Proposed Rule Seeks Methodology for Adjusting Loan Limits Each Year for Manufactured Homes Titled as Personal Property
The Federal Housing Administration has published a proposed rule in the Federal Register to increase and index the loan limits for its Title I Manufactured Home Loan Program that insures loans for manufactured homes titled as personal property, otherwise known as chattel loans.
It seeks public comment on a data-driven methodology to calculate loan limits for the program on an annual basis. The publication is the latest step in FHA’s efforts to promote manufactured homes, an important component of the Biden-Harris Administration’s May 2022 Housing Supply Action Plan.
“Adjusting loan limits to current market conditions will make Title I a much more useful source of affordable loan financing for manufactured homes,” Federal Housing Commissioner Julia Gordon said. “This proposal is the next step in FHA’s ongoing work to support manufactured housing as an affordable and attractive option in a challenging housing market.”
Loan limits for the Title I Manufactured Home Loan Program were last updated by the Housing and Economic Recovery Act of 2008. The proposed methodology will be used to establish indexes that annually calculate and adjust loan limits using sale prices, the number of sections of the manufactured home, and property data collected by the U.S. Census Bureau. FHA’s proposal includes separate indexes for single-section manufactured homes and multi-section manufactured homes for the three loan categories covered under the Title I Manufactured Home Loan Program:
- Manufactured home loans used for the purchase or refinance of manufactured home only;
- Manufactured home lot loans used for the purchase or refinance of the land where the home will be installed; and
- Manufactured home and lot combination loans used for the purchase or refinance of both the home and the land on which the home will be installed.
In November 2021, FHA published revised and enhanced Title I Manufactured Home Loan Program policies in its “Single Family Housing Policy Handbook” section 4000.1. These changes made it easier for lenders to understand and use the program while providing expanded eligibility requirements for loan financing that are consistent with the criteria for income and property valuations used in real-estate mortgage financing.
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