MHI Week In Review -- December 2, 2011

MHI Members Urged to Contact Members of Congress on Tax Extenders Legislation

Once again a number of important temporary tax incentives, frequently called “tax extenders” are scheduled to expire on December 31st, clearing the way for a tax increase on millions of U.S. taxpayers, businesses, and organizations that benefit from these provisions. Congress is now discussing what they can accomplish before year-end, including “tax extenders.” The New Energy Efficiency Home Tax Credit, which is included in the “tax extenders” package, is critical to our industry and MHI is urging members to personally contact their Representatives to act quickly to extend these pro-growth, pro-job provisions.

Specifically, manufacturers who build ENERGY STAR homes are eligible to receive a $1,000 tax credit while modular home builders are eligible to receive a $2,000 tax credit by exceeding the International Energy Conservation Code (IECC) by 50 percent. The “tax extenders” package has an impact on a wide range of activities that help spur economic growth, job creation, and job retention. Despite bicameral, bipartisan support for these provisions, Congress has yet to extend them beyond 2011.

While many in Congress focus on much-needed tax reform, restricting funding for energy efficiency investments would be counterproductive, undermining the short- and long-term economic and environmental interests of our nation. The lack of timely congressional action to extend these provisions would inject more instability and uncertainty into the economy and further weaken confidence in the marketplace.

MHI Stresses Need for Financing and Regulatory Relief during Manufactured Housing Hearing

On November 29th, members of the Manufactured Housing Institute (MHI) testified in Danville, Virginia before a field hearing of the House Financial Services Subcommittee on Housing, Insurance and Community Opportunity examining the state of the manufactured housing industry. (Danville is located in the “Southside” region of Virginia where factory-built housing has long been an important source of housing as well as an economic driver.)

The MHI members testifying on the critical financial and regulatory challenges included MHI Secretary Kevin Clayton (President and CEO of Clayton Homes), Virginia Manufactured and Modular Housing Association Executive Director Tyler Craddock and, Stan Rush of MHD Empire. Additional witnesses included:

• Henry Czauski, Acting Deputy Administrator for Manufactured Housing

• Scott Yates, President, Yates Homes

• Adam Rust, Research Director, Community Reinvestment Association of North Carolina (and member of the Manufactured Housing Consensus Committee)

• Carla Burr, manufactured housing resident (Fairfax, VA)

During the hearing, both industry and consumer witnesses agreed that the primary issue impacting the affordability and availability of manufactured housing was ready access to financing, including the ability of lenders to securitize loans through the secondary market.

Mr. Clayton also emphasized the anticipated regulations from the newly established Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, would represent an additional burden on lenders’ ability to serve low- and moderate-income families seeking to purchase affordable manufactured housing. He indicated that certain provisions within the Act would require his company to potentially reduce its lending activity in half. This is because the law would reclassify a significant portion of manufactured home loans as predatory.

In addition, Mr. Clayton was joined by Tyler Craddock and Stan Rush in calls to provide manufactured home sellers, including retailers and sellers financing the sale of their own homes, relief from the SAFE Act. Specifically, Mr. Craddock indicated that “at a time when financing options are very limited for manufactured home buyers, regulatory burdens imposed by the SAFE Act are further limiting the financing options available to low- and moderate-income manufactured home buyers.

Finally, Mr. Clayton emphasized the need for the Department of Housing and Urban Development (HUD) to keep the HUD-Code updated in a timely manner. In addition, he indicated that manufactured housing has not been an area of priority concern and that the appointment of a “non-career administrator would serve to enhance the role manufactured housing plays within HUD’s overall mission.”

Following the hearing, participants toured the modular home production facility of MHI member Commodore Homes. The tour provided Congressional staff and Members of Congress the opportunity to witness first-hand the factory-built housing production process. More importantly, they learned how the limited availability of financing had forced Commodore Homes to convert the facility from a HUD-Code manufactured home production facility to a modular facility, which enable consumers more ready access to mortgage products through conventional lenders.

To access witness testimony, click here.

House Financial Services Committee Asks the GAO to Investigate the HUD Manufactured Housing Program

On the heels of a Congressional field hearing on the state of the manufactured housing industry, the House Financial Services Committee Chairman Spencer Bacchus (R-AL) and Insurance, Housing and Community Opportunity Subcommittee Chairman Judy Biggert (R-IL), requested the Government Accountability Office (GAO) examine several aspects of the Department of Housing and Urban Development’s (HUD’s) regulation of the manufactured housing industry.

In a November 29th letter (click here to view the letter) to the Comptroller General of the U.S. GAO, Gene Dodaro, the two Republican committee members asked the GAO to examine:

• How HUD has implemented the Manufactured Housing Improvement Act (MHIA) of 2000.

• What effect the MHIA has had on revisions to HUD’s manufactured housing construction, safety and installation standards.

• The effect the Act has had on ensuring that these standards are timely and up-to-date.

• The specific authority of the Manufactured Housing Consensus Committee in advising HUD.

• The annual inspection process, including HUD’s process of collecting and administering the fees.

• Whether the fees are used in accordance with the 2000 Act.

• The effect the fees have had on production levels for manufactured homes.

MHI applauds the Committee’s action requesting a GAO investigation of the HUD program, and is on record in urging HUD to adopt the Manufactured Housing Consensus Committee recommendations to update the HUD-Code; strengthen its preemption policy regarding the HUD-Code; appoint a non-career administrator; and to expeditiously implement installation programs in states that have chosen not to adopt their own programs. MHI will work to ensure that the GAO is provided with all the necessary information to address the Committee’s request.