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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 That proposal was subsequently withdrawn by the Trump Administration on January 31, 2017, afterMHARRcast theonly“no” vote against the proposed rule within the DOE Manufactured Housing Energy Standards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

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.

“Restoring the Rule of Law To Manufactured Housing Regulation”

  • Written by Mark Weiss

MHARR ISSUES AND PERSPECTIVES
By Mark Weiss
JULY 2018

The rule of law, and the supremacy of law over the arbitrary whims of individuals who happen to wield government power, was a profound concern for the founders who debated and developed the Constitution of the United States. For over two centuries, legal scholars have pointed to the primacy of the “rule of law” in the system of limited government and defined powers established by the Constitution, stating, for example: “The rule of law may be the most significant and influential accomplishment of Western constitutional thinking. The very meaning and structure of our Constitution embody this principle. Nowhere expressed yet evident throughout the Constitution, this bedrock concept is the first principle on which the American legal and political system was built.”

For too long, though, the rule of law, as envisioned by the nation’s founders, has been undermined, ignored, or bypassed by the so-called “Fourth Branch” of government – the permanent, overgrown and largely unaccountable bureaucracy that has ballooned within the federal government, often in concert with overpaid and largely unaccountable government contractors. While this is a major socio-political issue with ramifications that extend far beyond the scope of this column, federally-regulated manufactured housing faces challenges of its own regarding the rule of law, and with a new Administration – with a new regulatory philosophy — now in place, there is no time like the present to clearly address this issue within the unique context of manufactured housing regulation.

In the manufactured housing arena, the most fundamental expression of the primacy of the rule of law is the Manufactured Housing Improvement Act of 2000.  Indeed, the 2000 reform law is a direct outgrowth of – and a direct congressional response to and remedy for – administrative abuses that had piled-up within the federal manufactured housing program over the first quarter-century of its existence. These included, but by no means were limited to: (1) defactorulemaking by “interpretation;” (2) circumventing, evading, or ignoring notice and comment requirements; (3) abuses of the “Interpretive Bulletin” process; (4) closed-door standards development activity; (5) non-consensus standards development; (6) contracting abuses resulting in a non-competitive, defacto“sole-source” program monitoring contract, the same monitoring contractor for the (now) entire40-year-plus history of the program, and the delegation of governmental power to an unaccountable private entity; and (7) activity to subvert the operation and objectivity of the former Manufactured Housing Advisory Council, and a hostof other actions that undermined the basic fairness, reasonableness and, ultimately, legitimacy of the federal manufactured housing program.

Taking cognizance of these (and other) serious program failings, Congress incorporatedmultipleprotections in the 2000 reform law designed to restore and enhancethe program’s compliance with – and adherence to – the rule of law, as reflected in the basic due process norms and substantive protections included in the original 1974 manufactured housing act. In large measure, then, the 2000 reform law is: (1) a reflection of Congress’ concern over program abuses which had – and continue to — unnecessarily limit the use and availability of affordable manufactured housing for millions of Americans and the growth of the industry; as well as (2) a compendium of targeted remedies designed to halt, cure and reverse those abuses.

As a result, the 2000 reform law, among manyother things: (1) established a balanced Manufactured Housing Consensus Committee (MHCC) and consensus process to develop and update consensus standards andprogram enforcement regulations; (2) reiterated and strengthened notice and comment requirements for all standards, regulations and “Interpretive Bulletins;” and (3) made the consensus process andnotice and comment, “mandatory” absent a statutorily-defined “emergency.” Moreover, to make sure that no-one misunderstood the extremely broad scope of the review and approval authority of the MHCC and the other due process protections incorporated in the 2000 reform law, Congress included what is commonly known as a “catchall” provision in the section of the law that establishes the MHCC and defines the scope of its powers.  The specific – and specifically targeted — purpose of that provision, was to ensure that HUD regulators would not fall back on their established practice of bypassing notice and comment rulemaking (and consensus committee review and approval under the new 2000 law) by the simple expedient of calling new (or modified) defactostandards and/or regulations by some other name, whether it be an “interpretation,” “guidance,” a “policy statement,” or some other moniker not mentioned as requiring rulemaking in either the original 1974 law or the federal Administrative Procedure Act (APA).  That “catchall” provision is section 604(b)(6) of the 2000 reform law.

Section 604(b)(6), as MHARR has written and observed many times before, is straightforward and unequivocal. It provides that: “Anystatement of policies, practices, or procedures relating toconstructionand safety standards, regulations, inspections, monitoring, or other enforcement activities that constitutes a statement of general or particular applicability to implement, interpret, or prescribe law or policy by the Secretary is subject to subsection (a) or this subsection. Any change adopted in violation of subsection (a) or this subsection is void.” (Emphasis added). The “subsection (a)” that is referred to, is the part of the 2000 reform law (i.e., section 604(a)) which requires MHCC consideration and approval of new or modified standards and their publication by HUD for notice and comment, among other things. Effectively then, section 604(b)(6) requires the same procedural safeguards mandated by the 2000 reform law for standards and regulations, to be applied with equal force to “any” change to HUD’s policies, practices, or procedures relating to either the standards, the regulations, monitoring, inspections or virtually any other aspect of standards-setting and enforcement in an extremelybroad, inclusive and comprehensive way.

Through this language, Congress sought to ensure the rule of law, rather than administrative fiat, in connection with manufactured housing regulation, in order to preserve the core purposes of the 1974 law as amended – i.e., to ensure the availability and affordability of manufactured housing for all Americans, and to avoid arbitrary, capricious, excessive and/or unnecessary regulation that would undermine or interfere with those objectives.  Or at least, that was the idea.

It did not take long, though, for HUD to start backtracking on section 604(b)(6), with a campaign designed: (1) to first limit its application and scope; (2) to subsequently read it out of the 2000 reform law entirely; and (3) having accomplished that, revert to the type of “sub-regulatory” actions and practices that section 604(b)(6) was designed to stop in the first place.

The first salvo in the war over section 604(b)(6) came in February 2004, in the form of a letter from the MHCC to HUD, asking the Department to confirm the broad scope and applicability of the MHCC’s review authority under section 604. The MHCC stated, in part: “It is the Committee’s opinion that the terms ‘procedural and enforcement regulations’ cited in subsections 604(b)(1) and (2) and ‘procedural or enforcement regulations’ cited in subsection 604(b)(3) refer to ‘any … regulations, inspections, monitoring or other enforcement activities that constitutes a statement of general or particular applicability to implement, interpret, or prescribe law or policy be the Secretary,’ as stipulated in section 604(b)(6), and, as such, must be submitted to the Committee….” (Emphasis added). HUD responded, however, in May 2004, with a five-page tome which drastically curtailed the role and authority of the MHCC. HUD’s opinion letter concluded that section 604(b)(6) – directly contrary to its clear and unequivocal language— rather than constituting a broad “catchall” provision, designed to bring most program activities withinthe scope of the MHCC’s consensus review and recommendation role, was actually designed to limitthe scope of section 604 to an extremely narrow category of HUD “statements on the construction and safety standards and [their] enforcement,” thereby excluding allof the sub-regulatory “interpretations” and other pseudo-regulatory statements and activity that section 604(b)(6), by its plain language, was actually designed and intended to embrace.

Matters, though, only got worse from there. In February 2010, HUD published an “interpretive rule” – without opportunity for notice and comment — which further slashed the scope and applicability of section 604(b)(6), to the point that it waseffectively read out of the law, concluding that section 604(b)(6) applies only to HUD statements and actions that would constitute a “rule” within the meaning of the APA in any event.  This position, however – as MHARR noted at the time and many times since — stands the law on its head and violates a basic rule of statutory construction which prohibits interpretations that would nullify either all – or any part – of an enactment of Congress.  Put differently, since the APA already requires notice and comment for APA “rules,” construing section 604(b)(6) to require notice and comment only for APA rules is redundant and renders section 604(b)(6) – and Congress’ action in adopting that section – meaningless, in violation of settled law concerning statutory interpretation.

The damage had been done, though, and the 2010 interpretive rule, in particular, opened the floodgates for a wave – or, more accurately, flood — of new sub-regulatory and pseudo-regulatory program actions (i.e., at least 14 “guidance” memoranda between 2014 and 2016 alone, not counting “monitoring”-related “guidance”) that imposed new and/or expanded mandates on regulated parties including, most significantly, wholesale changes to the Subpart I-related “monitoring” function, based on a new/modified “focus” that shifted from the detection of specific alleged standards violations, to a broader concentration on “quality control,” at a time when industry production was rapidly declining. This had the effect of maintaining and even increasing contractor work hours and compensation (as previously detailed by MHARR) while resulting in needlessly higher regulatory compliance costs for manufacturers and, ultimately, consumers – not a single part of which was ever considered by the statutory consensus committee or subject to notice and comment rulemaking.

The HUD program, accordingly, has spent much of the past decade operating outside of the rule of law, in direct violation of the clear language of its own authorizing statute, exercising authority it was never granted by Congress, in ways that were never authorized by Congress, while giving short-shrift to the statutory MHCC, all to the detriment of the industry – and particularly its smaller businesses – and the millions of Americans in need of affordable, non-subsidized home ownership.

Just as importantly, through nearly every step of this decade-plus subversion of the 2000 reform law, “deep state” regulators at HUD have been aided and abetted by “institutional” program contractors – i.e.defactosole-source contractors, such as the program monitoring contractor – which constitute a “deep state” of their very own, wielding unlawfully-delegated and largely unaccountable governmental power, together with a built-in incentive to continually expand both the scope and cost of regulation, thereby increasing their own power and influence and, not surprisingly, their contract revenues.  This needless regulatory expansion, in itself, has excluded hundreds-of-thousands of Americans from the benefits of manufactured home ownership, based on studies conducted by the National Association of Home Builders (NAHB), and has unnecessarily slowed and stunted the industry’s recovery from its modern production low in 2009, disproportionately harming smaller industry businesses.  Nor does the industry itself escape part of the blame for this activity, as far too many of its largest corporate conglomerates – and their representatives — have provided protection and “cover” for the HUD statusquoand program “leaders” who have gone to extraordinary lengths to undermine the most important elements of the 2000 reform law.

The change in presidential administrations, however, has opened the door to potential remedies for this fundamentally lawless regulatory activity. In particular, the Trump Administration’s “top-to-bottom” review of HUD’s manufactured housing regulations and “regulatory activities,” under Executive Orders 13771 (“Reducing Regulation and Controlling Regulatory Costs”) and 13777 (“Enforcing the Regulatory Reform Agenda”) provides a viable basis for action to repeal both the 2010 HUD interpretive rule andthe slew of “field guidance” and other sub-regulatory mandates issued by HUD based on the Department’s unlawful construction of section 604(b)(6).  And indeed, MHARR in its February 20, 2018 regulatory review comments to HUD, specifically urged the program to return to the rule of law, through the withdrawal of the 2010 interpretive rule and allof the program’s sub-regulatory mandates issued without MHCC consideration and notice and comment rulemaking.

This effort, moreover, received a major boost when the U.S. Department of Justice notified federal agencies, through memoranda issued on November 16, 2017 and January 25, 2018 that it would no longer enforce administrative “guidance” documents issued without notice and comment rulemaking. In part, the Justice Department stated: “Guidance documents cannot create biding requirements that do not already exist by statute or regulation.  Accordingly … the [Justice] Department may not use its enforcement authority to effectively convert agency guidance documents into binding rules.  Likewise, Department litigators may not use noncompliance with guidance documents as a basis for proving violations of applicable law….”

Based on these memoranda, MHARR filed a separate request with HUD on April 25, 2018, reiterating its call for the withdrawal of the 2010 interpretive rule and all HUD manufactured housing “guidance” documents imposed without notice and comment rulemaking (and/or proper MHCC review), stating: “[A]s is demonstrated by the November 16, 2017 and January 25, 2018 memoranda, the Justice Department would quite properly refuse to enforce any such guidance documents issued without rulemaking and prior MHCC consensus review … in any type of enforcement proceeding sought be HUD, in any event. Accordingly, rather than leaving those unenforceable ‘guidance’ documents on the public record … those ‘guidance’ documents … should be declared null and void in accordance with section 604(b)(6) and formally withdrawn.”

As MHARR has observed, the time has come for HUD to restore the rule of law to the manufactured housing program and to finally obey the 2000 reform law as written.  The pending EO 13771/13777 regulatory review process provides the perfect opportunity for HUD to finally and formally renounce its past lawlessness and withdraw both the 2010 interpretive rule and the invalid sub-regulatory “guidance” documents issued pursuant to that “rule.” The legitimacy of the federal program – and the rule of law – demand no less.

Mark Weiss

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

“MHARR-Issues and Perspectives” is available for re-publication in full (i.e., without alteration or substantive modification) without further permission and with proper attribution to MHARR.

 

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

Industry Production Increases Parallel Strong Trump Economy and Pending Regulatory Review

  • Written by Mark Weiss

Washington, D.C., July 5, 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 grew again in May 2018. Just-released statistics indicate that HUD Code manufacturers produced 8,846 homes in May 2018, a 12.2% increase over the 7,882 HUD Code homes produced during May 2017.  Cumulative industry production for 2018 now totals 42,492 homes, a 10.5% increase over the 38,450 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 May 2018 — with cumulative, monthly, current year (2018) and prior year (2017) shipments per category as indicated — are:

MHARR May CumulativeMay2018

MHARR May CumulativeMay2018

The latest information for May 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 Meeting with Hud Assistant Secretary Brian Montgomery

  • Written by Mark Weiss

JULY 26, 2018 

TO:  MHARR MANUFACTURERS
 MHARR STATE AFFILIATES
MHARR TECHNICAL REVIEW GROUP (TRG)
FROM:  MARK WEISS 

RE: MHARR MEETING WITH HUD ASSISTANT SECRETARY BRIAN Montgomery

A delegation of MHARR officials, including MHARR Chairman, James Shea, Jr., MHARR Immediate-Past Chairman, John Bostick, MHARR President Mark Weiss and MHARR Senior Advisor, Danny D. Ghorbani, met on July 25, 2018 with HUD Assistant Secretary–Federal Housing Commissioner, Brian Montgomery, the highest-ranking political appointee with direct oversight of the HUD manufactured housing program, to address issues concerning the both the program and the Federal Housing Administration’s (FHA) Title I manufactured housing loan insurance program. Scheduled shortly after Commissioner Montgomery was confirmed by the U.S. Senate, the meeting represents a continuation of MHARR’s direct interaction with Trump Administration officials at HUD and others agencies concerning both the federal manufactured housing program and federal financing support for affordable manufactured homes, including meetings with HUD Secretary Ben Carson and HUD Deputy Assistant Secretary Dana Wade, and Federal Housing Finance Agency (FHFA) director Melvin Watt, among others.

The main purpose of the meeting with Commissioner Montgomery who, while holding the same position in the Administration of President George W. Bush, was instrumental in establishing the statutory Manufactured Housing Consensus Committee (MHCC) and securing major achievements in the implementation of the Manufactured Housing Improvement Act of 2000, was to address key aspects of the ongoing manufactured housing program review and reform process initiated by President Trump and Secretary Carson, with a view toward putting the federal program back on track, in full compliance with all elements of the 2000 reform law.

Consequently, among other topics, the meeting addressed: (1) the status of the appointed manufactured housing program administrator mandated by the 2000 reform law; (2) the status of the pending “top-to-bottom” manufactured housing program regulatory review pursuant to Trump Administration Executive Orders (EOs) 13771 and 13777; (3) the status of the program monitoring contract, which is slated to expire in August 2018, the urgent need for a fully-competitive contracting process after more than 40 years of defactosole-source monitoring procurements, and the selection of a new program “monitoring” contractor; (4) the necessity of retaining state participation in the HUD program and proper funding for State Administrative Agencies (SAAs); and (5) the restoration of collective industry representation on the MHCC. In addition, the MHARR delegation urged Commissioner Montgomery to consider reforms at the Federal Housing Administration and the Government National Mortgage Association (GNMA), to expand the utilization of the FHA Title I manufactured housing program and the availability of insured manufactured home chattel loans under that program, particularly in light of the highly-restricted implementation of the “Duty to Serve Underserved Markets” with respect to manufactured home chattel loansby FHFA and the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac.

In particular, the MHARR delegation focused on harm to consumers and the industry resulting from unjustified, unwarranted, and/or misdirected HUD regulations (or pseudo-regulations), citing, as an example, HUD’s excessively costly and needlessly burdensome 2016 “on-site” construction rule, which, rather than reducing the cost and increasing the efficiency of on-site work and related approvals, has instead led to a decline in on-site completions and features requiring on-site completion, which has unnecessarily harmed the HUD Code market and unnecessarily denied consumers various on-site features that they seek in HUD Code homes. The MHARR delegation thus urged Assistant Secretary Montgomery to continue with – and aggressively implement and advance – the EO 13771/13777 regulatory reform process within the federal program that was initially spearheaded by Deputy Assistant Secretary Wade. And, in fact, it appears from responses at the meeting, that aspects of the Department’s regulatory reform process will be presented to – and considered by – the MHCC at a meeting currently expected to be held (but not yet formally announced in the Federal Register) on September 11-13, 2018 in Washington, D.C.

The MHARR delegation also addressed the decline – under the former federal program administrator — in the federal-state partnership that lies at the core of the HUD program and its proper operation.  Noting that state SAAs and state Primary Inspection Agencies (PIAs) had been tasked with numerous additional functions by HUD under its change to the “focus” of program inspections and monitoring, from the detection of specific standards violations to a new alleged emphasis on “quality control” and, worst of all, new unwarranted and baseless demands on long-standing and fully-compliant state installation programs – all without any corresponding rulemaking or regulatory process – MHARR pointed out that to date, there has been no corresponding increase in the compensation of such state agencies, leading some to either withdraw from the program or consider withdrawing. This, in turn, increases the power and influence of the entrenched monitoring contractor (and program installation contractor) – which assumes those expanded regulatory roles in “default” states, without the accountability, responsibility and responsiveness of the former state government entities. Meanwhile, a proposal to increase state SAA funding, recommended by the MHCC and published for notice and comment in 2016, needlessly remains in limbo, some two yearsafter-the-fact. The MHARR delegation, accordingly, urged Commissioner Montgomery to address this matter as a priority issue for the program.

In addition, the MHARR delegation encouraged Commissioner Montgomery, as Federal Housing Commissioner, to explore the re-vitalization and expansion of the FHA Title I manufactured housing program which, after being a significant source of consumer financing for HUD Code homes in the past, has declined drastically, to minimal activity levels in recent years.  Such a revitalization and expansion in FHA Title I support for manufactured home financing is particularly crucial in light of the minimal and long-delayed “implementation” of the Duty to Serve Underserved Markets (DTS) by Fannie Mae and Freddie Mac, and their federal regulator, FHFA, and their failure to establish – any time soon – market-significant levels of securitization and secondary market support for manufactured home chattel loans, which comprise upwards of 80% of all manufactured home consumer loans.

In particular, MHARR noted that the “10-10” net worth and reserve rule implemented by the Government National Mortgage Association (Ginne Mae) for FHA Title I financial institutions has severely and unjustifiably limited lender participation in the Title I program to just two approved lenders, both of which are finance subsidiaries of the industry’s largest corporate conglomerate.  As a result, for far too many Americans, the inherently affordable home ownership offered by today’s manufactured homes, is simply not available – contrary to HUD and FHA’s fundamental mission — due to the lack of available, accessible, competitive financing. Consequently, as MHARR stressed, in addition to the reform of its regulatory activities, HUD should also re-examine and reform its financing-related programs for manufactured housing.

MHARR, as it has since the inauguration of President Trump – in all forms of direct and formal interaction with relevant officials — will continue to press the case for HUD Code manufactured housing, for increased governmental support for manufactured home consumer financing, in full accordance with all applicable laws, and for fundamentalregulatory reform within the federal manufactured housing program in full compliance with the 2000 reform law, including proper program leadership in the person of an administrator appointed in accordance with the 2000 reform law.

MHARR Meeting with Hud Assistant Secretary Brian Montgomery-pdf

HUD Secretary Carson Addresses Manufactured Housing At Oversight Hearing

  • Written by Mark Weiss

MHARRRE:  HUD Secretary Carson Addresses Manufactured Housing At Oversight Hearing

The House of Representatives’ Financial Services Committee held an oversight hearing for the U.S. Department of Housing and Urban Development (HUD) on June 27, 2018. The sole witness for this hearing was HUD Secretary Dr. Benjamin Carson.  During the two-hour hearing, a number of questions directly relating to HUD-regulated manufactured housing were raised by Committee members.

Multiple Committee members posed questions focusing on the status of the “top-to-bottom” manufactured housing regulatory review announced by the Department in January 2018.

In responding to those inquiries, Secretary Carson first recognized and acknowledged the importance of manufactured housing as a key source of affordable home ownership in the United States, noting that manufactured housing currently represents roughly 10% of the nation’s housing stock. More importantly, the Secretary specifically acknowledged that the regulatory burdens imposed on manufactured housing in recent years by HUD — detailed by MHARR in its written regulatory review comments and emphasized by MHARR manufacturers and staff in a February 2018 meeting with the Secretary – were “ridiculous” and a “major concern” for him and for the Department under his leadership. Further, the Secretary indicated that the Department’s manufactured housing-specific regulatory review – sought by MHARR throughout 2017 as one of its organizational priorities – could potentially be completed before the end of 2018, noting that completion of that review was a “priority” for him and for HUD, and that he would seek to “expedite” that process.

Another more specific question by a Committee member focused on the baseless restrictions imposed by HUD in 2014 on multi-family manufactured housing that are neither required nor authorized by the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended by the Manufactured Housing Improvement Act of 2000. Pointing out that such a restriction appeared to be “illogical,” the same Committee member also asked whether that issue had been addressed by any commenters in the manufactured housing program regulatory review process.

In response, Secretary Carson noted that the specific issue of multi-family manufactured housing had, in fact, been raised within the program regulatory review process, and agreed that the HUD restriction on multi-family HUD Code homes was indeed, “illogical.” Specifically, the matter of multi-family HUD Code homes was raised by MHARR in its February 20, 2018 program regulatory review written comments. (See, MHARR February 20, 2018 regulatory review comments at p. 11, “HUD Should Adopt Standards for Multi-Family Manufactured Homes”).  After noting that a proposed standard to permit multi-family HUD Code homes had been approved and recommended by the statutory Manufactured Housing Consensus Committee (MHCC), but that HUD had failed to take action on that proposal within the 12-month timeframe mandated by the 2000 reform law, MHARR stated, in its comments: “Given the extremely beneficial impact that affordable, non-subsidized multi-family manufactured homes would have for lower and moderate-income American families, and given the fact that such an amendment to the HUD Code standards would be fully consistent with existing law … HUD should take immediate action to publish the MHCC-recommended provisions to authorize multi-dwelling unit manufactured homes as a proposed rule and to promulgate such a rule on an expedited time-frame.” (Emphasis added).

And, in fact, Secretary Carson, in response to this question, confirmed that this baseless, “illogical” restriction was being reviewed by the program as part of the ongoing regulatory review process, while the Committee member observed that there appeared to be no correlation between safety and multi-family habitation in manufactured homes.

In summary, the Secretary’s testimony with regard to manufactured housing was both positive and encouraging in acknowledging not only the substantive importance of HUD Code housing as a key affordable housing resource (including multi-family manufactured housing), but also the importance and progress of the program’s – and the Department’s – regulatory review processes.

MHARR will continue to interact directly with HUD appointed officials and will carefully monitor and keep you fully apprised of all developments affecting the manufactured housing program going forward.

cc: Other Interested HUD Code Industry Members

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MHARR on Tariffs, DOE, and, Federalized Installation – Exclusive Report and…

The Manufactured Housing Association for Regulatory Reform (MHARR) has released its latest Washington Update, an exclusive report and analysis that addresses key issues with the U.S. Department of Housing and Urban...

01-05-2017

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Magnificent May – New Reports, Announcements, and Schedule

Beginning with RC Williams hot new exclusive this morning on the behind-the-scenes developments in the nation’s capital regarding manufactured housing lending, Magnificent May will continue the MHProNews tradition of independent...

01-05-2017

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Patrick Rises Over 3 Percent, Manufactured Housing CV Broader Markets Jump

Noteworthy headlines on – CNNMoney – United and dragged passenger reach settlement. Southwest Airlines: We won’t overbook anymore. China’s Uber worth $50 billion after raising more cash. 10 things United...

27-04-2017

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Is Time Finally up for the CFPB?

Movement by the House Financial Services Committee, led by Chairman Jeb Hensarling (R-TX), could spell the end for the Consumer Financial Protection Bureau as we know it. According to ACA...

27-04-2017

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More First Nations Turning to Modular

Throughout Canada, many First Nations native tribes are struggling with the dual challenge of quality, and affordable, housing. Mold and other natural elements, when combined with overcrowding, present issues tribal...

27-04-2017

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Bark Worse than Bite? Manufactured Housing Institute Slams Trump Administra…

Comments from Commerce Secretary Wilbur Ross on CNBC yesterday regarding proposed anti-subsidy tariffs on Canadian goods raised quite a stir. “The tariff is not the beginning of a trade war with...

27-04-2017

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Drama in Ohio: Fake News, Facts and Myths

The ongoing battle between the Ohio Manufactured Housing Association (OMHA) and Ohio Governor John Kasich over the status of the Ohio Manufactured Housing Commission (OMHC) has been taken to a...

27-04-2017

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Classifieds

Press Releases

Zoning, Opening up Urban Infill and Making Sure Citizens who want Manufactured Homes are Heard

by Ed Schafer For the last three or four years, the South Carolina association’s focus is to move beyond killing bad zoning proposals and working to reopen areas that have been closed to manufactured homes for many years.

Schafer, Ed %COMMENTS 05-09-2016 September 2016

Zoning Eased to Allow MH for Flood Victims

Following up on a story concerning the flooding in Minot, North Dakota last spring, KFYR-TV reports the Minot City Council is relaxing zoning requirements to allow manufactured homes to be sited in areas not previously zoned for them, sometimes to the chagrin of neighbors. Working on a case by case basis, many of the homes [...]...

Matthew Silver %COMMENTS 09-05-2012 Daily Business News

Zoning Commission Recommends against Expansion of Manufactured Home Community

The Yellowstone County Zoning Commission unanimously turned down a zone change application that would have allowed Cherry Creek Estates manufactured home community (MHC) to expand by adding as many as 80 manufactured homes, reports billingsgazette. While the Yellowstone County Board of Commissioners will have the final say when it meets in...

Matthew Silver %COMMENTS 12-04-2016 Daily Business News

Zoning Changes on Tap for Manufactured Housing

A new proposal from the Columbus Junction (Iowa) Planning and Zoning Commission to the city council would create a manufactured housing (MH) district, and delete MH from R-2 and R-3 residential districts. According to muscatinejournal.com, current ordinances require any MH outside of a community to be placed on a permanent foundation and converted...

Matthew Silver %COMMENTS 27-09-2013 Daily Business News

Zoning Changes Could Affect Manufactured Housing

by RC Williams The Washington County, Maryland Board of Commissioners is holding a public hearing today regarding several proposed changes to the county’s zoning ordinance, including ones that affect manufactured homes.

Williams, RC %COMMENTS 04-03-2017 March 2017

Zoning Changes Allow Modular Units

Following up on a story we last posted May 2, 2012 about modular medical units temporarily placed on a property to house loved ones with special needs, MHProNews has learned several states, including Virginia, New York, and California have enacted legislation to allow these units to override local regulations and be sited on properties not [...]...

Matthew Silver %COMMENTS 24-07-2012 Daily Business News