The FHA Manufactured Housing Loan Modernization Act of 2008 (Subtitle B of Title II of the Housing and Economic Recovery Act of 2008; Public Law 110-289, approved July 30, 2008) (Act), amended various provisions in section 2 of Title I of the National Housing Act (12 U.S.C. 1703et seq.) relating to the Manufactured Home Loan Program for the purpose of providing: (1) Adequate funding for FHA insured manufactured housing for low and moderate income homebuyers, (2) modernizing the FHA Title I insurance program for manufactured housing loans to enhance participation by Ginnie Mae and the private lending markets, and (3) to adjust the low loan limits for Title I manufactured home loan insurance to reflect the increase in costs since such limits were last increased in 1992 and to index the limits to inflation.
The Act revised the FHA Title I Manufactured Home Loan Program by:(1) Increasing the loan limits and establishing indexing for future adjustments based on inflation, (2) changing the insurance type from portfolio insurance to individual loan insurance, (3) providing that insurance on each individually Title I insured manufactured home loan be incontestable, except for fraud or misrepresentation, (4) changing the method for calculating the insurance premium by allowing for both an upfront insurance premium, not to exceed 2.25 percent, and an annual insurance premium to be paid during the term of the loan, not to exceed 1.0 percent, (5) revising the underwriting criteria for loans and advances of credit in connection with the Title I manufactured home loan products as may be necessary to ensure that the program is financially sound, and (6) requiring a leasehold agreement if a manufactured home unit is to be situated in a manufactured home community. The term of the lease must not less than 3 years, renewable upon expiration of the original term by successive 1 year terms. The lessor must provide the lessee written notice of termination of the lease not less than 180 days prior to expiration of the current lease.
A Title I Letter has been issued to implement these reforms. HUD requests comments from lenders and other interested parties with regard to the implementation of these reforms. All comments received will be reviewed and considered by HUD in its development of a rule amending the Title I Manufactured Home Loan Program regulations at 24 CFR part 201. The rule will adopt the letter as issued or as may be revised pursuant to public comment or further consideration by HUD. Although FHA welcomes comments on all aspects of the Title I Letter, it is especially interested in receiving comments concerning upfront and periodic insurance charges, the methodology for indexing so as to be able to annually adjust the maximum loan limits, the underwriting criteria, and the potential economic costs and benefits of the reforms contained in the letter.
Comments must be submitted by the deadline date established in theDATESsection of this notice, and in accordance with the instructions contained in theADDRESSESsection of this notice.
Dated: April 14, 2009.
Brian D. Montgomery,
Assistant Secretary for Housing—Federal Housing Commissioner.