary Market for Personal Property Lending
MHI has been working with officials from the Federal Housing Finance Agency (FHFA) to ensure the inclusion of personal property lending as part of Duty to Serve (DTS) requirements being developed for Fannie Mae and Freddie Mac.
Included in the Housing and Economic Recovery Act of 2008 (HERA; PL 110-289) was statutory language that the Government Sponsored Enterprises (GSEs), including Fannie Mae and Freddie Mac, had a Duty to Serve three historically underserved housing markets: affordable housing, rural housing and manufactured housing. The Duty to Serve provision directed the GSEs to develop programs and secondary market access for manufactured home loans, including those secured by personal property.
In 2010, FHFA released a proposed rule implementing the Duty to Serve requirement that would have excluded manufactured home personal property loans. Then Acting FHFA Director Edward DeMarco, in his role as conservator of Fannie Mae and Freddie Mac, prevented Fannie Mae and Freddie Mac from entering into the personal property loan market. Since that time, the rule has gone unimplemented.
With Mel Watt assuming the position of Director, FHFA is beginning to examine the possibility of requiring Fannie Mae and Freddie Mac to provide secondary market access to manufactured home loans secured by personal property. FHFA is expected to release a proposed rule this year, with regulations to be finalized in 2015.
MHI has provided formal comments and has been meeting with FHFA senior policy staff to discuss practical methods for serving this market.
MHI CFPB and Financial Services Updates
House Passes Privilege Legislation
Before leaving for the August Recess, the House of Representatives passed legislation (H.R. 5062) amending the Consumer Financial Protection Act (CFPA) - which is Title X of the Dodd-Frank Act - to provide protection against waiver of state and federal law privileges for non-depository institutions supervised by the CFPB.
The bill is intended to protect a nonbank that is examined by the CFPB but does not fall under a state banking regulator's jurisdiction from a privilege waiver if the CFPB shares privileged information with the nonbank's state regulator. It received strong support from the American Financial Services Association (AFSA) and provides anti-waiver protection for "the sharing of information" with federal banking regulators, state banking regulators, or state regulators that "license, supervise, or examine the offering of consumer financial products or services."
Government and Political News from Around the Nation
Alaska - Democratic gubernatorial candidate Byron Mallott (D) is dropping his bid for governor and is instead joining forces with Independent candidate Bill Walker (I). Mallott will run as Walker's lieutenant governor as independents against incumbent Gov. Sean Parnell (R). Democrats will not field a gubernatorial candidate this Fall. Click here for more information.
Click here for more government and political news from around the nation.
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