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HUD “Clarification” on Frost-Free IB Offers More Questions and Confusion Than Answers

  • Written by Mark Weiss
MHARRFROM:           MHARR
RE:                 HUD “Clarification” on Frost-Free IB Offers
More Questions And Confusion Than Answers

As a follow-up to the MHARR memorandum sent earlier today regarding finalization of the proposed “frost-free” Interpretive Bulletin (IB), it now appears that the HUD program, after doing nothing during the October 16, 2018 installation conference call (which was conducted by the contractor) to correct the impression created by its contractor – that HUD would not be taking action to finalize that IB – is now trying to backpedal, or leave itself room to adopt the proposed IB at some point in the future.

The supposed HUD program “clarification” (reproduced in full below), however, actually creates more confusion and questions about how the program plans to handle this entire matter both near and long-term, and illustrates the type of regulatory and enforcement uncertainty that is inevitably created when regulatory and pseudo-regulatory functions are unlawfully delegated to contractors.

This incident, moreover, and HUD’s conduct regarding this matter, could indicate that the federal program might be starting to gravitate toward the type of unacceptable practices that characterized it before the arrival of the Trump Administration.

MHARR will closely monitor this matter very carefully for further discussion at the upcoming MHARR Board of Directors meeting.

Further, on the specific issue of the proposed “frost-free” IB, MHARR will continue to oppose the final adoption of the proposed IB – or any variant thereof – and will continue to press this matter until it gets full and complete answers.

HUD EMAIL

 
From: Payne, Teresa L This email address is being protected from spambots. You need JavaScript enabled to view it.  
     
To   Lesli Gooch This email address is being protected from spambots. You need JavaScript enabled to view it., mmarkweiss This email address is being protected from spambots. You need JavaScript enabled to view it.  
       
Cc   Gormley, Joseph M This email address is being protected from spambots. You need JavaScript enabled to view it., Mcjury, Jason C This email address is being protected from spambots. You need JavaScript enabled to view it.  

_
Lesli and Mark,

Due to questions from both industry associations, this email is being sent to further clarify the answer provided by SEBA Professional Services to a question received during the Open Industry Conference Call for the Installation program.  The incoming question and response stated:

Question: “Has there been any update to the Interim Guidance on use of Frost-free Foundations?“

Answer: “At this time, HUD has decided not to take action on finalizing the Interpretive Bulletin concerning frost free foundations.”

The answer provided was not intended to state any new or final program or policy decisions by HUD with respect to the future of the proposed Interpretative Bulletin on Foundations in Freezing Temperature Areas (the IB).  Rather, the answer provided was consistent with similar commentary provided by HUD during the recent MHCC Meeting.  To reiterate the essence of those comments, at this time, there has been no work or decisions on finalizing the IB.  HUD’s limited resources and current priorities for the office are not currently focused on finalizing the IB.  To be clear, at this time, there have not been any new or final policy decisions on the future of this proposed action.   The Department has received public comment on the proposed IB and HUD has also received previous comments from the MHCC.  HUD is also aware of the MHCC’s consideration of log items from the September 2018 MHCC meeting agenda.

Teresa

Teresa Payne
HUD Office of Manufactured Housing Programs (OMHP)
Photo courtesy of ManufacturedHomeLivingNews.com

HUD Will Not Finalize Proposed “Frost-Free” Interpretive Bulletin

  • Written by Mark Weiss

MHARRFROM:          MHARR
RE:  HUD Will Not Finalize Proposed “Frost-Free” Interpretive Bulletin

HUD’s Installation contractor, SEBA Professional Services, Inc., (SEBA) announced during an open industry conference call on October 16, 2018, that the Department’s June 21, 2017 proposed Interpretive Bulletin (IB) concerning so-called “frost-free” foundations (designated IB I-1-17) — consistently and strenuously opposed by MHARR since its initial publication – will not be finalized or issued by HUD as a final, binding IB.

MHARR specifically opposed the IB – which would have substantively changed the underlying HUD installation standard concerning foundations for frost-prone soils — in written comments filed on August 17, 2017, following publication of the proposed IB in the Federal Register, and called again for its withdrawal in February 20, 2018 comments filed pursuant to HUD’s manufactured housing regulatory review process under Trump Administration Executive Orders 13771 and 13777.

MHARR also raised the proposed “frost-free” IB as an example of baseless HUD regulatory excesses in 2018 meetings with HUD Secretary Ben Carson and HUD Assistant Secretary Brian Montgomery.

Most recently, the Manufactured Housing Consensus Committee (MHCC), at its September 11-13, 2018 meeting, had voted to recommend to HUD that the pending IB, one of the last administrative actions of former program administrator Pamela Danner, be withdrawn.

MHARR continues to press for the invalidation or withdrawal of other “field guidance” and related HUD pseudo-regulatory memoranda and pronouncements that were issued (and have been enforced) without notice and comment rulemaking as required by applicable law.

DOE Issues MH Energy Rule Request for Information

  • Written by Mark Weiss

MHARRThe U.S. Department of Energy (DOE) has published a “Notice of Data Availability and Request for Information” (“Notice”) regarding its previously dormant manufactured housing energy conservation standards rulemaking in the August 3, 2018 edition of the Federal Register (seecopy attached).

The DOE Notice seeks information and comments on possible alternatives to the horrific proposed manufactured housing energy rule previously published by DOE on June 17, 2016. To refresh your recollection, this rulemaking was initiated in response to language contained in the Energy Independence and Security Act of 2007 (EISA) which purported to shift responsibility for manufactured housing energy standards from HUD to DOE. This directive – which lacks any substantive basis and is totally unnecessary – as demonstrated by Census Bureau data showing that manufactured housing energy costs are either lower than, or comparable to those of other types of homes, hasconsistentlybeen opposed byMHARR, which was successful in stopping the imposition of such damaging and discriminatory standards at least three times over the past decade. 

Each time, though, the rulemaking proceeding was revived with the assistance and cooperation of some in the industry. The most recent DOE activity, the January 2017 proposed rule, was the product of a fundamentally tainted and arguably scandalous “negotiated rulemaking” whichMHARRvehemently opposed, and was ultimately rejected by the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) in late 2016. That proposal was subsequently withdrawn by the Trump Administration on January 31, 2017, afterMHARRcast theonly“no” vote against the proposed rule within the DOE Manufactured Housing Energy Standards Work Group and emphatically opposed the proposed rule in written comments to DOE and direct meetings with senior DOE and OIRA officials.

Unfortunately, after declaring the manufactured housing energy rulemaking “inactive” in the Fall 2017 Federal Semi-Annual Regulatory Agenda (SRA), DOE — apparently pressured by litigation filed in late December 2017 in Federal District Court in Washington, D.C. by the special interest Sierra Club – has now revived this manufactured housing rulemaking proceeding once again.

While the Notice offers certain clues as to the possible direction that DOE may be pursuing, it will require extremely thorough study and an extremely strong response to prevent the imposition of debilitating and discriminatory energy standards on federally-regulated manufactured homes that could potentially exclude millions of moderate and lower-income Americans from the HUD Code manufactured housing market and the only type of non-subsidized home ownership that they can afford.

MHARRwill carefully examine the DOE Notice and will respond in a strong and thorough manner consistent with its previous activity on this rulemaking. By copy of this package,MHARRis urging others in the industry to further oppose any such rule. MHARRwill prepare and submit written comments on this matter soon, and will make those comments available to all HUD Code industry members.

 

DOE Issues MH Energy Rule Request for Information-pdf

MHARR Calls on HUD To Remove Zoning, Placement and Consumer Financing Barriers to Manufactured Homes

  • Written by Mark Weiss

Washington, D.C., October 11, 2018 – The Manufactured Housing Association for Regulatory Reform (MHARR), in written comments filed with the U.S. Department of Housing and Urban Development (HUD) on October 11, 2018 (see, copy attached) has called on HUD to promote zoning and placement parity for federally-regulated manufactured homes as part of the Department’s plan to amend its regulations for Affirmatively Furthering Fair Housing (AFFH).

Noting that Secretary Carson and HUD itself have recently cited restrictive local zoning measures – including zoning mandates that discriminatorily exclude or restrict the placement of HUD-regulated manufactured homes – as a significant root cause underlying the lack of affordable housing in many areas of the United States, MHARR’s comments seek amendments to the AFFH regulations that would: (1) identify the discriminatory exclusion of HUD Code manufactured homes and/or manufactured home communities (or the discriminatory limitation of manufactured home placements in compatible residential areas) as an obstacle to fair housing that program participants must address as part of their AFFH compliance efforts; and (2) “encourage actions that increase housing choice,” by promoting changes to local zoning and land-use ordinances that would permit the siting of HUD Code manufactured homes in all compatible residential areas, as well as the development of new and/or expanded HUD Code manufactured housing communities in such compatible residential areas.

To ensure compliance with these amendments, MHARR urges HUD to expressly and specifically condition the receipt of grant (or other) funds on the elimination of discriminatory restrictions on the placement of HUD Code manufactured homes or — absent voluntary compliance by local jurisdictions — to federally preempt such discriminatory measures pursuant to the enhanced statutory preemption authority provided by Congress in the Manufactured Housing Improvement Act of 2000.

Strong and effective action by HUD is absolutely essential to ensure that all Americans have access to the inherently affordable, non-subsidized homeownership offered by today’s federally-regulated manufactured homes.  Although these homes are the best that the industry has ever produced, and represent an outstanding value that is intrinsically affordable for all Americans, including lower and moderate-income families, access to manufactured housing is being needlessly – and unlawfully – restricted by discriminatory zoning and placement restrictions that the industry’s post-production sector has been unable to effectively counter. Given Congress’ specific grant of authority to HUD to override such discriminatory zoning measures, HUD’s amendments to AFFH should ensure fullaccess to manufactured housing by every American everywhere in the United States.

In addition to removing such discriminatory local barriers to affordable, non-subsidized manufactured housing, MHARR has also called on HUD – in meetings with Secretary Carson and Assistant Secretary Brian Montgomery – to take concrete steps to place manufactured home consumer financing, and most especially federal support for the 80% of the manufactured housing consumer financing market represented by personal property or “chattel” loans on par with other types of consumer home lending.  MHARR has thus urged HUD to support and encourage market-significant securitization and secondary market support by Fannie Mae and Freddie Mac for manufactured homes under the “Duty to Serve” provision of the Housing and Economic Recovery Act of 2008 (HERA) and has also urged HUD leadership to revive and expand manufactured home chattel loan support under the existing Federal Housing Administration (FHA) Title I manufactured housing program.

In Washington, D.C., MHARR President and CEO, Mark Weiss, stated: “Once again, the leadership of President Trump and Secretary Carson is offering significant new opportunities for both consumers and producers of HUD Code manufactured housing.  As the federal government agency responsible for housing-related matters for the nation, HUD should use all of the tools that are available to it – through grant funding mechanisms and through mandatory federal preemption, if necessary – to ensure zoning, placement and consumer financing parity for inherently affordable manufactured homes and the mostly lower and moderate-income American families who rely on those homes to achieve the American Dream of homeownership. Baseless NIMBY-ism is no excuse for denying the benefits of homeownership to every American in every community.”

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

https://manufacturedhousingassociationregulatoryreform.org/wp-content/uploads/2018/10/MHARR.AFFHCOMMENTSNEWSRELEASE.pdf

 

https://manufacturedhousingassociationregulatoryreform.org/wp-content/uploads/2018/10/MHARR.AFFHZONINGCOMMENTS.pdf

 

HUD Code Production Growth Continues In June 2018

  • Written by Mark Weiss

MHARRWashington, D.C., August 6, 2018 – The Manufactured Housing Association for Regulatory Reform (MHARR) reports that according to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD), year-over-year manufactured housing industry production growth was sustained in June 2018. Just-released statistics indicate that HUD Code manufacturers produced 8,258 homes in June 2018, a 1.3% increase over the 8,152 HUD Code homes produced during June 2017. Cumulative industry production for 2018 now totals 50,897 homes, a 9.4% increase over the 46,502 HUD Code homes produced over the same period in 2017.

A further analysis of the official industry statistics shows that the top ten shipment states from the beginning of the industry production rebound in August 2011 through June 2018 — with cumulative, monthly, current year (2018) and prior year (2017) shipments per category as indicated — are:

HUD Code Production Growth Continues In June 2018 

The latest information for June 2018 results in no changes to the cumulative top ten list.

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

MHARR Exposes GSES’ Failure On Chattel Financing Before Congress

  • Written by Mark Weiss

FOR IMMEDIATE RELEASE     Contact: MHARR    (202) 783-4087

Washington, D.C., September 27, 2018 – The Manufactured Housing Association for Regulatory Reform (MHARR), in a submission (copy attached) to the House of Representatives’ Financial Services Committee in conjunction with a September 27, 2018 oversight hearing on regulation of the two “Government Sponsored Enterprises” (GSEs) – Fannie Mae and Freddie Mac – strongly criticized the Federal Housing Finance Agency (FHFA), for failing to implement federal law and, instead, sanctioning the GSEs’ continuing discrimination against lower and moderate-income American consumers seeking to purchase manufactured homes through personal property, or chattel loans.

Specifically, MHARR’s submission emphasizes that under the “Duty to Serve Underserved Markets” (DTS) provision of the Housing and Economic Recovery Act of 2008 (HERA), so-called DTS “implementation plans” developed by the GSEs and approved by FHFA in late 2017, fail to provide for market-significant participation by Fannie Mae and Freddie Mac in the manufactured housing chattel finance market some ten yearsafter Congress, through DTS,  specifically 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,” including chattel loans.  Such chattel loans account for 80%(or more) of the entire manufactured housing market, according to U.S. Census Bureau data.

As MHARR’s submission explains, the so-called Fannie Mae and Freddie Mac DTS “implementation plans,” by failing to provide for market-significant participation in the manufactured housing chattel financing market – beyond tiny, highly-conditional, “pilot programs” that through 2020 would serve, atmost, little more than 1% of the manufactured housing market – do not and cannot, by definition, satisfy the express statutory mandate of DTS.  Indeed, it is utterly inconceivable that Congress, in adopting DTS, intended for the vast bulk of all manufactured housing purchasers — and potential purchasers — seeking to access the nation’s most affordable source of non-subsidized homeownership, to gounservedunder DTS indefinitely and, potentially, forever.

Relying on an alleged lack of chattel loan “performance” data that is a direct result of their own long-term, discriminatory failure to serve the manufactured housing market – that DTS was specifically designed to remedy – Fannie Mae and Freddie Mac instead seek to evade that “duty” indefinitely. As emphasized by MHARR, this will effectively force the 80% (or more) of the manufactured housing purchasers who currently rely on chattel financing to seek loans from one of the existing market-dominant manufactured housing lenders that do not require or seek secondary-market securitization or support from the GSEs and provide such financing at interest rates that are higher than would be the case if the GSEs were significant participants in the manufactured housing chattel market. Even worse, many more potential lower and moderate-income manufactured home purchasers, who might otherwise qualify for a loan, will continue to be needlessly excludedfrom the manufactured housing market – and from homeownership altogether – because of the higher chattel loan interest rates and monthly loan costs resulting from the GSEs’ continuing discriminatory refusal to fully implement DTS with respect to chattel loans.

MHARR, accordingly, will continue to press for the fullimplementation and application of DTS to manufactured home chattel loans and will continue to address, through all necessary means (including Congress and the Administration) the ongoing failure of FHFA, Fannie Mae and Freddie Mac to implement DTS in a timely and market-significant manner, thereby depriving lower and moderate-income Americans of the full access to affordable, non-subsidized manufactured homeownership that Congress sought to provide.

In Washington, D.C., MHARR President and CEO, Mark Weiss, stated: “Congress, in its vital oversight role concerninhg FHFA, must hold that agency – and, by extension, Fannie Mae and Freddie Mac, which are being and have been bailed-out with billions of taxpayer dollars — accountable for their ongoing discriminatory failure, more than a decade after-the-fact, to fully implement  DTS with respect to the 80% of the federally-regulated manufactured housing market that is represented by chattel purchase-money loans. Affordable homeownership is desperately needed in the United States and is at the coreof the GSEs’ statutory mission.  Neither FHFA nor the GSEs should be allowed to flout this mission, nor the specific mandate of DTS with regard to manufactured housing chattel loans.”

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing.

https://manufacturedhousingassociationregulatoryreform.org/wp-content/uploads/2018/09/MHARR.DTSTESTIMONYNEWSRELEASE.pdf

 

 

HUD Publishes Notice of Impending MHCC Meeting

  • Written by Mark Weiss

As was referenced in MHARR’s July 26, 2018 memorandum concerning its recent meeting with HUD Assistant Secretary-Federal Housing Commissioner, Brian Montgomery, HUD has now published formal notice of an upcoming meeting of the Manufactured Housing Consensus Committee (MHCC) in the July 31, 2018 edition of the Federal Register (see, copy attached).

The meeting, scheduled to be held from September 11 through September 13, 2018 in Washington, D.C., will be the first meeting of the MHCC – of any kind – in more than a year-and-a-half, with the last telephone conference meeting of the MHCC having been held in December 2016 and the last in-person MHCC meeting having been conducted in October 2016.

Significantly, notwithstanding indications (and assurances) at MHARR’s July 25, 2018 meeting with Commissioner Montgomery that aspects of HUD’s “top-to-bottom” regulatory reform process for the federal manufactured housing program pursuant to Trump Administration Executive Orders (EO) 13771 and 13777 would be presented to – and considered by – the MHCC at this meeting, the bare-bones meeting agenda contained in the Federal Register announcement gives no specific indication of any such activity.  Instead, the “tentative agenda” included in the meeting notice refers to a continuing “Review of Current Log and Action Items,” even though the last “log” of proposed code changes posted at the federal program website – dated April 2018 – indicates that the MHCC (with just one exception) has already taken “final action” on all pending log items and submitted corresponding recommendations for action by HUD.

That said, it remains to be seen: (1) what – if any – presentation or review of proposed regulatory reform actions will be brought to the MHCC for consideration at this meeting; and/or (2) what other new proposals or action items may be brought to the Committee – if any – for consideration at this meeting, given HUD’s failure, to date, to publish or make those materials available to program stakeholders for review priorto the MHCC meeting and possible input or comment to the MHCC, at the meeting, regarding their specific content.  Therefore, while further HUD action on this point is certainly possible prior to the September meeting, it remains to be seen whether such action – if any — will provide either the Committee and/or program stakeholders with sufficient time and information to fully and completely evaluate any such proposals in advance of the meeting, in order to provide meaningful, substantive input.

Given the past history of the federal program in similar situations, MHARR will closely monitor this matter and will take further steps as necessary to ensure the integrity of the MHCC process, while keeping the industry apprised of further developments as warranted.

HUD Publishes Notice of Impending MHCC Meeting-pdf

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