[Title 24 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2012 Edition]
[From the U.S. Government Printing Office]



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                        Title 24

                 Housing and Urban Development


________________________

                       Part 1700 to End

                         Revised as of April 1, 2012

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2012
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 24:
    SUBTITLE B--Regulations Relating to Housing and Urban 
      Development (Continued)
          Chapter X--Office of Assistant Secretary for 
          Housing--Federal Housing Commissioner, Department of 
          Housing and Urban Development (Interstate Land Sales 
          Registration Program)                                      5
          Chapter XII--Office of Inspector General, Department 
          of Housing and Urban Development                          87
          Chapter XV--Emergency Mortgage Insurance and Loan 
          Programs, Department of Housing and Urban 
          Development                                              105
          Chapter XX--Office of Assistant Secretary for 
          Housing--Federal Housing Commissioner, Department of 
          Housing and Urban Development                            119
          Chapter XXIV--Board of Directors of the Hope for 
          Homeowners Program                                       425
          Chapter XXV--Neighborhood Reinvestment Corporation       439
  Finding Aids:
      Table of CFR Titles and Chapters........................     451
      Alphabetical List of Agencies Appearing in the CFR......     471
      List of CFR Sections Affected...........................     481

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 24 CFR 1710.1 refers 
                       to title 24, part 1710, 
                       section 1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
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name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
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LEGAL STATUS

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HOW TO USE THE CODE OF FEDERAL REGULATIONS

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OMB CONTROL NUMBERS

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[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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    Acting Director,
    Office of the Federal Register.
    April 1, 2012.







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                               THIS TITLE

    Title 24--Housing and Urban Development is composed of five volumes. 
The first four volumes containing parts 0-199, parts 200-499, parts 500-
699, parts 700-1699, represent the regulations of the Department of 
Housing and Urban Development. The fifth volume, containing part 1700 to 
end, continues with regulations of the Department of Housing and Urban 
Development and also includes regulations of the Board of Directors of 
the Hope for Homeowners Program, and the Neighborhood Reinvestment 
Corporation. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of April 1, 2012.

    For this volume, Bonnie Fritts was Chief Editor. The Code of Federal 
Regulations publication program is under the direction of Michael L. 
White, assisted by Ann Worley.

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                 TITLE 24--HOUSING AND URBAN DEVELOPMENT




                  (This book contains part 1700 to End)

  --------------------------------------------------------------------

   SUBTITLE B--Regulations Relating to Housing and Urban Development 
                                (Continued)

                                                                    Part

chapter x--Office of Assistant Secretary for Housing--
  Federal Housing Commissioner, Department of Housing and 
  Urban Development (Interstate Land Sales Registration 
  Program)..................................................        1710

chapter xii--Office of Inspector General, Department of 
  Housing and Urban Development.............................        2002

chapter xv--Emergency Mortgage Insurance and Loan Programs, 
  Department of Housing and Urban Development...............        2700

chapter xx--Office of Assistant Secretary for Housing--
  Federal Housing Commissioner, Department of Housing and 
  Urban Development.........................................        3280

chapter xxiv--Board of Directors of the Hope for Homeowners 
  Program...................................................        4001

chapter xxv--Neighborhood Reinvestment Corporation..........        4100

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   Subtitle B--Regulations Relating to Housing and Urban Development 
                               (Continued)

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 CHAPTER X--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING 
 COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (INTERSTATE 
                    LAND SALES REGISTRATION PROGRAM)




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Part                                                                Page
1700-1709       [Reserved]

1710            Land registration...........................           7
1715            Purchasers' revocation rights, sales 
                    practices and standards.................          64
1720            Formal procedures and rules of practice.....          68

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PARTS 1700	1709 [RESERVED]--Table of Contents





PART 1710_LAND REGISTRATION--Table of Contents



                     Subpart A_General Requirements

Sec.
1710.1 Definitions.
1710.3 General applicability.
1710.4 Exemptions--general.
1710.5 Statutory exemptions from the provisions of this chapter.
1710.6 One hundred lot exemption.
1710.7 Twelve lot exemption.
1710.8 Scattered site subdivisions.
1710.9 Twenty acre lots.
1710.10 Single-family residence exemption.
1710.11 Manufactured home exemption.
1710.12 Intrastate exemption.
1710.13 Metropolitan Statistical Area (MSA) exemption.
1710.14 Regulatory exemptions.
1710.15 Regulatory exemption--multiple site subdivision--determination 
          required.
1710.16 Regulatory exemption--determination required.
1710.17 Advisory opinion.
1710.18 No action letter.
1710.20 Requirements for registering a subdivision--Statement of 
          Record--filing and form.
1710.21 Effective dates.
1710.22 Statement of record--initial or consolidated.
1710.23 Amendment--filing and form.
1710.29 Use of property report--misstatements, omissions or 
          representation of HUD approval prohibited.
1710.35 Payment of fees.
1710.45 Suspensions.

                    Subpart B_Reporting Requirements

1710.100 Statement of Record--format.
1710.102 General instructions for completing the Statement of Record.
1710.103 Developer obligated improvements.
1710.105 Cover page.
1710.106 Table of contents.
1710.107 Risks of buying land.
1710.108 General information.
1710.109 Title to the property and land use.
1710.110 Roads.
1710.111 Utilities.
1710.112 Financial information.
1710.113 Local services.
1710.114 Recreational facilities.
1710.115 Subdivision characteristics and climate.
1710.116 Additional information.
1710.117 Cost sheet, signature of Senior Executive Officer.
1710.118 Receipt, agent certification and cancellation page.
1710.200 Instructions for Statement of Record, Additional Information 
          and Documentation.
1710.208 General information.
1710.209 Title and land use.
1710.210 Roads.
1710.211 Utilities.
1710.212 Financial information.
1710.214 Recreational facilities.
1710.215 Subdivision characteristics and climate.
1710.216 Additional information.
1710.219 Affirmation.
1710.310 Annual report of activity.

      Subpart C_Certification of Substantially Equivalent State Law

1710.500 General.
1710.503 Notice of certification.
1710.504 Cooperation among certified states and between certified states 
          and the Secretary.
1710.505 Withdrawal of State certification.
1710.506 State/Federal filing requirements.
1710.507 Effect of suspension or withdrawal of certification granted 
          under Sec. 1710.501(a): Full disclosure requirement.
1710.508 Effect of suspension of certification granted under Sec. 
          1710.501(b): Sufficient protection requirement.
1710.552 Previously accepted state filings.
1710.556 Previously accepted state filings--amendments and 
          consolidations.
1710.558 Previously accepted state filings--notice of revocation rights 
          on property report cover page.
1710.559 Previously accepted state filings--notice of revocation rights 
          in contracts and agreements.

    Authority: 15 U.S.C. 1718; 42 U.S.C. 3535(d).



                     Subpart A_General Requirements

    Authority: Sec. 1419, Interstate Land Sales Full Disclosure Act, 82 
Stat. 590, 598; 15 U.S.C. 1718; sec. 7(d), Dept. of Housing and Urban 
Development Act, 42 U.S.C. 3535(d).



Sec. 1710.1  Definitions.

    (a) Statutory terms. All terms are used in accordance with their 
statutory meaning in 15 U.S.C. 1702 or with part 5 of this title, unless 
otherwise defined in paragraph (b) of this section or elsewhere in this 
part.
    (b) Other terms. As used in this part:
    Act means the Interstate Land Sales Full Disclosure Act, 15 U.S.C. 
1701.
    Advisory opinion means the formal written opinion of the Secretary 
as to jurisdiction in a particular case or the applicability of an 
exemption under Sec. Sec. 1710.5 through 1710.15, based on facts 
submitted to the Secretary.

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    Available for use means that in addition to being constructed, the 
subject facility is fully operative and supplied with any materials and 
staff necessary for its intended purpose.
    Beneficial property restrictions means restrictions that are 
enforceable by the lot owners and are designed to control the use of the 
lot and to preserve or enhance the environment and the aesthetic and 
economic value of the subdivision.
    Date of filing means the date a Statement of Record, amendment, or 
consolidation, accompanied by the applicable fee, is received by the 
Secretary.
    Good faith estimate means an estimate based on documentary evidence. 
In the case of cost estimates, the documentation may be obtained from 
the suppliers of the services. In the case of estimates of completion 
dates, the documentation may be actual contracts let, engineering 
schedules, or other evidence of commitments to complete the amenities.
    Lot means any portion, piece, division, unit, or undivided interest 
in land located in any State or foreign country, if the interest 
includes the right to the exclusive use of a specific portion of the 
land.
    OILSR means the Interstate Land Sales Registration program.
    Owner means the person or entity who holds the fee title to the land 
and has the power to convey that title to others.
    Parent corporation means that entity which ultimately controls the 
subsidiary, even though the control may arise through any series or 
chain of other subsidiaries or entities.
    Principal means any person or entity holding at least a 10 percent 
financial or ownership interest in the developer or owner, directly or 
through any series or chain of subsidiaries or other entities.
    Rules means all rules adopted pursuant to the Act, including the 
general requirements published in this part.
    Sale means any obligation or arrangement for consideration to 
purchase or lease a lot directly or indirectly. The terms ``sale'' or 
``seller'' include in their meanings the terms ``lease'' and ``lessor''.
    Senior Executive Officer means the individual of highest rank 
responsible for the day-to-day operations of the developer and who has 
the authority to bind or commit the developing entity to contractual 
obligations.
    Site means a group of contiguous lots, whether such lots are 
actually divided or proposed to be divided. Lots are considered to be 
contiguous even though contiguity may be interrupted by a road, park, 
small body of water, recreational facility, or any similar object.
    Start of construction means breaking ground for building a facility, 
followed by diligent action to complete the facility.

[61 FR 13597, Mar. 27, 1996]



Sec. 1710.3  General applicability.

    Except in the case of an exempt transaction, a developer may not 
sell or lease lots in a subdivision, making use of any means or 
instruments of transportation or communication in interstate commerce, 
or of the mails, unless a Statement of Record is in effect in accordance 
with the provisions of this part. In non-exempt transactions, the 
developer must give each purchaser a printed Property Report, meeting 
the requirements of this part, in advance of the purchaser's signing of 
any contract or agreement for sale or lease.

(Approved by the Office of Management and Budget under control number 
2502-0243)

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984]



Sec. 1710.4  Exemptions--general.

    (a) The exemptions available under Sec. Sec. 1710.5 through 1710.16 
are not applicable when the method of sale, lease or other disposition 
of land or an interest in land is adopted for the purpose of evasion of 
the Act.
    (b) With the exception of the sales or leases which are exempt under 
Sec. 1710.5, the anti-fraud provisions of the Act (15 U.S.C. 
1703(a)(2)) apply to exempt transactions. The anti-fraud provisions make 
it unlawful for a developer or agent to employ any device, scheme, or 
artifice to:
    (1) Defraud;

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    (2) To obtain money or property by means of any untrue statement of 
a material fact, or
    (3) To omit to state a material fact necessary in order to make the 
statements made not misleading, with respect to any information 
pertinent to the lot or subdivision; or
    (4) To engage in any transaction, practice, or course of business 
which operates or would operate as a fraud or deceit upon a purchaser.
    (c) The anti-fraud provisions of the Act require that certain 
representations be included in the contract in transactions which are 
not exempt under Sec. 1710.5. Specifically, the Act requires that if a 
developer or agent represents that roads, sewers, water, gas or electric 
service or recreational amenities will be provided or completed by the 
developer, the contract must stipulate that the services or amenities 
will be provided or completed. See Sec. 1715.15(f).
    (d) Eligibility for exemptions available under Sec. Sec. 1710.5 
through 1710.14 is self-determining. With the exception of the 
exemptions available under Sec. Sec. 1710.15 and 1710.16, a developer 
is not required to file notice with or obtain the approval of the 
Secretary in order to take advantage of an exemption. If a developer 
elects to take advantage of an exemption, the developer is responsible 
for maintaining records to demonstrate that the requirements of the 
exemption have been met.
    (e) A developer may present evidence, or otherwise discuss, in an 
informal hearing before the OILSR Administrator or designee, the 
Department's position on the jurisdiction or non-exempt status of a 
particular subdivision.

[45 FR 40479, June 13, 1980, as amended at 54 FR 40866, Oct. 4, 1989]



Sec. 1710.5  Statutory exemptions from the provisions of this chapter.

    A listing of the statutory exemptions is contained in 15 U.S.C. 
1703. In accordance with 15 U.S.C. 1703(a)(2), if the sale involves a 
condominium or multi-unit construction, a presale clause conditioning 
the sale of a unit on a certain percentage of sales of other units is 
permissible if it is legally binding on the parties and is for a period 
not to exceed 180 days. However, the 180-day provision cannot extend the 
2-year period for performance. The permissible 180 days is calculated 
from the date the first purchaser signs a sales contract in the project 
or, if a phased project, from the date the first purchaser signs the 
first sales contract in each phase.

[61 FR 13597, Mar. 27, 1996]



Sec. 1710.6  One hundred lot exemption.

    The sale of lots in a subdivision is exempt from the registration 
requirements of the Act if, since April 28, 1969, the subdivision has 
contained fewer than 100 lots, exclusive of lots which are exempt from 
jurisdiction under Sec. 1710.5. In the sale of lots in the subdivision 
that are not exempt under Sec. 1710.5, the developer must comply with 
the Act's anti-fraud provisions, set forth in Sec. 1710.4 (b) and (c).

[49 FR 31368, Aug. 6, 1984]



Sec. 1710.7  Twelve lot exemption.

    (a) The sale of lots is exempt from the registration requirements of 
the Act if, beginning with the first sale after June 20, 1980, no more 
than twelve lots in the subdivision are sold in the subsequent twelve-
month period. Thereafter, the sale of the first twelve lots is exempt 
from the registration requirements if no more than twelve lots were sold 
in each previous twelve month period which began with the anniversary 
date of the first sale after June 20, 1980.
    (b) A developer may apply to the Secretary to establish a different 
twelve month period for use in determining eligibility for the exemption 
and the Secretary may allow the change if it is for good cause and 
consistent with the purpose of this section.
    (c) In determining eligibility for this exemption, all lots sold or 
leased in the subdivision after June 20, 1980, are counted, whether or 
not the transactions are otherwise exempt. Sales or leases made prior to 
June 21, 1980, are not considered in determining eligibility for the 
exemption.
    (d) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984]

[[Page 10]]



Sec. 1710.8  Scattered site subdivisions.

    (a) The sale of lots in a subdivision consisting of noncontiguous 
parts is exempt from the registration requirements of the Act if--
    (1) Each noncontiguous part of the subdivision contains twenty or 
fewer lots; and
    (2) Each purchaser or purchaser's spouse makes a personal, on-the-
lot inspection of the lot purchased prior to signing a contract.
    (b) For purposes of this exemption, interruptions such as roads, 
parks, small bodies of water or recreational facilities do not serve to 
break the contiguity of parts of a subdivision.
    (c) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984]



Sec. 1710.9  Twenty acre lots.

    (a) The sale of lots in a subdivision is exempt from the 
registration requirements of the Act if, since April 28, 1969, each lot 
in the subdivision has contained at least twenty acres. In determining 
eligibility for the exemption, easements for ingress and egress or 
public utilities are considered part of the total acreage of the lot if 
the purchaser retains ownership of the property affected by the 
easement.
    (b) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984]



Sec. 1710.10  Single-family residence exemption.

    (a) General. The sale of a lot which meets the requirements 
specified under paragraphs (b) and (c) of this section is exempt from 
the registration requirements of the Act.
    (b) Subdivision requirements. (1) The subdivision must meet all 
local codes and standards.
    (2) In the promotion of the subdivision there must be no offers, by 
direct mail or telephone solicitation, of gifts, trips, dinners or use 
of similar promotional techniques to induce prospective purchasers to 
visit the subdivision or to purchase a lot.
    (c) Lot requirements. (1) The lot must be located within a 
municipality or county where a unit of local government or the State 
specifies minimum standards in the following areas for the development 
of subdivision lots taking place within its boundaries:
    (i) Lot dimensions.
    (ii) Plat approval and recordation.
    (iii) Roads and access.
    (iv) Drainage.
    (v) Flooding.
    (vi) Water supply.
    (vii) Sewage disposal.
    (2) Each lot sold under the exemption must be either zoned for 
single-family residences or, in the absence of a zoning ordinance, 
limited exclusively by enforceable covenants or restrictions to single-
family residences. Manufactured homes, townhouses, and residences for 
one-to-four family use are considered single-family residences for 
purposes of this exemption provision.
    (3) The lot must be situated on a paved street or highway which has 
been built to standards established by the State or the unit of local 
government in which the subdivision is located. If the roads are to be 
public roads they must be acceptable to the unit of local government 
that will be responsible for maintenance. If the street or highway is 
not complete, the developer must post a bond or other surety acceptable 
to the municipality or county in the full amount of the cost of 
completing the street or highway to assure completion to local 
standards. For purposes of this exemption, paved means concrete or 
pavement with a bituminous surface that is impervious to water, protects 
the base and is durable under the traffic load and maintenance 
contemplated.
    (4) The unit of local government or a homeowners association must 
have accepted or be obligated to accept the responsibility for 
maintaining the street or highway upon which the lot is situated. In any 
case in which a homeowners association has accepted or is obligated to 
accept maintenance responsibility, the developer must, prior to signing 
of a contract or agreement to purchase, provide the purchaser with a 
good faith written estimate of

[[Page 11]]

the cost of carrying out the responsibility over the first ten years of 
ownership.
    (5) At the time of closing, potable water, sanitary sewage disposal, 
and electricity must be extended to the lot or the unit of local 
government must be obligated to install the facilities within 180 days 
following closing. For subdivisions which will not have a central water 
or sewage disposal system, there must be assurances that an adequate 
potable water supply is available year-round and that the lot is 
approved for the installation of a septic tank.
    (6) The contract of sale must require delivery within 180 days after 
the signing of the sales contract of a warranty deed, which at the time 
of delivery is free from monetary liens and encumbrances. If a warranty 
deed is not commonly used in the jurisdiction where the lot is located, 
a deed or grant which warrants that the seller has not conveyed the lot 
to another person may be delivered in lieu of a warranty deed. The deed 
or grant used must warrant that the lot is free from encumbrances made 
by the seller or any other person claiming by, through, or under the 
seller.
    (7) At the time of closing, a title insurance binder or title 
opinion reflecting the condition of title must be in existence and 
issued or presented to the purchaser showing that, subject only to 
exceptions which are approved in writing by the purchaser at the time of 
closing, marketable title to the lot is vested in the seller.
    (8) The purchaser or purchaser's spouse must make a personal, on-
the-lot inspection of the lot purchased prior to signing a contract or 
agreement to purchase.
    (d) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984; 50 
FR 9269, Mar. 7, 1985]



Sec. 1710.11  Manufactured home exemption.

    (a) The sale of a lot is exempt from the registration requirements 
of the Act when the following eligibility requirements are met:
    (1) The lot is sold as a homesite by one party and a manufactured 
home is sold by another party and the contracts of sale--
    (i) Obligate the sellers to perform, contingent upon the other 
seller carrying out its obligations so that a completed manufactured 
home will be erected on a completed homesite within two years after the 
date the purchaser signed the contract to purchase the lot;
    (ii) Provide that all funds received by the sellers are to be 
deposited in escrow accounts independent of the sellers until the 
transactions are completed;
    (iii) Provide that funds received by the sellers will be released to 
the buyer upon demand if the lot on which the manufactured home has been 
erected is not conveyed within two years; and
    (iv) Contain no provisions which restrict the purchaser's remedy of 
bringing suit for specific performance.
    (2) The homesite is developed in conformance with all local codes 
and standards, if any, for manufactured home subdivisions.
    (3) At the time of closing--
    (i) Potable water and sanitary sewage disposal are available to the 
homesite and electricity has been extended to the lot line;
    (ii) The homesite is accessible by roads;
    (iii) The purchaser receives marketable title to the lot; and
    (iv) Other common facilities represented in any manner by the 
developer or agent to be provided are completed or there are letters of 
credit, cash escrows or surety bonds in the form acceptable to the local 
government in an amount equal to 100 percent of the estimated cost of 
completion. Corporate bonds are not acceptable for purposes of the 
exemption.
    (4) For purposes of this section, a manufactured home is a unit 
receiving a label in conformance with HUD regulations implementing the 
National Manufactured Housing Construction and Safety Standards Act of 
1974 (42 U.S.C. 5401).
    (b) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, Aug. 6, 1984; 49 
FR 33644, Aug. 24, 1984; 50 FR 9269, Mar. 7, 1985]

[[Page 12]]



Sec. 1710.12  Intrastate exemption.

    (a) Eligibility requirements. The sale of a lot is exempt from the 
registration requirements of the Act if the following requirements are 
met:
    (1) The sale of lots in the subdivision after December 20, 1979, is 
restricted solely to residents of the State in which the subdivision is 
located unless the sale is exempt under Sec. 1710.5, Sec. 1710.11 or 
Sec. 1710.13.
    (2) The purchaser or purchaser's spouse makes a personal on-the-lot 
inspection of the lot to be purchased before signing a contract.
    (3) Each contract--
    (i) Specifies the developer's and purchaser's responsibilities for 
providing and maintaining roads, water and sewer facilities and any 
existing or promised amenities;
    (ii) Contains a good faith estimate of the year in which the roads, 
water and sewer facilities and promised amenities will be completed; and
    (iii) Contains a non-waivable provision giving the purchaser the 
opportunity to revoke the contract until at least midnight of the 
seventh calendar day following the date the purchaser signed the 
contract. If the purchaser is entitled to a longer revocation period by 
operation of State law, that period becomes the Federal revocation 
period and the contract must reflect the requirements of the longer 
period.
    (4) The lot being sold is free and clear of all liens, encumbrances 
and adverse claims except the following:
    (i) Mortgages or deeds of trust which contain release provisions for 
the individual lot purchased if--
    (A) The contract of sale obligates the developer to deliver, within 
180 days, a warranty deed (or its equivalent under local law), which at 
the time of delivery is free from any monetary liens or encumbrances; 
and
    (B) The purchaser's payments are deposited in an escrow account 
independent of the developer until a deed is delivered.
    (ii) Liens which are subordinate to the leasehold interest and do 
not affect the lessee's right to use or enjoy the lot.
    (iii) Property reservations which are for the purpose of bringing 
public services to the land being developed, such as easements for water 
and sewer lines.
    (iv) Taxes or assessments which constitute liens before they are due 
and payable if imposed by a State or other public body having authority 
to assess and tax property or by a property owners' association.
    (v) Beneficial property restrictions that are mutually enforceable 
by the lot owners in the subdivision. Restrictions, whether separately 
recorded or incorporated into individual deeds, must be applied 
uniformly to every lot or group of lots. To be considered beneficial and 
enforceable, any restriction or covenant that imposes an assessment on 
lot owners must apply to the developer on the same basis as other lot 
owners. Developers who maintain control of a subdivision through a 
Property Owners' Association, Architectural Control Committee, 
restrictive covenant or otherwise, shall transfer such control to the 
lot owners no later than when the developer ceases to own a majority of 
total lots in, or planned for, the subdivision. Relinquishment of 
developer control shall require affirmative action, usually in the form 
of an election based upon one vote per lot.
    (vi) Reservations contained in United States land patents and 
similar Federal grants or reservations.
    (5) Prior to the sale the developer discloses in a written statement 
to the purchaser all qualifying liens, reservations, taxes, assessments 
and restrictions applicable to the lot purchased. The developer must 
obtain a written receipt from the purchaser acknowledging that the 
statement required by this subparagraph was delivered to the purchaser.
    (6) Prior to the sale the developer provides in a written statement 
good faith estimates of the cost to the purchaser of providing electric, 
water, sewer, gas and telephone service to the lot. The estimates for 
unsold lots must be updated every two years or more frequently if the 
developer has reason to believe that significant cost increases have 
occurred. The dates on which the estimates were made must be included in 
the statement. The developer must obtain a written receipt from the 
purchaser acknowledging that

[[Page 13]]

the statement required by this subparagraph was delivered to the 
purchaser.
    (b) Intrastate Exemption Statement. To satisfy the requirements of 
paragraphs (a)(5) and (a)(6) of this section, an Intrastate Exemption 
Statement containing the information prescribed in each such paragraph 
shall be given to each purchaser. A State-approved disclosure document 
may be used to satisfy this requirement if all the information required 
by paragraphs (a)(5) and (a)(6) of this section is included in this 
disclosure. In such a case, the developer must obtain a written receipt 
from the purchaser and comply with all other requirements of the 
exemption. To be acceptable for purposes of the exemption, the 
statement(s) given to purchasers must contain neither advertising nor 
promotion on behalf of the developer or subdivision nor references to 
the U.S. Department of Housing and Urban Development. A sample 
Intrastate Exemption Statement is included in the exemption guidelines.
    (c) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31368, 31369, Aug. 6, 
1984]



Sec. 1710.13  Metropolitan Statistical Area (MSA) exemption.

    (a) Eligibility requirements. The sale of a lot which meets the 
following requirements is exempt from registration requirements of the 
Act:
    (1) The lot is in a subdivision which contains fewer than 300 lots 
and has contained fewer than 300 lots since April 28, 1969.
    (2) The lot is located within a Metropolitan Statistical Area (MSA) 
as defined by the Office of Management and Budget and characterized in 
paragraph (b) of this section.
    (3) The principal residence of the purchaser is within the same MSA 
as the subdivision.
    (4) The purchaser or purchaser's spouse makes a personal on-the-lot 
inspection of the lot to be purchased prior to signing a contract or 
agreement.
    (5) Each contract--
    (i) Specifies the developer's and purchaser's responsibilities for 
providing and maintaining roads, water and sewer facilities and any 
existing or promised amenities;
    (ii) Contains a good faith estimate of the year in which the roads, 
water and sewer facilities and promised amenities will be completed;
    (iii) Contains a nonwaivable provision giving the purchaser the 
opportunity to revoke the contract until at least midnight of the 
seventh calendar day following the date the purchaser signed the 
contract, or, if the purchaser is entitled to a longer revocation period 
by operation of State law, that period becomes the Federal revocation 
period and the contract must reflect the requirements of the longer 
period.
    (6) The lot being sold must be free and clear of liens such as 
mortgages, deeds of trust, tax liens, mechanics' liens, or judgments. 
For purposes of this exemption, the term liens does not include the 
following:
    (i) Mortgages or deeds of trust which contain release provisions for 
the individual lot purchased if--
    (A) The contract of sale obligates the developer to deliver, within 
180 days, a warranty deed (or its equivalent under local law), which at 
the time of delivery is free from any monetary liens or encumbrances; 
and
    (B) The purchaser's payments are deposited in an escrow account 
independent of the developer until a deed is delivered.
    (ii) Liens which are subordinate to the leasehold interest and do 
not affect the lessee's right to use or enjoy the lot.
    (iii) Property reservations which are for the purpose of bringing 
public services to the land being developed, such as easements for water 
and sewer lines.
    (iv) Taxes or assessments which constitute liens before they are due 
and payable if imposed by a State or other public body having authority 
to assess and tax property or by a property owners' association.
    (v) Beneficial property restrictions that are mutually enforceable 
by the lot owners in the subdivision. Restrictions, whether separately 
recorded or incorporated into individual deeds, must be applied 
uniformly to every lot

[[Page 14]]

or group of lots. To be considered beneficial and enforceable, any 
restriction or covenant that imposes an assessment on lot owners must 
apply to the developer on the same basis as other lot owners. Developers 
who maintain control of a subdivision through a Property Owners' 
Association, Architectural Control Committee, restrictive covenants, or 
otherwise, shall transfer such control to the lot owners no later than 
when the developer ceases to own a majority of total lots in, or planned 
for, the subdivision. Relinquishment of developer control shall require 
affirmative action, usually in the form of an election based upon one 
vote per lot.
    (vi) Reservations contained in United States land patents and 
similar Federal grants or reservations.
    (7) Before the sale the developer gives a written MSA Exemption 
Statement to the purchaser and obtains a written receipt acknowledging 
that the statement was received. A sample MSA Exemption Statement is 
included in the exemption guidelines. A State-approved disclosure 
document may be used to satisfy this requirement if all of the 
information required by this section is included. The statement(s) given 
to purchasers must contain neither advertising nor promotion on behalf 
of the developer or the subdivision nor references to the U.S. 
Department of Housing and Urban Development. In descriptive and concise 
terms, the statement that the developer must give the purchaser shall 
disclose the following:
    (i) All liens, reservations, taxes, assessments, beneficial property 
restrictions which are enforceable by other lot owners in the 
subdivision, and adverse claims which are applicable to the lot to be 
purchased.
    (ii) Good faith estimates of the cost to the purchaser of providing 
electric, water, sewer, gas and telephone service to the lot. The 
estimates for unsold lots must be updated every two years, or more 
frequently if the developer has reason to believe that significant cost 
increases have occurred. The dates on which the estimates were made must 
be included in the statement.
    (8) The developer executes and gives to the purchaser a written 
instrument designating a person within the State of residence of the 
purchaser as the developer's agent for service of process. The developer 
must also acknowledge in writing that it submits to the legal 
jurisdiction of the State in which the purchaser or lessee resides.
    (9) The developer executes a written affirmation for each sale made 
under this exemption. By January 31 of each year, the developer submits 
to the Secretary a copy of the executed affirmation for each sale made 
during the preceding calendar year or a master affirmation in which are 
listed all purchasers' names and addresses and the identity of the lots 
purchased. Individual affirmations must be available for the Secretary's 
review at all times during the year.
    The affirmation must be in the following form:

Developer's Name________________________________________________________
Developer's Address_____________________________________________________
Purchaser's Name(s)_____________________________________________________
Purchaser's Address(es) (including county)______________________________
Name of Subdivision_____________________________________________________
Legal Description of Lot(s) Purchased___________________________________

    I hereby affirm that all of the requirements of the MSA exemption as 
set forth in 15 U.S.C. 1702(b)(8) and 24 CFR 1710.13 have been met in 
the sale or lease of the lot(s) described above.
    I also affirm that I submit to the jurisdiction of the Interstate 
Land Sales Full Disclosure Act with regard to the sale or lease cited 
above.

(Date)__________________________________________________________________
(Signature of Developer or Authorized Agent)____________________________
________________________________________________________________________
(Title)_________________________________________________________________

    (b) Metropolitan Statistical Area. Metropolitan Statistical Areas 
are defined by the Office of Management and Budget generally on the 
basis of population statistics reported in a census. To determine 
whether a subdivision is located within an MSA and the boundaries of an 
MSA, contact the Office of Information and Regulatory Affairs, Office of 
Management and Budget, 726 Jackson Place, NW., Washington, DC 20503.
    (c) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c).

[45 FR 40479, June 13, 1980, as amended at 49 FR 31369, Aug. 6, 1984]

[[Page 15]]



Sec. 1710.14  Regulatory exemptions.

    (a) Eligibility requirements. The following transactions are exempt 
from the registration requirements of the Act unless the Secretary has 
terminated the exemption in accordance with paragraph (b) of this 
section.
    (1) The sale of lots, each of which will be sold for less than $100, 
including closing costs, if the purchaser will not be required to 
purchase more than one lot.
    (2) The lease of lots for a term not to exceed five years if the 
terms of the lease do not obligate the lessee to renew.
    (3) The sale of lots to a person who is engaged in a bona fide land 
sales business.
    (4) The sale of a lot to a person who owns the contiguous lot which 
has a residential, commercial or industrial building on it.
    (5) The sale of real estate to a government or government agency.
    (6) The sale of a lot to a person who has leased and resided 
primarily on the lot for at least the year preceeding the sale.
    (b) Termination. If the Secretary has reasonable grounds to believe 
that exemption from the registration requirements in a particular case 
is not in the public interest, the Secretary may, after issuing a notice 
and giving the respondent an opportunity to request a hearing within 
fifteen days of receipt of the notice, terminate eligibility for 
exemption. The basis for issuing a notice may be the conduct of the 
developer or agent, such as unlawful conduct or insolvency, or adverse 
information about the lots or real estate that should be disclosed to 
the purchasers. Proceedings will be governed by Sec. 1720.238.
    (c) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31370, Aug. 6, 1984]



Sec. 1710.15  Regulatory exemption--multiple site subdivision-
-determination required.

    (a) General. (1) The sale of lots contained in multiple sites of 
fewer than 100 lots each, offered pursuant to a single common 
promotional plan, is exempt from the registration requirements.
    (2) For purposes of this exemption, the sale of lots in an 
individual site that exceeds 99 lots is not exempt from registration. 
Likewise, the sale of lots in a site containing fewer than 100 lots, 
where the developer either owns contiguous land or holds an option or 
other evidence of intent to acquire contiguous land which, when taken 
cumulatively, would or could result in one site of 100 or more lots, is 
not exempt from registration. Furthermore, the sale of lots that are 
within a subdivision established by a separate developer is not exempt 
from registration by this provision.
    (b) Eligibility requirements. The sale of each lot must meet the 
following requirements to be eligible for this exemption.
    (1) The lot is sold ``as is'' with all advertised improvements and 
amenities completed and in the condition advertised.
    (2) The lot is in conformance with all local codes and standards.
    (3) The lot is accessible, both legally and physically. For lots 
which are advertised or otherwise represented as ``residential'', either 
primary or secondary, with any inference that a permanent or temporary 
dwelling unit of any description (excluding collapsible tents) can be 
built or installed, physical access must be available by automobile, 
pick-up truck or equivalent ``on-road'' vehicle.
    (4) At the time of closing, a title insurance binder or title 
opinion reflecting the condition of title must be issued to the 
purchaser showing that, subject only to exceptions approved in writing 
by the purchaser at the time of closing, marketable title is vested in 
the seller.
    (5) Each contract or agreement and any promissory notes--
    (i) Contain the following non-waivable provision in bold face type 
(which must be distinguished from the type used for the rest of the 
document) on the face or signature page above all signatures:

    You have the option to cancel your contract or agreement of sale by 
notice to the

[[Page 16]]

seller until midnight of the seventh day following the date of signing 
of the contract or agreement.
    If you did not receive a Lot Information Statement prepared pursuant 
to the rules and regulations of the Interstate Land Sales Registration 
Division, U.S. Department of Housing and Urban Development, in advance 
of your signing the contract or agreement, the contract or agreement of 
sale may be cancelled at your option for two years from the date of 
signing.


If the purchaser is entitled to a longer revocation period by operation 
of state or local law, that period becomes the Federal revocation period 
and the contract must reflect the requirement of the longer period 
rather than the seven days. The revocation provisions may not be limited 
or qualified in the contract or other document by requiring a specific 
type of notice or by requiring that notice be given at a specified 
place.
    (ii) Obligate the developer to deliver, within 180 days, a warranty 
deed (or its equivalent under local law) for the lot which at the time 
of delivery is free from any monetary liens or encumbrances.
    (6) The purchaser or purchaser's spouse makes a personal on-the-lot 
inspection of the lot to be purchased before signing a contract.
    (7) The purchaser's payments are deposited in an escrow account 
independent of the developer until a deed is delivered.
    (8) Prior to the purchaser signing a contract or agreement of sale, 
the developer discloses in a written Lot Information Statement all 
liens, reservations, taxes, assessments, easements and restrictions 
applicable to the lot purchased (see paragraph (b)(11) of this section).
    (9) Prior to the purchaser signing a contract or agreement of sale, 
the developer discloses in a written Lot Information Statement the name, 
address and telephone number of the local governmental agency or 
agencies from which information on permits or other requirements for 
water, sewer and electrical installations can be obtained. This 
Statement will also contain the name, address and telephone number of 
the suppliers which would or could provide the foregoing services.
    (10) The lot sale must comply with the anti-fraud provisions of 24 
CFR 1710.4 (b) and (c) and the sales practices and standards in 24 CFR 
1715.10 through 1715.28.
    (11) A written Lot Information Statement must be delivered to, and 
acknowledged by, each purchaser prior to his or her signing a contract 
or agreement of sale, and must contain the information shown in the 
format below. The Statement must be typed or printed in at least 10 
point font. A copy of the acknowledgement will be maintained by the 
developer for three years and will be made available to OILSR upon 
request. If the Statement is not delivered as required, the contract or 
agreement of sale may be revoked and a full refund paid, at the option 
of the purchaser, within two years of the signing date and the contract 
or agreement of sale will clearly provide this right.

                              Sample Format

    (Use of the following headings and first paragraph are mandatory.)

                        Lot Information Statement

            Important: Read Carefully Before Signing Anything

    The developer has obtained a regulatory exemption from registration 
under the Interstate Land Sales Full Disclosure Act. One requirement of 
that exemption is that you must receive this Statement prior to the time 
you sign an agreement (contract) to purchase a lot.

                             Right To Cancel

    (Under this heading the developer is to state the specific 
rescission rights provided for in the contract pursuant to 
1710.15(b)(5)(i)).

                           Risk of Buying Land

    (Under this heading the developer is to list the following 
information:)
    There are certain risks in purchasing real estate that you should be 
aware of. The following are some of those risks:
    The future value of land is uncertain and dependent upon many 
factors. Do not expect all land to automatically increase in value.
    Any value which your lot may have will be affected if roads, 
utilities and/or amenities cannot be completed or maintained.

[[Page 17]]

    Any development will likely have some impact on the surrounding 
environment. Development which adversely affects the environment may 
cause governmental agencies to impose restriction on the use of the 
land.
    In the purchase of real estate, many technical requirements must be 
met to assure that you receive proper title and that you will be able to 
use the land for its intended purpose. Since this purchase involves a 
major expenditure of money, it is recommended that you seek professional 
advice before you obligate yourself.
    If adequate provisions have not been made for maintenance of the 
roads or if the land is not served by publicly maintained roads, you may 
have to maintain the roads at your expense.
    If the land is not served by a central sewage system and/or water 
system, you should contact the local authorities to determine whether a 
permit will be given for an on-site sewage disposal system and/or well 
and whether there is an adequate supply of water. You should also become 
familiar with the requirements for, and the cost of, obtaining 
electrical service to the lot.

                          Developer Information

    (Under this heading the developer is to list the following 
information:)

Developer's Name:_______________________________________________________
Address:________________________________________________________________
Telephone Number:_______________________________________________________

                             Lot Information

    (Under this heading the developer is to list the following 
information:)

Lot Location:___________________________________________________________
    (Enter a statement disclosing all liens, reservations, taxes, 
assessments, easements and restrictions applicable to the lot. A copy of 
the restrictions may be attached in lieu of recitation.)

              Suppliers of Utilities and Issuers of Permits

    (Under this heading the developer is to list the name, address and 
phone number of the appropriate governmental agency or agencies, if any, 
that will provide information on permits or other requirements for 
water, sewer and electrical installations. The information will also 
contain the name, address and telephone number of the suppliers of such 
utilities which can provide information to the purchaser on costs and 
availability of such services. A chart similar to the one below may be 
used to supply this information.
    Listed below are contact points for determining permit requirements, 
if any, and to obtain information on approximate costs and availability 
for the listed services:

------------------------------------------------------------------------
                                            Name, Address and Telephone
                                                     Number of
                                         -------------------------------
                                           Governmental
                                              agency         Supplier
------------------------------------------------------------------------
Water...................................
Sewer...................................
Electricity.............................
------------------------------------------------------------------------

    If misrepresentations are made in the sale of this lot to you, you 
may have rights under the Interstate Land Sales Full Disclosure Act. If 
you have evidence of any scheme, artifice or device used to defraud you, 
you may wish to contact: Interstate Land Sales Registration Division, 
HUD Building, Room 6278, 451 Seventh Street, SW., Washington, DC 20410.
    (The Receipt is to be in the following form:)

              Sample Receipt For Lot Information Statement

Purchaser (print or type):______________________________________________
Date:___________________________________________________________________
Signature of purchaser:_________________________________________________
Street Address:_________________________________________________________
City:___________________________________________________________________
State:__________________________________________________________________
Zip:____________________________________________________________________
Name of salesperson (print or type):____________________________________
Signature of salesperson:_______________________________________________

    (c) Request for Multiple Site Subdivision Exemption. (1) The 
developer must file a request for the Multiple Site Subdivision 
Exemption in the following format. The request must be accompanied by a 
filing fee of $500 (prepared in accordance with Sec. 1710.35 (a)) and a 
sample Lot Information Statement.

             Request for Multiple Site Subdivision Exemption

    Developer:
Name:___________________________________________________________________
Address:________________________________________________________________
Telephone No.:__________________________________________________________
    Agent:
Name:___________________________________________________________________
Address:________________________________________________________________
Telephone No.:__________________________________________________________
    (Insert a general description of the developer's method of 
operation.)
    I affirm that I am, or will be the developer of the property and/or 
method of operation described above.
    I affirm that the lots in said property will be sold in compliance 
with all of the requirements of 24 CFR 1710.15.
    I further affirm that the statements contained in all documents 
submitted with this request for an Exemption Order are true and 
complete.
Date:___________________________________________________________________
Signature:______________________________________________________________

[[Page 18]]

Title:__________________________________________________________________
    Warning: 18 U.S.C. 1001 provides, among other things, that whoever 
knowingly and willingly makes or uses a document or writing containing 
any false, fictitious, or fraudulent statement or entry, in any matter 
within the jurisdiction of any department or agency of the United 
States, shall be fined not more than $10,000 or imprisoned for not more 
than 5 years or both.

    (2) This exemption will become effective upon issuance of an 
Exemption Order by the Secretary.
    (d) Annual Report. (1) By January 31 of each year the developer will 
send a report to the Secretary listing each site and its location 
available for a sale pursuant to the exemption during the preceding year 
and indicate the number of lot sales made in each site. The report will 
describe any changes in the information provided in the Request for the 
Multiple Site Subdivision Exemption or contain a statement that there 
are no changes.
    (2) The Annual Report must be accompanied by a filing fee of $100.
    (3) The Annual Report must be signed and dated by the developer, 
attesting to its completeness and accuracy.
    (4) Failure to submit the Annual Report within ten days after the 
receipt of notice from the Secretary will automatically terminate 
eligibility for the exemption as of the Report due date.
    (e) Termination. If, subsequent to the issuance of an Exemption 
Order, the Secretary has reasonable grounds to believe that exemption 
from the registration requirements in the particular case is not in the 
public interest, the Secretary may, after issuing a notice and giving 
the respondent an opportunity to request a hearing within fifteen days 
of receipt of the notice, terminate the exemption order. The basis for 
issuing a notice may be apparent omissions or misrepresentations in the 
documents submitted to the Secretary, the conduct of the developer or 
agent, such as unlawful conduct or insolvency, or adverse information 
about the real estate that should be disclosed to purchasers. 
Proceedings will be governed by 24 CFR 1720.238.

[54 FR 40866, Oct. 4, 1989]



Sec. 1710.16  Regulatory exemption--determination required.

    (a) General. The Secretary may exempt from the registration 
requirements of the Act any subdivision or lots in a subdivision by 
issuing an order in writing if it is determined that registration is not 
necessary in the public interest and for the protection of purchasers on 
the basis of the small amount or limited character of the offering and 
the requirements contained in paragraph (b) of this section.
    (b) Eligibility requirements. An exemption order may be issued at 
the discretion of the Secretary on the basis of the small amount or 
limited character of the offering if the following requirements are met:
    (1) The subdivision or sales substantially meet the requirements of 
one of the exemptions available under this chapter.
    (2) Each contract--
    (i) Specifies the developer's and purchaser's responsibilities for 
providing and maintaining roads, water and sewer facilities and any 
existing or promised amenities;
    (ii) Contains a good faith estimate of the year in which the roads, 
water and sewer facilities and promised amenities will be completed;
    (iii) Contains a non-waivable provision giving the purchaser the 
opportunity to revoke the contract until at least midnight of the 
seventh calendar day following the date the purchaser signed the 
contract. If the purchaser is entitled to a longer revocation period by 
operation of State law, that period becomes the Federal revocation 
period and the contract must reflect the requirements of the longer 
period.
    (iv) Contains a provision that obligates the developer to deliver to 
the purchaser within 180 days of the date the purchaser signed the sales 
contract, a warranty deed, or its equivalent under local law, which at 
the time of delivery is free from any monetary liens or encumbrances.
    (3) The purchaser or purchaser's spouse makes a personal on-the-lot 
inspection of the lot to be purchased before signing a contract.
    (4) The developer files a request for an exemption order and 
supporting documentation in accordance with

[[Page 19]]

paragraphs (c) and (d) of this section and submits a filing fee of 
$500.00 in accordance with Sec. 1710.35(a) of this part. This fee is 
not refundable.
    (c) Request. The request for an Exemption Order must be in the 
following format:

                       Request for Exemption Order

Subdivision_____________________________________________________________
Location (including county)_____________________________________________
Developer_______________________________________________________________
Address_________________________________________________________________
Authorized Agent or President of Developer______________________________
________________________________________________________________________
Address_________________________________________________________________
Number of Lots Subject to Exemption Request_____________________________
Description of Lots (list lot and block number or other identifying 
designation)____________________________________________________________
________________________________________________________________________
    I affirm that I am the developer or owner of the property described 
above or will be the developer or owner at the time the lots are offered 
for sale to the public, or that I am the agent authorized by the 
developer or owner to complete this statement.
    I further affirm that the statements contained in all documents 
submitted with the request for an exemption order are true and complete.

________________________________________________________________________
(Date)
________________________________________________________________________
(Signature of Developer, Owner or Authorized Agent)
________________________________________________________________________
(Title)

    Warning: Section 1418 of the Housing and Urban Development Act of 
1968 (83 Stat. 598, 15 U.S.C. 1717 as amended) provides: ``any person 
who willfully violates any of the provisions of this title or the rules 
and regulations prescribed pursuant thereto * * *, shall upon conviction 
be fined not more than $10,000.00 or imprisoned not more than five 
years, or both.''

    (d) Supporting documentation. A request for an exemption order must 
be accompanied by the following documentation:
    (1) A plat of the entire subdivision with the lots subject to the 
exemption request delineated thereon.
    (2) A copy of the contract to be used.
    (3) A clear and specific statement detailing how the proposed sales 
of lots subject to the exemption request substantially complies with one 
of the available exemption provisions.
    (4) A description of the method by which the lots have been and will 
be promoted and to which population centers the promotion has been and 
will be directed.
    (e) The sale must also comply with the anti-fraud provisions of 
Sec. 1710.4 (b) and (c) of this part.
    (f) Termination. If, subsequent to the issuance of an exemption 
order, the Secretary has reasonable grounds to believe that exemption 
from the registration requirements in the particular case is not in the 
public interest, the Secretary may, after issuing a notice and giving 
the respondent an opportunity to request a hearing within fifteen days 
of receipt of the notice, terminate the exemption order. The basis for 
issuing a notice may be apparent omissions or misrepresentations in the 
documents submitted to the Secretary, the conduct of the developer or 
agent, such as unlawful conduct or insolvency, or adverse information 
about the real estate that should be disclosed to purchasers. 
Proceedings will be governed by Sec. 1720.238.

[45 FR 40479, June 13, 1980, as amended at 49 FR 31370, 31373, Aug. 6, 
1984]



Sec. 1710.17  Advisory opinion.

    (a) General. A developer may request an opinion from the Secretary 
as to whether an offering qualifies for an exemption or is subject to 
the jurisdiction of the Act.
    (b) Requirements. All requests for Advisory Opinions must be 
accompanied by the following:
    (1) A $500.00 filing fee submitted in accordance with Sec. 
1710.35(a). This fee is not refundable.
    (2) A comprehensive description of the conditions and operations of 
the offering. There is no prescribed format for submitting this 
information, but the developer should at least cite the applicable 
statutory or regulatory basis for the exemption or lack of jurisdiction 
and thoroughly explain how the offering either satisfies the 
requirements for exemption or falls outside the purview of the Act.
    (3) An affirmation as shown below:

                         Developer's Affirmation

Name of Subdivision_____________________________________________________
Location (Including County and State)___________________________________
Name of Developer_______________________________________________________
Address of Developer____________________________________________________
Name of Agent___________________________________________________________
Address of Agent________________________________________________________

[[Page 20]]

Number of Lots in Subdivision___________________________________________
Number of Acres in Subdivision__________________________________________

    I affirm that I am the developer or owner of the property described 
above or will be the developer or owner at the time the lots are offered 
for sale to the public, or that I am the agent authorized by the 
developer or owner to complete this statement.
    I further affirm that the statements contained in all documents 
submitted with the request for an Advisory Opinion are true and 
complete.

________________________________________________________________________
(Date)
________________________________________________________________________
(Signature)
________________________________________________________________________
(Title)

    Warning: Section 1418 of the Housing and Urban Development Act of 
1968 (83 Stat. 598, 15 U.S.C. 1717 as amended) provides: ``Any person 
who willfully violates any of the provisions of this title or the rules 
and regulations prescribed pursuant thereto * * *, shall upon conviction 
be fined not more than $10,000.00 or imprisoned not more than five 
years, or both.''

[45 FR 40479, June 13, 1980, as amended at 49 FR 31370, 31373, Aug. 6, 
1984]



Sec. 1710.18  No action letter.

    (a) If the sale of lots is subject to the registration requirements 
of the Act but the circumstances of the sale are such that no 
affirmative action to enforce the registration requirements is needed to 
protect the public interest or prospective purchasers, the Secretary may 
issue a No Action Letter.
    (b) To obtain a No Action Letter a developer must submit a request 
which includes a thorough description of the proposed transaction, the 
property involved, and the circumstances surrounding the sale.
    (c) The issuance of a No Action Letter will not affect any right 
which a purchaser has under the Act, and it will not limit future action 
by the Secretary if there is evidence to show that affirmative action is 
necessary to protect the public interest or prospective purchasers. In 
no event will a No Action Letter be issued after the sale has occurred.

[45 FR 40479, June 13, 1980]



Sec. 1710.20  Requirements for registering a subdivision--Statement of
Record--filing and form.

    (a) Filing. In order to register a subdivision and receive an 
effective date, the developer or owner of the subdivision must file a 
Statement of Record with the Secretary. The official address to be used 
is:

Office of Interstate Land Sales Registration, Department of Housing and 
Urban Development, 451 Seventh Street, SW., Washington, DC 20410.


When the Statement of Record is filed, a fee in the amount set out in 
Sec. 1710.35(b) must be paid in accordance with Sec. 1710.35(a).
    (b) Form. The Statement of Record shall be in the format specified 
in Sec. 1710.100 and shall be completed in accordance with the 
instructions in Sec. Sec. 1710.102, 1710.105 through 1710.118, 
1710.200, 1710.208 through 1710.216 and 1710.219. It shall be supported 
by the documents required by Sec. Sec. 1710.208 through 1710.216 and 
1710.219. It shall include any other information or documents which the 
Secretary may require as being necessary or appropriate for the 
protection of purchasers.
    (c) State filings. A Statement of Record submitted under the 
provisions of 24 CFR part 1710, subpart C--Certification of 
Substantially Equivalent State Law, shall consist of the materials 
designated by the Certification Agreement between the Secretary and the 
certified State in which the subdivision is located.

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979, as amended at 50 FR 10942, Mar. 19, 1985; 
63 FR 54332, Oct. 8, 1998]



Sec. 1710.21  Effective dates.

    (a) General. The effective date of an initial, consolidated or 
amended Statement of Record is the 30th day after the filing of the 
latest amendatory material unless the Secretary notifies the developer 
in writing prior to such 30th day that:
    (1) The effective date has been suspended in accordance with Sec. 
1710.45(a), or
    (2) An earlier effective date has been determined.

[[Page 21]]

    (b) Suspension of effective date by developer. (1) A developer, or 
owner, may request that the effective date of its Statement of Record be 
suspended, provided there are no administrative proceedings pending 
against either of them at the time the request is submitted. The request 
must include any consolidations or amendments which have been made to 
the initial Statement of Record. Forms for this purpose will be 
furnished by the Secretary upon request.
    (2) Upon acceptance by the Secretary, the effectiveness of the 
Statement of Record shall be suspended as of the date the request was 
executed by the developer or owner.
    (3) The suspension shall continue until the developer, or owner, 
submits all amendments necessary to bring the registration into full 
compliance with the Regulations which are in effect on the date of the 
amendments and the Secretary allows those amendments to become 
effective.

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979, as amended at 49 FR 31370, Aug. 6, 1984]



Sec. 1710.22  Statement of record--initial or consolidated.

    (a) Initial Statement of Record. (1) Except in the case of exempt 
transactions, an initial Statement of Record shall be filed, and an 
effective date issued, prior to selling or leasing any lot in a 
subdivision.
    (2) If a developer buys from another developer 100 or more lots from 
an existing registration, the new developer, or owner, may have to 
submit a new initial Statement of Record and receive an effective date 
covering the acquired lots prior to selling or leasing any of those 
lots.
    (3) Changes in principals due to a sale of stock in a corporation or 
changes in partners or joint venturers which are accomplished in 
accordance with the partnership or joint venture agreement but which do 
not cause a change in the title to the land in the subdivision may be 
submitted as an amendment.
    (4) Any initial Statement of Record must be accompanied by a fee, as 
specified in Sec. 1710.35(b), based upon the number of lots sought to 
be registered.
    (b) Consolidated Statement of Record. (1) If the developer intends 
to sell or lease additional lots as part of the same common promotional 
plan with lots already registered, a consolidated Statement of Record 
may be submitted for the additional lots. A fee, as specified in Sec. 
1710.35(b) and based on the number of additional lots, must accompany 
the submission. The additional lots may not be sold or leased until a 
new effective date is issued.
    (2) If the additional lots are simply the result of a replatting of 
lots previously registered and enumerated in the Property Report and do 
not include any additional land, the change may be made by an amendment. 
However, the amendment must be accompanied by a fee, as specified in 
Sec. 1710.35(b), based on the number of additional lots.
    (c) Consolidated Statement of Record--Form. A consolidated Statement 
of Record shall contain:
    (1) Those pages of the Property Report portion and Additional 
Information and Documentation portion which contain changes which have 
occurred since the last effective submission, and
    (2) A recapitulation or listing of each of the section headings, and 
subheadings if necessary, of the Additional Information and 
Documentation portion. Each item of the listing shall contain a 
statement as to whether or not any change is made in the section; 
whether any new or additional information is being submitted and, if 
documentation is incorporated by cross reference, the previous 
submission in which that documentation may be found, and
    (3) Documentation to support the additional lots (e.g., plat maps, 
topographic maps and general plan to reflect new lots, title 
information, permits for additional facilities, financial assurances of 
completion of additional facilities, financial statements) or updated or 
expanded documents in support of previous submissions, and
    (4) The affirmation required by Sec. 1710.219.

Pages having no changes and documents in previous submissions which 
apply equally to the additional lots may be incorporated by reference. 
However, the developer may, at its option, submit the entire format for 
an

[[Page 22]]

initial filing, including copies of previously submitted documents, to 
expedite the examination process.
    (d) Consolidated Statement of Record amends prior Statement of 
Record. A Consolidated Statement of Record shall contain all applicable 
information for all registered lots in the subdivision except those 
deleted pursuant to other provisions in these regulations. The resulting 
Property Report shall be used for all sales in the subdivision, except 
for those transactions which are exempt from the provisions of the Act 
or which have been granted an exempt status by the Secretary, unless the 
Secretary has specifically authorized the use of multiple Property 
Reports.
    (e) Initial Statement of Record--when prior approval to submit is 
required. In those subdivisions where there is a disparity between the 
lots already registered and those sought to be registered because of 
location, terrain, proposed use of the lots or the amenities to be 
furnished or available, the developer may present a resume of the 
differences and request the Secretary's permission to file a separate 
initial Statement of Record for the additional lots. Upon consideration 
of the facts submitted, the Secretary may allow such a procedure.
    (f) Lots which have been deleted from registration. Should the 
developer, for any reason, delete by amendment any registered lots from 
an effective Statement of Record, those lots must be reregistered by a 
consolidation and a new effective date issued, before they can be sold 
or leased. An appropriate fee must accompany the submission.
    (g) Lots sold to individual purchasers. It is not necessary to 
delete from the registration those lots which have been sold to 
individual purchasers for their own use.

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979, as amended at 45 FR 40488, June 13, 1980]



Sec. 1710.23  Amendment--filing and form.

    (a) Filing. If any change occurs in any representation of material 
fact required to be stated in an effective Statement of Record, an 
amendment shall be filed. The amendment shall be filed within 15 days of 
the date on which the developer knows, or should have known, that there 
has been a change in material fact.
    (b) Form. An amendment shall incorporate by reference the prior 
Statement of Record except for any changes in material fact. A change in 
material fact shall be specifically described and supported by the same 
documentation which would be required for an initial submission. Any 
amendment shall be accompanied by:
    (1) A letter from the developer giving a clear and concise 
description of the purpose and significance of the amendment and 
referring to the section and page of the Statement of Record which is 
being amended, and
    (2) All pages of the Statement of Record, which have been amended, 
retyped in the required format to reflect the changes. The OILSR number 
of the Statement of Record shall appear at the top of each page of the 
material submitted.
    (c) Amendments to suspended filings. Developers wishing to 
reactivate a suspended filing shall file the following:
    (1) Any amendments necessary to bring the filing into compliance, 
submitted in accordance with paragraphs (a) and (b) of this section;
    (2) An activity report in the form prescribed by Sec. 1710.310; and
    (3) An amendment fee, if required under Sec. 1710.35(d)(2).

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979, as amended at 49 FR 31373, Aug. 6, 1984]



Sec. 1710.29  Use of property report--misstatements, omissions or 
representation of HUD approval prohibited.

    Nothing is these regulations shall be construed to authorize or 
approve the use of a property report containing any untrue statement of 
a material fact or omitting to state a material fact required to be 
stated therein. Nor shall anything in these regulations be construed to 
authorize or permit any representation that the Property Report

[[Page 23]]

is prepared or approved by the Secretary, OILSR or the Department of 
Housing and Urban Development.

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979]



Sec. 1710.35  Payment of fees.

    (a) Method of payment. (1) Each fee must be paid by:
    (i) Certified check, cashier's check, or postal money order made 
payable to the Treasurer of the United States, with the registration 
number, when known, and the name, of the subdivision on the face of the 
check, and mailed to an address specified by the Secretary; or
    (ii) Electronic payment in a manner specified by the Secretary.
    (2) Information regarding the current mailing address or electronic 
payment procedures is available from: HUD, Office of Interstate Land 
Sales/RESPA Division, Room 9156, 451 7th St., SW., Washington, DC 20410.
    (b) Fees for registration. The fee for each initial and consolidated 
registration is set forth in the following schedule:

------------------------------------------------------------------------
                        Number of lots                            Fees
------------------------------------------------------------------------
200 or fewer lots.............................................      $800
201 or more lots..............................................    $1,000
------------------------------------------------------------------------

    (c) Fee for Exemption Order or Advisory Opinion. The filing fee for 
an Exemption Order or an Advisory Opinion (Sec. 1710.16 or Sec. 
1710.17) is $500. This fee is not refundable.
    (d) Amendment fee. (1) A fee of $800 is charged when an Annual 
Activity Report reflects an annual ending inventory of 101 or more 
unsold registered lots.
    (2) A fee of $800 is charged for an amendment to reactivate a 
Statement of Record subsequent to its suspension, unless the developer 
has 100 or fewer unsold lots included in the Statement of Record.

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979, as amended at 49 FR 31373, Aug. 6, 1984; 63 
FR 54332, Oct. 8, 1998]



Sec. 1710.45  Suspensions.

    (a) Suspension notice--prior to effective date. (1) If it appears to 
the Secretary that a Statement of Record or an amendment is on its face 
incomplete or inaccurate in any material respect, the Secretary shall so 
advise the developer, by issuing a suspension notice, within a 
reasonable time after the filing of such materials but prior to the time 
the materials would otherwise be effective.
    (2) A suspension notice issued pursuant to this subsection shall 
suspend the effective date of the Statement of Record or the amendment. 
It shall continue in effect until 30 days, or such earlier date as the 
Secretary may determine, after the necessary amendments are submitted 
which correct all deficiencies cited in the notice.
    (3) Upon receipt of a suspension notice, the developer has 15 days 
in which to request a hearing. If a hearing is requested, it shall be 
held within 20 days of the receipt of the request by the Secretary.
    (b) Suspension orders--subsequent to effective date. (1) A notice of 
proceedings to suspend an effective Statement of Record may be issued to 
a developer if the Secretary has reasonable grounds to believe that an 
effective Statement of Record includes an untrue statement of a material 
fact, or omits a material fact required by the Act or rules and 
regulations, or omits a material fact which is necessary to make the 
statements therein not misleading. The Secretary may, after notice, and 
after opportunity for a hearing requested pursuant to Sec. 1720.220 
within 15 days of receipt of such notice, issue an order suspending the 
Statement of Record. In the event that a suspension order is issued, 
such order shall remain in effect until the developer has amended the 
Statement of Record or otherwise complied with the requirements of the 
order. When the developer has complied with the requirements of the 
order, the Secretary shall so declare and thereupon the suspension order 
shall cease to be effective.
    (2) If the Secretary undertakes an examination of a developer or its 
records to determine whether a suspension

[[Page 24]]

order should be issued, and the developer fails to cooperate with the 
Secretary or obstructs, or refuses to permit the Secretary to make such 
examination, the Secretary may issue an order suspending the Statement 
of Record. Such order shall remain in effect until the developer has 
complied with the requirements of the order. When the developer has 
complied with the requirements of the order, the Secretary shall so 
declare and thereupon the suspension order shall cease to be effective. 
In accordance with the procedure described in Sec. 1720.235, a hearing 
may be requested.
    (3) Upon receipt of an amendment to an effective Statement of 
Record, the Secretary may issue an order suspending the Statement of 
Record until the amendment becomes effective if the Secretary has 
reasonable grounds to believe that such action is necessary or 
appropriate in the public interest or for the protection of purchasers. 
In accordance with the procedure described in Sec. 1720.235, a hearing 
may be requested.
    (4) Suspension orders issued pursuant to this subsection shall 
operate to suspend the Statement of Record as of the date the order is 
either served on the developer or its registered agent or is delivered 
by certified or registered mail to the address of the developer or its 
authorized agent.

(Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et seq.)

[44 FR 21453, Apr. 10, 1979]



                    Subpart B_Reporting Requirements

    Authority: Pub. L. 90-448, 82 Stat. 476, 590; 15 U.S.C. 1701 et 
seq., unless otherwise noted.

    Source: 44 FR 21453, Apr. 10, 1979, unless otherwise noted.



Sec. 1710.100  Statement of Record--format.

    (a) The Statement of Record consists of two portions; the Property 
Report portion and the Additional Information and Documentation portion.
    (b) General format. The Statement of Record shall be prepared in 
accordance with the following format:

                             Property Report

                       Heading and Section Number

Cover Sheet.....................................................1710.105
Table of Contents...............................................1710.106
Risks of Buying Land, Warnings..................................1710.107
General Information.............................................1710.108
Title and Land Use..............................................1710.109

    (a) General Instructions
    (b) Method of Sale
    (c) Encumbrances, Mortgages and Liens
    (d) Recording the Contract and Deed
    (e) Payments
    (f) Restrictions
    (g) Plats, Zoning, Surveying, Permits, Environment

Roads...........................................................1710.110
Utilities.......................................................1710.111

    (a) Water
    (b) Sewer
    (c) Electricity
    (d) Telephone
    (e) Fuel or other Energy Source

Financial Information...........................................1710.112
Local Services..................................................1710.113
Recreational Facilities.........................................1710.114
Subdivision Characteristics and Climate.........................1710.115

    (a) General Topography
    (b) Water Coverage
    (c) Drainage and Fill
    (d) Flood Plain
    (e) Flooding and Soil Erosion
    (f) Nuisances
    (g) Hazards
    (h) Climate
    (i) Occupancy

Additional Information..........................................1710.116

    (a) Property Owners' Association
    (b) Taxes
    (c) Violations and Litigation
    (d) Resale or Exchange Program
    (e) Unusual Situations
    1. Leases
    2. Foreign Subdivision
    3. Time Sharing
    4. Membership
    (f) Equal Opportunity in Lot Sales
    (g) Listing of lots

Cost Sheet......................................................1710.117
Receipt, Agent Certification and Cancellation Page..............1710.118

                Additional Information and Documentation

General Information.............................................1710.208
Title and Land Use..............................................1710.209
Roads...........................................................1710.210
Utilities.......................................................1710.211
Financial Information...........................................1710.212
Recreational Facilities.........................................1710.214
Subdivision Characteristics.....................................1710.215
Additional Information..........................................1710.216

[[Page 25]]

Affirmation.....................................................1710.219

(Approved by the Office of Management and Budget under control number 
2502-0243)

[44 FR 21453, Apr. 10, 1979, as amended at 49 FR 31370, Aug. 6, 1984; 49 
FR 33644, Aug. 24, 1984]



Sec. 1710.102  General instructions for completing the Statement 
of Record.

    (a) Paper and type. The Statement of Record shall be on good 
quality, unglazed white or pastel paper. Letter size paper, 
approximately 8x11 inches in size, will be used for the Property Report 
portion and legal size paper, approximately 8\1/2\x14 inches in size, 
will be used for the Additional Information and Documentation portion. 
Side margins shall be no less than 1 inch and no greater than 1\1/2\ 
inches. Top and bottom margins shall be no less than 1 inch. In the 
preparation of the charts to be included in the Property Report, the 
developer may vary from the above margin requirements or print the 
charts lengthwise on the required size paper if such measures are 
necessary to make the charts readable. The Statement of Record shall be 
prepared in an easily readable style of elite or pica or similar type of 
uniform font in blue, black or blueblack ink.
    (b) Numbering and dating. Each page of the Statement of Record as 
submitted to OILSR shall be numbered and shall include the date of 
typing or preparation in the lower right hand corner, except in the 
final printed version of the Property Report portion.
    (c) Signing. The Statement of Record shall be signed by the senior 
executive officer of the developer or a designated agent.
    (d) Printing. The Statement of Record and, insofar as practical, all 
papers and documents filed as a part thereof, shall be printed, 
lithographed, photocopied, typewritten or prepared by any similar 
process which, in the opinion of the Secretary, produces copies suitable 
for a permanent record. Irrespective of the process used, all copies of 
any such materials shall be clear and easily readable.
    (e) Headings, subheadings, captions, introductory paragraphs, 
warnings. Property Report subject ``headings'' are those descriptive 
introductory words which appear immediately after section numbers 
1710.106 through 1710.116 (e.g. Sec. 1710.108 has ``General 
Information'' and Sec. 1710.111 has ``Utilities''). Each such heading 
shall be printed in the Property Report in underlined capital letters 
and centered at the top of a new page. Section numbers shall not be 
printed in the Property Report. Property Report subheadings are those 
descriptive introductory words which appear in italics in the 
regulations at the beginning of paragraphs designated by paragraph 
letters (a), (b), (c) etc. An example of a subheading is ``water'' found 
immediately after the paragraph letter (a) in Sec. 1710.111. These 
subheadings will be printed in the Property Report only if they are 
relevant to the subject subdivision. If printed these subheadings shall 
be capitalized and shall begin at the left hand margin of the page. 
Property Report ``captions'' are those descriptive introductory words 
which appear in italics in the Regulations at the beginning of 
subparagraphs designated by numbers (1), (2), (3), etc. An example of 
such captions is ``Sales Contract and Delivery of Deed'' found 
immediately after the subparagraph number ``(1)'' in Sec. 1710.109 (b). 
These captions are to be printed in the Property Report only if they are 
applicable to the subject subdivision. If printed, these captions shall 
be centered on the page from the side margins, and shall have only the 
first letter of each word capitalized. Headings and subheadings will be 
used in the Property Report in accordance with the sample page appearing 
in Sec. 1710.102. Introductory paragraphs will follow headings if they 
are applicable and necessary for a readable entry into the subject 
matters, but note, the introductory paragraphs for ``Title to the 
Property and Land Use'' are to be used in every case as provided in 
Sec. 1710.109(a)(1). Subheadings and captions which do not apply to the 
subdivision should be omitted from the Property Report portion and 
answered ``not applicable'' in the Additional Information and 
Documentation portion, unless specifically required to be included 
elsewhere in these instructions. Warnings shall be printed substantially 
as they appear in the instructions in Sec. Sec. 1710.105 through 
1710.118. They shall

[[Page 26]]

be printed in capital letters and enclosed in a box as shown on the 
sample page in Sec. 1710.102. The paragraphs in the Property Report 
portion need not be numbered.

                               Sample Page

                                  roads

    Here we discuss the roads that lead to the subdivision, those within 
the subdivision and the location of nearby communities.

ACCESS TO THE SUBDIVISION.

    County road 43 leads to the subdivision. It has two lanes 
and the width of the wearing surface is 22 feet. It's paved with a 
macadam surface.

    This road is maintained by Bottineau County with County funds. No 
improvements are planned at this time.

ACCESS WITHIN THE SUBDIVISION.

    The roads within the subdivision will be located on rights of way 
dedicated to the public.

    We are responsible for constructing the interior roads. There will 
be no additional cost to you for this construction.

    WE HAVE NOT SET ASIDE ANY FUNDS IN AN ESCROW OR TRUST ACCOUNT OR 
MADE ANY OTHER FINANCIAL ARRANGEMENTS TO ASSURE COMPLETION OF THE ROADS, 
SO THERE IS NO ASSURANCE WE WILL BE ABLE TO COMPLETE THE ROADS.

    At present, the roads are under construction and do not provide 
access to the lots in Units 2 and 3 during wet weather. The succeeding 
chart describes their present condition and estimated completion dates.

----------------------------------------------------------------------------------------------------------------
         Estimated starting       Percentage of            Estimated
  Unit     date (month and       construction now       completion date     Present surface      Final surface
                year)                complete          (month and year)
----------------------------------------------------------------------------------------------------------------
1......  February 1979.....                       50  December 1979.....  Gravel............  Asphalt.
2......  August 1979.......                        0  June 1980.........  Dirt..............   Do.
3......  April 1980........                        0  October 1980......  None..............   Do.
----------------------------------------------------------------------------------------------------------------

    (f) Language style. All information given in the Property Report 
portion shall be stated in narrative form using plain, concise, everyday 
language which can be readily understood by purchasers who are 
unfamiliar with real estate transactions. Excessively long paragraphs 
should be avoided. Keep them as brief as possible. Use separate 
paragraphs for different points discussed. Disclose all pertinent facts. 
Potential consequences to a purchaser must be made clear even though not 
specifically asked for in the format and the instructions. In the 
Property Report the pronouns ``you'' and ``your'' shall generally be 
used in referring to the prospective purchaser and the pronouns ``we'', 
``us'', and ``our'' shall generally be used in referring to the 
developer. The Secretary specifically reserves the right to require 
modification of the text when the narrative does not meet the standards 
of this section.
    (g) Format of the Additional Information and Documentation portion 
of the Statement of Record. The supporting information and documentation 
required by these regulations shall be identified by affixing a tab on 
the right side of the cover sheet of the required information or 
documentation and by identifying on the tab the section number of the 
Statement of Record instructions to which the information or 
documentation corresponds. This information or documentation shall then 
be placed immediately after the page(s) on which the section number and 
answers for that section appear. If the data in a document is applicable 
to more than one section of instructions, the developer may substitute 
as a document in the second case a statement incorporating the earlier 
document by

[[Page 27]]

reference. Deeds, title policies, subdivision plats or maps and other 
documentary information required to be contained in the Additional 
Information and Documentation portion of the Statement of Record need 
not be on the same size paper as the Statement of Record but, if larger, 
shall be folded to a size no larger than 8\1/2\x14 inches. Supporting 
documents shall be inserted into the binding in such a manner as to 
permit them to be examined without the necessity of removing them from 
the binding. This may be accomplished by proper folding or through the 
use of envelopes.
    (h) Binding. The Statement of Record shall be bound with the 
Property Report portion on top, including any documents which may be 
required to be attached when delivered to the purchaser, followed by the 
Additional Information and Documentation portion.
    (i) Advertising and promotional material. No advertising, or 
promotional material or statements which are self-serving on behalf of 
the developer or owner may be included in the Statement of Record or 
resulting Property Report.
    (j) Additional information. (1) In addition to the information 
expressly required to be stated in the Statement of Record, there shall 
be added, and the Secretary may require, such further material 
information, documentation and certification as may be necessary in the 
public interest and for the protection of purchasers or necessary in 
order to make the statements not misleading in the light of 
circumstances under which they are made.
    (2) The instructions are not all inclusive. The developer shall 
include any other facts which would have a bearing upon the use by the 
purchaser of any of the facilities, services or amenities; which would 
cause or result in additional expenses to the purchaser; which would 
have an effect upon the use and enjoyment of the lot by the purchaser 
for the purpose for which it is sold or which would adversely affect the 
value of the lot.
    (k) Modification of format or content. The Secretary may require or 
permit modification to the content and format of the Property Report to 
include additional information, to modify or omit required information, 
or to change the sequence or position of information when such changes 
are deemed to be in the public interest or for the protection of 
purchasers.
    (l) Required documentation. Where the documentation required by the 
Statement of Record cannot be obtained, the Secretary may permit the 
best available alternative documentation to be substituted.
    (m) Final version of property report. On the date that a Statement 
of Record becomes effective, the Property Report portion shall become 
the Property Report for the subject subdivision. The version of the 
Property Report delivered to prospective lot purchasers shall be 
verbatim to that found effective by the Secretary and shall have no 
covers, pictures, emblems, logograms or identifying insignia other than 
as required by these regulations. It shall meet the same standards as to 
grade of paper, type size, margins, style and color of print as those 
set herein for the Statement of Record, except where required otherwise 
by these regulations. However, the date of typing or preparation of the 
pages and the OILSR number shall not appear in the final version. If the 
final version of the Property Report is commercially printed, or 
photocopied by a process which results in a commercial printing quality, 
and is bound on the left side, both sides of the pages may be used for 
printed material. If it is typed or photocopied by a process which does 
not result in a clear and legible product on both sides of the page or 
is bound at the top, printing shall be done on only one side of the 
page. Three copies of the final version of the Property Report, in the 
exact form in which it is delivered to prospective lot purchasers, shall 
be sent to this Office within 20 days of the date on which the Statement 
of Record, amendment, or consolidation is allowed to become effective by 
the Secretary. If a Property Report in a foreign language is used as 
required by Sec. 1715.25(g), three copies of that Property Report 
together with copies of the translated documents shall be furnished the 
Secretary within 20 days of the date on which the advertising is first 
used. A Property Report prepared pursuant to these regulations shall not

[[Page 28]]

be distributed to potential lot purchasers until after the Statement of 
Record of which it is a part or any amendment to that Statement of 
Record has been made effective by the Secretary.

(Approved by the Office of Management and Budget under control number 
2502-0243)

[44 FR 21453, Apr. 10, 1979, as amended at 45 FR 40488, June 13, 1980; 
49 FR 31370, Aug. 6, 1984; 49 FR 33644, Aug. 24, 1984]



Sec. 1710.103  Developer obligated improvements.

    (a) If the developer represents either orally or in writing that it 
will provide or complete roads or facilities for water, sewer, gas, 
electricity or recreational amenities, it must be contractually 
obligated to do so (see Sec. 1715.15(f)), and the obligation shall be 
clearly stated in the Property Report. While the developer may disclose 
relevant facts about completion, the obligation to complete cannot be 
conditioned, other than as provided for in Sec. 1715.15(f), and an 
estimated completion date (month and year) must be stated in the 
Property Report. However, a developer that has only tentative plans to 
complete may so state in the Property Report, provided that the 
statement clearly identifies conditions to which the completion of the 
facilities are subject and states that there are no guarantees the 
facilities will be completed.
    (b) If a party other than the developer is responsible for providing 
or completing roads or facilities for water, sewer, gas, electricity or 
recreational amenities, that entity shall be clearly identified in the 
Property Report under the categories described in Sec. 1710.110, Sec. 
1710.111 or Sec. 1710.114, as applicable. A statement shall be included 
in the proper section of the Property Report that the developer is not 
responsible for providing or completing the facility or amenity and can 
give no assurance that it will be completed or available for use.

[49 FR 31370, Aug. 6, 1984]



Sec. 1710.105  Cover page.

    The cover page of the Property Report shall be prepared in 
accordance with the following directions:
    (a) The margins shall be at least 1 inch.
    (b) The next 3 inches shall contain a warning, centered, in \1/2\ 
inch capital letters in red type with \1/4\ inch space between the lines 
which reads as follows:

            READ THIS PROPERTY REPORT BEFORE SIGNING ANYTHING

    (c) The remainder of the page shall contain the following paragraphs 
beginning \1/4\ inch below the last line of the warning:

    This Report is prepared and issued by the developer of this 
subdivision. It is not prepared or issued by the Federal Government.
    Federal law requires that you receive this Report prior to your 
signing a contract or agreement to buy or lease a lot in this 
subdivision. However, NO FEDERAL AGENCY HAS JUDGED THE MERITS OR VALUE, 
IF ANY, OF THIS PROPERTY.
    If you received this Report prior to signing a contract or 
agreement, you may cancel your contract or agreement by giving notice to 
the seller any time before midnight of the seventh day following the 
signing of the contract or agreement.
    If you did not receive this Report before you signed a contract or 
agreement, you may cancel the contract or agreement any time within two 
years from the date of signing.

Name of Subdivision_____________________________________________________
Name of Developer_______________________________________________________
Date of This Report_____________________________________________________

    (d)(1) If the purchaser is entitled to a longer revocation period by 
operation of State law, that period becomes the Federal revocation 
period and the Cover Page must reflect the requirements of the longer 
period, rather than the seven days.
    (2)(i) If a deed is not delivered within 180 days of the signing of 
the contract or agreement of sale or unless certain provisions are 
included in the contract or agreement, the purchaser is entitled to 
cancel the contract within two years from the date of signing the 
contract or agreement.
    (ii) The deed must be a warranty deed, or where such a deed is not 
commonly used, a similar deed legally acceptable in the jurisdiction 
where the lot is located. The deed must be free and clear of liens and 
encumbrances.
    (iii) The contract provisions are:

[[Page 29]]

    (A) A legally sufficient and recordable lot description; and
    (B) A provision that the seller will give the purchaser written 
notification of purchaser's default or breach of contract and the 
opportunity to have at least 20 days from the receipt of notice to 
correct the default or breach; and
    (C) A provision that, if the purchaser loses rights and interest in 
the lot because of the purchaser's default or breach of contract after 
15% of the purchase price, exclusive of interest, has been paid, the 
seller shall refund to the purchaser any amount which remains from the 
payments made after subtracting 15% of the purchase price, exclusive of 
interest, or the amount of the seller's actual damages, whichever is the 
greater.
    (iv) If a deed is not delivered within 180 days of the signing of 
the contract or if the necessary provisions are not included in the 
contract, the following statement shall be used in place of any other 
recision language:

    Under Federal law you may cancel your contract or agreement of sale 
any time within two years from the date of signing.

    (e) At the time of submission, the developer may indicate its 
intention to comply with the red printing by an illustration or by a 
statement to that effect.
    (f) The ``Date of This Report'' shall be the date on which the 
Secretary allows the Statement of Record to become effective and shall 
not be entered until the submission has become effective.

(Sec. 1419, Interstate Land Sales Full Disclosure Act, 82 Stat. 590, 
598; 15 U.S.C. 1718; sec. 7(d), Dept. of Housing and Urban Development 
Act, 42 U.S.C. 3535(d))

[45 FR 40489, June 13, 1980]



Sec. 1710.106  Table of contents.

    (a) The second page(s) shall consist of a Table of Contents which 
lists the headings in the Property Report, the major subheadings, if 
any, and the page on which they appear. For example, the entry for Title 
and Land Use would appear as follows:

Title and Land Use  Page 
Method of Sale
Encumbrances, Mortgages and Liens
Recording the Contract and Deed
Payments
Restrictions on the Use of Your Lot
Plat Maps, Zoning, Surveying, Permits and Environment

    (b) Use of ``You'' and ``We''. At the end of the Table of Contents 
insert the following remark:

    ``In this Property Report, the words ``you'' and ``your'' refer to 
the buyer. The words ``we'', ``us'' and ``our'' refer to the 
developer.''



Sec. 1710.107  Risks of buying land.

    (a) The next page shall be headed ``Risks of Buying Land'' and shall 
contain the paragraphs listed below. However, paragraph (a)(2) of this 
section may be omitted if all improvements have been completed or if no 
improvements are proposed.
    (1) The future value of any land is uncertain and dependent upon 
many factors. DO NOT expect all land to increase in value.
    (2) Any value which your lot may have will be affected if the roads, 
utilities and all proposed improvements are not completed.
    (3) Resale of your lot may be difficult or impossible, since you may 
face the competition of our own sales program and local real estate 
brokers may not be interested in listing your lot.
    (4) Any subdivision will have an impact on the surrounding 
environment. Whether or not the impact is adverse and the degree of 
impact, will depend on the location, size, planning and extent of 
development. Subdivisions which adversely affect the environment may 
cause governmental agencies to impose restrictions on the use of the 
land. Changes in plant and animal life, air and water quality and noise 
levels may affect your use and enjoyment of your lot and your ability to 
sell it.
    (5) In the purchase of real estate, many technical requirements must 
be met to assure that you receive proper title. Since this purchase 
involves a major expenditure of money, it is recommended that you seek 
professional advice before you obligate yourself.
    (b) Warnings. If the instructions or the Secretary require any 
warnings to be included in the Property Report portion, the following 
statement shall be

[[Page 30]]

added beneath the ``Risks of Buying Land'' under a heading ``Warnings'':

    ``Throughout this Property Report there are specific warnings 
concerning the developer, the subdivision or individual lots. Be sure to 
read all warnings carefully before signing any contract or agreement.''


Both the heading, ``Warnings'', and the statement shall be printed in 
capital letters and enclosed in a box.



Sec. 1710.108  General information.

    Insert and complete the following format:

    ``This Report covers ---- lots located in -------- County, (State). 
See Page ---- for a listing of these lots. It is estimated that this 
subdivision will eventually contain ------ lots.''
``The developer of this subdivision is:
________________________________________________________________________
    (Developer's Name)
________________________________________________________________________
    (Developer's Address)
________________________________________________________________________
    (Developer's telephone number)

    ``Answers to questions and information about this subdivision may be 
obtained by telephoning the developer at the number listed above.''



Sec. 1710.109  Title to the property and land use.

    (a) General instructions. (1) Below the heading ``Title to the 
Property and Land Use'' insert the following introductory paragraphs:

    ``A person with legal title to property generally has the right to 
own, use and enjoy the property. A contract to buy a lot may give you 
possession but doesn't give you legal title. You won't have legal title 
until you receive a valid deed. A restriction or an encumbrance on your 
lot, or on the subdivision, could adversely affect your title.''
    ``Here we will discuss the sales contract you will sign and the deed 
you will receive. We will also provide you with information about any 
land use restrictions and encumbrances, mortgages, or liens affecting 
your lot and some important facts about payments, recording, and title 
insurance.''

    (2) Information to be provided. After the above introductory 
paragraphs provide the information required by the following 
instructions and questions. Follow a general form identical to the 
sample page printed in Sec. 1710.102.
    (b) Method of sale--(1) Sales contract and delivery of deed. (i) 
Will the buyer sign a purchase money or installment contract or similar 
instrument in connection with the purchase of the lot? When will a deed 
be delivered?
    (ii) If an installment contract is used, include the following, or 
substantially the same, language in the disclosure narrative under 
``Method of Sale'':

    ``If you fail to make your payments required by the contract, you 
may lose your lot and all monies paid.''

    (iii) If, at the time of a credit sale, the developer gives the 
buyer a deed to the lot, what type of security must the buyer give the 
seller?
    (iv) If the lots are to be sold on the basis of an installment 
contract, can the developer or the owner of the subdivision or their 
creditors encumber the lots under contract? If so, include the following 
warning in the disclosure narrative under the caption ``Sales contract 
and delivery of deed'':

    ``The (indicate subdivision developer, owner, or their creditors) 
can place a mortgage on or encumber the lots in this subdivision after 
they are under contract. This may cause you to lose your lot and any 
monies paid on it.''

    (2) Type of deed. What type of deed will be used to convey title to 
lots in the subdivision?
    (3) Quitclaim deeds. If a quitclaim deed is to be given to lot 
purchasers insert the below warning, or a warning which is substantially 
the same, in the disclosure narrative below the caption ``Quitclaim 
Deeds''. This particular warning may be deleted at the direction of the 
Secretary if an acceptable attorney's opinion is submitted with the 
Statement of Record which indicates that a quitclaim deed has a meaning 
in the jurisdiction where the subdivision is located which is 
substantially contrary to the effect of this warning. This warning shall 
be phrased substantially as follows:

    ``The Quitclaim deed used to transfer title to lots in this 
subdivision gives you no assurance of ownership of your lot.''

    (4) Oil, gas, and mineral rights. If oil, gas or mineral rights have 
been reserved, insert the following statement or one substantially the 
same in the narrative answer under the caption ``oil, gas, and mineral 
rights'':


[[Page 31]]


    ``The (indicate oil, gas, or mineral rights) to (state which lots) 
in this subdivision will not belong to the purchaser of those lots. The 
exercise of these rights could affect the use, enjoyment and value of 
your lot.''

    (c) Encumbrances, mortgages and liens--(1) In general. State whether 
any of the lots or common facilities which serve the subdivision, other 
than recreation facilities, are subject to a blanket encumbrance, 
mortgage or lien. If yes, identify the type of encumbrance (e.g. deed of 
trust, mortgage, mechanics liens), the holder of the lien, and the lots 
covered by the lien. If any blanket encumbrance, mortgage, or lien is 
not current in accordance with its terms, so indicate.
    (2) Release provisions. (i) Explain the effect of any release 
provisions of any blanket encumbrance, mortgage or lien and include the 
one of the following statements that pertains.
    (A) If the release clauses are not included in a recorded 
instrument, insert the following statement or one substantially the same 
in the disclosure narrative below the caption ``Release Provisions'':

    ``The release provisions for the (indicate all or particular lots) 
have not been recorded. Therefore, they may not be honored by subsequent 
holders of the mortgage. If they are not honored, you may not be able to 
obtain clear title to a lot covered by this mortgage until we have paid 
the mortgage in full, even if you have paid the full purchase price of 
the lot. If we should default on the mortgage prior to obtaining a 
release of your lot, you may lose your lot and all monies paid.''

    (B) If the developer or subdivision owner states that the release 
provisions are recorded and that the lot purchaser may pay the release 
price of the mortgage, the statement shall be supported by documentation 
supplied in Sec. 1710.209. If the purchaser may pay the release fee, 
state the amount of the release fee and inform the purchaser that the 
amount may be in addition to the contract payments unless there is a 
bona fide trust or escrow arrangement in which the purchaser's payments 
are set aside to pay the release price before any payments are made to 
the developer.
    (C)(1) If there are no provisions in the blanket encumbrance for 
release of an individual purchaser's lot from a blanket encumbrance, 
include the following warning or a warning substantially the same, in 
the disclosure narrative under the ``Release Provisions'' caption:

    ``The (state type of encumbrance) on (indicate all or particular 
lots) in this subdivision does not contain any provisions for the 
release of an individual lot when the full purchase price of the lot has 
been paid. Therefore, if your lot is subject to this (state type of 
encumbrance), you may not be able to obtain clear title to your lot 
until we have paid the (state type of encumbrance) in full, even though 
you may have received a deed and paid the full purchase price of the 
lot. If we should default on the (state type of encumbrance) prior to 
obtaining a release, you may lose your lot and all monies paid.''

    (2) If the provisions for release of individual lots from the 
blanket encumbrance may be exercised only by the developer insert the 
following statement, or one substantially the same, in the disclosure 
narrative under the ``Release Provisions'' caption:

    ``The release provisions in the (state the type of encumbrance) on 
(indicate all or particular lots) in this subdivision may be exercised 
only by us. Therefore, if we default on the (state type of encumbrance) 
before obtaining a release of your lot, you may lose your lot and any 
money you have paid for it.''

    (d) Recording the contract and deed--(1) Method or purpose of 
recording. (i) State what protection, if any, recording of deeds and 
contracts gives a lot purchaser in your jurisdiction.
    (ii) If the sales contract or deed may be recorded, so state. Also 
state whose responsibility it is to record the contract or deed.
    (iii) If the developer or subdivision owner will not have the sales 
contract officially acknowledged or if the applicable jurisdiction will 
not record sales contracts, state that sales contracts will not be 
recorded and why they will not be recorded.
    (iv) If at, or immediately after, the signing of a contract, the 
contract or a deed transfer to the buyer is not recorded by the 
developer or owner or if title to the lot is not otherwise transferred 
of record to a trust, or if other sufficient notice of transfer or sale 
is not placed of record, then the developer

[[Page 32]]

shall include the following, or substantially the same, warning in the 
disclosure narrative under the caption ``Method and Purpose of 
Recording'':

    ``Unless your contract or deed is recorded you may lose your lot 
through the claims of subsequent purchasers or subsequent creditors of 
anyone having an interest in the land''.


The reference to contracts shall be deleted from the above warning if 
the answer to paragraph (d)(1)(i) of this section indicates that 
recording of a contract in the subject jurisdiction does not protect the 
purchaser from claims of later purchasers or creditors of anyone having 
an interest in the land.

    (2) Title insurance. If the developer does not deliver a title 
insurance policy to the buyer, state that the purchaser should obtain an 
attorney's opinion of title or a title insurance policy which will 
describe the rights of ownership which are being acquired in the lot. 
Recommend that an appropriate professional should interpret the opinion 
or policy.
    (e) Payments--(1) Escrow. If purchasers' deposits, down payments, or 
installment payments are to be placed in a third party controlled escrow 
or similar account, describe the arrangement including the name and 
address of the escrow holder or similar person. If there is no such 
arrangement, insert the following statement in the disclosure narrative 
under the caption ``Escrow'':

    ``You may lose your (indicate deposit, down payment and/or 
installment payments) on your lot if we fail to deliver legal title to 
you as called for in the contract, because (they are/it is) not held in 
an escrow account which fully protects you.''


The questions regarding an escrow agreement or similar protection may be 
answered affirmatively only if the money is under the control of an 
independent third party, allowing a purchaser to receive a return of all 
money paid in the event of the developer's failure to convey title or 
the developer's default on any obligation which would otherwise result 
in the purchaser's loss of that money.
    (2) Prepayments. Explain any prepayment penalties or privileges in 
everyday language.
    (3) Default. What are the developer's or subdivision owners' 
remedies against a defaulted purchaser?
    (f) Restrictions on the use of your lot--(1) Restrictive covenants. 
(i) Have any restrictive covenants been recorded against the land in the 
subdivision? If so, do they contain items which require the purchaser to 
secure permissions, approvals or take any other action prior to using or 
disposing of his lot (e.g., architectural control, developer's right of 
first refusal, building deadlines, etc.)? If any of these or similar 
items are included, explain their meaning and effect upon the purchaser.
    (ii) If any restrictive covenants are to be used and if they have 
not been recorded, how will they be imposed? Include a statement to the 
effect that the restrictive covenants have not been recorded; that there 
is no assurance they will be applied uniformly; that they may be changed 
and that they may be difficult to enforce. If no restrictive covenants 
will be imposed, include a statement to the effect that, since there are 
no restrictive covenants on the use of the lots, they may be used for 
purposes which could adversely affect the use and enjoyment of 
surrounding lots.
    (iii) If there are restrictive covenants, whether recorded or 
unrecorded, the following statement shall be made: ``A complete copy of 
these restrictions is available upon request.''
    (2) Easements. (i) Are there easements which may have an effect on 
the purchaser's building or lot use plans (e.g., large drainage 
easements along lot lines, high voltage electric transmission lines, 
pipe lines or drainage easements which encroach upon the building area 
of the lot or inhibit its use)?
    (ii) Is the subdivision subject to any type of flood control or 
flowage easements?
    (iii) If the answer to either (2)(i) or (2)(ii) is in the 
affirmative, identify the affected lots and state the effect upon the 
use of the lots.
    (g) Plats, zoning, surveying, permits and environment--(1) Plats. 
(i) Have the subdivision plans and plats of specific units been approved 
by the regulatory authorities? If the approvals have not been obtained, 
include a warning to the

[[Page 33]]

effect that regulatory authorities have not approved the proposed plats; 
that they may require significant alterations before they will approve 
them and they may not allow the land to be used for the purpose for 
which it is being sold.
    (ii) Have plats covering the lots in this Report been recorded? If 
so, where are they recorded? If they have not been recorded, is the 
description of the lots given in this Report legally adequate for the 
conveyance of land in the jurisdiction where the subdivision is located? 
If it is not, include a statement to the effect that the description of 
the lots is not legally adequate for the conveyance of the lots and that 
it will not be until the plat is recorded.
    (2) Zoning. For what purpose may the lots be used (e.g., single 
family homes, camping, commercial)? Does this use conform to local 
zoning requirements and the restrictive covenants?
    (3) Surveying. Has each lot been surveyed and is each lot marked for 
identification? If not, and the purchaser is responsible for the 
expense, state the estimated cost.
    (4) Permits. Must the purchaser obtain a building permit before 
beginning construction on his lot? Where is the permit obtained? Are any 
other permits necessary to use the lot for the purpose for which it is 
sold or for construction in connection with its use?
    (5) Environment. Has there been any environmental impact study 
prepared which considers the effect of the subdivision on the 
environment? If a study has been prepared, summarize any adverse 
conclusions and refer the lot buyer to the proper State Clearinghouse 
for complete information. If a study has not been prepared, include a 
statement that ``No determination has been made as to the possible 
adverse effects the subdivision may have upon the environment and 
surrounding area.''

(If the developer does not know whether an environmental impact study 
has been prepared, or the name and location of the Office where any 
study made can be found, inquiry should be made to the State or Area 
Clearinghouse established under the authority of title IV of the 
Intergovernmental Cooperation Act of 1968.)



Sec. 1710.110  Roads.

    (a) Access to the subdivision. (1) Is access to the subdivision 
provided by public or private roads? What type of surface do they have? 
How many lanes? What is the width of the wearing surface?
    (2) Who is responsible for their maintenance? What is the cost to 
the purchaser, if any? Are any improvements contemplated? If so, when 
will they begin and when will they be completed? At whose expense?
    (b) Access within the subdivision. (1) How have legal and physical 
access by conventional automobile been or will they be, provided to the 
lots (e.g., road on recorded easement; right of way dedicated to the 
public; right of way dedicated to use of lot owners)?
    (2) Who is responsible for the road construction? Is there any 
construction cost to the purchaser? Is there any financial assurance of 
completion? If there is no financial assurance of completion, enter a 
warning to the effect that no funds have been set aside in an escrow or 
trust account and there are no other financial arrangements to assure 
completion of the roads.
    (3) How many lanes do the interior roads have? What is the estimated 
starting date of construction (month and year); the present percentage 
of construction now complete; the present surface; the estimated 
completion date (month and year) and what is the final surface to be? If 
there are separate units or sections in the subdivision which will have 
different completion dates or different surfaces, the following chart 
shall be used rather than a narrative paragraph.

----------------------------------------------------------------------------------------------------------------
                                        Percentage of          Estimated
     Unit        Estimated starting    construction now     completion date       Present        Final surface
                 date (month/year)         complete           (month/year)        surface
----------------------------------------------------------------------------------------------------------------
 
 
 
----------------------------------------------------------------------------------------------------------------


[[Page 34]]

    (4) Who is responsible for road maintenance? If the roads are to be 
maintained by a public authority, a property owners' association or some 
other entity at some time in the future, who is responsible for their 
maintenance during the interim period? What is the cost to the purchaser 
during the interim period and after acceptance for permanent 
maintenance? Will they be maintained so as to provide access to the lots 
on a year round basis? If not, include a warning which informs the 
purchaser that access may not be available year round. Identify the 
months when access may not be available to lots. If there are no 
arrangements for maintenance, include a warning to the effect that 
purchasers are responsible for maintaining the roads and that, if 
maintenance is not performed, the roads may soon deteriorate and access 
may become difficult or impossible.
    (5) If estimated completion dates given in prior Statements of 
Record have not been met, state that previous dates have not been met 
and give the previous dates. Underline the answer. If the roads are 100 
percent completed, no dates are needed.
    (6) Complete the following chart by listing the county seat 
(identify) and at least two nearby communities.
    Include at least one community of significant size which offers 
general services.

Nearby Communities......................................................
Population..............................................................
Distance Over Paved Roads...............................................
Distance Over Unpaved Roads.............................................
 Total..................................................................

    (7) If the purchasers will be individually responsible for providing 
access to their lots and for maintaining that access, what is the 
estimated cost of construction and maintenance?



Sec. 1710.111  Utilities.

    (a) Water. (1) How is water to be supplied to the individual lots 
(e.g., central system or individual wells)? Of the following items only 
those which apply to the subdivision need be included.
    (i) Individual system. (A) If water is to be supplied by an 
individual private well, cistern or other individual system, what are 
the total estimated costs of the system, including but not limited to, 
the costs of installation, storage, any treatment facilities and other 
necessary equipment?
    (B) If individual cisterns or similar storage tanks are to be used, 
state where water to fill them can be secured; the cost of the water, 
and its delivery costs for a supply sufficient to serve the monthly 
needs of a family of four living in a house on a year-round basis. 
Include a statement to the effect that water stored for extended periods 
tends to become stale and may acquire an unpleasant taste or odor.
    (C) If individual wells are to be used and if the sales contract 
contains no provisions for refund or exchange in the event a productive 
well cannot be installed, include a statement to the effect that there 
is no assurance a productive well can be installed and, if it cannot, no 
refund of the purchase price of the lot will be made.
    (D) If individual wells or individual cisterns are to be used, 
include a brief statement to the effect that the purity and chemical 
content of the water cannot be determined until each individual well or 
source of water is completed and tested.
    (E) If there have been no hydrological surveys in connection with 
the use of individual wells or sources of hauled water for cisterns, 
include a warning to the effect that there is no assurance of a 
sufficient supply of water for the anticipated population.
    (F) Is a permit required to install the individual system to be 
used? If so, from whom and where is the permit secured? State the cost 
of a permit.
    (ii) Central system. (A) If water is to be provided by a central 
system, who is the supplier? What is the supplier's address?
    (B) Will the water mains be extended in front of, or adjacent to, 
each lot? When will construction begin? What is the present percentage 
of completion of the water mains and central supply plant? When will 
service be available to the individual lots? If the central system is 
not complete and there are separate units or sections of the subdivision 
included in the Statement of Record which have different completion 
dates, then the starting date for construction (month and year), the

[[Page 35]]

percentage of construction now complete and the estimated service 
availability date (month and year) shall be set forth in the following 
chart form rather than in a narrative paragraph.

                                  Water
------------------------------------------------------------------------
                 Estimated        Percentage of      Estimated service
    Unit       starting date    construction now     availability date
             (month and year)       complete          (month and year)
------------------------------------------------------------------------
 
 
 
------------------------------------------------------------------------

    (C) What is the present capacity of the central plant (i.e., how 
many connections can be supplied)? If the capacity is not sufficient to 
serve all lots in the Statement of Record and is to be expanded in 
phases, what is the time-table for each phase to be in service and what 
will trigger the beginning of the expansion for each phase? If an entity 
other than the developer or an affiliate or subsidiary of the developer 
will supply the water for the central system; if the operation of that 
entity is supervised by a governmental agency and if that entity states 
it can supply the anticipated population of the development, then 
information as to the capacity of the plant and a hydrological survey is 
not necessary. If the entity does not indicate it can supply enough 
water for the anticipated population or if the capacity of any central 
system is not sufficient to serve all lots in the Statement of Record, 
include a warning which describes the limitations and sets forth the 
number of lots which can now be served.
    (D) Have there been any hydrological surveys to determine that a 
sufficient source of water is available to serve the anticipated 
population of the subdivision? Has the water in the central system been 
tested for purity and chemical content? If so, did the results show that 
the water meets all standards for a public water supply? If there have 
been no hydrological surveys showing a sufficient supply of water or no 
tests for purity and chemical content for the central system, include a 
warning to the effect that there is no assurance of a sufficient supply 
or that the water is drinkable.
    (E) Is there any financial assurance of completion of the central 
system and any future expansion? If not, include a warning to the effect 
that no funds have been set aside in an escrow or trust account nor have 
any other financial arrangements been made to assure completion of the 
water system.
    (F) If the developer or an affiliate or subsidiary of the developer 
operates the central system, have all permits been obtained from the 
proper agencies for the construction, use and operation of the central 
system? If not, include a warning to the effect that the required 
permits, approvals or licenses for construction, operation or use of the 
water system have not been obtained, therefore there is no assurance the 
system can be constructed or used.
    (G) If previous completion dates given in prior Statements of Record 
have not been met, state that previous completion dates have not been 
met and give the previous dates. Underline the answer. If the central 
water system is 100 percent completed, no dates are needed.
    (H) Is the purchaser to pay any construction costs, one-time 
connection fees, availability fees, special assessments or deposits for 
the central system? If so, what are the amounts? If not, state there are 
no charges other than use fees. If the purchaser will be responsible for 
construction costs of the water mains, state the cost to install the 
mains to the most remote lot covered by this report.
    (I) If a purchaser wishes to use a lot prior to the date central 
water is available to it, may the purchaser install an individual 
system? If so, include the information required for individual systems 
in Sec. 1710.111(a)(1)(i). Will the purchaser be required to 
discontinue use of any individual system and connect to the central 
system when service is available to the lot? If the purchaser is not 
required to connect to the central system, must any construction costs, 
connection fees, availability fees, special assessments or deposits in 
connection with the central system still be paid? If an individual 
system may not be installed, so state and indicate water will not be 
available until the central system is extended to the lot.

[[Page 36]]

    (J) If connection to the system is voluntary and not all purchasers 
elect to use the system, will the cost to those who do use the system be 
increased? If so, include a statement to the effect that connection to 
the central system is voluntary and those who use the system may have to 
pay a disproportionate share of the cost of the system and its 
operation.
    (K) If the developer is to construct the system and will later turn 
it over to a property owners' association for operation and maintenance, 
state the estimated date and conditions of the conveyance and if it will 
be conveyed free and clear of any encumbrance. If there is a charge or 
if the association must assume an encumbrance, state the estimated 
amount of either and the terms for retirement of either obligation.
    (L) If the supplier of water is other than a governmental agency or 
an entity which is regulated and supervised by a governmental agency, 
state that neither the operation of the water system nor the rates are 
regulated by a public authority.
    (M) The following warning shall be included unless:
    (1) The central water system is owned and operated by the developer, 
or an affiliate or subsidiary of the developer, or
    (2) The central water system is owned and operated by a governmental 
agency or by an entity which is regulated and supervised by a 
governmental agency.

    ``We do not own or operate the central water system so we cannot 
assure its continued availability for your use.''

    (b) Sewer. (1) What methods of sewage disposal are to be used (e.g., 
central system, comfort stations or individual on-site systems such as 
septic tanks, holding tanks, etc.) in the subdivision? Of the following 
items, only those which apply to the subdivision need be included.
    (i) Individual systems. (A) If individual systems are to be used, 
have the local authorities given general approval to the use of these 
systems in the subdivision or have they given specific approval for each 
lot?

Are permits necessary? From whom and where are they obtained? Must 
testing of the lot be done prior to the issuance of a permit? State the 
cost of a permit and the estimated costs of the system and any necessary 
tests.
    (B) If holding tanks are to be used, state whether pumping and 
hauling service is available and the estimated monthly costs of that 
service for a family of four living in a house on a year-round basis.
    (C) If each and every lot has not been approved for the use of an 
individual on-site system, include a warning to the effect that there is 
no assurance permits can be obtained for the installation and use of 
individual on-site systems. If the sales contract contains no provisions 
for refund or exchange in the event a permit cannot be obtained, include 
a statement to the effect that there is no assurance an individual on-
site system can be installed and, if it cannot, no refund of the 
purchase price of the lot will be made.
    (D) If no permit is required for the installation and use of 
individual on-site systems, explain whether this may have an effect upon 
the purchaser or the availability of construction or permanent 
financing.
    (E) If the developer has knowledge that permits for the installation 
of individual on-site systems have been denied; that there have been 
unsatisfactory percolation tests or that systems have not operated 
satisfactory in the subdivision, state the number of these rejections, 
unsatisfactory tests or operations.
    (ii) Comfort stations. (A) If comfort stations are to be used, how 
many lots will be served by each station? When will construction be 
started? When will the station or stations be completed and ready for 
use? Have the necessary permits been obtained for the construction and 
use of comfort stations? If the necessary permits have not been 
obtained, include a warning that the necessary permits, approvals or 
licenses have not been obtained for the construction and use of the 
comfort stations, therefore there is no assurance they can be 
constructed or used. If there are comfort stations located in different 
units and having different completion dates, the following chart

[[Page 37]]

shall be used to show the estimated construction starting date (month 
and year), the present percentage of completion and the date on which 
they will be used rather than a narrative paragraph.

                            Comfort Stations

Unit____________________________________________________________________
Estimated Starting Date (month-year)____________________________________
Percentage of Construction now complete_________________________________
Estimated Service Availability Date (month and year)____________________

    (B) Who is to construct the comfort stations? Is there any financial 
assurance of their completion? If not, include a warning to the effect 
that no funds have been set aside in an escrow or trust account nor have 
any other financial arrangements been made to assure completion of the 
comfort stations and there is no assurance the facilities will be 
completed.
    (C) Who will be responsible for maintenance of the comfort stations? 
Is there any cost to the purchaser for construction, use or maintenance?
    (iii) Central system. (A) If a central sewage treatment and 
collection system is being installed, who is responsible for 
construction of the system? Will the sewer mains be installed in front 
of, or adjacent to, each lot? When will construction be started (month 
and year)? When will service be available (month and year)? Who will own 
and operate the system? Give the name and address of the entity.
    (B) What is the present percentage of completion and the present 
capacity of the system (i.e., number of connections which can be 
served)? If the present capacity is not sufficient to serve all lots in 
the Statement of Record and it is to be expanded in phases, what is the 
time-table for expansion and what will trigger that expansion? If the 
central system is not complete and there are separate units or sections 
of the subdivision which have different service availability dates, the 
following chart shall be used to show the construction starting date 
(month and year); the percentage of completion and service availability 
date (month and year) in each unit or section rather than a narrative 
paragraph.

                                  Sewer

Unit Estimated Starting Date (month/year)_______________________________
Percentage of Construction now complete_________________________________
Estimated Service Availability Date (month/year)________________________


If sewage treatment facilities are to be supplied by an entity which is 
regulated by a governmental agency and which is not the developer or an 
affiliate or subsidiary of the developer and the entity has stated it 
can serve the anticipated population of the development, then 
information on capacity need not appear.
    (C) If the developer or an affiliate or subsidiary of the developer 
operates the central system, have all necessary permits been obtained 
for the construction, operation and use of the central system? Do these 
permits limit the number of connections or homes which the system may 
serve? If the permits have not been obtained, enter a warning to the 
effect that the necessary permits, approvals or licenses have not been 
obtained for the central sewage system; therefore there is no assurance 
that the system can be completed, operated or used.
    (D) If the system cannot now serve all lots included in the 
Statement of Record, either because the supplier of the service has not 
stated it can and will serve all lots or if construction has not reached 
a stage where all lots can be served or permits to serve all lots have 
not been obtained, include a warning which states that all lots cannot 
now be served; the number which can be served and the reason for the 
lack of capacity.
    (E) Will the purchaser pay any construction costs, special 
assessments, one time connection fees or availability fees? What are the 
amounts of these charges? If the purchaser is to pay construction costs 
of the sewer mains, state the cost of installation of the mains to the 
most remote lot in this Report.
    (F) If the purchaser wishes to use the lot prior to the date central 
sewer service is available, may the purchaser install an individual 
system? If so, include the information on individual systems required by 
Sec. 1710.111(b)(1)(i). Will the purchaser be required to discontinue 
use of the individual system and connect to the central system

[[Page 38]]

when service is available? If the purchaser is not required to connect 
to the central system, must the purchaser still pay any construction 
costs, connection fees, availability fees, or special assessments? If 
the purchaser may not install an individual system, so state and 
indicate service will not be available until the central system reaches 
the lot.
    (G) If connection to the system is voluntary and not all purchasers 
elect to use the system, will the cost to those who do use the system be 
increased? If so, include a statement to the effect that connection to 
the central system is voluntary and those who use the system may have to 
pay a disproportionate share of the cost of the system and its 
operation.
    (H) Is there any financial assurance of completion of the central 
system and any future expansion? If not, include a warning that no funds 
have been set aside in an escrow or trust account nor have any other 
financial arrangements been made to assure the completion of the central 
system; therefore there is no assurance that it will be completed.
    (I) If previous completion dates given in prior Statements of Record 
have not been met, state that previous dates have not been met and give 
the previous dates. Underline the answer. If the central sewage 
treatment and collection system are 100 percent completed, no dates are 
needed.
    (J) If the developer is to construct the system and will later turn 
it over to a property owners' association for operation and maintenance, 
state the date of the transfer and whether there will be any charge for 
the conveyance and if it will be conveyed free and clear of any 
encumbrance. If there is a charge or if the association must assume an 
encumbrance, state the estimated amount of either and the terms for 
retirement of either obligation.
    (K) If the owner or operator of the central sewer system is other 
than a governmental agency or an entity which is regulated and 
supervised by a governmental agency, state that neither the operation of 
the sewer system nor the rates are regulated by a public authority.
    (L) The following warning shall be included unless:
    (1) The central sewer system is owned and operated by the developer, 
or an affiliate or subsidiary of the developer, or
    (2) The central sewer system is owned and operated by a governmental 
agency or by an entity which is regulated and supervised by a 
governmental agency.

    ``We do not own or operate the central sewer system so we cannot 
assure its continued availability for your use.''

    (c) Electricity. (1) Who will provide electrical services to the 
subdivision?
    (2) Have primary electrical service lines been extended in front of, 
or adjacent to, all of the lots? If not, when (month and year) or under 
what conditions will construction begin and when will service be 
available? If they have not been installed, who is responsible for their 
construction?

If electrical service lines have not been extended in front of, or 
adjacent to, all lots and there are separate units or sections having 
different service availability dates, the following chart shall be used 
rather than a narrative paragraph.

                            Electric Service
------------------------------------------------------------------------
                 Estimated        Percentage of      Estimated service
    Unit       starting date      construction       availability date
             (month and year)       complete          (month and year)
------------------------------------------------------------------------
 
 
 
------------------------------------------------------------------------

    (3) If construction of the lines or service to the ultimate consumer 
is provided by an entity other than a publicly regulated utility, who 
provides, or will provide, the service? Who will be responsible for 
maintenance? What is the assurance of completion? If service is not 
provided by a publicly regulated utility, what charges or assessments 
will the purchaser pay?
    (4) If the primary service lines have not been extended in front of, 
or adjacent to each lot, will the purchaser be responsible for any 
construction costs? If so, what is the utility company's policy and 
charges for extension of primary lines? Based on that policy, what would 
be the cost to the purchaser for

[[Page 39]]

extending primary service to the most remote lot in this Report?
    (5) If electrical service will not be provided, what is an alternate 
source (e.g., generators, etc.) and what are the estimated costs?
    (6) If the lines are to be installed by some entity other than a 
publicly regulated utility and if there is no financial assurance of 
completion, include a warning to the effect that no funds have been set 
aside in an escrow or trust account nor have any other financial 
arrangements been made to assure construction of the electric lines.
    (d) Telephone. (1) Is telephone service now, or will it be, 
available? Who will furnish the service?
    (2) Have the service lines been extended in front of, or adjacent 
to, each of the lots? If not, when, and under what conditions, will 
construction be started and when will service be available (month and 
year)?
    (3) If the service lines have not been extended in front of, or 
adjacent to, each lot, will the purchaser be responsible for any 
construction costs? If so, what is the utility company's policy and 
charges for extension of service lines? Based on that policy, what would 
be the cost to the purchaser of extending service lines to the most 
remote lot in this Report?
    (e) Fuel or other energy source. (1) What fuel, or other energy 
source, will be available for heating, cooking, etc. in the subdivision? 
If other than electricity is to be used, describe the availability of 
the fuel or other energy source. Give the name and address of the 
supplier. If the fuel is natural gas, when will the mains be installed 
to the lots? What is the cost to the purchaser for installation fees and 
connection fees? If oil or propane gas will be used, include the cost of 
a storage tank.
    (2) [Reserved]



Sec. 1710.112  Financial information.

    (a) The information required by paragraphs (b) and (c) of this 
section need appear only if the answer to the question is an affirmative 
one.
    (b) Has the developer had a deficit in retained earnings or 
experienced an operating loss during the last fiscal year or, if less 
than a year old, since its formation? If so, include a statement to the 
effect that this may affect the developer's ability to complete promised 
facilities and to discharge financial obligations. This statement may be 
omitted if:
    (1) All facilities, utilities and amenities proposed to be completed 
by the developer in the Property Report and sales contract have been 
completed so that the lots included in the Statement of Record are 
immediately usable for the purpose for which they are sold, or if:
    (2) The developer is contractually obligated to the purchaser to 
complete all facilities, utilities and amenities promised by it in the 
Statement of Record, and:
    (i) The developer has made financial arrangements, such as the 
posting of surety bonds (corporate or individual notes or bonds are not 
acceptable), irrevocable letters of credit, escrow or trust accounts, to 
assure that the facilities, utilities and amenities will be completed by 
the dates set out in the Property Report or contract;
    (ii) The sales contract provides for delivery of a deed within 180 
days of the signing of the contract which conveys title free of any 
mortgage or lien, or the developer has filed an assurance of title 
agreement with OILSR as outlined in Sec. 1710.212(e); and
    (iii) Any down payments or deposits are held in an escrow or trust 
account.
    (c) If the developer's financial statements have been audited, did 
the accountant qualify the opinion or decline to give an opinion? If so, 
why was the opinion qualified or declined?
    (d) The following statement shall appear:

    A copy of our financial statements for the period ending ----------
------ is available from us upon request.

    (e) The information furnished in Sec. 1710.212(b) may necessitate a 
warning as to costs and/or feasibility of the completion of the 
subdivision.

[44 FR 21453, Apr. 10, 1979, as amended at 49 FR 31370, Aug. 6, 1984]



Sec. 1710.113  Local services.

    (a) Fire protection. Describe the availability of fire protection 
and indicate whether it is available year round.

[[Page 40]]

    (b) Police protection. Describe the availability of police 
protection.
    (c) Schools. State whether elementary, junior high and senior high 
schools are available to residents of the subdivision. Is school bus 
transportation available from within the subdivision?
    (d) Hospital. Give the name and location of the nearest hospital and 
state whether ambulance service is available.
    (e) Physicians and dentists. State the location of the nearest 
physicians' and dentists' offices.
    (f) Shopping facilities. State the location of the nearest shopping 
facilities.
    (g) Mail service. If there is no mail service to the subdivision, 
describe the arrangements the purchasers must make to receive mail 
service.
    (h) Public transportation. Is there public transportation available 
in the subdivision or to nearby towns? If not, give the location of the 
nearest public transportation and the distance from the subdivision.



Sec. 1710.114  Recreational facilities.

    (a) Recreational facilities to be covered. Unless otherwise 
indicated, all information required by paragraphs (b) and (c) of this 
section shall be provided for only those recreational facilities which
    (1) The developer is contractually responsible to provide or 
complete and which are:
    (i) Within, adjacent or contiguous to the subdivision, and
    (ii) Maintained substantially for the use of lot owners; or
    (2) For which a third party is responsible and which are:
    (i) Within, adjacent or contiguous to the subdivision, and
    (ii) Maintained substantially for the use of lot owners.
    (b) Recreational facility chart. Complete the below chart in 
accordance with the instructions which follow it. This chart shall 
immediately follow the Sec. 1710.114 heading. Limit the chart to 
facilities provided essentially for use of lot buyers.

----------------------------------------------------------------------------------------------------------------
                                      Estimated date of
                     Percentage of         start of        Estimated date       Financial        Buyer's annual
     Facility       construction now     construction    available for use     assurance of         cost or
                        complete         (month/year)       (month/year)        completion        assessments
----------------------------------------------------------------------------------------------------------------
 
 
----------------------------------------------------------------------------------------------------------------

    (1) Facility. Identify each recreational facility. Identify closely 
related facilities (e.g., swimming pool and bathhouse) separately only 
if their availability dates differ. If any recreational facility is not 
owned by the developer, insert a warning below the chart phrased 
substantially as follows:

    ``We do not own the (name of facility or facilities) so we can not 
assure its (their) continued availability.''

    (2) Percent complete. State the present percentage of completion of 
construction for each recreational facility.
    (3) Estimated date of start of construction. Insert the estimated 
date of the start of construction for the facility (month and year).
    (4) Estimated date available for use. If the construction of the 
facility is not complete or if it is not available to lot owners for its 
intended use, indicate the estimated date (month and year) that the 
facility will be available for use. If the ``estimated date available 
for use'' for any facility has been amended to delay it to a later date, 
indicate such delay in a statement immediately below the chart. 
Underline the response.

This statement shall include the name of the facility and the prior 
estimated availability date, and it shall be referenced to the 
appropriate facility listed on the chart by use of an asterisk or other 
appropriate symbol. If a facility is 100 percent completed and in use, 
no date is needed.
    (5) Financial assurance of completion. If the construction of the 
facility is not complete, state whether there is any financial assurance 
of completion. If none, state ``none''. If such exists, state the type 
of assurance (i.e. bond, escrow, or trust). If no documentation for such 
assurance has been provided in Sec. 1710.214 of the Statement of 
Record, then do not indicate such assurance on

[[Page 41]]

the chart, but in place of such assurance on the chart state ``none''.
    (6) Buyer's annual cost or assessments. State the lot buyer's annual 
cost or assessments for using the facility. These costs should include 
any applicable property owners' association assessment, and the 
developer's maintenance assessment. If the cost information is lengthy, 
you may use an asterisk or other appropriate symbol and include the cost 
information in a paragraph below the chart.
    (c) Information to be provided below the recreational facility chart 
and related warnings.
    (1) Constructing the facilities. If the facilities are not complete, 
indicate who is responsible for the construction of the facilities. 
Indicate whether the purchaser will be required to pay any of the cost 
of construction of these facilities (estimate and disclose such cost, if 
any).
    (2) Maintaining the facilities. Indicate who is responsible for the 
operation and maintenance of these facilities.
    (3) Facilities which will be leased to lot purchasers. If no 
facilities covered here will be leased to a Property Owners' Association 
or other lot owners in the subject subdivision, omit this caption and 
any information requested under it from the Property Report. If such 
leases exist or are anticipated, state which facilities are or will be 
leased and indicate the term of the lease. Also, state whether the lot 
owners will have an opportunity to terminate or ratify the lease after 
control of the Property Owners' Association is turned over to them. 
Indicate whether the owner of a recreational facility leased to the 
Property Owners' Association or other lot owners may encumber it and 
whether the holders of such encumbrances may acquire the leased 
facilities and not honor the lease. Indicate whether the lease payments 
may be increased on an escalating or other basis and what costs or 
expenses, if any, will be borne by the owner. State whether the lease 
can be assigned or sublet. State how the lease can be terminated.
    (4) Transfer of the facilities. If there are presently any liens or 
mortgages on any of these recreational facilities, describe such liens 
or mortgages. If the developer, or owner of the subdivision, their 
principals, or subsidiaries, intend to transfer the title of a listed 
recreational facility in the future, explain at what time, by what type 
of conveyance, and to whom such transfer will be made. Disclose any 
adverse effects on, or cost to, lot purchasers which may be caused by 
such transfer. If any facility is to be transferred to lot owners as a 
Property Owners' Association or otherwise, state whether the facility 
will be transferred free and clear of all liens and encumbrances. If 
not, state the amount of the encumbrance to be assumed and disclose any 
contractual conditions on such transfer which relate to lot purchasers.
    (5) Permits. If the necessary permits have not been obtained for the 
construction and/or use of the facilities, identify the facilities for 
which such permits have not been obtained and include the following 
statement, or one substantially the same, in the narrative under the 
caption ``Permits''.

    ``The (identify the permit or license) has not been obtained and 
therefore there is no assurance that the lot owners will be able to use 
the (identify the facility)''.

    (6) Who may use the facilities. Indicate who will be permitted to 
use the recreational facilities (e.g., lot owners, their guests, 
employees of developer, general public, etc.). If the general public 
will be permitted to use the facilities include the following statement 
in the narrative under the caption ``Who may use the facilities'':

    ``The (identify the facility) is open to use by the general public 
and their use of the facility may limit use of it by lot owners''.

[44 FR 21453, Apr. 10, 1979, as amended at 45 FR 40489, June 13, 1980; 
50 FR 10942, Mar. 19, 1985]



Sec. 1710.115  Subdivision characteristics and climate.

    (a) General topography. What is the general topography and the major 
physical characteristics of the land in the subdivision? State the 
percentage of the subdivision which is to remain as natural open space 
and as developed parkland. Are there any steep slopes, rock 
outcroppings, unstable or expansive soil conditions, etc., which will 
necessitate the use of special construction techniques to build on, or 
use, any

[[Page 42]]

lot in the subdivision? If so, identify the lots affected, and describe 
the techniques recommended. If any lots in the subdivision have a slope 
of 20%, or more, include a warning that ``Some lots in this subdivision 
have a slope of 20%, or more. This may affect the type and cost of 
construction.''
    (b) Water coverage. Are any lots, or portions of any lots, covered 
by water at any time? What lots are affected? When are they covered by 
water? How does this affect their use for the purpose for which they are 
sold? Can the condition be corrected? At what cost to the purchaser?
    (c) Drainage and fill. Identify the lots which require draining or 
fill prior to being used for the purpose for which they are being sold. 
Who will be responsible for any corrective action? If the purchaser is 
responsible, what are the estimated costs?
    (d) Flood plain. Is the subdivision located within a flood plain or 
an area designated by any Federal, State or local agency as being flood 
prone? What lots are affected? Is flood insurance available? Is it 
required in connection with the financing of any improvements to the 
lot? What is the estimated cost of the flood insurance?
    (e) Flooding and soil erosion. (1) Does the developer have a program 
which provides, or will provide, at least minimum controls for soil 
erosion, sedimentation or periodic flooding throughout the subdivision?
    (2) If there is a program, describe it. Include in the decription 
information as to whether the program has been approved by the 
appropriate government officials; when it is to start; when it is to be 
completed (month and year); whether the developer is obligated to comply 
with the program and whether there is any financial assurance of 
completion.
    (3) If there is no program or if the program has not been approved 
by the appropriate officials or if the program does not provide minimum 
protection, include a statement to the effect that the measures being 
taken may not be sufficient to prevent property damage or health and 
safety hazards. (A minimum program will usually provide for:
    (i) Temporary measures such as mulching and seeding of exposed areas 
and silt basins to trap sediments in runoff water, and
    (ii) Permanent measures such as sodding and seeding in areas of 
heavy grading or cut and fill along with the construction of diversion 
channels, ditches, outlet channels, waterway stabilizers and sediment 
control basins.)
    (f) Nuisances. Are there any land uses which may adversely affect 
the subdivision (e.g., unusual or unpleasant noises or odors, pollutants 
or nuisances such as existing or proposed industrial activity, military 
installations, airports, railroads, truck terminals, race tracks, animal 
pens, noxious smoke, chemical fumes, stagnant ponds, marshes, 
slaughterhouses and sewage treatment facilities)? If any nuisances 
exist, describe them. If there are none, state there are no nuisances 
which affect the subdivision.
    (g) Hazards. (1) Are there any unusual safety factors which affect 
the subdivision (e.g., dilapidated buildings, abandoned mines or wells, 
air or vehicular traffic hazards, danger from fire or explosion or 
radiation hazards)? Is the developer aware of any proposed plans for 
construction which may create a nuisance or safety hazard or adversely 
affect the subdivision? If there are any existing hazards or if there is 
any proposed construction which will create a nuisance or hazard, 
describe the hazard or nuisance. If there are no existing or possible 
future hazards, state that there are none.
    (2) Is the area subject to natural hazards or has it been formally 
identified by any Federal, State or local agency as an area subject to 
the frequent occurrence of natural hazards (e.g., tornadoes, hurricanes, 
earthquakes, mudslides, forest fires, brush fires, avalanches, flash 
flooding, etc.)? If the jurisdiction in which the subdivision is located 
has a rating system for fire hazard, state the rating assigned to the 
land in the subdivision and explain its meaning.
    (h) Climate. What are the average temperature ranges, summer and 
winter, for the area in which the subdivision is located (i.e., high, 
low and mean)? What is the average annual rainfall and snowfall?

[[Page 43]]

    (i) Occupancy. How many homes are occupied on a full- or part-time 
basis as of (date of submission)?



Sec. 1710.116  Additional information.

    (a) Property Owners' Association. (1) Will there be a property 
owners' association for the subdivision? Has it been formed? What is its 
name? Is it operating? If not yet formed, when will it be formed? Who is 
responsible for its formation?
    (2) Does the developer exercise, or have the right to exercise, any 
control over the Association because of voting rights or placement of 
officers or directors? For how long will this control last?
    (3) Is membership in the association voluntary? Will non-member lot 
owners be subject to the payment of dues or assessments? What are the 
association dues? Can they be increased? Are members subject to special 
assessments? For what purpose? If membership in the association is 
voluntary and if the association is responsible for operating or 
maintaining facilities which serve all lot owners, include the following 
statement:

    ``Since membership in the association is voluntary, you may be 
required to pay a disproportionate share of the association costs or it 
may not be able to carry out its responsibilities.''

    (4) What are the functions and responsibilities of the association? 
Will the association hold architectural control over the subdivision?
    (5) Are there any functions or services that the developer now 
provides at no charge for which the association may be required to 
assume responsibility in the future? If so, will an increase in 
assessments or fees be necessary to continue these functions or 
services?
    (6) Does the current level of assessments, fees, charges or other 
income provide the capability for the association to meet its present, 
or planned, financial obligations including operating costs, maintenance 
and repair costs and reserves for replacement? If not, how will any 
deficit be made up?
    (b) Taxes. (1) When will the purchaser's obligation to pay taxes 
begin? To whom are the taxes paid? What are the annual taxes on an 
unimproved lot after the sale to a purchaser? If the taxes are to paid 
to the developer, include a statement that ``Should we not forward the 
tax funds to the proper authorities, a tax lien may be placed against 
your lot.''
    (2) If the subdivision is encompassed within a special improvement 
district or if a special district is proposed, describe the purpose of 
the district and state the amount of assessments. Describe the 
purchasers obligation to retire the debt.
    (c) Violations and litigations. This information need appear only if 
any of the questions are answered in the affirmative. Unless the 
Secretary gives prior approval for it to be omitted, a brief description 
of the action and its present status or disposition shall be given.
    (1) With respect to activities relating to or in violation of a 
Federal, state or local law concerned with the environment, land sales, 
securities sales, construction or sale of homes or home improvements, 
consumer fraud or similar activity, has the developer, the owner of the 
land or any of their principals, officers, directors, parent 
corporation, subsidiaries or an entity in which any of them hold a 10% 
or more financial interest, been:
    (i) Disciplined, debarred or suspended by any governmental agency, 
or is there now pending against them an action which could result in 
their being disciplined, debarred or suspended or,
    (ii) Convicted by any court, or is there now pending against them 
any criminal proceedings in any court? (OILSR suspension notices on 
preeffective Statements of Record and amendments need not be listed.)
    (2) Has the developer, the owner of the land, any principal, any 
person holding a 10% or more financial or ownership interest in either, 
or any officer or director of either, filed a petition in bankruptcy? 
Has an involuntary petition in bankruptcy been filed against it or them 
or have they been an officer or director of a company which became 
insolvent or was involved, as a debtor, in any proceedings under the 
Bankruptcy Act during the last 13 years?

[[Page 44]]

    (3) Is the developer or any of its principals, any parent 
corporation or subsidiary, any officer or director a party to any 
litigation which may have a material adverse impact upon its financial 
condition or its ability to transfer title to a purchaser or to complete 
promised facilities? If so, include a warning which describes the 
possible effects which the action may have upon the subdivision.
    (d) Resale or exchange program. (1) Are there restrictions which 
might hinder lot owners in the resale of their lots (e.g., a prohibition 
against posting signs, limitations on access to the subdivision by 
outside brokers or prospective buyers; the developer's right of first 
refusal; membership requirements)? If so, briefly explain the 
restrictions.
    (2) Does the developer have an active resale program? If the answer 
is ``no'', include the following statement: ``We have no program to 
assist you in the sale of your lot.''
    (3) Does the developer have a lot exchange program? If the answer is 
``yes'', describe the program; state any conditions and indicate if the 
program reserves a sufficient number of lots to accommodate all those 
wishing to participate. If there is no program or if sufficient lots are 
not reserved, include one of the following statements as applicable: 
``We do not have any provision to allow you to exchange one lot for 
another'' or ``We do not have a program which assures that you will be 
able to exchange your lot for another.''
    (e) Unusual situations. This topic need appear only if one or more 
of the following cases apply to the subdivision, then only the 
applicable subject, or subjects, will appear.
    (1) Leases. What is the term of the lease? Is it renewable? Is it 
recordable? Can creditors of the developer, or owner, acquire title to 
the property without any obligation to honor the terms of the lease? Are 
the lease payments a flat sum or are they graduated? Can the lessee 
mortgage or otherwise encumber the leasehold? Will the lessee be 
permitted to remove any improvements which have been installed when the 
lease expires or is terminated?
    (2) Foreign subdivision. (i) Is the owner or developer of the 
subdivision a foreign country corporation? If legal action is necessary 
to enforce the contract, must it be taken in the courts of the country 
where the subdivision is located?
    (ii) Does the country in which the subdivision is located have any 
laws which restrict, in any way, the ownership of land by aliens? If so, 
what are the restrictions?
    (iii) Must an alien obtain a permit or license to own land, build a 
home, live, work or do business in the country where the subdivision is 
located? If so, where is such permit or license secured; for how long is 
it valid and what is its cost?
    (3) Time sharing. (i) How is title to be conveyed? How many shares 
will be sold in each lot? How is use time allocated? How are taxes, 
maintenance and utility expenses divided and billed? How are voting 
rights in any Association apportioned? Are there management fees? If so, 
what are their amounts and how are they apportioned?
    (ii) Is conveyance of any portion of the lot contingent upon the 
sale of the remaining portions? Is the initial buyer responsible for any 
greater portion of the expense than his normal share until the remaining 
interests are sold? If the purchase of any of the portions is financed, 
will the default of one owner have any effect upon the remaining owners?
    (4) Memberships. (i) Does the purchaser receive any interest in 
title to the land? What is the term of the membership? Is it renewable? 
What disposition is made of the membership in the event of the death of 
the member? Are the lots individually surveyed and the corners marked? 
If not, how does the member identify the area which the member is 
entitled to use? What is the approximate square footage the member is 
entitled to use? Are there different classes of membership? How are the 
different classes identified and what are the differences between them?
    (ii) If the member does not receive any interest in the title to the 
land, include a warning to the effect that ``you receive no interest in 
the title to the

[[Page 45]]

land but only the right to use it for a certain period of time.''
    (f) Equal opportunity in lot sales. State whether or not the 
developer is in compliance with title VIII of the Civil Rights Act of 
1968 by not directly or indirectly discriminating on the basis of race, 
religion, sex or national origin in any of the following general areas: 
Lot marketing and advertising, rendering of lot services, and in 
requiring terms and conditions on lot sales and leases.

An affirmative answer cannot be given if the developer, directly or 
indirectly, because of race, color, religion, sex or national origin is:
    (1) Refusing to sell or lease lots after the making of a bona fide 
offer or to negotiate for the sale or lease of lots or is otherwise 
making unavailable or denying a lot to any person, or
    (2) Discriminating against any person in the terms, conditions or 
privileges in the sale or leasing of lots or in providing services or 
facilities in connection therewith, or
    (3) Making, printing, publishing or causing to be made, printed or 
published any notice, statement or advertisement with respect to the 
sale or leasing of lots that indicates any preference, limitation or 
discrimination against any person, or
    (4) Representing to any person that any lot is not available for 
inspection, sale or lease when such lot is in fact available, or
    (5) For profit, inducing or attempting to induce any person to sell 
or lease any lot by representations regarding the entry or non-entry 
into the neighborhood of a person or persons of a particular race, 
color, religion, sex or national origin.
    (g) Listing of lots. Provide a listing of lots which shall consist 
of a description of the lots included in the Statement of Record by the 
names or number of the section or unit, if any; the block number, if 
any; and the lot numbers. The lots shall be listed in the most efficient 
and concise manner. If the filing is a consolidation, the listing shall 
include all lots registered to date in the subdivision, except any which 
have been deleted by amendment.

[44 FR 21453, Apr. 10, 1979, as amended at 49 FR 31370, 31371, Aug. 6, 
1984]



Sec. 1710.117  Cost sheet, signature of Senior Executive Officer.

    (a) Cost sheet--Format. (1) The cost sheet shall be prepared in 
accordance with the following format and paragraph (a)(2) of this 
section.

                               Cost Sheet

    In addition to the purchase price of your lot, there are other 
expenditures which must be made.
    Listed below are the major costs. There may be other fees for use of 
the recreational facilities.
    All costs are subject to change.

                               Sales Price
Cash Price of lot...........................................  $.........
                                                                  ......
Finance Charge..............................................  $.........
                                                                  ......
                                                             -----------
      Total.................................................  $.........
                                                                  ......
                                                             ===========
                       Estimated one-time charges
 
1. Water connection fee/installation or private well........  $.........
                                                                  ......
2. Sewer connection fee/installation of private on-site       $.........
 sewer system...............................................      ......
3. Construction costs to extend electric and/or telephone     $.........
 services...................................................      ......
4. Other (Identify).........................................  $.........
                                                                  ......
                                                             -----------
                                                              $.........
                                                                  ......
                                                             ===========
      Total of estimated sales price and one-time charges...  $.........
                                                                  ......
                                                             ===========
     Estimated monthly/annual charges, exclusive of utility use fees
1. Taxes--Average unimproved lot after sale to purchaser....  $.........
                                                                  ......
2. Dues and assessments.....................................  $.........
                                                                  ......
 

    The information contained in this Property Report is an accurate 
description of our subdivision and development plans.

________________________________________________________________________
 Signature of Senior Executive Officer

    (2) Cost sheet instructions. (i) All amounts for cost sheet items 
will be entered before the purchaser signs the receipt. However, any 
costs that are identical for all lots may be pre-printed.
    (ii) If a central water or sewer system will be used in all or part 
of the subdivision and a private system in all or other parts, then the 
portion that does not apply to the purchaser's lot shall be crossed out.
    (iii) If individual private systems may be used prior to the 
availability of service from any central system and

[[Page 46]]

the purchaser is not required to connect to any central system, both 
figures may be entered or only the highest cost figures may be used with 
a parenthetical explanation or footnote. If the purchaser is required to 
connect to any central system and discontinue the use of his private 
system when central service is available, both cost figures shall be 
given, together with an explanation or footnote.
    (iv) If there is a one time, lump sum ``availability fee'' which is 
assessed to the purchaser in connection with a central utility, include 
under ``other'' and identify.
    (v) Dues and assessments need be included only if they are 
involuntary regardless of use.
    (vi) At the discretion of the Secretary, where there is extreme 
diversity in the figures for different areas of the subdivision, 
variations may be permitted as to whether the figures will be printed, 
entered manually, or a range of costs used or any combination of these 
features.
    (vii) The estimated annual taxes shall be based upon the projected 
valuation of the lot after sale to a purchaser.
    (b) Signature of the Senior Executive Officer. The Senior Executive 
Officer or a duly authorized agent shall sign the property report. 
Facsimile signatures may be used for purposes of reproduction of the 
property Report.

[44 FR 21453, Apr. 10, 1979, as amended at 49 FR 31371, Aug. 6, 1984]



Sec. 1710.118  Receipt, agent certification and cancellation page.

    (a) Format. The receipt, agent certification and cancellation page 
shall be prepared in accordance with the sample printed herein.

           Receipt, Agent Certification and Cancellation Page

                            purchaser receipt

                        Important: Read Carefully

Name of subdivision_____________________________________________________

OILSR number ------------------------ Date of report ------

    We must give you a copy of this Property Report and give you an 
opportunity to read it before you sign any contract or agreement. By 
signing this receipt, you acknowledge that you have received a copy of 
our Property Report.

Received by ---------------------------------------- Date ------

Street address__________________________________________________________

City ---------------------------- State ---------------------------- Zip 
          ------

    If any representations are made to you which are contrary to those 
in this Report, please notify the:

     Office of Interstate Land Sales Registration
     HUD Building, 451 Seventh Street, S.W.
     Washington, D.C. 20410

                           Agent Certification

    I certify that I have made no representations to the person(s) 
receiving this Property Report which are contrary to the information 
contained in this Property Report.

Lot -------------------- Block -------------------- Section ------------
          --------

Name of salesperson_____________________________________________________

Signature ---------------------------------------- Date ------

                          Purchase Cancellation

    If you are entitled to cancel your purchase contract, and wish to do 
so, you may cancel by personal notice, or in writing. If you cancel in 
person or by telephone, it is recommended that you immediately confirm 
the cancellation by certified mail. You may use the form below.

Name of subdivision_____________________________________________________

Date of contract________________________________________________________


[[Page 47]]

________________________________________________________________________
This will confirm that I/we wish to cancel our purchase contract.

Purchaser(s) signature-------------------- Date ------

    (b) The original and one copy of this page shall be attached to the 
Property Report delivered to prospective purchasers. Carbon paper may be 
inserted between the two so that after the purchaser has signed the 
receipt and the salesman has signed the certification, the copy can be 
detached and retained by the developer for a period of three years from 
the date of execution or the term of the contract, whichever is the 
longer. Upon demand by the Secretary, the developer shall, without 
delay, make the copies of these receipts and certifications available 
for inspection by the Secretary or the developer shall forward to the 
Secretary any of the receipts and certifications, or copies thereof, as 
the Secretary may specify.
    (c) If the transaction takes place through the mails, the cost 
figures shall be entered and the person most active in dealing with the 
prospective purchaser shall sign the certification prior to mailing the 
Property Report to the purchaser. Otherwise, the certification shall be 
executed in the presence of the purchaser.
    (d) The date of Report appearing on the receipt shall be the same as 
that appearing on the cover sheet of the Property Report.
    (e) Notification of cancellation by mail shall be considered given 
at the time post-marked.



Sec. 1710.200  Instructions for Statement of Record, Additional 
Information and Documentation.

    The Additional Information and Documentation portion of the 
Statement of Record shall contain the statements and documents required 
in Sec. Sec. 1710.208 through 1710.219. Each section number and its 
associated heading and each paragraph letter or number and their 
associated subheadings or captions must appear in this portion. 
Following each heading, subheading, or caption printed in this portion, 
the registrant shall insert an appropriate response. If a heading, 
subheading, or caption does not apply to the subdivision, it shall be 
followed by the words ``not applicable''. Immediately after the page(s) 
on which the section number and answers for that section appear, insert 
the information or documents which support that section. In addition to 
the statements and documentation expressly required there shall be added 
any further material, information, documentation and certifications as 
may be necessary in the public interest and for the protection of 
purchasers or to cause the statements made to be not misleading in the 
light of the circumstances under which they are made.



Sec. 1710.208  General information.

    (a) Administrative information. (1) State whether the material 
represents an initial Statement of Record or a consolidated Statement of 
Record. If it is a consolidated Statement of Record, identify the 
original OILSR number assigned to the initial Statement of Record. State 
whether subsequent Statements of Record will be submitted for additional 
lots in the subdivision.
    (2) Has the developer submitted a request for an exemption for the 
subdivision?
    (3) List the states in which registration has been made by the 
developer for the sale of lots in the subdivision.
    (4) If any State listed in paragraph (a)(3) of this section has not 
permitted a registration to become effective or has suspended the 
registration or prohibited sales, name the State involved and give the 
reasons cited by the State for their action.
    (5) State whether the developer has made, or intends to make, a 
filing with the U.S. Securities and Exchange Commission (SEC) which is 
related in any way to the subdivision. If a filing has been made with 
the SEC, give the SEC identification number; identify the prospectus by 
name; date of filing and state the page number of the prospectus upon 
which specific reference to the subdivision is made. Any disciplinary 
action taken against the developer by the SEC should be disclosed in 
Sec. Sec. 1710.116 and 1710.216.
    (b) Subdivision information. (1) If this is a consolidated Statement 
of Record,

[[Page 48]]

state the number of lots being added, the number of lots in prior 
Statements of Record and the new total number of lots. The Secretary 
must be able to reconcile the numbers stated here with the title 
evidence; the plat maps and the disclosure in Sec. 1710.108.
    (2) State the number of acres represented by the lots in this 
Statement of Record. If this is a consolidated Statement of Record, 
state the number of acres being added, the number of acres in prior 
Statements of Record and the new total number of acres. State the total 
acreage owned in the subdivision, the number of acres under option or 
similar arrangement for acquisition of title to the land and the total 
acreage to be offered pursuant to the same common promotional plan.
    (3) State whether any lots have been sold in this subdivision since 
April 28, 1969 and prior to registration with this Office. If they were 
sold pursuant to an exemption, identify the exemption provision and 
state whether an advisory opinion, exemption order or exemption 
determination was obtained with respect to those lots sales. Give the 
OILSR number assigned to the exemption, if any.
    (c) Developer information. (1) State the name, address, Internal 
Revenue Service number and telephone number of the owner of the land. If 
the owner is other than an individual, name the type of legal entity and 
list the interest, and extent thereof, of each principal. Identify the 
officers and directors.
    (2) If the developer is not the owner of the land, state the 
developer's name, address, Internal Revenue Service number and telephone 
number. If the developer is other than an individual, name the type of 
legal entity and list the interest, and the extent thereof, of each 
principal. Identify the officers and directors.
    (3) If you wish to appoint an authorized agent, state the agent's 
name, address and telephone number and scope of responsibility. This 
shall be the party designated by the developer to receive 
correspondence, service of process and notice of any action taken by 
OILSR. In all Statements of Record, including those for foreign 
subdivisions, the authorized agent shall be a resident of the United 
States. A change of the authorized agent will require an appropriate 
amendment.
    (4) State whether the owner of the land, the developer, its parent, 
subsidiaries or any of the principals, officers or directors of any of 
them are directly or indirectly involved in any other subdivision 
containing 100 or more lots. If so, identify the subdivision by name, 
location, and OILSR number, if any.
    (5) State whether the owner or developer is a subsidiary 
corporation. If either the owner or developer is a subsidiary 
corporation or if any of the principals of the owner or developer are 
corporate entities, name the parent and/or corporate entity and state 
the principals of each to the ultimate parent entity.
    (d) Documentation. (1) Submit a copy of the property report, 
subdivision report, offering statement or similar document filed with 
the state or states with which the subdivision has been registered.
    (2) Submit a copy of a general plan of the subdivision. This general 
plan must consist of a map, prepared to scale, and it must identify the 
various proposed sections or blocks within the subdivision, the existing 
or proposed roads or streets, and the location of the existing or 
proposed recreational and/or common facilities. In an initial filing, 
this map must at least show the area included in the Statement of 
Record. In a consolidated Statement of Record, show areas being added, 
as well as the areas previously registered. If a map of the entire 
subdivision is submitted with the initial Statement of Record, and if no 
substantial changes are made when material for a consolidated Statement 
of Record is submitted, the original map may be incorporated by 
reference.
    (3)(i) If the developer is a corporation, submit a copy of the 
articles of incorporation, with all amendments; a copy of the 
certificate of incorporation or a certificate of a corporation in good 
standing and, if the subdivision is located in a state other than the 
one in which the original certificate of corporation was issued, a 
certificate of registration as a foreign corporation with the state 
where the subdivision is located.

[[Page 49]]

    (ii) If the developer is a partnership, unincorporated association, 
joint stock company, joint venture or other form of organization, submit 
a copy of the articles of partnership or association and all other 
documents relating to its organization.
    (iii) If the developer is not the owner of the land, submit copies 
of the above documents for the owner.

[44 FR 21453, Apr. 10, 1979, as amended at 45 FR 40489, June 13, 1980; 
49 FR 31371, Aug. 6, 1984]



Sec. 1710.209  Title and land use.

    (a) General information. (1) State whether the developer has 
reserved the right to exchange or withdraw lots after a purchaser has 
signed a sales contract (e.g., for prior sales, failure to pass credit 
check). If yes, indicate this authority and make reference to the 
applicable paragraph in the sales contract or other document.
    (2) State whether there is a provision giving purchasers an option 
to exchange lots. If yes, indicate this and make reference to the 
applicable paragraph in the sales contract or other document.
    (3) State whether the developer knows of any instruments not of 
record which, if recorded, would affect title to the subdivision. If 
yes, copies of these instruments shall be submitted, except that copies 
of unrecorded contracts for sales of lots in the subdivision need not be 
submitted.
    (4)(i) Identify the Federal, State and local agencies or similar 
organizations which have the authority to regulate or issue permits, 
approvals or licenses which may have a material effect on the 
developer's plans with respect to the proposed division of the land, and 
any existing or proposed facilities, common areas or improvements to the 
subdivision.
    (ii) Describe or identify the land or facilities affected; the 
permit, approval or license required; and indicate whether the permit, 
approval or license has been obtained by the developer.
    (iii) If no agency regulates the division of the land or issues any 
permits, approvals or licenses with respect to improvements, so state.
    (iv) Answers must specifically cover the areas of environmental 
protection; environmental impact statements; and construction, dredging, 
bulkheading, etc. that affect bodies of water within or around the 
subdivision. Also include licenses or permits required by water 
resources boards, pollution control boards, river basin commissions, 
conservation agencies or similar organizations.
    (5) State whether it is unlawful to sell lots prior to the final 
approval and recording of a plat map in the jurisdiction where the 
subdivision is located.
    (b) Title evidence. (1) Submit title evidence that specifically 
states the status of the legal and equitable title to the land 
comprising the lots covered by the Statement of Record and any common 
areas or facilities disclosed in the Property Report. Title evidence 
need not be submitted for those common areas and facilities which are 
not owned by the developer.
    (2) Acceptable title evidence shall be dated no earlier than 20 
business days preceding the date of the filing of the Statement of 
Record with the Secretary. Previously issued title evidence may be 
updated to the date referred to in the preceding sentence by 
endorsements or attorneys' opinions of title.
    (3) The developer shall amend the title evidence to reflect the 
change in status of title of any previously registered, reacquired lots 
unless their status is at least as marketable as they were when first 
offered for sale by the developer as registered lots.
    (c) Forms of acceptable title evidence. (1) An original or a copy of 
a signed owner's or mortgagee's policy of title insurance, title 
commitment, certificate of title or similar instrument issued by a title 
company authorized by law to issue such instruments in the state in 
which the subdivision is located. Title evidence that limits insurance 
or negligence liability to amounts less than the market value of the 
subject land at the time of its acquisition by the subdivision owner is 
not acceptable;
    (2) A legal opinion stating the condition of title, prepared and 
signed by an attorney at law experienced in the examination of titles 
and a member of the Bar in the state in which the property is located. 
The title opinion may be based on a Torrens land registration

[[Page 50]]

system certificate of title, or similar instrument, provided it meets 
all general title evidence requirements of this section and a copy of 
the registration certificate of title is submitted. Title opinions that 
limit negligence liability to amounts less than the market value of the 
subject land at the time of its acquisition by the subdivision owner are 
not acceptable.
    (d) Title searches. The required evidence of the status of title 
shall be based on a search of all public records which may contain 
documents affecting title to the land or the developer's ability to 
deliver marketable title. The search must cover a period which is 
required or generally considered adequate for insuring marketability of 
title in the jurisdiction in which the subdivision is located. Such 
search shall include an examination of at least the following documents:
    (1) The records of the recorder of deeds or similar authority;
    (2) U.S. Internal Revenue Liens;
    (3) The records of the circuit, probate, or other courts including 
Federal courts and bankruptcy or reorganization proceedings which have 
jurisdiction to affect the title to the land;
    (4) The tax records;
    (5) Financing statements filed pursuant to the Uniform Commercial 
Code or similar law. If it is held that the financing statements do not 
affect the title of the land, include a statement of the legal authority 
for that opinion.

This search may be accomplished through the use of a title insurance 
company title plant, the information in which is based on current 
searches of the appropriate and necessary documents, including as a 
minimum those listed immediately above. For any attorney's title opinion 
based on Torrens certificates of title, the title search need only go 
beyond the original time of registration of the certificate of title for 
those types of encumbrances which were not conclusively settled by the 
proceedings at the time of such registration. In such cases, the 
required statement shall clearly reflect the documents and periods 
searched.
    (e) Items to be included in the title evidence. The acceptable title 
evidence must include the following information, instruments and 
statements and need not be repeated or duplicated elsewhere in the 
Statement of Record.
    (1) A legal description of the land on which the lots, common areas, 
and facilities covered by the title evidence are located. This legal 
description shall be adequate for conveying land in the jurisdiction in 
which the subdivision is located. If this legal description is based on 
a recorded plat, the lot numbers, recording place, book name, book 
number, and page number shall be stated in the description. If this 
legal description is given by metes and bounds, the title evidence shall 
include or be accompanied by a certified statement of the preparer of 
the title evidence, a licensed attorney, or an engineer or surveyor, 
indicating that all subject lots, common areas, and common facilities 
are encompassed within the metes and bounds description in the evidence. 
If at any time after the submission of the legal description required 
above, the description of the subject land is changed or found to be in 
error, a correcting amendment shall be made to the Statement of Record.
    (2) The name of the person(s) or other legal entity(ies) holding fee 
title to the property described.
    (3) The name of any person(s) or other legal entity(ies) holding a 
leasehold estate or other interest of record in the property described.
    (4) A listing of any and all exceptions or objections to the title, 
estate or interest of the person(s) or legal entity(ies) referred to in 
paragraph (e)(2) or (e)(3) of this section, including any encumbrances, 
easements, covenants, conditions, reservations, limitations or 
restrictions of record. (Any reference to exceptions or objections to 
title shall include specific references to the instruments in the public 
records upon which they are based). When an objection or exception to 
title affects less than all of the property covered by this Statement of 
Record, the title evidence shall specifically note what portion of the 
property is so affected.
    (5) Copies of all instruments in the public records specifically 
referred to in paragraph (e)(4) of this section. (Abstracts of such 
instruments are acceptable if prepared by an attorney or professional or 
official abstractor qualified and authorized by law to prepare

[[Page 51]]

and certify such abstracts and if the abstracts contain a material 
portion of the recorded instruments sufficient to determine the nature 
and effect of such instruments.) Also include copies of any release 
provisions, relating to encumbrances on the property described, which 
are not included in the documents otherwise required by this section.
    (6) If an attorney's title opinion has been submitted pursuant to 
this section which has been based on a Torrens land registration 
certificate of title, submit a copy of such certificate.
    (f) Supplemental title information. (1) If there is a holder of an 
ownership interest in the land other than the developer, submit a copy 
of any documentation which evidences the developers' authorization to 
develop and/or sell the land.
    (2) Submit copies of any trust deeds, deeds in trust, escrow 
agreements or other instruments which purport to protect the purchaser 
in the event of default or bankruptcy by the developer on any instrument 
or instruments which create a blanket encumbrance upon the property 
unless they have been previously provided as part of ``title evidence'' 
submitted pursuant to paragraph (e) of this section.
    (3)(i) Submit copies of all forms of contracts or agreements and 
notes to be used in selling or leasing lots. The contracts or 
agreements, including promissory notes, must contain the following 
language in boldface type (which must be distinguished from the type 
used for the rest of the contract) on the face or signature page above 
all signatures:

    You have the option to cancel your contract or agreement of sale by 
notice to the seller until midnight of the seventh day following the 
signing of the contract or agreement.
    If you did not receive a Property Report prepared pursuant to the 
rules and regulations of the Office of Interstate Land Sales 
Registration, U.S. Department of Housing and Urban Development, in 
advance of your signing the contract or agreement, the contract or 
agreement of sale may be cancelled at your option for two years from the 
date of signing.

    (ii) If the purchaser is entitled to a longer revocation period by 
operation of State law or the Act, that period becomes the Federal 
revocation period and the contract or agreement must reflect the 
requirements of the longer period, rather than the seven days. This 
language shall be consistent with that shown on the Cover Page (see 
Sec. 1710.105).
    (iii) The revocation provisions may not be limited or qualified in 
the contract or other document by requiring a specific type of notice or 
by requiring that notice be given at a specified place.
    (iv) If it is represented that the developer will provide or 
complete roads or facilities for waters, sewer, gas, electric service or 
recreational amenities, the contract must contain a provision that the 
developer is obligated to provide or complete such roads, facilities and 
amenities (see Sec. 1715.15(f)).
    (4) Submit copies of deeds and leases by which the developer will 
lease or convey title to the lots to purchasers or lessees.
    (g) Plat maps, environmental studies and restrictions--(1) Plat 
maps. (i) In those jurisdictions where it is unlawful to sell lots prior 
to final approval and recording of the plat, and in those cases where a 
plat has been recorded, submit a copy of the recorded plat. This plat 
should be an exact copy of the recorded document. It should reflect the 
signatures of the approving authorities and bear a stamp or notation by 
the recorder of deeds, or similarly constituted officer, as to the 
recording data.
    (ii) If the plat has not been approved by the local authorities nor 
recorded, and if it is not unlawful to sell lots prior to final approval 
and recording, submit a map which has been prepared to scale and which 
shows the proposed division of the land, the lot dimensions and their 
relation to proposed or existing streets and roads. The map shall 
contain sufficient engineering data to enable a surveyor to locate the 
lots.
    (iii) Whether recorded or unrecorded, the plat or map should show:
    (A) The dimensions of each lot, stated in the standard unit of 
measure acceptable for such purposes in the political subdivision where 
the land is located.

[[Page 52]]

    (B) A clear delineation of each of the lots and any common areas or 
facilities.
    (C) Any encroachments or rights-of-way on, over, or under the land, 
or a notation of these items together with the identity of the lots 
affected.
    (D) The courses, distances and monuments, natural or otherwise, of 
the land's boundaries; contiguous boundaries and identification or 
ownership of adjoining land and names of abutting streets, ways, etc.
    (E) The location of the section or unit encompassing the lots in 
relationship to the larger tract, or tracts, in the subdivision.
    (F) The delineation of any flood plains or flood control easements 
affecting any of the lots.
    (iv) The plat, or map shall be prepared by a licensed surveyor or 
engineer.
    (v) If all lots on each page of the plat are not included in the 
Statement of Record with which the plat or map is submitted, then the 
lots which are to be included in the Statement of Record shall be 
identified on the plat or map; a legend describing the method of 
identification shall be entered on the face of the plat or map and the 
number of lots so identified entered in the lower right hand corner of 
the plat map. The Secretary must be able to reconcile the totals of 
these numbers with the information given in Sec. Sec. 1710.108 and 
1710.208 of the Statement of Record and the title evidence.
    (2) Environmental impact study. If the developer is aware of any 
environmental impact study which considers the effect of the subdivision 
on the environment, submit a summary of that study.
    (3) Restrictions or covenants. Submit a copy of any recorded or 
proposed restrictions or covenants for the subdivision if not submitted 
elsewhere in this Statement of Record.

A copy of these restrictions or covenants shall be delivered to a 
prospective purchaser upon request. A supply shall be maintained at 
whatever place or places as will be necessary to allow immediate 
delivery upon request.

[44 FR 21453, Apr. 10, 1979, as amended at 45 FR 40489, June 13, 1980; 
49 FR 31371, Aug. 6, 1984]



Sec. 1710.210  Roads.

    (a) State the estimated cost to the developer of the proposed road 
system.
    (b) If the developer is to complete any roads providing access to 
the subdivision, submit copies of any bonds or escrow agreements which 
have been posted to guarantee completion thereof.
    (c) Submit copies of any bonds or escrow agreements which have been 
posted to assure completion of the roads within the subdivision.
    (d) If the interior roads are to be maintained by a public 
authority, submit a copy of a letter from that authority which states 
that the roads have been, or the conditions upon which they will be, 
accepted for maintenance and when.



Sec. 1710.211  Utilities.

    (a) Water. (1) State the estimated cost to the developer of the 
central water system.
    (2) If water is to be supplied by a central system, furnish a letter 
from the supplier that it will supply the water. If the system is 
operated by a governmental division or by an entity whose operations are 
regulated by a governmental agency but which is not affiliated with or 
under the control of the developer, the letter shall include a statement 
that the supply of water will be sufficient to serve the anticipated 
population of the subdivision or how many homes or connections it can 
and will serve and that the water is tested at regular intervals and has 
been found to meet all standards for a public water supply.
    (3) If the water is to be supplied by individual wells, by an entity 
which is not regulated by a governmental agency, by the developer or by 
an entity which is affiliated with or controlled by the developer, 
submit a copy of any engineers' reports or hydrological surveys which 
indicate there is a sufficient supply of water to serve the anticipated 
population of the subdivision.
    (4) If the supplier of water is not in one of the categories in 
paragraph (a)(2) of this section, submit a copy of a letter or report 
from a cognizant health officer, or from a private laboratory licensed 
by the state to perform tests and issue reports on water, to the

[[Page 53]]

effect that the water was found to meet all drinking water standards 
required by the state for a public water system.
    (5) If any bond, escrow agreement or other financial assurance of 
the completion of the central system, including any phases which are to 
be constructed in the future, has been posted by the developer or an 
entity not regulated by a government agency, furnish a copy of the 
document.
    (6) Furnish a copy of any permits which have been obtained by the 
developer or any entity affiliated with or under the control of the 
developer in connection with the construction and operation of the 
central system. If a permit is required to install individual wells, 
submit a letter from the proper authority which states the requirements 
for obtaining the permit and that there is no objection to the use of 
individual wells in the subdivision.
    (7) Furnish a copy of any membership agreement or contract which 
allows or requires lot owners to use the central water system. If this 
document is furnished elsewhere in the Statement of Record, reference to 
it may be made here.
    (b) Sewer. (1) State the estimated cost to the developer of the 
central sewer system.
    (2) If sewage disposal is to be by individual on-site systems, 
furnish a letter from the local health authorities giving general 
approval to the use of these systems in the subdivision or giving 
specific approval for each and every lot.
    (3) If sewage disposal is to be through a central system which is 
owned and operated by a governmental division, or by an entity whose 
operations are regulated by a governmental agency but which is not 
affiliated with, or under the control of, the developer, furnish a 
letter from the entity that it will provide this service and that its 
treatment facilities have the capacity to serve the anticipated 
population of the subdivision or how many homes or connections it can 
and will serve.
    (4) Furnish a copy of any permits obtained by the developer or any 
entity affiliated with or under the control of the developer, for the 
construction and operation of the central sewer system or construction 
and use of any other method of sewage disposal contemplated for the 
subdivision except those to be obtained by individual lot owners at a 
later date.
    (5) If any bond, escrow agreement or other financial assurance of 
the completion of the central system or other system for which the 
developer is responsible, and any future expansion, has been posted, 
furnish a copy of the document.
    (6) Furnish a copy of any membership agreement of contract which 
allows, or requires, the lot owners to use the central system. If this 
document is furnished elsewhere in the Statement of Record, it may be 
incorporated here by reference.
    (c) Electricity. Give an estimate of the total construction cost to 
be expended by the developer and submit any instrument providing 
financial assurance of completion of the facilities which has been 
posted by the developer.
    (d) Telephone. Give an estimate of the total construction cost to be 
expended by the developer and submit a copy of any instrument providing 
financial assurance of the completion of the facilities which has been 
posted by the developer.



Sec. 1710.212  Financial information.

    (a) Financing of improvements. Describe the financing plan that is 
to be used in financing on-site or off-site improvements proposed in the 
Statement of Record.
    (b) Complete the following format:
    (1) Estimated date for full completion of amenities
    (2) Projected date for complete sell out of subdivision
    (3) Cost and expense recap for lots included in this Statement of 
Record:

(If the subdivision or common promotional plan contains, or will 
contain, 1000 or more lots, furnish this information in its entirety. If 
the subdivision or common promotional plan contains, or will contain, 
less than 1,000 lots, only paragraphs (b)(3) (iii) and (iv) need be 
completed.)
    (i) Land acquisition cost or current fair market value of land.
    (ii) Development and improvement costs (include the estimated cost 
of such items as roads, utilities, and

[[Page 54]]

amenities which the developer will incur).
    (iii) Estimated marketing and advertising costs.
    (iv) Estimated sales commission.
    (v) Interest (include cost in financing the land purchase, 
improvements, or other borrowings).
    (vi) Estimated other expenses (include general costs, administrative 
costs, profit, etc.).
    (vii) Total.
    (4) Total land sales revenue:
    (i) Estimated total land sales income.
    (ii) Estimated other income.
    (iii) Total income.
    (c) Financial statements. (1) Submit a copy of the developer's 
financial statements for the last full fiscal year. These statements 
shall be prepared in accordance with generally accepted accounting 
principles as prescribed by the Financial Accounting Standards Board and 
generally accepted auditing standards as prescribed by the American 
Institute of Certified Public Accountants, and shall be audited by an 
independent licensed public accountant. They shall include a balance 
sheet, a statement of profit and loss, a statement of changes in 
financial condition and a certified opinion by the accountant. The 
statements shall be no more than six months old on the date the 
Statement of Record is submitted.
    (2) If the audited statements are more than six months old at the 
date of submission of the Statement of Record, or if the last full 
fiscal year has ended within the last 90 days and audited Statements are 
not yet available, the developer may submit a copy of the audited 
statements for the previous full fiscal year and supplement them with 
unaudited, interim statements so that the financial information is no 
more than six months old on the date that the Statement of Record is 
submitted. The interim statements may be prepared by company personnel 
but must contain a balance sheet, a statement of profit and loss and a 
statement of changes in financial condition and be prepared in 
accordance with generally accepted accounting principles.
    (d) Annual report. (1) Each year after the initial effective date, 
the developer shall submit a copy of its latest financial statements. 
These statements must meet the standards set out in Sec. 
1710.212(c)(1), unless the developer has qualified for an exception 
under Sec. 1710.212(e), and must be submitted within 120 days after the 
close of the developer's fiscal year.
    (2) If a developer has submitted its latest statements with a 
consolidated filing since the close of its fiscal year and prior to the 
end of the 120 day period, a second submission of the statements to 
comply with this section is not necessary.
    (3) If the developer no longer has an active sales program on the 
date this report is due, the information set forth in Sec. 
1710.310(c)(7)(iii) may be furnished in lieu of this report.
    (e) Exceptions. (1) If the developer does not have audited financial 
statements and the criteria in one of the following exceptions are met, 
statements need not be audited and certified but must meet all of the 
other requirements set forth in paragraphs (c)(1) and (2) of this 
section.
    (2) The term ``conveys title free of any mortgage or lien'' in these 
exceptions is not intended to prohibit the taking of an instrument as 
security for the lot purchase price after title is conveyed. For the 
purposes of these exceptions, these definitions shall apply:
    (i) ``Deed'' shall mean a warranty deed, or its equivalent, which 
conveys title free and clear of liens and encumbrances.
    (ii) ``Assurance of Title Agreement'' shall mean a legal arrangement 
whereby the purchaser is guaranteed a deed upon payment of no more than 
the full purchase price of the lot (e.g. subdivision trust). In addition 
to a copy of any Assurance of Title Agreement, the Secretary may require 
additional documentation such as an attorney's opinion letter to assure 
that the purchaser's title is fully protected.
    (iii) ``Date of contract'' shall mean the date on which the contract 
or agreement is signed by the purchaser.
    (iv) ``Escrow or trust account as to down payments and deposits'' 
shall mean an account, established in accordance with local real estate 
laws or regulations, which assures the return to the purchaser of any 
monies paid in the event title is not delivered to the

[[Page 55]]

purchaser in accordance with the terms of the contract.
    (3) The exceptions are:
    (i) The aggregate sales price of all lots offered pursuant to a 
common promotional plan equals $500,000.00 or less; or
    (ii) Each of the following conditions of paragraphs (e)(3)(ii)(A) 
and (B) are met, plus the conditions of one of paragraphs (e)(3)(ii)(C), 
(D), or (E):
    (A) Downpayments and deposits are held in an escrow or trust 
account.
    (B) The contract provides for delivery of a deed which conveys title 
free of any mortgage or lien within 180 days of the signing of the 
contract. (In lieu of delivery of a deed, the developer may submit to 
OILSR an Assurance of Title Agreement.)
    (C) The aggregate sales prices of all lots offered pursuant to a 
common promotional plan is at least $500,000 but less than $1,500,000.
    (D) All facilities, utilities and amenities proposed by the 
developer in the Property Report or sales contract have been completed 
so that the lots in the Statement of Record are immediately usable for 
the purpose for which they are sold.
    (E) (1) The developer is contractually obligated to the purchaser to 
complete all facilities, utilities and amenities proposed by the 
developer in the Property Report and sales contract so that all lots 
included in the Statement of Record will be usable for the purpose for 
which they are sold by the dates set out in the Property Report, and;
    (2) The developer has made financial arrangements, such as the 
posting of surety bonds (corporate bonds or individual notes or bonds 
are not acceptable), irrevocable letters of credit or the establishment 
of escrow or trust accounts, which assure completion of all facilities, 
utilities and amenities proposed by the developer in the Property Report 
or contract.
    (f) Newly-formed entity. If the developer is newly formed or has not 
had any significant operating experience, an audited or unaudited 
balance sheet and statements of receipts and disbursements of funds may 
be submitted.
    (g) Use of parent company statements. If the developer is a 
subsidiary company and does not have audited financial statements, the 
Secretary may permit the use of the audited and certified statements of 
the parent company: Provided, That those statements are accompanied by 
an unconditional guaranty that the parent shall perform and fulfill the 
obligations of the subsidiary. If this procedure is adopted, the 
developer shall submit the following:
    (1) The audited and certified financial statements of the parent 
company, together with interim statements if necessary, which comply 
with Sec. 1710.212(c).
    (2) A properly executed guaranty in a form acceptable to the 
Secretary.

The disclosure information required in Sec. 1710.112 shall be 
appropriately amended to reference the parent company and not the 
developer and must include a statement to the effect that the 
developer's parent company (insert name) has entered into an 
unconditional guaranty to perform and fulfill the obligations of the 
developer.
    (h) Opinions. If the accountant qualifies or disclaims his opinion, 
the Secretary may accept the statements and require such additional 
disclosure as the Secretary deems necessary in the public interest or 
for the protection of purchasers.
    (i) Copies for prospective purchasers. Copies of the financial 
statements filed with the Statement of Record shall be made available to 
prospective purchasers upon request. A supply of the latest submitted 
statements shall be maintained at whatever place, or places, as is 
necessary to allow immediate delivery upon request by a prospective 
purchaser. These statements shall contain financial information only and 
shall not include any promotional material such as that usually set 
forth in annual reports.
    (j) Change from audited to unaudited statements. (1) Developers who 
file audited statements must continue with audited statements throughout 
the duration of the registration unless, at a later date, the developer 
submits amendments which demonstrate to the satisfaction of the 
Secretary that it then qualifies for an exception from audited 
statements under paragraph (e)(3)(ii) of this section. For purposes of 
paragraph (e)(3)(ii)(C) of this section,

[[Page 56]]

the Secretary will consider the aggregate sales prices of only the lots 
yet to be sold, and may consider whether any additions to the 
subdivisions or reacquisitions of lots already sold would be likely to 
cause the dollar limits to be exceeded.
    (i) The aggregate sales prices of the lots yet to be sold in the 
subdivision has been reduced to less than $1,500,000.00, and that it 
will not exceed this amount through further additions to the subdivison, 
or through the reacquisition of lots already sold, and;
    (ii) The sales contract provides for delivery of a deed within 120 
days of the date of the contract which conveys title free and clear of 
any mortgage or lien or the developer files an Assurance of Title 
Agreement with OILSR, and;
    (iii) Any down payments or deposits are held in an escrow or trust 
account, or;
    (iv) The developer then qualifies for exception (e)(3)(iii) or 
(e)(3)(iv) above.
    (2) The Secretary may allow a developer, who has made sales prior to 
registration, to submit unaudited statements under the provisions of 
paragraph (j)(1)(i) of this section. The developer must demonstrate to 
the satisfaction of the Secretary that the acceptance of unaudited 
statements would not be a detriment to the public interest or to the 
protection of purchasers.

[44 FR 21453, Apr. 10, 1979, as amended at 45 FR 40490, June 13, 1980; 
49 FR 31372, Aug. 6, 1984; 50 FR 10942, Mar. 19, 1985]



Sec. 1710.214  Recreational facilities.

    (a) Submit a synopsis of the proposed plans and estimated cost of 
any proposed or partially constructed recreational facility disclosed in 
Sec. 1710.114. This item should include the general dimensions and a 
brief description of the facility but it should not include blueprints 
or similar technical materials.
    (b) Submit a copy of any bond or escrow arrangements to assure 
completion of the recreational facilities disclosed in Sec. 1710.114 
which are not structurally complete.
    (c) Submit a copy of the lease for any leased recreational facility.



Sec. 1710.215  Subdivision characteristics and climate.

    (a) Submit two copies of a current geological survey topographic 
map, or maps, of the largest scale available from the U.S. Geological 
Survey with an outline of the entire subdivision and the area included 
in this Statement of Record clearly indicated. Photo copies made by the 
developer are not acceptable. Do not shade the areas on the maps which 
have been outlined.
    (b) If drainage facilities are proposed but not yet completed, 
submit a synopsis of the developer's proposed plans which includes a 
description of the system of collecting surface waters; a description of 
the steps to be taken to control erosion and sedimentation and the 
estimated cost of the drainage facilities.
    (c) Submit copies of any bonds, escrow or trust accounts or other 
financial assurance of completion of the drainage facilities.
    (d) State whether the jurisdiction in which the subdivision is 
located has a system for rating the land for fire hazards.



Sec. 1710.216  Additional information.

    (a) Property Owners' Association. (1) If the association has been 
formed as a legal entity, submit a copy of the articles of association, 
bylaws or similar documents, and a copy of the charter or certificate of 
incorporation.
    (2) If the developer exercises any control over the association, 
state whether any contracts have been executed between the association 
and the developer or any affiliate or principal of the developer. If 
there have been, briefly summarize the terms of the contracts, their 
purpose, their duration and the method and rate of payment required by 
the contract. State whether the association may modify or terminate the 
contracts after the owners assume control of the association.
    (3) State whether there is any agreement which would require the 
association to reimburse the developer, its affiliates or successors for 
any attorney's fees or costs arising from an action brought against them 
by the association or individual property owners regardless of the 
outcome of the action.

[[Page 57]]

    (4) If the answer to paragraph (a)(2) or (a)(3) of this section is 
in the affirmative, disclosure may be required in Sec. 1710.116(a) at 
the discretion of the Secretary.
    (5) Submit a copy of any membership agreement or similar document.
    (b) Price range, type of sales and marketing. (1) State the price 
range of lots in the subdivision.
    (2) State the type of sales to be made, i.e., contract for deed, 
cash, deed with security instrument, etc.
    (3) Describe the methods of advertising and marketing to be used for 
the subdivision. The description should include, but need not be limited 
to, information on such matters as to:
    (i) Whether the developer will employ his own sales force or will 
contract with an outside group;
    (ii) Whether wide area telephone solicitation will be employed;
    (iii) Whether presentations will be made away from the immediate 
vicinity of the subdivision and/or if prospective purchasers will be 
furnished transportation from distant cities to the subdivision;
    (iv) Whether mass mailing techniques will be used and gifts offered 
to those who respond.
    (4) Submit a copy of any advertising or promotional material that 
is, or has been, used for the subdivision that:
    (i) Mentions or refers to recreational facilities which are not 
disclosed in Sec. 1710.114, or;
    (ii) Promotes the sale of lots based on the investment potential or 
expected profits, or;
    (iii) Contains information which is in conflict with that disclosed 
in this Statement of Record.

Amendments to reflect changes in advertising or promotional material 
need be filed only when there is a material change related to one of the 
above factors. Depending upon the content of the material submitted, the 
Secretary may require additional warnings in the Property Report 
portion.
    (c) Violations and litigation. (1) Submit a copy of the 
complaint(s), the answer(s) and the decision(s) for any litigation 
listed in Sec. 1710.116(c).
    (2) If it is indicated in Sec. 1710.116(c) that the developer or 
any of the parties involved in the subdivision are, or have been, the 
subject of any bankruptcy proceedings, furnish a copy of the schedules 
of liabilities and assets (or a recap of those schedules); the petition 
number; the date of the filing of the petition; names and addresses of 
the petitioners, trustee and counsel; the name and location of the court 
where the proceedings took place and the status or disposition of the 
petition.

Explain, briefly, the cause of the action.
    (3) Furnish a copy of any orders issued in connection with any 
violations listed in Sec. 1710.116(c).
    (d) Resale or exchange program. (1) If it is stated in Sec. 
1710.116(d)(3) that there is an exchange program which provides 
sufficient lots to satisfy all requests for exchange, describe the 
method used to determine the number of lots required; state whether 
these lots have been reserved or set aside; whether additional lots will 
be provided if the lots available for exchange are exhausted and the 
source of any additional lots.
    (e) Unusual situations--(1) Foreign subdivisions. If the subdivision 
is located outside the several States, the District of Columbia, the 
Commonwealth of Puerto Rico or the territories or possession of the 
United States, the Statement of Record shall be submitted in the English 
language and all supporting documents, including copies of any laws 
which restrict the ownership of land by aliens, shall be submitted in 
their original language and shall be accompanied by a translation into 
English.



Sec. 1710.219  Affirmation.

    The following affirmation shall be executed by the senior executive 
officer or a duly authorized agent:

    I hereby affirm that I am the Senior Executive Officer of the 
developer of the lots herein described or will be the Senior Executive 
Officer of the developer at the time lots are offered for sale or lease 
to the public, or that I am the agent authorized by the Senior Executive 
Officer of such developer to complete this statement (if agent, submit 
written authorization to act as agent); and,
    That the statements contained in this Statement of Record and any 
supplement hereto, together with any documents submitted herein, are 
full, true, complete, and correct; and,

[[Page 58]]

    That the developer is bound to carry out the promises and 
obligations set forth in this Statement of Record and Property Report or 
I have clearly stated who is or will be responsible; and
    That the fees accompanying this submission are in the amount 
required by the rules and regulations of the Office of Interstate Land 
Sales Registration.

________________________________________________________________________
(Date)
________________________________________________________________________
(Signature)
________________________________________________________________________
(Corporate seal if applicable)
________________________________________________________________________
(Title)

    Warning: Section 1418 of the Housing and Urban Development Act of 
1968 (82 Stat. 598, 15 U.S.C. 1717) provides: ``Any person who willfully 
violates any of the provisions of this title or of the rules and 
regulations or any person who willfully, in a Statement of Record filed 
under, or in a Property Report issued pursuant to this title, makes any 
untrue statement of a material fact * * *, shall upon conviction be 
fined not more than $10,000.00 or imprisoned not more than 5 years, or 
both.''

[45 FR 40490, June 13, 1980]



Sec. 1710.310  Annual report of activity.

    (a) As an integral part of the Statement of Record, the developer 
shall file with the Secretary an Annual Report of Activity on any 
initial or consolidated registration not under suspension. For this 
purpose, only one Annual Report of Activity will be expected for 
subdivisions on which developers have filed consolidations. For 
registrations certified by a State as provided for in Sec. 1710.500, a 
developer need file only one Annual Report of Activity for any 
registration for which the OILSR number is the same (alphabetic 
designators indicate that the registration has been treated as a 
consolidation).
    (b) The report shall be submitted within 30 days of the annual 
anniversary of the effective date of the initial Statement of Record.
    (c) The report shall contain the following information:
    (1) Subdivision name and address.
    (2) Developer's name, address and telephone number.
    (3) Agent's name, address and telephone number.
    (4) Interstate Land Sales Registration number.
    (5) The date on which the initial filing first became effective.
    (6) The number of registered lots, parcels or units which are unsold 
as of the date on which the report is due.
    (7) One of the following:
    (i) A statement that the developer is still engaged in land sales 
activity at the subject subdivision and that there have been no changes 
in material fact since the last effective date was issued which would 
require an amendment to the Statement of Record; or
    (ii) A statement that the developer is still engaged in land sales 
activity at the subject subdivision, that material changes have occurred 
since the last effective date, and that corrected pages to the Property 
Report portion or Additional Information and Documentation portion of 
the Statement accompany the report; or
    (iii) A statement that the developer is no longer engaged in land 
sales activity at the subject subdivision, together with the reason the 
developer is no longer selling (e.g., all lots sold to the public or the 
remaining lots sold to another developer, along with the date of sale 
and the new developer's name, address and telephone number). A request 
may be made that the Statement of Record be voluntarily suspended. The 
request should be submitted in duplicate and will become effective upon 
the counter-signature of the Secretary (or an authorized Designee) with 
the duplicate being returned to the developer.
    (8) The report shall be dated and shall be signed by the senior 
executive officer of the developer on a signature line above his typed 
name and title. The senior executive officer's acknowledgement shall be 
attested to or certified by a notary public or similar public official 
authorized to attest or certify acknowledgements in the jurisdiction in 
which the report is executed.
    (d) If the report indicates that there are 101 or more registered 
lots, parcels or units remaining for sale, the report shall be 
accompanied by an amendment fee in the amount and form prescribed in 
Sec. 1710.35.
    (e) Failure to submit the report when due shall be grounds for an 
action to

[[Page 59]]

suspend the effective Statement of Record.

(Approved by the Office of Management and Budget under control number 
2502-0243)

[49 FR 31373, Aug. 6, 1984]



      Subpart C_Certification of Substantially Equivalent State Law

    Authority: Sec. 1419, Interstate Land Sales Full Disclosure Act, 82 
Stat. 590, 598; 15 U.S.C. 1718; sec. 7(d), Dept. of Housing and Urban 
Development Act, 42 U.S.C. 3535(d).

    Source: 45 FR 40491, June 13, 1980, unless otherwise noted.



Sec. 1710.500  General.

    (a) This subpart establishes procedures and criteria for certifying 
State land sale or lease disclosure programs and State land development 
standards programs. The purpose of State Certification is to lessen the 
administrative burden on the individual developer, arising where there 
are duplicative state and federal registration and disclosure 
requirements, without affecting the level of protection given to the 
individual purchaser or lessee. If the Secretary determines that a state 
has adopted and is effectively administering a program that gives 
purchasers and lessees the same level of protection given to them by the 
Federal Interstate Land Sales Registration Program, then the Secretary 
shall certify that state. Developers who accomplish an effective 
registration with a state in which the land is located after the 
Secretary has certified the state may satisfy the registration 
requirements of the Secretary by filing with the Secretary materials 
designated by agreement with certified states in lieu of the federal 
Statement of Record and Property Report.
    (b) A state that is certified by the Secretary shall be known as the 
situs certified state for all land located within its borders.
    (c) After a developer is effectively registered with the Secretary 
through a certified state, the Secretary has the same authority over 
that developer as the Secretary has over developers who file directly 
with the Secretary. This includes the authority to subpoena information 
and to examine, evaluate and suspend a developer's registration under 
sections 1407(d) and (e) of the Act and Sec. 1710.45(b)(1) and (b)(2) 
of these regulations.
    (d) The prohibitions against the use of the Property Report 
contained in Sec. 1710.29 apply to state disclosure materials and 
substantive development standards. In addition, for purposes of this 
paragraph, references made to the Secretary, OILSR and the Department of 
Housing and Urban Development in Sec. 1710.29 will include a reference 
to the equivalent state officer or agency.
    (e) The Purchaser's Revocation Rights, Sales Practices and Standards 
rules contained in part 1715 of these regulations apply to developers 
who register with the Secretary through certified States. All of the 
rules in part 1715 apply, excepting the disclaimer statement in Sec. 
1715.50(a) which is modified to read as follows:

    Obtain the Property Report or its equivalent, required by Federal 
and State law and read it before signing anything. No Federal or State 
agency has judged the merits or value, if any, of this property.

    (f) Developers are obliged to pay filing fees as set forth in Sec. 
1710.35 of these regulations.



Sec. 1710.503  Notice of certification.

    (a) If the Secretary determines that a state qualifies for 
certification under Sec. 1710.501(a) or Sec. 1710.501(b), the 
Secretary shall so notify the state in writing. The state will be 
effectively certified under the section and as of the date specified in 
the notice.
    (b) If the Secretary determines that a state does not meet the 
standards for certification, the Secretary shall so notify the state in 
writing. The notice will specify particular changes in state law, 
regulations or administration that are needed to obtain certification. 
The Secretary shall not be bound in advance to certify a state that 
makes the suggested changes if other deficiencies become apparent at a 
later time.
    (c) The Secretary's final determination to accept or reject a 
State's Application for Certification of Land Sales Program shall be 
published in the Federal Register.
    (d) A state's certification will remain in effect until it is 
voluntarily suspended by the state or withdrawn by

[[Page 60]]

the Secretary. A state can voluntarily suspend its certification by 
notifying the Secretary in writing. The suspension will take effect as 
of the date and time specified in the notice to the Secretary, or upon 
receipt by the Secretary if no date is specified. The Secretary may 
withdraw certification as provided in Sec. 1710.505.



Sec. 1710.504  Cooperation among certified states and between 
certified states and the Secretary.

    (a) By filing an Application for Certification of State Land Sales 
Program pursuant to Sec. 1710.502, a state agrees that, if it is 
certified by the Secretary, it will:
    (1) Accept for filing and allow to be distributed as the sole 
disclosure document, a disclosure document currently in effect in the 
situs certified state. Only those documents filed with the situs state 
after certification by the Secretary must automatically be accepted by 
other certified states;
    (2) Certify copies of all disclosure documents, amendments and 
consolidations filed with it by developers of land located within its 
borders for and as needed by developers required to submit certified 
copies to the Secretary and all other certified states. The 
certification shall indicate whether the documents are currently in 
effect. The certification should state as follows:

    The (indicate the State Department of Real Estate or other 
appropriate entity) has reviewed the attached materials and finds they 
are true copies of (1) the (indicate Property Report or other similar 
state accepted document or amendment to such document) for (indicate the 
name of the subdivision), made effective by the State of --------------
-- on ---------------- (give date) and still in effect; and (2) the 
supporting documentation upon which such (indicate the document or 
amendment) is based.
________________________________________________________________________
Signature

    (3) Assist and cooperate with the Secretary and other certified 
states by requiring that developers of land within its borders amend 
disclosure documents if any change occurs in any representation of 
material fact required to be stated in the disclosure documents, 
including a change resulting from the developer's compliance with the 
requirements of the law in another certified state. The state shall 
require developers to send certified copies of the amended documents to 
the Secretary and requesting certified states. All amendments to such 
materials, which reflect changes in material facts regarding the 
subdivision, shall be submitted to the situs certified state authorities 
within 15 days of the date on which the developer knows, or should have 
known, of such change. Certified copies of the disclosure documents 
shall be submitted by the developer to the Secretary and the other 
certified states within 15 days after it becomes effective under the 
situs certified state laws.
    (4) Continue to effectively operate its Land Sales Program as that 
Program is described in the Application for Certification and as it was 
certified by the Secretary.
    (5) Assist and cooperate with the Secretary by monitoring the sales 
practices of developers registered with it directly or through another 
certified state, and by reporting to the Secretary any violations of the 
Act, including but not limited to the required contract provisions, 
revocation rights and anti-fraud provisions of 15 U.S.C. 1703, or the 
regulations.
    (b) A state required to accept the disclosure documents of another 
situs certified state pursuant to paragraph (a)(1) of this section, may, 
in its discretion, require the developer to furnish it with copies 
certified pursuant to paragraph (a)(2) of this section.
    (c) No state shall be prevented from establishing substantive or 
disclosure requirements which exceed the federal standard provided that 
such requirements are not in conflict with the Act or these regulations. 
For example, a certified state may impose additional disclosure 
requirements on developers of land located within its borders but may 
not impose additional disclosure requirements on developers whose 
disclosure documents it is required to accept pursuant to paragraph 
(a)(1) of this section. However, a certified state may impose additional 
nondisclosure requirements on out of state developers even though the 
developer is registered in the certified state in which the land is 
located.

[[Page 61]]

    (d) After a developer is effectively registered with a certified 
state through a situs certified state, either or both certified states 
may exercise full enforcement authorities and powers over that developer 
according to applicable law and regulations.
    (e) The Secretary shall cooperate with the certified states by 
offering a forum for nonbinding arbitration of disputes between two or 
more certified States arising out of the State Certification Program.



Sec. 1710.505  Withdrawal of State certification.

    (a) The Secretary shall periodically review the laws, regulations 
and administration thereof, of a certified state. If the Secretary finds 
that, taken as a whole, the laws, regulations or administration thereof, 
no longer meet the requirements of subpart C, then the Secretary may 
issue a notice to withdraw the certification of that state.
    (b) The notice of proceedings to withdraw a state's certification 
will be issued to the state by the Secretary pursuant to Sec. 1720.236. 
The Secretary may, after notice and after an opportunity for a hearing, 
pursuant to Sec. 1720.237, issue an order withdrawing certification.

In the event that a withdrawal order is issued, the order shall remain 
in effect until the state has amended its laws, regulations or the 
administration thereof or has otherwise complied with the requirements 
of the order. When the state has complied with the requirements of the 
order, the Secretary shall so declare and the withdrawal order shall 
cease to be effective.
    (c) Withdrawal orders issued pursuant to this subsection will be 
effective as of the date the order is received by the state. The 
withdrawal order shall be published in the Federal Register.
    (d) The rules of chapter IX of 24 CFR part 1720, subpart D will 
generally apply to hearings on withdrawal of a state's certification.



Sec. 1710.506  State/Federal filing requirements.

    (a)(1) If the Secretary has certified a state under Sec. 1710.501, 
the Secretary shall accept for filing disclosure materials or other 
acceptable documents which have been approved by the certified state 
within which the subdivision is located. Only those filings made by the 
developer with the state after the state was certified by the Secretary 
shall be automatically accepted by the Secretary.
    (2) Retroactive application of the effectiveness of state's 
certification to a specified date may be granted on a state-by-state 
basis, where the Secretary determines that retroactive application will 
not result in automatic federal registration of any state filing that 
has not met the requirements of the certified state laws.
    (b) For a developer to be registered with the Secretary, the 
developer shall file with the Secretary a state certified copy of the 
Property Report or its equivalent, and any other documentation as 
stipulated in the Secretary's Notice of Certification to the state.
    (c) The documents and materials filed under paragraph (b) of this 
section will be automatically effective as the Federal Statement of 
Record and Property Report after these materials and the proper filing 
fee have been received by the Secretary.
    (d) The Secretary has authority pursuant to Sec. 1710.45(b)(1) and 
(b)(2) to suspend individual filings which fail to meet the requirements 
of the certified state's law or regulations or the standards in the 
certification agreement whether or not the state agency has initiated a 
similar action.
    (e)(1) State accepted materials filed with the Secretary pursuant to 
this section must be amended to reflect any amendment to such materials 
made effective by the state. All amendments to such materials must be 
submitted to the Secretary within 15 days after becoming effective under 
the applicable state laws. Amendments are automatically effective upon 
their receipt by the Secretary and the provisions of Sec. 1710.45(b)(1) 
and (2) apply to amendments filed under this section.
    (2) Amendments shall include or be accompanied by:
    (i) A letter from the developer giving a narrative statement fully 
explaining the purpose and significance of the

[[Page 62]]

amendment and referring to that section and page of the material which 
is being amended, and;
    (ii) A signed state acceptance certification substantially the same 
as that required by Sec. 1710.504(a)(2).
    (f) If a certified state suspends the registration of a particular 
subdivision for any reason, the subdivision's federal registration with 
the Secretary shall be automatically suspended as a result of the state 
action. No action need be taken by the Secretary to effect the 
suspension.
    (g) A state is certified only with regard to land located within the 
state borders. The Secretary is not required to accept filings which 
have been accepted by a certified state if the land which is the subject 
of the filing is not located within that certified state. For example, 
if State A is certified by the Secretary and State B is not, the 
Secretary is not required to accept filings from State B simply because 
State A accepts filings from State B.



Sec. 1710.507  Effect of suspension or withdrawal of certification
granted under Sec. 1710.501(a): Full disclosure requirement.

    (a) If a state certified under Sec. 1710.501(a) suspends its own 
certification or has its certification withdrawn under Sec. 1710.505, 
the Federal disclosure materials accepted and made effective by the 
Secretary, pursuant to Sec. 1710.506, prior to the suspension or 
withdrawal shall remain in effect unless otherwise suspended by the 
Secretary.
    (b) In the event that there is a change in a material fact with 
regard to a subdivision that remains registered under the provisions of 
paragraph (a), the developer shall file a new registration with the 
Secretary meeting the requirements of the then applicable Federal 
registration regulations. Modifications of the Federal format may be 
used as specified by the Secretary.



Sec. 1710.508  Effect of suspension of certification granted under 
Sec. 1710.501(b): Sufficient protection requirement.

    (a) If a state certified under Sec. 1710.501(b) suspends its own 
certification or has its certification withdrawn under Sec. 1710.505, 
the effectiveness of the Federal disclosure materials accepted and made 
effective by the Secretary, pursuant to Sec. 1710.506, prior to the 
suspension or withdrawal shall terminate ninety (90) days after the 
notice of withdrawal order is published in the Federal Register as 
provided in Sec. 1710.505(c).
    (b) At the end of the ninety day period, or during the ninety day 
period in the event that there is a change in material fact with regard 
to a subdivision that remains registered under the provisions of 
paragraph (a), the developer shall file a new registration with the 
Secretary meeting the requirements of the then applicable Federal 
registration regulations. Modifications of the Federal format may be 
used as specified by the Secretary.



Sec. 1710.552  Previously accepted state filings.

    (a) Materials filed with a state and accepted by the Secretary as a 
Statement of Record prior to January 1, 1981, pursuant to 24 CFR 
1710.52-59 (as published in the Federal Register on April 10, 1979) may 
continue in effect. However, developers must comply with the applicable 
amendments to the Federal Act and the regulations thereunder. In 
particular, see Sec. Sec. 1710.558 and 1710.559, which require that the 
Property Report and contracts or agreements contain notice of 
purchaser's revocation rights. In addition see Sec. 1715.15(f), which 
provides that it is unlawful to make any representations with regard to 
the developer's obligation to provide or complete roads, water, sewers, 
gas, electrical facilities or recreational amenities, unless the 
developer is obligated to do so in the contract.
    (b) If any such filing becomes inactive or suspended under the laws 
of the state, the registration with the Secretary shall be ineffective 
from that time.
    (c) Such Statement of Record may be suspended pursuant to Sec. 
1710.45.
    (d) The Secretary may refuse to accept any particular filing under 
this section when it is determined that acceptance is not in the public 
interest.

[[Page 63]]

    (e) The Secretary may require such changes, additional information, 
documents or certification as the Secretary determines to be reasonably 
necessary or appropriate in the public interest.



Sec. 1710.556  Previously accepted state filings--amendments and 
consolidations.

    (a) Amendments--(1) General requirements. State accepted materials, 
filed with the Secretary pursuant to Sec. 1710.552 shall be amended to 
reflect any amendment to such materials made effective by the state or 
any change of a material fact regarding the subdivision. All amendments 
to such materials, which reflect changes in material facts regarding the 
subdivision, shall be submitted to the state authorities within 15 days 
of the date on which the developer knows, or should have known, of such 
change and to the Secretary within 15 days after it becomes effective 
under the applicable State laws. However, such amendment shall not be 
effective as a Federal registration until the Secretary has determined 
that the amendment meets all applicable requirements of these 
regulations.
    (2) Amendments shall include or be accompanied by:
    (i) A letter from the developer giving a narrative statement fully 
explaining the purpose and significance of the amendment and referring 
to that section and page of the Statement of Record which is being 
amended, and;
    (ii) All amended pages of the state accepted materials filed with 
the Secretary. These pages shall be retyped with their amendments. Each 
such page shall have its date of preparation in the lower right hand 
corner, and;
    (iii) A signed state acceptance certification, and;
    (iv) The appropriate fees as indicated in Sec. 1710.35.
    (b) Consolidations--(1) When consolidations allowed. If lots are to 
be registered pursuant to Sec. 1710.552 which are in the same common 
promotional plan with other lots already registered with the Secretary, 
then new consolidated state accepted materials including such lots may 
be filed with the Secretary as a Statement of Record following the 
format of the previously accepted filing.
    (2) Consolidated Statements of Record shall include or be 
accompanied by:
    (i) State accepted consolidation materials which are also acceptable 
to the Secretary as a Statement of Record (state property report 
inclusive). These state accepted consolidation materials shall cover all 
lots previously registered in the common promotional plan except those 
deleted pursuant to other provisions in these regulations. These 
materials shall also include information and items required for state 
accepted materials filed as an initial registration Statement of Record, 
except that, supporting documentation in materials previously made 
effective by the Secretary for other lots in the subject common 
promotional plan may be incorporated by reference into the new 
consolidation materials submitted as a Statement of Record. However, 
such documentation may be incorporated by reference only if it is 
applicable to the new consolidated lots as well as to the previously 
registered lots.
    (ii) A signed state acceptance certification.
    (iii) The appropriate fees as indicated in Sec. 1710.35.
    (c) Effective date--State filing. The effective dates of state 
materials filed as amendments and consolidated Statements of Record 
shall be determined in accordance with the provisions of Sec. 1710.21.

[45 FR 40491, June 13, 1980, as amended at 49 FR 31372, Aug. 6, 1984]



Sec. 1710.558  Previously accepted state filings--notice of revocation
rights on property report cover page.

    (a)(1) The cover page on Property Reports for filings made with the 
Secretary pursuant to Sec. 1710.552 shall be prepared in accordance 
with Sec. 1710.105 and shall include the following paragraphs:

    ``If you received this Report prior to signing a contract or 
agreement, you may cancel your contract or agreement by giving notice to 
the seller anytime before midnight of the seventh day following the 
signing of the contract or agreement.
    ``If you did not receive this Report before you signed a contract or 
agreement, you may cancel the contract or agreement anytime within two 
years from the date of signing.''


[[Page 64]]


    (2) If the purchaser is entitled to a longer revocation period by 
operation of State law, that period becomes the Federal revocation 
period and the Cover Page must reflect the longer period, rather than 
the seven days.
    (b)(1) If a deed is not delivered within 180 days of the signing of 
the contract or agreement of sale or unless certain provisions are 
included in the contract or agreement, the purchaser is entitled to 
cancel the contract within two years from the date of signing the 
contract or agreement.
    (2) The deed must be a warranty deed, or where such a deed is not 
commonly used, a similar deed legally acceptable in the jurisdiction 
where the lot is located. The deed must be free and clear of liens and 
encumbrances.
    (3) The contract provisions are:
    (i) A legally sufficient and recordable lot description, and;
    (ii) A provision that the seller will give the purchaser written 
notification of purchaser's default or breach of contract and the 
opportunity to remedy the default or breach within 20 days of the 
notice; and
    (iii) A provision that, if the purchaser loses rights and interest 
in the lot because of the purchaser's default or breach of contract 
after 15 percent of the purchase price, exclusive of interest, has been 
paid, the seller shall refund to the purchaser any amount which remains 
from the payments made after subtracting 15 percent of the purchase 
price, exclusive of interest, or the amount of the seller's actual 
damages, whichever is the greater.
    (4) If a deed is not delivered within 180 days of the signing of the 
contract or if the necessary provisions are not included in the 
contract, the following statement shall be used in place of any other 
rescision language:

    ``Under Federal law you may cancel your contract or agreement of 
sale any time within two years from the date of signing.''



Sec. 1710.559  Previously accepted state filings--notice of revocation
rights in contracts and agreements.

    (a)(1) All contracts or agreements, including promissory notes used 
in sale of lots for filings made with the Secretary pursuant to Sec. 
1710.552, must contain the following language in boldface type (which 
must be distinguished from the type used for the rest of the contract) 
on the face or signature page above all signatures:

    You have the option to cancel your contract or agreement of sale by 
notice to the seller until midnight of the seventh day following the 
signing of the contract or agreement.
    If you did not receive a Property Report prepared pursuant to the 
rules and regulations of the Office of Interstate Land Sales 
Registration, U.S. Department of Housing and Urban Development, in 
advance of your signing the contract or agreement, this contract or 
agreement may be revoked at your option for two years from the date of 
signing.

    (2) If the purchaser is entitled to a longer revocation period by 
operation of State law or the Act, that period becomes the Federal 
revocation period and the contract or agreement must reflect the longer 
period, rather than the seven days. The language shall be consistent 
with that shown on the Cover Page (see Sec. 1710.558).
    (b) The above revocation provisions may not be limited or qualified 
in the contract or other document by requiring a specific type of notice 
or by requiring that notice be given at a specified place.



PART 1715_PURCHASERS' REVOCATION RIGHTS, SALES PRACTICES AND 
STANDARDS--Table of Contents



                 Subpart A_Purchasers' Revocation Rights

Sec.
1715.1 General.
1715.2 Revocation regardless of registration.
1715.4 Contract requirements and revocation.
1715.5 Reimbursement.

                 Subpart B_Sales Practices and Standards

1715.10 General.
1715.15 Unlawful sales practices--statutory provisions.
1715.20 Unlawful sales practices--regulatory provisions.
1715.25 Misleading sales practices.
1715.27 Fair housing.
1715.30 Persons to whom subpart B is inapplicable.

                    Subpart C_Advertising Disclaimers

1715.50 Advertising disclaimers; subdivisions registered and effective 
          with HUD.


[[Page 65]]


    Authority: 15 U.S.C. 1718; 42 U.S.C. 3535(d).

    Source: 45 FR 40496, June 13, 1980, unless otherwise noted.



                 Subpart A_Purchasers' Revocation Rights



Sec. 1715.1  General.

    The purpose of this subpart A is to elaborate on the revocation 
rights in 15 U.S.C. 1703, by enumerating certain conditions under which 
purchasers may exercise revocation rights. Generally, whenever 
revocation rights are available, they apply to promissory notes, as well 
as traditional agreements.

[61 FR 13597, Mar. 27, 1996]



Sec. 1715.2  Revocation regardless of registration.

    All purchasers have the option to revoke a contract or lease with 
regard to a lot not exempt under Sec. Sec. 1710.5 through 1710.11 and 
1710.14 until midnight of the seventh day after the day that the 
purchaser signs a contract or lease. If a purchaser is entitled to a 
longer revocation period under State law, that period is deemed the 
Federal revocation period rather than the 7 days, and all contracts and 
agreements (including promissory notes) shall so state.

[61 FR 13597, Mar. 27, 1996]



Sec. 1715.4  Contract requirements and revocation.

    (a) In accordance with 15 U.S.C. 1703(d)(3), the refund to the 
purchaser is calculated by subtracting from the amount described in 15 
U.S.C. 1703(d)(3)(B), the greater of:
    (1) Fifteen percent of the purchase or lease price of the lot 
(excluding interest owed) at the time of the default or breach of 
contract or agreement; or
    (2) The amount of damages incurred by the seller or lessor due to 
the default or breach of contract.
    (b) For the purposes of this section:
    Damages incurred by the seller or lessor means actual damages 
resulting from the default or breach, as determined by the law of the 
jurisdiction governing the contract. However, no damages may be 
specified in the contract or agreement, except a liquidated damages 
clause not exceeding 15 percent of the purchase price of the lot, 
excluding any interest owed.
    Purchase price means the cash sales price of the lot shown on the 
contract.
    (c) The contractual requirements of 15 U.S.C. 1703(d) do not apply 
to the sale of a lot for which, within 180 days after the signing of the 
sales contract, the purchaser receives a warranty deed or, where 
warranty deeds are not commonly used, its equivalent under State law.

[61 FR 13598, Mar. 27, 1996]



Sec. 1715.5  Reimbursement.

    If a purchaser exercises rights under 15 U.S.C. 1703(b), (c) or (d), 
but cannot reconvey the lot in substantially similar condition, the 
developer may subtract from the amount paid by the purchaser, and 
otherwise due to the purchaser under 15 U.S.C. 1703, any diminished 
value in the lot caused by the acts of the purchaser.

[61 FR 13598, Mar. 27, 1996]



                 Subpart B_Sales Practices and Standards



Sec. 1715.10  General.

    Sales practices means any conduct or advertising by a developer or 
its agents to induce a person to buy or lease a lot. This subpart 
describes certain unlawful sales practices and provides standards to 
illustrate what other sales practices are considered misleading in light 
of certain circumstances in which they are made and within the context 
of the overall offer and sale or lease.



Sec. 1715.15  Unlawful sales practices--statutory provisions.

    The statutory prohibitions against fraudulent or misleading sales 
practices are set forth at 15 U.S.C. 1703(a). With respect to the 
prohibitions against representing that certain facilities will be 
provided or completed unless there is a contractual obligation to do so 
by the developer:
    (a) The contractual covenant to provide or complete the services or 
amenities may be conditioned only upon grounds that are legally 
sufficient to establish impossibility of performance in the jurisdiction 
where the services

[[Page 66]]

or amenities are being provided or completed;
    (b) Contingencies such as acts of God, strikes, or material 
shortages are recognized as permissible to defer completion of services 
or amenities; and
    (c) In creating these contractual obligations developers have the 
option of incorporating by reference the Property Report in effect at 
the time of the sale or lease. If a developer chooses to incorporate the 
Property Report by reference, the effective date of the Property Report 
being incorporated by reference must be specified in the contract of 
sale or lease.

[61 FR 13598, Mar. 27, 1996]



Sec. 1715.20  Unlawful sales practices--regulatory provisions.

    In selling, leasing or offering to sell or lease any lot in a 
subdivision it is an unlawful sales practice for any developer or agent, 
directly or indirectly, to:
    (a) Give the Property Report to a purchaser along with other 
materials when done in such a manner so as to conceal the Property 
Report from the purchaser.
    (b) Give a contract to a purchaser or encourage him to sign anything 
before delivery of the Property Report.
    (c) Refer to the Property Report or Offering Statement as anything 
other than a Property Report or Offering Statement.
    (d) Use any misleading practice, device or representation which 
would deny a purchaser any cancellation or refund rights or privileges 
granted the purchaser by the terms of a contract or any other document 
used by the developer as a sales inducement.
    (e) Refuse to deliver a Property Report to any person who exhibits 
an interest in buying or leasing a lot in the subdivision and requests a 
copy of the Property Report.
    (f) Use a Property Report, note, contract, deed or other document 
prepared in a language other than that in which the sales campaign is 
conducted, unless an accurate translation is attached to the document.
    (g) Deliberately fail to maintain a sufficient supply of restrictive 
covenants and financial statements or to deliver a copy to a purchaser 
upon request as required by Sec. Sec. 1710.109(f), 1710.112(d), 
1710.209(g) and 1710.212(i).
    (h) Use, as a sales inducement, any representation that any lot has 
good investment potential or will increase in value unless it can be 
established, in writing, that:
    (1) Comparable lots or parcels in the subdivision have, in fact, 
been resold by their owners on the open market at a profit, or;
    (2) There is a factual basis for the represented future increase in 
value and the factual basis is certain, and;
    (3) The sales price of the offered lot does not already reflect the 
anticipated increase in value due to any promised facilities or 
amenities. The burden of establishing the relevancy of any comparable 
sales and the certainty of the factual basis of the increase in value 
shall rest upon the developer.
    (i) Represent a lot as a homesite or building lot unless:
    (1) Potable water is available at a reasonable cost;
    (2) The lot is suitable for a septic tank operation or there is 
reasonable assurance that the lot can be served by a central sewage 
system;
    (3) The lot is legally accessible; and
    (4) The lot is free from periodic flooding.



Sec. 1715.25  Misleading sales practices.

    Generally, promotional statements or material will be judged on the 
basis of the affirmative representations contained therein and the 
reasonable inferences to be drawn therefrom, unless the contrary is 
affirmatively stated or appears in promotional material, or unless 
adequate safeguards have been provided by the seller to reasonably 
guarantee the occurrence of the thing inferred. For example, when a lot 
is represented as being sold by a warranty deed, the inference is that 
the seller can and will convey fee simple title free and clear of all 
liens, encumbrances, and defects except those which are disclosed in 
writing to the prospective purchaser prior to conveyance. The following 
advertising and promotional practices, while not all inclusive, are 
considered misleading, and are used to evaluate a developer's or agent's 
representations in determining

[[Page 67]]

possible violations of the Act or regulations. (In this section 
``represent'' carries its common meaning.)
    (a) Proposed improvements. References to proposed improvements of 
any land unless it is clearly indicated that (1) the improvements are 
only proposed or (2) what the completion date is for the proposed 
improvement.
    (b) Off-premises representations. Representing scenes or proposed 
improvements other than those in the subdivision unless
    (1) It is clearly stated that the scenes or improvements are not 
related to the subdivision offered; or
    (2) In the case of drawings that the scenes or improvements are 
artists' renderings;
    (3) If the areas or improvements shown are available to purchasers, 
what the distance in road miles is to the scenes or improvements 
represented.
    (c) Land use representations. Representing uses to which the offered 
land can be put unless the land can be put to such use without 
unreasonable cost to the purchaser and unless no fact or circumstance 
exists which would prohibit the immediate use of the land for its 
represented use.
    (d) Use of ``road'' and ``street''. Using the words ``road'' or 
``street'' unless the type of road surface is disclosed. (All roads and 
streets shown on subdivision maps are presumed to be of an all-weather 
graded gravel quality or higher and are presumed to be traversable by 
conventional automobile under all normal weather conditions unless 
otherwise shown on the map.)
    (e) Road access and use. Representing the existence of a road 
easement or right-of-way unless the easement or right-of-way is 
dedicated to the public, to property owners or to the appropriate 
property owners association.
    (f) Waterfront property. References to waterfront property, unless 
the property being offered actually fronts on a body of water. 
Representations which refer to ``canal'' or ``canals'' must state the 
specific use to which such canal or canals can be put.
    (g) Maps and distances. (1) The use of maps to show proximity to 
other communities, unless the maps are drawn to scale and scale 
included, or the specific road mileage appears in easily readable print.
    (2) The use of the terms such as ``minutes away'', ``short 
distance'', ``only miles'', or ``near'' or similar terms to indicate 
distance unless the actual distance in road miles is used in conjunction 
with such terms. Road miles will be measured from the approximate 
geographical center of the subdivided lands to the approximate downtown 
or geographical center of the community.
    (h) Lot size. Representation of the size of a lot offered unless the 
lot size represented is exclusive of all easements to which the lot may 
be subject, except for those for providing utilities to the lot.
    (i) ``Free'' lots. Representing lots as ``free'' if the prospective 
purchaser is required to give any consideration whatsoever, offering 
lots for ``closing costs only'' when the closing costs are substantially 
more than customary, or when an additional lot must be purchased at a 
higher price.
    (j) Pre-development prices. References to pre-development sales at a 
lower price because the land has not yet been developed unless there are 
plans for development, and reasonable assurance is available that the 
plans will be completed.
    (k) False reports of lot sales. Repeatedly announcing that lots are 
being sold or to make repetitive announcements of the same lot being 
sold when in fact this is not the case.
    (l) Guaranteed refund. Use of the word ``guarantee'' or phrase 
``guaranteed refund'' or similar language implying a money-back 
guarantee unless the refund is unconditional.
    (m) Discount certificates. The use of discount certificates when in 
fact there is no actual price reduction or when a discount certificate 
is regularly used.
    (n) Lot exchanges. Representations regarding property exchange 
privileges unless any applicable conditions are clearly stated.
    (o) Resale program. Making any representation that implies that the 
developer or agent will resell or repurchase the property being offered 
at some future time unless the developer or agent has an ongoing program 
for doing so.

[[Page 68]]

    (p) Symbols for conditions. The use of asterisks or any other 
reference symbol or oral parenthetical expression as a means of 
contradicting or substantially changing any previously made statement or 
as a means of obscuring material facts.
    (q) Proposed public facilities. References to a proposed public 
facility unless money has been budgeted for construction of the facility 
and is available to the public authority having the responsibility of 
construction, or unless disclosure of the existing facts concerning the 
public facility is made.
    (r) Non-profit or institutional name use. The use of names or trade 
styles which imply that the developer is a nonprofit research 
organization, public bureau, group, etc., when such is not the case.



Sec. 1715.27  Fair housing.

    Title VIII of the Civil Rights Act of 1968, 42 U.S.C. 3601, et seq., 
and its implementing regulations and guidelines apply to land sales 
transactions to the extent warranted by the facts of the transaction.

[61 FR 13598, Mar. 27, 1996]



Sec. 1715.30  Persons to whom subpart B is inapplicable.

    Newspaper or periodical publishers, job printers, broadcasters, or 
telecasters, or any of the employees thereof, are not subject to this 
subpart unless the publishers, printers, broadcasters, or telecasters--
    (a) Have actual knowledge of the falsity of the advertisement or
    (b) Have any interest in the subdivision advertised or
    (c) Also serve directly or indirectly as the advertising agent or 
agency for the developer.



                    Subpart C_Advertising Disclaimers



Sec. 1715.50  Advertising disclaimers; subdivisions registered and
effective with HUD.

    (a) The following disclaimer statement shall be displayed below the 
text of all printed material and literature used in connection with the 
sale or lease of lots in a subdivision for which an effective Statement 
or Record is on file with the Secretary. If the material or literature 
consists of more than one page, it shall appear at the bottom of the 
front page. The disclaimer statement shall be set in type of at least 
ten point font.

    Obtain the Property Report required by Federal law and read it 
before signing anything. No Federal agency has judged the merits or 
value, if any, of this property.

    (b) If the advertising is of a classified type; is not more than 
five inches long and not more than one column in print wide, the 
disclaimer statement may be set in type of at least six point font.
    (c) This disclaimer statement need not appear on billboards, on 
normal size matchbook folders or business cards which are used in 
advertising nor in advertising of a classified type which is less than 
one column in print wide and is less than five inches long.
    (d) A developer who is required by any state, or states, to display 
an advertising disclaimer in the same location, or one of equal 
prominence, as that of the federal disclaimer, may combine the wording 
of the disclaimers. All of the wording of the federal disclaimer must be 
included in the resulting combined disclaimer.



PART 1720_FORMAL PROCEDURES AND RULES OF PRACTICE--Table of Contents



                     Subpart A_Rules and Rulemaking

Sec.
1720.1 Scope of rules in this subpart.
1720.5 Initiation of rulemaking.
1720.10 Investigations and conferences.
1720.15 Notice.
1720.20 Promulgation of rules and regulations.
1720.25 Effective date of rules and regulations.

                       Subpart B_Filing Assistance

1720.30 Scope of this subpart.
1720.35 Prefiling assistance.
1720.40 Processing of filings.

Subpart C [Reserved]

                   Subpart D_Adjudicatory Proceedings

                           General Provisions

1720.105 Scope of rules in this subpart.

[[Page 69]]

1720.110 Applicability of sections of this subpart.
1720.115 Department representative.
1720.120 Qualification for appearances.
1720.125 Public nature and timing of hearings.
1720.130 Restrictions on appearances as to former officers and 
          employees.
1720.135 Standards of practice.
1720.140 Administrative law judge, powers and duties.
1720.145 Disqualification of administrative law judge.
1720.150 Failure to comply with administrative law judge's directions.
1720.155 Ex parte communications.
1720.160 Form and filing requirements.
1720.165 Time computation.
1720.170 Service.
1720.175 Intervention by interested persons.
1720.180 Settlements.

                                Pleadings

1720.205 Suspension notice under Sec. 1710.45(a) of this chapter.
1720.210 Hearings--suspension notice pursuant to Sec. 1710.45(a) of 
          this chapter.
1720.215 Notice of proceedings pursuant to Sec. 1710.45(b)(1) of this 
          chapter.
1720.220 Hearings--notice of proceedings pursuant to Sec. 1710.45(b)(1) 
          of this chapter.
1720.225 Suspension order under Sec. 1710.45(b)(2) of this chapter.
1720.230 Suspension order under Sec. 1710.45(b)(3) of this chapter.
1720.235 Hearings--suspension orders issued pursuant to Sec. Sec. 
          1710.45(b)(2) and 1710.45(b)(3) of this chapter.
1720.236 Notice of proceedings to withdraw a State's certification 
          pursuant to Sec. 1710.505 of this chapter.
1720.237 Hearings--notice of proceedings pursuant to Sec. 1710.505 of 
          this chapter.
1720.238 Notices of proceedings to terminate exemptions pursuant to 
          Sec. Sec. 1710.14, 1710.15 and 1710.16 of this chapter.
1720.239 Hearings--notice of proceedings pursuant to Sec. Sec. 1710.14, 
          1710.15 and 1710.16 of this chapter.
1720.240 Time for filing answer.
1720.245 Content of answer.
1720.250 Presumption of hearing request.
1720.255 Amendments and supplemental pleadings.
1720.260 Prehearing conferences.
1720.265 Reporting--prehearing conferences.

                                 Motions

1720.305 Motions--filing requirements.
1720.310 Answers to motions.
1720.315 Motions for more definite statement.
1720.320 Motions for extension of time.
1720.325 Motions for dismissal.
1720.330 Motions to limit or quash.
1720.335 Consolidation.

                         Discovery and Evidence

1720.405 Depositions and discovery.
1720.410 Subpoenas ad testificandum.
1720.415 Subpoenas duces tecum.
1720.420 Rulings on applications for compulsory process; appeals.
1720.425 Presentation and admission of evidence.
1720.430 Production of witnesses' statements.
1720.435 Official notice.

                                Hearings

1720.505 Interlocutory review of administrative law judge's decision.
1720.510 Reporting and transcription.
1720.515 Corrections.
1720.520 Proposed findings, conclusions, and order.
1720.525 Decision of administrative law judge.
1720.530 Decision of administrative law judge--content.
1720.535 Reopening of proceeding; termination of jurisdiction.

                                 Appeals

1720.605 Appeal from decision of administrative law judge.
1720.610 Answering brief.
1720.615 Reply brief.
1720.620 Length and form of briefs.
1720.625 Oral argument.
1720.630 Decision on appeal or review.
1720.635 Appeals officer.

    Authority: 15 U.S.C. 1718; 42 U.S.C. 3535(d).

    Source: 43 FR 29496, July 7, 1978, unless otherwise noted.



                     Subpart A_Rules and Rulemaking



Sec. 1720.1  Scope of rules in this subpart.

    The rules in this subpart apply to and govern procedures for the 
promulgation of rules and regulations under the Act. The rules in this 
subpart do not apply to interpretative rules, general statements of 
policy, rules of organization procedure or practice or in any situation 
in which the Secretary for good cause finds (and incorporates the 
findings and brief statement of the reasons therefor in the rules 
issued) that notice and public procedure thereon are impracticable, 
unnecessary or contrary to the public interest.



Sec. 1720.5  Initiation of rulemaking.

    (a) The issuance, amendment or repeal of any rule or regulation may 
be

[[Page 70]]

proposed upon the initiative of the Secretary or upon the petition of 
any interested person showing reasonable grounds therefor.
    (b) Petitions for rulemaking by interested persons filed under this 
section:
    (1) Shall be identified as a petition for rulemaking under this 
subpart;
    (2) Shall explain the interest of the petitioner in the action 
requested;
    (3) Shall set forth the text or substance of the rule or amemdment 
proposed or specify the rule that the petitioner seeks to have repealed, 
as the case may be;
    (4) Shall contain any information and arguments available to the 
petitioner to support the action sought; and
    (5) Shall be filed with the Rules Docket Clerk, Office of General 
Counsel, Department of Housing and Urban Development, Room 5218, 451 
Seventh Street SW., Washington, DC 20410.
    (c) The Secretary shall respond to a petition submitted under this 
section within 180 days of receipt thereof, except that this time limit 
may be exceeded for good cause found and communicated to the petitioner. 
The Secretary's normal response shall be to grant or deny the petition 
but alternatively, the Secretary may schedule a public hearing or other 
appropriate proceeding prior to the granting or denial of a petition. If 
the Secretary grants the petition, the Secretary shall publish a 
proposed rule in accordance with the petition and a copy of the proposed 
rule shall be furnished to the petitioner. If the Secretary denies the 
petition, the Secretary shall notify the petitioner within 7 days after 
such denial.



Sec. 1720.10  Investigations and conferences.

    (a) In connection with a rulemaking proceeding, the Secretary may 
conduct such investigations, make such studies, and hold such 
conferences as are necessary. Investigations in connection with a 
rulemaking may be conducted in accordance with the general investigatory 
procedures under part 3800 of this chapter.
    (b) At any such conferences, interested persons may appear to 
express views and suggest amendments relative to proposed rules.

[61 FR 10442, Mar. 13, 1996]



Sec. 1720.15  Notice.

    General notice of proposed rulemaking shall be published in the 
Federal Register and, to the extent practicable, otherwise made 
available to interested persons. Such notice shall state the time, 
place, and nature of public hearings, if any; the authority under which 
the rule or regulation is proposed; either the terms or substance of the 
proposed rule or regulation or a description of the subjects and issues 
involved; and the manner in which interested persons shall be afforded 
the opportunity to participate in the rulemaking. If the rulemaking was 
instituted pursuant to petition, a copy of the notice shall be served on 
the petitioner.



Sec. 1720.20  Promulgation of rules and regulations.

    The Secretary, after consideration of all relevant matters of fact, 
law, policy, and discretion, including all relevant matters presented by 
interested persons in the rulemaking proceedings, shall adopt and 
publish in the Federal Register an appropriate rule or regulation 
together with a concise general statement of its basis and purpose and 
any necessary findings; or the Secretary shall give other appropriate 
public notice of disposition of the rulemaking proceeding.



Sec. 1720.25  Effective date of rules and regulations.

    The effective date of any rule or regulation or of an amendment, 
suspension, or repeal of any rule or regulation shall be specified in a 
notice published in the Federal Register. Such date shall not be less 
than 30 days after the date of such publication unless the Secretary 
specifies an earlier effective date for good cause found and published 
with the rule or regulation.

[[Page 71]]



                       Subpart B_Filing Assistance



Sec. 1720.30  Scope of this subpart.

    The rules in this subpart apply to and govern procedures under which 
developers may obtain prefiling assistance and be notified of and 
permitted to correct deficiencies in the Statement of Record.



Sec. 1720.35  Prefiling assistance.

    Persons intending to file with the Office of Interstate Land Sales 
Registration may receive advice of a general nature as to the 
preparation of the filing including information as to proper format to 
be used and the scope of the items to be included in the format. 
Inquiries and requests for informal discussions with staff members 
should be directed to the Administrator, Office of Interstate Land Sales 
Registration, Department of Housing and Urban Development, 451 Seventh 
Street SW., Washington, DC 20410.



Sec. 1720.40  Processing of filings.

    (a) Statements of Record and accompanying filing fees will be 
received on behalf of the Secretary by the Administrator, Office of 
Interstate Land Sales Registration, for determination of:
    (1) Completeness of the statement,
    (2) Adequacy of the filing fee and
    (3) Adequacy of disclosure.


Where it appears that all three criteria are satisfied and it is 
otherwise practicable, acceleration of the effectiveness of the 
Statement of Record will normally be granted.
    (b) Filings intended as Statements of Record but which do not comply 
in form with Sec. Sec. 1710.105 and 1710.120 of this chapter, whichever 
is applicable, and Statements of Record accompanied by inadequate filing 
fees will not be effective to accomplish any purpose under the Act. At 
the discretion of the Administrator, such filings and any moneys 
accompanying them may be immediately returned to the sender or after 
notification may be held pending the sender's appropriate response.
    (c) Persons filing incomplete or inaccurate Statements of Record 
will be notified of the deficiencies therein by the Suspension Notice 
procedure described in Sec. 1710.45(a) of this chapter.

Subpart C [Reserved]



                   Subpart D_Adjudicatory Proceedings

                           General Provisions



Sec. 1720.105  Scope of rules in this subpart.

    The rules in this subpart are applicable to adjudicative proceedings 
which involve a hearing or opportunity for a hearing under the 
Interstate Land Sales Full Disclosure Act.



Sec. 1720.110  Applicability of sections of this subpart.

    Succeeding sections of this subpart shall apply to all adjudicatory 
hearings conducted by OILSR unless specifically limited in applicability 
by a particular section.



Sec. 1720.115  Department representative.

    In each case heard before an administrative law judge pursuant to 
this part, the Department shall be represented by a Department hearing 
attorney. The General Counsel shall designate one or more attorneys to 
act as Department hearing attorneys.



Sec. 1720.120  Qualification for appearances.

    (a) Members of the bar of a Federal Court or of the highest court of 
any state or of the United States are eligible to practice before the 
Secretary. No register of attorneys will be maintained.
    (b) Any individual or member of a partnership involved in any 
proceeding or investigation may appear on personal behalf or that of the 
partnership upon adequate identification. A corporation or association 
may be represented by a bona fide officer thereof upon a showing of 
adequate authorization.
    (c) A person shall not be represented except as stated in paragraphs 
(a) and (b) of this section unless otherwise permitted.



Sec. 1720.125  Public nature and timing of hearings.

    (a) All hearings in adjudicative proceedings shall be public.

[[Page 72]]

    (b) Hearings shall proceed with all reasonable speed and insofar as 
practicable, shall be held at one place and shall continue without 
recess or suspension until concluded. The administrative law judge shall 
have the authority to order brief intervals of the sort normally 
involved in judicial proceedings and, in unusual and exceptional 
circumstances for good cause stated on the record, shall have the 
authority to order hearings at more than one place and to order recesses 
to permit further gathering of evidence or settlement discussions.



Sec. 1720.130  Restrictions on appearances as to former officers and
employees.

    (a) Except as specifically authorized by the Secretary, no former 
officer or employee of the Department of Housing and Urban Development 
shall appear as attorney or counsel or otherwise participate through any 
form of professional consultation or assistance in any proceeding or 
investigation, formal or informal, which was pending in any manner in 
the Office of Interstate Land Sales Registration while such former 
officer or employee served with the Department of Housing and Urban 
Development.
    (b) In cases to which paragraph (a) of this section is applicable, a 
former officer or employee of the Department of Housing and Urban 
Development may request authorization to appear or participate in a 
proceeding or investigation by filing with the Secretary a written 
application disclosing the following relevant information:
    (1) The nature and extent of the former officer's or employee's 
participation in, knowledge of, and connection with the proceeding or 
investigation during service with the Department of Housing and Urban 
Development;
    (2) Whether the files of the proceeding or investigation came to the 
former officer or employee's attention;
    (3) Whether the former officer or employee was employed in the same 
office, division, or administrative unit in which the proceeding or 
investigation is or has been pending;
    (4) Whether the former officer or employee worked directly or in 
close association with the Office of Interstate Land Sales Registration 
personnel assigned to the proceeding or investigation;
    (5) Whether during service with the Department of Housing and Urban 
Development the former officer or employee was engaged in any matter 
concerning the individual, company or industry in the proceeding or 
investigation.
    (c) The requested authorization will not be given in any case:
    (1) Where it appears that the former officer or employee during 
service with the Department of Housing and Urban Development 
participated personally and substantially in the proceeding or 
investigation, or
    (2) Where the application is filed within one (1) year after 
termination of the former officer's or employee's service with the 
Department of Housing and Urban Development and it appears that within a 
period of one (1) year prior to the termination of service the 
proceeding or investigation was within the official responsibility of 
the former officer or employee.

In other cases, authorization will be given where the Secretary is 
satisfied that the appearance or participation will not involve any 
actual conflict of interest or impropriety thereof.
    (d) In any case in which a former officer or employee of the 
Department of Housing and Urban Development is prohibited under this 
section from appearing or participating in a proceeding or 
investigation, any partner or legal or business associate of such former 
officer or employee shall likewise be so prohibited unless:
    (1) Such partner or legal or business associate files with the 
Secretary an affidavit that in connection with the matter the services 
of the disqualified former officer or employee will not be utilized in 
any respect and the matter will not be discussed with the former officer 
or employee in any manner, and that the disqualified former officer or 
employee shall not share, directly or indirectly, in any fees or 
retainers received for services rendered in connection with such 
proceeding or investigation;
    (2) The disqualified former officer or employee files an affidavit 
agreeing not to participate in the matter in any

[[Page 73]]

manner, and not to discuss it with any person involved in the matter; 
and
    (3) Upon the basis of such affidavits, the Secretary determines that 
the appearance or participation by the partner or associate would not 
involve any actual conflict of interest or impropriety thereof.



Sec. 1720.135  Standards of practice.

    (a) Attorneys shall conform to the standards of professional and 
ethical conduct required by practitioners in the courts of the United 
States and by the bars of which the attorneys are members.
    (b) The privilege of appearing or practicing may be denied, 
temporarily or permanently, to any person who is found after notice and 
opportunity for hearing which at the person's request or in the 
discretion of the Secretary may be private, and for presentation of oral 
argument in the matter:
    (1) Not to possess the requisite qualifications to represent others, 
or
    (2) To be lacking in character or integrity, or
    (3) To have engaged in unethical or improper professional conduct.
    (c) Contemptuous conduct at any hearing shall be grounds for summary 
exclusion from said hearing for the duration of the hearing.



Sec. 1720.140  Administrative law judge, powers and duties.

    (a) Hearings in adjudicative proceedings shall be presided over by a 
duly qualified administrative law judge who shall be designated by the 
Secretary in a notice to the parties in the proceeding.
    (b) Administrative law judges shall have the duty to conduct fair 
and impartial hearings, to take all necessary action to avoid delay in 
the disposition of proceedings and to maintain order. They shall have 
all powers necessary to those ends including all powers granted under 5 
U.S.C. 556(c), and also power including but not limited to the 
following:
    (1) To administer oaths and affirmations.
    (2) To issue subpoenas and orders requiring access.
    (3) To take or to cause depositions to be taken.
    (4) To rule upon offers of proof and receive evidence.
    (5) To regulate the course of the hearings and the conduct of the 
parties and their counsel.
    (6) To hold conferences for simplification and clarification of the 
issues or any other purpose.
    (7) To consider and rule upon as justice may require, all procedural 
and other motions appropriate in an adjudicative proceeding, including 
motions to open defaults.
    (8) To make and file decisions.
    (9) To certify question to a Departmental appeals officer.
    (10) To take any action authorized by the rules in this part or 
other appropriate action.



Sec. 1720.145  Disqualification of administrative law judge.

    (a) When an administrative law judge feels disqualified from 
presiding in a particular proceeding, the administrative law judge shall 
withdraw therefrom by notice on the record and shall notify the 
Secretary of such withdrawal.
    (b) Whenever any party believes that the administrative law judge 
should be disqualified from presiding, or continuing to preside in a 
particular proceeding, such party may file with the administrative law 
judge a motion that the administrative law judge be disqualified and 
removed. Such motion shall be supported by affidavits setting forth the 
alleged grounds for disqualification. If the administrative law judge 
does not agree to disqualification, the hearing shall proceed, and the 
question of fair hearing and due process may be raised on appeal.



Sec. 1720.150  Failure to comply with administrative law judge's
directions.

    Any party who refuses or fails to comply with a lawfully issued 
order or direction of an administrative law judge may be considered to 
be in contempt of the Secretary. The circumstances of any such neglect, 
refusal or failure, together with a recommendation for appropriate 
action, shall be promptly certified by the administrative law judge to 
the Secretary who may make such orders in

[[Page 74]]

regard thereto as the circumstances may warrant.



Sec. 1720.155  Ex parte communications.

    (a) No person shall communicate with an administrative law judge or 
an appeals officer either directly or indirectly concerning any pending 
proceeding unless prior to or simultaneously with such communication its 
contents are disclosed in detail to all persons interested in the 
proceeding; nor shall an administrative law judge or appeals officer 
request or consider any such unauthorized ex parte communication. This 
prohibition shall not apply to a simple request for information 
respecting the status of the proceeding, nor to any ex parte 
communication expressly authorized by these rules.
    (b) Any administrative law judge or appeals officer, who receives an 
ex parte communication which the judge knows or has reason to believe is 
unauthorized, shall promptly place the communication, or its substance, 
in the public file and shall inform all persons interested in the 
proceeding of its existence and general contents. Facts or arguments so 
communicated shall not be taken into account in deciding any matter in 
issue unless such facts or arguments shall be brought properly before 
the administrative law judge.
    (c) Opportunity to answer allegations or contentions contained in an 
unauthorized ex parte communication may be afforded any interested 
person upon motion for leave to do so, wherever such leave will operate 
to assure a fair hearing or decision.



Sec. 1720.160  Form and filing requirements.

    (a) Filing. Except as otherwise permitted, an original and three 
copies of all documents shall be filed with the Docket Clerk for 
Administrative Proceedings, Room 10278, Department of Housing and Urban 
Development, Washington, DC 20410, on official work days between the 
hours of 8:45 a.m. and 5:15 p.m.
    (b) Title. Documents shall show clearly the title of the action, the 
docket number, and OILSR file number in connection with which they are 
filed.
    (c) Form. Except as otherwise permitted, all documents shall be 
printed, typewritten, or otherwise processed in clear legible form and 
on good unglazed paper.



Sec. 1720.165  Time computation.

    Computation of any period of time prescribed or allowed by the rules 
and regulations in this part, or by order of the Secretary or of an 
administrative law judge, shall begin with the first business day 
following that on which the act, event, development or default 
initiating such period of time shall have occurred. When the last day of 
the period so computed is a Saturday, Sunday, or national holiday, or 
other day on which the Department of Housing and Urban Development is 
closed, the period shall run until the end of the next following 
business day. Except when any prescribed or allowed period of time is 7 
days or less, each of the Saturdays, Sundays, and national holidays 
shall be included in the computation of the prescribed or allowed 
period.



Sec. 1720.170  Service.

    Notices, orders, processes, determinations and other documents 
required or permitted under these rules may be served as follows:
    (a) Upon the Secretary. By personal delivery at the office, or by 
registered or certified mail addressed to the office of any of the 
following officials in the Office of Interstate Land Sales Registration: 
Administrator; Associate Administrator; Director, Office of Interstate 
Land Sales Registration: Provided, however, That during the pendency of 
a proceeding before the Secretary all pleadings, motions, notices or 
other documents shall be served in accordance with the terms of Sec. 
1720.160.
    (b) Upon any other person. By delivery of a copy of the documents to 
the person to be served wherever the person may be found, or by leaving 
such copy at the person's office or place of business with a person 
apparently in charge thereof, or, if there is no one in charge or if the 
office is closed or if the person has no office, by leaving a copy at 
the person's residence with some person of suitable age and discretion 
then residing therein, or sending a

[[Page 75]]

copy by registered or certified mail, return receipt requested, 
addressed to the person at the person's last known residence, or at the 
person's last known principal office or place of business. If the 
address of the residence, principal office, or place of business is 
unknown and cannot with due diligence be ascertained, service may be 
made by mail to any office at which the person to be served is known to 
be employed or by publication in the Federal Register.
    (c) Service on corporations, partnerships, associations, other 
entities. Service may be made upon any corporation, partnership, 
business association or other entity by serving any officer, director, 
partner, trustee, agent for service or managing agent thereof. A 
managing agent, within the meaning of this subsection, is an agent 
having the principal managerial responsibility in connection with the 
regular operation of a distinct office or activity of the enterprise.
    (d) Service through attorney. When a person other than the Secretary 
and the Secretary's staff shall have appeared of record in a proceeding, 
generally or specially, by attorney, all subsequent services of notices, 
orders, processes, and other documents in connection with such 
proceeding may be made upon such person by serving the attorney, except 
that subpoenas and other orders by which such person may be brought in 
contempt shall be served upon the person by one of the methods described 
in paragraphs (b) and (c) of this section. In any case, a copy of any 
document served on a client shall be sent to any attorney who has 
entered an appearance for that client. In such situations, it shall be 
sufficient proof of service to show that either the client or the 
attorney has received a copy of the document.
    (e) Proof of service. Proof of service shall not be required unless 
the fact of service is reasonably put in issue by appropriate motion or 
objection on the part of the person allegedly served or other party. In 
such cases, service may be established by written admission signed by or 
on behalf of the person to be served, or may be established prima facie 
by affidavit or certificate of service or mailing, as appropriate. When 
service is by registered or certified mail, it is complete upon delivery 
of the document by the post office.



Sec. 1720.175  Intervention by interested persons.

    (a) The administrative law judge, upon timely petition in writing 
and for good cause shown, and if deemed to be in the public interest, 
may permit any person to participate by intervention in the proceeding. 
The petition shall state:
    (1) The petitioner's relationship to and interest in the matters 
contained in the proceeding;
    (2) The petitioner's position with respect to each specific issue 
upon which the petitioner proposes to intervene, and the facts which the 
petitioner proposes to adduce in support of each such position; and
    (3) An assent to exercise of jurisdiction by the Department with 
respect to the petitioner.
    (b) The administrative law judge shall determine the propriety of 
such intervention and the extent to which such intervener may 
participate, basing such determination upon applicable law, the 
directness and substantiality of the petitioner's interest in the 
proceeding and the effect upon the proceeding of allowing such 
participation.



Sec. 1720.180  Settlements.

    Parties may propose in writing, at any time during the course of a 
proceeding, offers of settlement which shall be submitted to the 
Secretary. If determined to be appropriate, the party making the offer 
may be given an opportunity to make an oral presentation in support of 
such offer. If an offer of settlement is rejected, the party making the 
offer shall be so notified and the offer shall be deemed withdrawn and 
shall not constitute a part of the record in the proceeding. Final 
acceptance by the Secretary of any offer of settlement will terminate 
any proceeding related thereto upon notification to the administrative 
law judge or the appeals officer.

[[Page 76]]

                                Pleadings



Sec. 1720.205  Suspension notice under Sec. 1710.45(a) of this chapter.

    A suspension pursuant to Sec. 1710.45(a) of this chapter shall be 
effected by service of a suspension notice which shall contain:
    (a) An identification of the filing to which the notice applies.
    (b) A specification of the deficiencies of form, disclosure, 
accuracy, documentation or fee tender which constitute the grounds under 
Sec. 1710.45(a) of this chapter, of the suspension, and of the 
additional or corrective procedure, information, documentation, or 
tender which will satisfy the Secretary's requirements.
    (c) A notice of the hearing rights of the developer under Sec. 
1720.210 and of the procedures for invoking those rights.
    (d) A notice that, unless otherwise ordered, the suspension shall 
remain in effect until 30 days after the developer cures the specified 
deficiencies as required by the notice.



Sec. 1720.210  Hearings--suspension notice pursuant to Sec. 1710.45(a)
of this chapter.

    (a) A developer, upon receipt of a suspension notice issued pursuant 
to Sec. 1710.45(a) of this chapter, may obtain a hearing by filing a 
written request in accordance with the instructions regarding such 
request contained in the suspension notice. Such a request must be filed 
within 15 days of receipt of the suspension notice and must be 
accompanied by an answer and 3 copies thereof signed by the respondent 
or the respondent's attorney conforming to the requirements of Sec. 
1720.245. Filing of a motion for a more definite statement pursuant to 
Sec. 1720.315 shall alter the period of time to request a hearing in 
accordance with Sec. 1720.240.
    (b) When a hearing is requested pursuant to paragraph (a) of this 
section, such hearing shall be held within 20 days of receipt of the 
request. The time and place for hearing shall be fixed with due regard 
for the public interest and the convenience and necessity of the parties 
or their representatives.
    (c) A request for hearing filed pursuant to paragraph (a) of this 
section shall not interrupt or annul the effectiveness of the suspension 
notice, and suspension of the effective date of the Statement or 
amendment shall continue until vacated by order of the Secretary or 
administrative law judge. Except in cases in which the developer shall 
waive or withdraw the request for such hearing, or shall fail to pursue 
the same by appropriate appearance at a hearing duly scheduled, noticed 
and convened, the suspended filing shall be reinstated in the event of 
failure of the Secretary to schedule, give notice of or hold a duly-
requested hearing within the time specified in paragraph (b) of this 
section, or in the event of a finding that the Secretary has failed to 
support at such hearing the propriety of the suspension with respect to 
the material issues of law and fact raised by the answer. Such 
reinstatement shall be effective on the date on which the filing would 
have become effective had no notice of suspension been issued with 
respect to it.
    (d) If there is an outstanding suspension notice under Sec. 
1710.45(a) with respect to the same matter for which a suspension order 
under Sec. 1710.45(b)(3) is issued, the notice and order shall be 
consolidated for the purposes of hearing. In the event that allegations 
upon which the suspension notice and suspension order are based are 
identical, only one answer need be filed.



Sec. 1720.215  Notice of proceedings pursuant to Sec. 1710.45(b)(1)
of this chapter.

    A proceeding pursuant to Sec. 1710.45(b)(1) of this chapter is 
commenced by issuance and service of a notice which shall contain:
    (a) A clear and accurate identification of the filing or filings to 
which the notice relates.
    (b) A clear and concise statement of material facts, sufficient to 
inform the respondent with reasonable definiteness of the statements, 
omissions, conduct, circumstances or practices alleged to constitute the 
grounds for the proposed suspension order under Sec. 1710.45(b)(1) of 
this chapter.
    (c) A notice of hearing rights of the developer under Sec. 1720.220 
and of the procedures for invoking those rights.
    (d) Designation of the administrative law judge appointed to preside 
over

[[Page 77]]

pre-hearing procedures and over the hearings.
    (e) A notice that failure to file an answer or motion as provided 
under Sec. 1720.240 will result in an order suspending the Statement of 
Record.



Sec. 1720.220  Hearings--notice of proceedings pursuant to 
Sec. 1710.45(b)(1) of this chapter.

    (a) A developer, upon receipt of a notice of proceedings issued 
pursuant to Sec. 1710.45(b)(1) of this chapter, may obtain a hearing by 
filing a written request in accordance with the instructions regarding 
such request contained in the notice of proceedings. Such a request must 
be filed within 15 days of receipt of the notice of proceedings and must 
be accompanied by an answer conforming to the requirements of Sec. 
1720.245. Filing of a motion for a more definite statement pursuant to 
Sec. 1720.315 shall alter the period of time to request a hearing in 
accordance with Sec. 1720.240.
    (b) When a hearing is requested pursuant to paragraph (a) of this 
section, such hearing shall be held within 45 days of receipt of the 
request by the Secretary unless it is determined that it is not in the 
public interest. The time and place for hearing shall be fixed with due 
regard for the public interest and the convenience and necessity of the 
parties or their representatives.
    (c) Failure to answer within the time allowed by Sec. 1720.140 or 
failure of a developer to appear at a hearing duly scheduled shall 
result in an appropriate order under Sec. 1710.45(b)(1) of this chapter 
suspending the statement of record. Such order shall be effective as of 
the date of service or receipt.



Sec. 1720.225  Suspension order under Sec. 1710.45(b)(2) of this chapter.

    A suspension pursuant to Sec. 1710.45(b)(2) of this chapter shall 
be effected by service of a suspension order which shall contain:
    (a) An identification of the filing to which the order applies.
    (b) Bases for issuance of order.
    (c) A notice of the hearing rights of the developer under Sec. 
1720.235 the procedures for invoking those rights.
    (d) A statement that the order shall remain in effect until the 
developer has complied with the Secretary's requirements.



Sec. 1720.230  Suspension order under Sec. 1710.45(b)(3) of this chapter.

    A suspension pursuant to paragraph (b)(3) of Sec. 1710.45 of this 
chapter shall be effected by service of a suspension order which shall 
contain:
    (a) An identification of the filing to which the order applies.
    (b) An identification of the amendment to the filing which generated 
the order.
    (c) A statement that the issuance of the order is necessary or 
appropriate in the public interest or for the protection of purchasers.
    (d) A statement that the order shall remain in effect until the 
amendment becomes effective.
    (e) A notice of the hearing rights of the developer under Sec. 
1720.235 and of the procedure for invoking those rights.



Sec. 1720.235  Hearings--suspension orders issued pursuant to 
Sec. 1710.45(b)(2) and Sec. 1710.45(b)(3) of this chapter.

    (a) A developer, upon receipt of a suspension order issued pursuant 
to Sec. 1710.45(b)(2) or Sec. 1710.45(b)(3) of this chapter, may 
obtain a hearing by filing a written request in accordance with the 
instructions regarding such request contained in the suspension order. 
Such request must be filed within 15 days of receipt of the suspension 
order and must be accompanied by an answer and 3 copies thereof signed 
by the respondent or respondent's attorney conforming to the 
requirements of Sec. 1720.245. Filing of a motion for a more definite 
statement pursuant to Sec. 1720.315 shall alter the period of time to 
request a hearing in accordance with Sec. 1720.240.
    (b) When a hearing is requested pursuant to paragraph (a) of this 
section, such hearing shall be held within 20 days of receipt of the 
request. The time and place for hearing shall be fixed with due regard 
for the public interest and the convenience and necessity of the parties 
or their representatives.
    (c) A request for hearing filed pursuant to paragraph (a) of this 
section

[[Page 78]]

shall not interrupt or annul the effectiveness of the suspension order.



Sec. 1720.236  Notice of proceedings to withdraw a State's 
certification pursuant to Sec. 1710.505 of this chapter.

    A proceeding pursuant to Sec. 1710.505 of this chapter is commenced 
by issuance and service of a notice which shall contain:
    (a) An identification of the State certification to which the notice 
applies.
    (b) A clear and concise statement of material facts, sufficient to 
inform the respondent with reasonable definiteness of the basis for the 
Secretary's determination, pursuant to Sec. 1710.505, that the State's 
laws, regulations and the administration thereof, taken as a whole, no 
longer meet the requirements of Sec. 1710. 501.
    (c) A notice of hearing rights of the State under Sec. 1720.237 and 
of the procedures for invoking those rights.
    (d) A notice that failure to file an answer or motion as provided 
under Sec. 1720.240 will result in an order suspending the State's 
certification.

[45 FR 40499, June 13, 1980]



Sec. 1720.237  Hearings--notice of proceedings pursuant to 
Sec. 1710.505 of this chapter.

    (a) A State, upon receipt of a notice of proceedings issued pursuant 
to Sec. 1710.505 of this chapter, may obtain a hearing by filing a 
written request in accordance with the instructions regarding such 
request contained in the notice of proceedings. Such request must be 
filed within 15 days of receipt of the notice of proceedings and must be 
accompanied by an answer conforming to the requirements of Sec. 
1720.245. Filing of a motion for a more definite statement pursuant to 
Sec. 1720.315 shall alter the period of time to request a hearing in 
accordance with Sec. 1720.240.
    (b) When a hearing is requested pursuant to paragraph (a) of this 
section, such hearing shall be held within 45 days of receipt of this 
request. The time and place for the hearing shall be fixed with due 
regard for the public interest and the convenience and necessity of the 
parties or their representatives.
    (c) Failure to answer within the time allowed by Sec. 1720.240 or 
failure to appear at a hearing duly scheduled shall result in an 
appropriate order under Sec. 1710.505 of this chapter withdrawing the 
State's certification. Such order shall be effective as of the date of 
service or receipt.

[45 FR 40499, June 13, 1980]



Sec. 1720.238  Notices of proceedings to terminate exemptions pursuant
to Sec. Sec. 1710.14, 1710.15 and 1710.16 of this chapter.

    A proceeding to terminate a self-determining exemption under Sec. 
1710.14 or an exemption order under Sec. 1710.15 or Sec. 1710.16 is 
commenced by issuance and service of a notice which shall contain:
    (a) In the case of an exemption under Sec. 1710.14, an 
identification of the developer and subdivision to which this notice 
applies. In the case of an exemption under either Sec. 1710.15 or Sec. 
1710.16, an identification of the exemption order to which the notice 
applies.
    (b) A clear and concise statement of material facts, sufficient to 
inform the respondent with reasonable definiteness of the basis for the 
Secretary's determination that further exemption from the registration 
and disclosure requirements is not in the public interest or that the 
sales or leases do not meet the requirements for exemption, or both.
    (c) A notice of hearing rights of the respondent under Sec. 
1720.239 and of the procedures for invoking those rights.
    (d) A notice that failure to file an answer or motion as provided 
under Sec. 1720.240 will result, in the case of a notice issued under 
Sec. 1710.14, an order terminating eligibility for the exemption, or, 
in the case of a notice issued under either Sec. 1710.15 or Sec. 
1710.16, an order terminating the exemption order.

[45 FR 40499, June 13, 1980, as amended at 54 FR 40868, Oct. 4, 1989]



Sec. 1720.239  Hearings--notice of proceedings pursuant to Sec. 
Sec. 1710.14, 1710.15 and 1710.16 of this chapter.

    (a) A developer, upon receipt of a notice of proceedings issued 
under Sec. Sec. 1710.14, 1710.15 and 1710.16 of this chapter, may 
obtain a hearing by filing a written request contained in the notice of 
proceedings. The request must

[[Page 79]]

be filed within 15 days of receipt of the notice of proceedings and must 
be accompanied by an answer conforming to the requirements of Sec. 
1720.245. Filing of a motion for a more definite statement under Sec. 
1720.315 shall alter the period of time to request a hearing in 
accordance with Sec. 1720.240.
    (b) When a hearing is requested pursuant to paragraph (a) of this 
section, such hearing shall be held within 45 days of receipt of this 
request. The time and place for the hearing shall be fixed with due 
regard for the public interest and the convenience and necessity of the 
parties of their representatives.
    (c) Failure to answer within the time allowed by Sec. 1720.240, or 
failure to appear at a duly scheduled hearing shall result in an 
appropriate order under Sec. 1710.14 Sec. 1710,15 or Sec. 1710.16 of 
this chapter terminating the developer's exemption. The order shall be 
effective as of the date of service or receipt.

[45 FR 40500, June 13, 1980, as amended at 54 FR 40868, Oct. 4, 1989]



Sec. 1720.240  Time for filing answer.

    (a) Within 15 days after service of the notice or order, the 
respondent shall mail or submit to the Docket Clerk for Administrative 
Proceedings, Room 10278, Department of Housing and Urban Development, 
Washington, DC 20410, an answer and three copies thereof signed by the 
respondent or attorney. Unless a different time is fixed by the 
Secretary, the filing of a motion for a more definite statement of the 
allegations shall alter the period of time in which to file an answer as 
follows:
    (1) If the motion is denied, the answer shall be filed within 15 
days after service of the denial.
    (2) If the motion is granted in whole or in part, the more definite 
statement of allegations shall be filed after service of the order 
granting the motion and the answer shall be filed within 15 days after 
service of the more definite statement of allegations.
    (b) If a notice or order is amended pursuant to Sec. 1720.255(a), 
the respondent shall have 15 days after service of the amended notice or 
order within which to file an answer.



Sec. 1720.245  Content of answer.

    (a) An answer to a notice or order shall contain:
    (1) Specific admission, denial or explanation of each fact alleged 
in the notice or, if the respondent is without knowledge thereof, a 
statement to that effect; and
    (2) A brief statement of the facts constituting each defense.
    (b) Allegations not answered in this manner shall be deemed 
admitted.



Sec. 1720.250  Presumption of hearing request.

    When an answer to a suspension notice, a notice of proceedings, or a 
suspension order is timely filed but a respondent has failed 
specifically to request a hearing, the answer shall be deemed to 
constitute such a request.



Sec. 1720.255  Amendments and supplemental pleadings.

    (a) Amendments. Prior to the receipt by the Docket Clerk for 
Administrative Proceedings of an answer to a notice or order, that 
notice or order may be amended as a matter of course. After the receipt 
of an answer, the administrative law judge may allow appropriate 
amendments to pleadings by motion whenever determination of a 
controversy on the merits will be facilitated thereby.
    (b) Variances of proof. When issues not raised by the pleadings but 
reasonably within the scope of the suspension notice or notice of 
proceedings are tried by express or implied consent of the parties, they 
shall be treated in all respects as if they had been raised in the 
pleadings; and such amendments of the pleadings as may be necessary to 
make them conform to the evidence and to raise such issues shall be 
allowed at any time.
    (c) Supplemental pleadings. The administrative law judge may, upon 
reasonable notice and such terms as are just, permit service of a 
supplemental pleading setting forth transactions or events which have 
occurred since the date of the pleading sought to be supplemented and 
which are relevant to any of the issues involved.

[[Page 80]]



Sec. 1720.260  Prehearing conferences.

    (a) Where it will expedite the proceeding, the administrative law 
judge may direct or allow the parties or their representatives to appear 
for a conference to consider:
    (1) Simplification and clarification of the issues;
    (2) Necessity or desirability of amendments to the pleadings;
    (3) Stipulations and admissions of fact and the contents and 
authenticity of documents;
    (4) Expedition in the discovery and presentation of evidence;
    (5) Matters of which official or judicial notice will be taken; and
    (6) Such other matters as may aid in the orderly and expeditious 
disposition of the proceeding, including disclosure of the names of 
witnesses and of documents or other exhibits which will be introduced in 
evidence in the course of the proceeding.

Prior to the conference, the administrative law judge may direct or 
allow the parties or their representatives to file memoranda specifying 
the issues of law and fact to be considered.
    (b) If the circumstances are such that a conference is 
impracticable, the administrative law judge may require the parties to 
correspond for the purpose of accomplishing any of the objectives set 
forth in this section.



Sec. 1720.265  Reporting--prehearing conferences.

    Prehearing conferences shall be stenographically or mechanically 
reported; and the administrative law judge shall prepare and file for 
the record a written summary of the action taken at the conference, 
which shall incorporate any written agreements or stipulations made by 
the parties at the conference or as a result of the conference.

                                 Motions



Sec. 1720.305  Motions--filing requirements.

    During the time a proceeding is before an administrative law judge, 
all motions therein shall be in writing; and, except as otherwise 
provided in this part, a copy of each motion shall be served on the 
other party or parties. Such motions shall be signed, addressed to, 
filed with and ruled upon by the administrative law judge. The 
provisions of this section need not apply to motions made during the 
course of a hearing.



Sec. 1720.310  Answers to motions.

    Within 7 days after service of any written motion, an opposing party 
shall answer or shall be deemed to consent to the granting of the relief 
asked for in the motion. The moving party shall have no right to reply 
except as permitted by the administrative law judge or the appeals 
officer.



Sec. 1720.315  Motion for more definite statement.

    When a respondent is unable to respond to the allegations in a 
suspension notice, a notice of proceedings, or a suspension order, 
because such allegations are vague, unclear or otherwise indefinite, 
motion may be made requesting a more definite statement of the 
allegations before filing an answer. Such motion shall indicate 
specifically in what manner the notice or order is indefinite or 
defective and shall be mailed or submitted to the Docket Clerk for 
Administrative Proceedings, Room 10278, Department of Housing and Urban 
Development, Washington, DC 20410, within five days after service of the 
notice or order.



Sec. 1720.320  Motions for extension of time.

    As a matter of discretion, the administrative law judge or the 
appeals officer may waive the requirements of Sec. 1720.310 as to 
motions for extension of time, and may rule upon such motions ex parte. 
Extensions of time or continuances in any proceeding may be ordered on a 
motion by the administrative law judge or on the motion of either party 
for sufficient cause after the policy of the Secretary under Sec. 
1720.125 has been considered.



Sec. 1720.325  Motions for dismissal.

    (a) A motion to dismiss may be made at any time until and including 
the fifth day after the close of the case for the reception of evidence.
    (b) When a motion to dismiss, based upon alleged failure to 
establish a

[[Page 81]]

prima facie case, is made at the close of the evidence offered in 
support of the notice or order, the administrative law judge may defer 
ruling thereon until the close of the case for the reception of 
evidence.
    (c) When a motion to dismiss is granted so as to terminate entirely 
the proceeding before the administrative law judge, the administrative 
law judge shall file a decision in accordance with the provisions of 
Sec. 1720.525. If such a motion is granted only as to some allegations 
or as to some respondents, the administrative law judge shall enter this 
partial determination on the record and take it into account in the 
decision.



Sec. 1720.330  Motions to limit or quash.

    Any person to whom a subpoena is directed may, prior to the time 
specified therein for compliance, but in no event more than 5 days after 
the date of service of such subpoena, apply to the administrative law 
judge to quash or modify such subpoena, accompanying such application 
with a brief statement of the reasons therefor. The administrative law 
judge shall have the discretion of granting, denying or modifying said 
motion.



Sec. 1720.335  Consolidation.

    When more than one proceeding involves a common question of law or 
fact, the administrative law judge may order a joint hearing of any or 
all of the matters in issue in the proceedings and may make such other 
orders concerning the proceedings as to avoid unnecessary costs or 
delay.

                         Discovery and Evidence



Sec. 1720.405  Depositions and discovery.

    (a) At any time during the course of a proceeding, the 
administrative law judge may discretionally order the taking of a 
deposition and the production of documents by the deponent. Such order 
may be entered upon a showing that the deposition is necessary for the 
purpose of discovery or to preserve relevant evidence. Insofar as 
consistent with considerations of fairness and the requirements of due 
process and the rules of this subpart, a deposition shall not be ordered 
when it appears that it will result in undue burden to any other party 
or in undue delay of the proceeding. Depositions may be taken orally or 
upon written interrogatories and cross-interrogatories.
    (b) Any party desiring to take a deposition shall make application 
in writing to the administrative law judge setting forth the 
justification therefor and the time and place proposed for the taking of 
the deposition. The application shall include also the name and address 
of each proposed deponent and the subject matter concerning which each 
is expected to depose and shall be accompanied by an application for any 
subpoenas desired.
    (c) An order that the administrative law judge may issue for taking 
a deposition shall state the circumstances warranting its being taken, 
and shall designate the time and place and shall show the name and 
address of each person who is expected to appear and the subject matter 
with regard to which each is expected to depose. The time designated 
shall allow not less than 5 days from date of service of the order when 
the deposition is to be taken within the United States, and not less 
than 15 days when the deposition is to be taken elsewhere.
    (d) After an order is served for taking a deposition upon motion 
timely made by any party or by the person to be deposed and for good 
cause shown, the administrative law judge may determine the propriety of 
and issue any of the following orders:
    (1) That the deposition shall not be taken.
    (2) That it may be taken only at some designated place other than 
that stated in the order.
    (3) That it may be taken only on written interrogatories.
    (4) That certain matters shall not be inquired into.
    (5) That the examination shall be held with no one present except 
the parties to the action, their counsel and a person qualified in the 
designated place to administer oaths and affirmations.
    (e) The administrative law judge may make any other order which 
justice requires to protect the party or deponent from annoyance, 
embarrassment or oppression, or to prevent the unnecessary

[[Page 82]]

disclosure or publication of information contrary to the public interest 
and beyond the requirements of justice in the particular proceeding.
    (f) Each deponent shall be duly sworn, and any adverse party shall 
have the right to cross-examine. Objections to questions or documents 
shall be in short form, stating the grounds of objections relied upon. 
The questions and the anwers, together with all objections made, but 
excluding argument or debate, shall be reduced to writing and certified 
by the person before whom the deposition was taken. Thereafter such 
person shall forward the deposition and one copy thereof to the party at 
whose instance the deposition was taken, and shall forward one copy 
thereof to the representative of each party who was present or 
represented at the taking of the deposition.
    (g) A deposition taken to preserve relevant evidence which any party 
intends to offer in evidence may be corrected in the manner provided by 
Sec. 1720.515. Any such deposition shall, in addition to the other 
required procedures, be read to or by the deponent and be subscribed by 
the deponent if the party intending to offer it in evidence so notifies 
the person before whom the deposition was taken. Subject to appropriate 
rulings on such objections to the questions and answers as were noted at 
the time the deposition was taken or as may be valid when it is offered, 
a deposition taken to preserve relevant evidence, or any part thereof, 
may be used or offered in evidence as against any party who was present 
or represented at the taking of the deposition or who had due notice 
thereof if the administrative law judge finds any of the following:
    (1) That the deponent is dead.
    (2) That the deponent is out of the United States or is located at 
such a distance that attendance would be impractical, unless it appears 
that the absence of the deponent was procured by the party offering the 
deposition.
    (3) That the deponent is unable to attend or testify because of age, 
sickness, infirmity or imprisonment.
    (4) That the party offering the deposition has been unable to 
procure the attendance of the deponent by subpoena.
    (5) That such exceptional circumstances exist as to make it 
desirable, in the interest of justice and with due regard to the 
importance of presenting the testimony of witnesses orally in open 
hearing, to allow the deposition to be used.



Sec. 1720.410  Subpoenas ad testificandum.

    Application for issuance of a subpoena requiring a person to appear 
and depose or testify at the taking of a deposition or at an 
adjudicative hearing shall be made to the administrative law judge who 
may issue such subpoena.



Sec. 1720.415  Subpoenas duces tecum.

    (a) Application for issuance of a subpoena requiring a person to 
appear and depose or testify and to produce specific documents, papers, 
books, or other physical exhibits at the taking of a deposition, or at a 
prehearing conference, or at an adjudicative hearing shall be made in 
writing to the administrative law judge who may issue such subpoena and 
shall specify as exactly as possible the general relevancy of the 
material and the reasonableness of the scope of the subpoena.
    (b) Subpoenas duces tecum may be used by any party for purposes of 
discovery or for obtaining documents, papers, books, or other physical 
exhibits for use in evidence, or for both purposes. When used for 
discovery purposes a subpoena may require a person to produce and permit 
the inspection and copying of nonprivileged documents, papers, books, or 
other physical exhibits which constitute or contain evidence relevant to 
the subject matter involved and which are in the possession, custody or 
control of such person.



Sec. 1720.420  Rulings on applications for compulsory process; appeals.

    (a) Applications for orders requiring the production of witnesses' 
statements pursuant to the provisions of Sec. 1720.430, applications 
for orders requiring the taking of depositions pursuant to Sec. 
1720.405 and applications for the issuance of subpoenas pursuant to 
Sec. Sec. 1720.410 and 1720.415 may be made ex

[[Page 83]]

parte, and, if so made, such applications and the rulings thereon shall 
remain ex parte unless otherwise ordered by the administrative law 
judge. Such applications shall be ruled upon by the administrative law 
judge assigned to hear the case or, in the event that judge is not 
available, by another administrative law judge designated by the 
Secretary.
    (b) Appeals to an appeals officer from rulings denying applications 
within the scope of paragraph (a) of this section, or from rulings on 
motions to limit or quash process issued pursuant to such applications 
will be entertained by the appeals officer only upon a showing that the 
ruling complained of involves substantial rights and will materially 
affect the final decision, and that a determination of its correctness 
before conclusion of the hearing is essential to serve the interests of 
justice. Such appeals shall be made on the record, shall briefly state 
the grounds relied on and shall be filed within 5 days after notice of 
the ruling complained of. Appeals from denials of ex parte applications 
shall have annexed thereto copies of the applications and rulings 
involved. Any answer to such appeal shall not operate to suspend the 
hearing unless otherwise ordered by the administrative law judge or the 
appeals officer.



Sec. 1720.425  Presentation and admission of evidence.

    (a) All witnesses at a hearing for the purpose of taking evidence 
shall testify under oath or affirmation which shall be administered by 
the administrative law judge. Every party shall have the right to 
present such oral or documentary evidence and to conduct such cross-
examinations as may be required for a full and true disclosure of the 
facts. The administrative law judge shall receive relevant and material 
evidence, rule upon offers of proof and exclude all irrelevant, 
immaterial or unduly repetitious evidence.
    (b) Evidence shall not be excluded merely by application of 
technical rules governing its admissibility, competency, weight or 
foundation in the record; but evidence lacking any significant probative 
value, or substantially tending merely to confuse or extend the record, 
shall be excluded. The administrative law judge may allow arguments on 
the admissibility of evidence by analogy to the Federal Rules of 
Evidence currently applicable in the United States District Courts of 
the United States.
    (c) When offered evidence is excluded, the party offering the same 
shall be permitted to state on the record an offer of proof with respect 
thereto and rejected exhibits, adequately marked, shall on request of 
the party offering the same be retained in the record for purposes of 
review. Evidence may be received subject to deferred ruling on 
objections to its admissibility.
    (d) Objections to evidence shall be timely made and shall specify 
the particular ground of objection without argument except as argument 
may be expressly required by the administrative law judge. Formal 
exception to an adverse ruling is unnecessary.



Sec. 1720.430  Production of witnesses' statements.

    After a witness called by the attorney for the Office of Interstate 
Land Sales Registration has given direct testimony in a hearing, any 
other party may request and obtain the production of any statement, or 
part thereof, of such witness pertaining to the witness' direct 
testimony in the possession of the Office of Interstate Land Sales 
Registration, subject, however, to the limitations applicable to the 
production of witnesses' statements under the Jencks Act, 18 U.S.C. 
3500.



Sec. 1720.435  Official notice.

    Official notice may be taken of any material fact which might be 
judicially noticed by a District Court of the United States, any matter 
in the public official records of the Office of Interstate Land Sales 
Registration or any matter which is peculiarly within the knowledge of 
the administrative law judge. When any decision of an administrative law 
judge rests, in whole or in part, upon the taking of official notice of 
a material fact not appearing in evidence of record, opportunity to 
disprove such noticed fact shall be granted any party making timely 
request therefor.

[[Page 84]]

                                Hearings



Sec. 1720.505  Interlocutory review of administrative law judge's 
decision.

    (a) The appeals officer will not review a ruling of an 
administrative law judge prior to the appeals officer's consideration of 
the entire proceeding in the absence of extraordinary circumstances. 
Except as provided in Sec. 1720.140 an administrative law judge shall 
not certify a ruling for interlocutory review to an appeals officer 
unless a party so requests and the administrative law judge is of the 
opinion and finds either on the record or in writing that:
    (1) A subsequent reversal of the ruling would cause unusual delay or 
expense, taking into consideration the probability of such reversal, or
    (2) Substantial rights are at stake and the final decision might be 
materially affected.
    (b) The certification by the administrative law judge shall be in 
writing and shall specify the material relevant to the ruling involved. 
The appeals officer may decline to consider the ruling certified if the 
officer determines that interlocutory review is not warranted or 
appropriate under the circumstances. If the administrative law judge 
does not certify a matter, a party who had requested certification may 
apply to the appeals officer for review. An application for review shall 
be in writing and shall briefly state the grounds relied on and shall be 
filed within 2 days after notice of the ruling complained of. Review 
will not be granted unless the appeals officer concludes that the 
administrative law judge erred in failing to certify the matter. Unless 
otherwise ordered by the administrative law judge, the hearing shall 
continue whether or not such certification or application is made. 
Failure to request certification or to make such application will not 
waive the right to seek review of the ruling of the administrative law 
judge after the close of the hearing.

[43 FR 29496, July 7, 1978, as amended at 50 FR 10942, Mar. 19, 1985]



Sec. 1720.510  Reporting and transcription.

    Hearings shall be stenographically or mechanically reported and 
transcribed under the supervision of the administrative law judge. The 
original transcript shall be a part of the record and the sole official 
transcript. Copies of transcripts shall be available from the reporter 
at rates not to exceed the maximum rates fixed by contract between the 
Secretary and the reporter.



Sec. 1720.515  Corrections.

    Corrections of the official transcript ordered by the administrative 
law judge shall be included in the record. Corrections shall not be 
ordered by the administrative law judge except upon notice and 
opportunity for the hearing of objections. Such corrections shall be 
made by the reporter by furnishing substitute pages, under the usual 
certificate of the reporter, for insertion in the official record.



Sec. 1720.520  Proposed findings, conclusions, and order.

    The administrative law judge may fix a reasonable time, not to 
exceed 30 days after the close of the evidence, during which any party 
may file with the administrative law judge proposed findings of fact, 
conclusions of law and rules or orders together with briefs in support 
thereof. Such proposals shall be in writing, shall be served upon all 
parties and shall contain adequate references to the record and to 
authorities relied on. The record shall show the administrative law 
judge's ruling on each proposed finding and conclusion, except when the 
rule or order disposing of the proceeding otherwise informs the parties 
of the action taken thereon.



Sec. 1720.525  Decision of administrative law judge.

    (a) The administrative law judge shall make and file a decision 
within 30 days after the close of the taking of evidence in cases in 
which a hearing is held.
    (b) The decision shall be effective 10 days after service upon the 
parties unless a petition for appeal is filed pursuant to Sec. 1720.605 
which shall serve to

[[Page 85]]

stay the effectiveness of the decision while the appeal procedure is 
ongoing.



Sec. 1720.530  Decision of administrative law judge--content.

    The administrative law judge's decision shall include a statement 
of:
    (a) Findings, with specific references to principal supporting items 
of evidence in the record and conclusions, as well as the reasons or 
bases therefor, upon all of the material issues of fact, law or 
discretion presented on the record, and
    (b) An appropriate order.

The administrative law judge's decision shall be based upon a 
consideration of the whole record and supported by reliable, probative 
and substantial evidence.



Sec. 1720.535  Reopening of proceeding; termination of jurisdiction.

    (a) At any time prior to the filing of the decision, the 
administrative law judge may reopen the proceeding for the reception of 
further evidence.
    (b) The jurisdiction of the administrative law judge is terminated 
when the decision becomes effective unless and until the proceeding is 
remanded to the judge by the appeals officer or a court of appropriate 
jurisdiction. The administrative law judge may sua sponte or on motion 
of a party file corrections of clerical errors.

                                 Appeals



Sec. 1720.605  Appeal from decision of administrative law judge.

    (a) Petition for appeal. The administrative law judge's decision may 
be appealed by filing a written petition for appeal with the Docket 
Clerk for Administrative Proceedings within 10 days after service of the 
decision appealed from. Copies of the petition for appeal shall be 
served on all interested parties. The petition shall be limited to 
specifying the findings and conclusions to which exceptions are taken, 
together with a summary of the reasons in support of such exceptions.
    (b) Denial of petition. A petition for appeal of the decision of the 
administrative law judge may be denied by the appeals officer. The 
petition shall be ruled on by the appeals officer within 10 days after 
filing. A denial of the petition shall be final agency action and shall 
render the administrative law judge's decision immediately effective.
    (c) Appeal brief. If the appeals officer grants the petition, the 
appeal shall be perfected by filing within 30 days after service of the 
decision granting the petition a brief conforming to Sec. 1720.620. In 
addition, the appellant shall submit a proposed order for the 
consideration of the appeals officer.



Sec. 1720.610  Answering brief.

    Within 20 days after service of an appeal brief upon a party, such 
party may file an answering brief conforming to the requirements of 
Sec. 1720.620.



Sec. 1720.615  Reply brief.

    A brief in reply to an answering brief, limited to rebuttal of 
matters in the answering brief, may be filed and served by a party 
within 7 days after receipt of the answering brief or the day preceding 
oral argument whichever is earlier. No answer to a reply brief will be 
permitted.



Sec. 1720.620  Length and form of briefs.

    No brief shall exceed 60 pages in length except with the permission 
of the administrative law judge or the appeals officer on the Interstate 
Land Sales Board and shall contain, in the order indicated, the 
following:
    (a) The title of the proceeding, file number, the name of the party 
on whose behalf it is submitted and the name and address of the attorney 
in the matter on the front cover or title page.
    (b) Subject index with page references.
    (c) Table of cases alphabetically arranged, statutes, texts, and 
other authorities and materials cited, with page references.
    (d) A concise statement of the facts of the case, without argument.
    (e) A concise statement of the questions sought to be raised.
    (f) The argument, presenting clearly the points of fact and law 
relied upon in support of the position taken on each question with 
specific page references to the record so far as available, and to legal 
authority or other

[[Page 86]]

material relied upon in support of statements contained in the argument.



Sec. 1720.625  Oral argument.

    Oral arguments will not be heard in cases on appeal to the appeals 
officer unless the officer otherwise orders, and stenographic or 
mechanical record of such oral argument may be made, in the officer's 
discretion. The purpose of oral argument is to emphasize and clarify the 
written argument appearing in the briefs and to answer questions.



Sec. 1720.630  Decision on appeal or review.

    (a) Upon appeal from or review of an administrative law judge's 
decision, the appeals officer will consider such parts of the record as 
are cited or as may be necessary to resolve the issues and, in addition, 
to the extent necessary or desirable, will exercise all the powers which 
could have been exercised had the appeals officer made the initial 
decision. Unless exceptional circumstances are present, however, all 
appeals and reviews will be determined upon the record made before the 
administrative law judge.
    (b) The appeals officer may affirm, reverse, modify, set aside or 
remand for further proceedings, in whole or in part, the administrative 
law judge's decision. The appellate order shall set forth the reasons 
upon which the decision is based.
    (c) In those cases where the appeals officer believes that further 
information or additional arguments of the parties are needed as to the 
form and content of the rule or order to be issued, the appeals officer 
may withhold final decision pending the receipt of such additional 
information or argument under procedures specified.
    (d) The decision of the appeals officer shall be final 10 days after 
service upon the parties.
    (e) The appeals officer shall render a decision within 30 days after 
the date of receipt of the reply brief or the taking of additional 
information and evidence, whichever is later.



Sec. 1720.635  Appeals officer.

    The Secretary shall hear, consider and determine fully and finally 
all appeals from decisions made pursuant to the rules in this part by 
the administrative law judge; provided, however, that the Secretary may, 
upon lawful delegation, designate a staff member or other person to 
serve as the appeals officer.

[[Page 87]]



  CHAPTER XII--OFFICE OF INSPECTOR GENERAL, DEPARTMENT OF HOUSING AND 
                            URBAN DEVELOPMENT




  --------------------------------------------------------------------
Part                                                                Page
2000-2001       [Reserved]

2002            Availability of information to the public...          89
2003            Implementation of the Privacy Act of 1974...          95
2004            Subpoenas and production in response to 
                    subpoenas or demands of courts or other 
                    authorities.............................          98

[[Page 89]]

                       PARTS 2000	2001 [RESERVED]



PART 2002_AVAILABILITY OF INFORMATION TO THE PUBLIC--Table of Contents



Sec.
2002.1 Scope of the part and applicability of other HUD regulations.
2002.3 OIG's overall policy concerning discloseable records and requests 
          for OIG records.
2002.5 Records produced upon request when reasonably described.
2002.7 OIG processing of requests.
2002.9 Where to review records.
2002.11 Review of records, aggregating requests and waiving or reducing 
          fees.
2002.13 Charges for interest and for unsuccessful searches; utilization 
          of Debt Collection Act.
2002.15 Advance payments.
2002.17 Time limitations.
2002.19 Authority to release records or copies.
2002.21 Authority to deny requests for records and form of denial.
2002.23 Effect of denial of request.
2002.25 Administrative review.

    Authority: 5 U.S.C. 552; Electronic Freedom of Information Act (Pub. 
L. 104-231); Freedom of Information Reform Act of 1986 (Pub. L. 99-579); 
5 U.S.C. App. 3 (Inspector General Act of 1978); 42 U.S.C. 3535(d); 
Delegation of Authority, Jan. 9, 1981 (46 FR 2389).

    Source: 49 FR 11165, Mar. 26, 1984, unless otherwise noted.



Sec. 2002.1  Scope of the part and applicability of other HUD regulations.

    (a) General. This part contains the regulations of the Office of 
Inspector General which implement the Freedom of Information Act (5 
U.S.C. 552). It informs the public how to request records and 
information from the Office of Inspector General and explains the 
procedure to use if a request is denied. Requests for documents made by 
subpoena or other order are governed by procedures contained in part 
2004 of this chapter. In addition to the regulations in this part, the 
following provisions of part 15 of this title covering the production or 
disclosure of material or information apply (except as limited in 
paragraph (b) of this section) to the production or disclosure of 
material in the possession of the Office of Inspector General:
    Sec. 15.2--What definitions apply to this part?
    Sec. 15.3--What exemptions are authorized by 5 U.S.C. 552?;
    Sec. 15.108--What are HUD's policies concerning designating 
confidential commercial or financial information under Exemption 4 of 
the FOIA and responding to requests for business information?
    Sec. 15.110--What fees will HUD charge?
    (b) Limited applicability of section 15.110. For purposes of this 
part, paragraphs (d) through (k) of Sec. 15.110 are not applicable.
    (c) Use of the term ``HUD''. For purposes of this part, and when the 
words ``HUD'' or ``Department'' are used in this part or Sec. Sec. 
15.2(b), 15.3, 15.108 and 15.110 of this title, the term means the 
Office of the Inspector General.
    (d) Request for declassification and release of classified material. 
Section 15.107 of this title contains provisions for requesting 
declassification and release of declassified material.

[67 FR 47216, July 17, 2002]



Sec. 2002.3  OIG's overall policy concerning discloseable records 
and requests for OIG records.

    (a) The Office of Inspector General will fully and responsibly 
disclose its identifiable records and information consistent with 
competing public interests, such as national security, personal privacy, 
grand jury and investigative secrecy, complainant confidentiality, 
agency deliberative process, as are recognized by FOIA and other federal 
statutes.
    (b) A request for Office of Inspector General records may be made in 
person during normal business hours at any office where Office of 
Inspector General employees are permanently stationed. Although oral 
requests may be honored, a requester may be asked to submit the request 
in writing. A written request shall be addressed to: The Office of 
Inspector General, Department of Housing and Urban Development, 451 
Seventh Street, SW, Room 8260, Washington, DC 20410.
    (c) Each request must reasonably describe the desired record 
including the name, subject matter, and number or date, where possible, 
so that the record

[[Page 90]]

may be identified and located. The request should also include the name, 
address and telephone number of the requester, and the format in which 
the requester would like the desired record to be reproduced. In order 
to enable the Office of Inspector General to comply with the time 
limitations set forth in Sec. 2002.17, both the envelope containing a 
written request and the letter itself should clearly indicate that the 
subject is a Freedom of Information Act request.
    (d) The request must be accompanied by the fee or an offer to pay 
the fee as determined in Sec. 15.110.
    (e) Copies of available records will be made as promptly as 
possible. Copying service will be limited to not more than 10 copies of 
any single page. Records that are published or available for sale need 
not be reproduced.
    (f) To the extent that records are readily reproducible, the Office 
of Inspector General will send records in the form requested, including 
electronic format.

[67 FR 47217, July 17, 2002]



Sec. 2002.5  Records produced upon request when reasonably described.

    (a) When a request is made which reasonably describes a record of 
the Office of Inspector General (see Sec. 2002.3) which has been stored 
in the National Archives or other record center of the General Services 
Administration, the record will be requested by the Office of Inspector 
General if it otherwise would be available under this part.
    (b) Every effort will be made to make a record in use by the staff 
of the Office of Inspector General available when requested, and such 
availability will be deferred only to the extent necessary to avoid 
serious interference with the business of the Office of Inspector 
General.



Sec. 2002.7  OIG processing of requests.

    (a) Multitracking. (1) The Office of Inspector General places each 
request in one of two tracks. The Office of Inspector General places 
requests in its simple or complex track based on the amount of work and 
time involved in processing the request. Factors the Office of Inspector 
General will consider in assigning a request in the simple or complex 
track will include whether the request involves the processing of 
voluminous documents and/or whether the request involves responsive 
documents from more than one organizational unit. Within each track, the 
Office of Inspector General processes requests in the order in which 
they are received.
    (2) For requests that have been sent to the wrong office, the Office 
of Inspector General will assign the request within each track using the 
earlier of either:
    (i) The date on which the request was referred to the appropriate 
office; or,
    (ii) The end of the ten (10) working day period in which the request 
should have been referred to the appropriate office.
    (b) Expedited processing. The Office of Inspector General may take 
your request or appeal out of normal order if the Office of Inspector 
General determines that you have a compelling need for the records or in 
other cases as determined by the Office of Inspector General. If the 
Office of Inspector General grants your request for expedited 
processing, the Office of Inspector General will give your request 
priority and will process it as soon as practicable. The Office of 
Inspector General will consider a compelling need to exist if:
    (1) Your failure to obtain the requested records on an expedited 
basis could reasonably be expected to pose an imminent threat to the 
life or physical safety of an individual or a threatened loss of 
substantial due process rights; or,
    (2) You are primarily engaged in disseminating information and there 
is an urgency to inform the public concerning actual or alleged Federal 
Government activity.

[67 FR 47217, July 17, 2002]



Sec. 2002.9  Where to review records.

    (a) You may inspect and copy hardcopy records that section 552(a)(2) 
of FOIA requires the Office of Inspector General make available to the 
public in reading rooms. At the Headquarters and DC Offices, this would 
be at HUD's Library, Room 8141, 451 Seventh St., SW, Washington, DC 
20410, and should be coordinated through Counsel's Office to the 
Inspector General, Room

[[Page 91]]

8260. Local offices may coordinate for local requests.
    (b) For records created on or after November 1, 1996, this 
information is available to you through the Office of Inspector 
General's Internet website at http://www.hud.gov/oig/oigindex.html.

[67 FR 47217, July 17, 2002]



Sec. 2002.11  Review of records, aggregating requests and waiving or
reducing fees.

    (a) Review of records. Only requesters who are seeking documents for 
commercial use may be charged for the time HUD spends reviewing records 
to determine whether they are exempt from mandatory disclosure. Charges 
may be assessed only for the initial review (i.e., the review undertaken 
the first time HUD analyzes the applicability of a specific exemption to 
a particular record or portion of a record). HUD will not charge for 
review at the administrative appeal level of an exemption already 
applied. However, records or portions of records withheld in full under 
an exemption which is subsequently determined not to apply may be 
reviewed again to determine the applicability of other exemptions not 
previously considered. The costs for such a subsequent review would be 
properly assessable. Review time will be assessed at the same rates 
established for search time in Sec. 15.110 of this title.
    (b) Aggregating requests. A requester may not file multiple requests 
at the same time, each seeking portions of a document or documents, 
solely in order to avoid payment of fees. When HUD reasonably believes 
that a requester or a group of requesters acting in concert, is 
attempting to break a request down into a series of requests for the 
purpose of evading the assessment of fees, HUD may aggregate any such 
requests and charge accordingly.
    (c) Waiving or reducing fees. HUD will furnish documents without 
charge or at reduced charge if disclosure of the information is in the 
public interest because it is likely to contribute significantly to 
public understanding of the operations or activities of the government 
and is not primarily in the commercial interest of the requester. The 
official authorized to grant access to records may waive or reduce the 
applicable fee where requested. The determination not to waive or reduce 
the fee will be subject to administrative review as provided in Sec. 
2002.25 after the decision on the request for access has been made. Six 
factors shall be used in determining whether the requirements for a fee 
waiver or reduction are met. These factors are as follows:
    (1) The subject of the request: Whether the subject of the requested 
records concerns ``the operations or activities of the government'';
    (2) The informative value of the information to be disclosed: 
Whether the disclosure is ``likely to contribute'' to an understanding 
of government operations or activities;
    (3) The contribution to an understanding of the subject by the 
general public likely to result from disclosure: Whether disclosure of 
the requested information will contribute to ``public understanding'';
    (4) The significance of the contribution to public understanding: 
Whether the disclosure is likely to contribute ``significantly'' to 
public understanding of government operations or activities;
    (5) The existence and magnitude of a commercial interest: Whether 
the requester has a commercial interest that would be furthered by the 
requested disclosure; and, if so
    (6) The primary interest in disclosure: Whether the magnitude of the 
identified commercial interest of the requester is sufficiently large, 
in comparison with the public interest in disclosure, that disclosure is 
``primarily in the commercial interest of the requester.''

[53 FR 37551, Sept. 27, 1988, as amended at 67 FR 47217, July 17, 2002]



Sec. 2002.13  Charges for interest and for unsuccessful searches; 
utilization of Debt Collection Act.

    (a) Charging interest. HUD will begin assessing interest charges on 
an unpaid bill starting on the 31st day following the day on which the 
billing was sent. A fee received by HUD, even if not processed, will 
suffice to stay the accrual of interest. Interest will be at the rate 
prescribed in section 3717 of title 31 U.S.C. and will accrue from the 
date of the billing.

[[Page 92]]

    (b) Charge for unsuccessful search. Ordinarily no charge for search 
time will be assessed when the records requested are not found or when 
the records located are withheld as exempt. However, if the requester 
has been notified of the estimated cost of the search time and has been 
advised specifically that the requested records may not exist or may be 
withheld as exempt, fees shall be charged.
    (c) Use of Debt Collection Act of 1982. When a requester has failed 
to pay a fee charged in a timely fashion (i.e., within 30 days of the 
date of the billing), HUD may, under the authority of the Debt 
Collection Act and part 17, subpart C of this title, use consumer 
reporting agencies and collection agencies, where appropriate, to 
recover the indebtedness owed the Department.

[53 FR 37552, Sept. 27, 1988]



Sec. 2002.15  Advance payments.

    (a) HUD may not require a requester to make an advance payment, 
i.e., payment before work is commenced or continued on a request, 
unless:
    (1) HUD estimates or determines that allowable charges that a 
requester may be required to pay are likely to exceed $250. Then, HUD 
will notify the requester of the likely cost and obtain satisfactory 
assurance of full payment where the requester has a history of prompt 
payment of FOIA fees, or require an advance payment of an amount up to 
the full estimated charges in the case of requesters with no history of 
payment; or
    (2) Where a requester has previously failed to pay a fee charged in 
a timely fashion (i.e., within 30 days of the date of the billing), HUD 
may require the requester to pay the full amount owed plus any 
applicable interest as provided by Sec. 2002.13(a) or demonstrate that 
he has, in fact, paid the fees, and to make an advance payment of the 
full amount of the estimated fee before HUD begins to process a new 
request or a pending request from that requester.
    (b) When HUD acts under paragraph (a)(1) or (a)(2) of this section, 
the administrative time limits prescribed in subsection (a)(6) of the 
FOIA (i.e., 20 working days from receipt of initial requests and 20 
working days from receipt of appeals from initial denial, plus 
permissible extensions of these time limits) will begin only after HUD 
has received fee payments described in paragraph (a) of this section.
    (c) Where it is anticipated that either the duplication fee 
individually, the search fee individually, or a combination of the two 
exceeds $25.00 over and above the free search time and duplication 
costs, where applicable, and the requesting party has not indicated in 
advance a willingness to pay so high a fee, the requesting party shall 
be promptly informed of the amount of the anticipated fee or such 
portion thereof as can readily be estimated. The notification shall 
offer the requesting party the opportunity to confer with agency 
representatives for the purpose of reformulating the request so as to 
meet that party's needs at a reduced cost.

[53 FR 37552, Sept. 27, 1988, as amended at 67 FR 47217, July 17, 2002]



Sec. 2002.17  Time limitations.

    (a) Upon receipt of a request for records, the appropriate Assistant 
Inspector General or an appointed designee will determine within twenty 
(20) working days whether to grant the request. The Assistant Inspector 
General or designee will notify the requestor immediately in writing of 
the determination and the right of the person to request a review by the 
Inspector General of an adverse determination.
    (b) The time of receipt for processing a request for records 
purposes is the time it is received by the appropriate office for 
review. If a request is misdirected by the requester, the Office of 
Inspector General or Department official who receives the request will 
promptly refer it to the appropriate office and will advise the 
requester about the delayed time of receipt.
    (c) A determination with respect to a request for review by the 
Inspector General of HUD under Sec. 2002.25 will be made within 20 
working days after receipt and will be communicated immediately to the 
person requesting review.
    (d) If the Office of Inspector General grants the request for 
records, the records will be made available promptly to the requester.

[[Page 93]]

    (e) In unusual circumstances as specified in this paragraph, and 
subject to the concurrence of any Assistant Inspector General or 
appointed designee, the time limits prescribed in either paragraph (a) 
or (c) of this section may be extended. Any extension will be in writing 
to the requester and will include reasons for the extension and the date 
on which the disposition of the request will be sent. No extension will 
be for more than ten working days. As used in this paragraph, unusual 
circumstances means (but only to the extent necessary to the proper 
processing of the particular request) that there is a need:
    (1) To search for and collect the requested records from field 
facilities or other establishments that are separate from the office 
processing the request; or
    (2) To search for, collect, and appropriately examine a voluminous 
amount of separate and distinct records which are demanded in a single 
request; or
    (3) For consultation, which shall be conducted with all practicable 
speed, with another agency having a substantial interest in the 
determination of the request or among two or more offices of the Office 
of Inspector General having a substantial interest in the subject matter 
of the request.

[49 FR 11165, Mar. 26, 1984. Redesignated and amended at 53 FR 37550, 
37552, Sept. 27, 1988; 57 FR 2227; Jan. 21, 1992; 59 FR 14097, Mar. 25, 
1994; 67 FR 47217, July 17, 2002]



Sec. 2002.19  Authority to release records or copies.

    Any Assistant Inspector General or an appointed designee is 
authorized to release any record (or copy) pertaining to activities for 
which he or she has primary responsibility, unless disclosure is clearly 
inappropriate under this part. No authorized person may release records 
for which another officer has primary responsibility without the consent 
of the officer or his or her designee.

[49 FR 11165, Mar. 26, 1984. Redesignated at 53 FR 37550, Sept. 27, 
1988, as amended at 59 FR 14098, Mar. 25, 1994]



Sec. 2002.21  Authority to deny requests for records and form of denial.

    (a) An Assistant Inspector General may deny a request for a record. 
Any denial will:
    (1) Be in writing;
    (2) State simply the reasons for the denial;
    (3) State that review of the denial by the Inspector General of HUD 
may be requested;
    (4) Set forth the steps for obtaining review consistent with Sec. 
2002.25; and
    (5) Be signed by the Assistant Inspector General responsible for the 
denial.
    (b) The classes of records authorized to be exempted from disclosure 
by the Freedom of Information Act (5 U.S.C. 552) are those which concern 
matters that are:
    (1)(i) Specifically authorized under criteria established by an 
executive order to be kept secret in the interest of national defense or 
foreign policy; and
    (ii) Are in fact properly classified under the cited executive 
order;
    (2) Related solely to the internal personnel rules and practices of 
HUD;
    (3) Specifically exempted from disclosure by statute (other than 
section 552b of title 5), provided that the statute either:
    (i) Requires that the matters be withheld from the public in a 
manner that leaves no discretion on the issue; or
    (ii) Establishes particular criteria for withholding or refers to 
particular types of matters to be withheld;
    (4) Trade secrets and commercial or financial information that are 
obtained from a person and are privileged or confidential;
    (5) Inter-agency or intra-agency memoranda or letters that would not 
be available by law to a party other than an agency in litigation with 
HUD;
    (6) Personnel and medical files and similar files the disclosure of 
which would constitute a clearly unwarranted invasion of personal 
privacy;
    (7) Records or information compiled for law enforcement purposes, 
but only to the extent that the production of such law enforcement 
records or information:
    (i) Could reasonably be expected to interfere with enforcement 
proceedings;

[[Page 94]]

    (ii) Would deprive a person of a right to a fair trial or an 
impartial adjudication;
    (iii) Could reasonably be expected to constitute an unwarranted 
invasion of personal privacy;
    (iv) Could reasonably be expected to disclose the identity of a 
confidential source, including a state, local, or foreign agency or 
authority, or any private institution which furnished information on a 
confidential basis, and, in the case of a record or information compiled 
by a criminal law enforcement authority in the course of a criminal 
investigation or by an agency conducting a lawful national security 
intelligence investigation, information furnished by a confidential 
source;
    (v) Would disclose techniques and procedures for law enforcement 
investigations or prosecutions, or would disclose guidelines for law 
enforcement investigations or prosecutions if the disclosure could 
reasonably be expected to risk circumvention of the law; or
    (vi) Could reasonably be expected to endanger the life or physical 
safety of any individual;
    (8) Contained in or related to examination, operating, or condition 
reports prepared by, on behalf of, or for the use of an agency 
responsible for the regulation or supervision of financial institutions; 
or
    (9) Geological and geophysical information and data, including maps, 
concerning wells.
    (c) With regard to a request for commercial or financial 
information, predisclosure notification to business submitters is 
required by Executive Order 12600 (3 CFR, 1987 Comp., p. 235) to afford 
the business submitter an opportunity to object to disclosure of the 
requested information.
    (d) Any reasonably segregable portion of a record shall be provided 
to any person requesting the record, after deletion of the portions that 
are exempt under this section.

[57 FR 2228, Jan. 21, 1992, as amended at 59 FR 14098, Mar. 25, 1994]



Sec. 2002.23  Effect of denial of request.

    Denial of a request shall terminate the authority of the Assistant 
Inspector General or his or her designee to release or disclose the 
requested record, which thereafter may not be made available except with 
express authorization of the Inspector General of HUD.

[49 FR 11165, Mar. 26, 1984. Redesignated at 53 FR 37550, Sept. 27, 
1988]



Sec. 2002.25  Administrative review.

    (a) Review is available only from a written denial of a request for 
a record issued under Sec. 2002.21 and only if a written request for 
review is filed within 30 days after issuance of the written denial.
    (b) A review may be initiated by mailing a request for review to the 
Inspector General of HUD, Department of Housing and Urban Development, 
451 Seventh Street, SW., Room 8256, Washington, DC 20410. Each request 
for review must contain the following:
    (1) A copy of the request, if in writing;
    (2) A copy of the written denial issued under Sec. 2002.21; and
    (3) A statement of the circumstances, reasons, or arguments advanced 
in support of disclosure of the original request for the record.

In order to enable the Inspector General of HUD to comply with the time 
limitations set forth in Sec. 2002.17, both the envelope containing the 
request for review and the letter itself should clearly indicate that 
the subject is a Freedom of Information Act request for review.
    (c) Review will be made promptly by the Inspector General of HUD on 
the basis of the written record described in paragraph (b) of this 
section. Before a denial, the Inspector General will obtain the 
concurrence of legal counsel for the Office of Inspector General.
    (d) The time of receipt for processing of a request for review 
purposes is the time it is received by the Inspector General of HUD. If 
a request is misdirected by the requester and is received by one other 
than the Inspector General, the Office of Inspector General or 
Department official who receives the request will forward it promptly to 
the Inspector General and will advise the requester about the delayed 
time of receipt.
    (e) The decision after review will be in writing, will constitute 
final agency

[[Page 95]]

action on the request, and, if the denial of the request for records is 
in full or in part upheld, the Inspector General will notify the person 
making the request of his or her right to seek judicial review under 5 
U.S.C. 552(a)(4).

[49 FR 11165, Mar. 26, 1984. Redesignated and amended at 53 FR 37550, 
37552, Sept. 27, 1988]



PART 2003_IMPLEMENTATION OF THE PRIVACY ACT OF 1974--Table of Contents



Sec.
2003.1 Scope of the part and applicability of other HUD regulations.
2003.2 Definitions.
2003.3 Requests for records.
2003.4 Officials to receive requests and inquiries.
2003.5 Initial denial of access to records.
2003.6 Disclosure of a record to a person other than the individual to 
          whom it pertains.
2003.7 Authority to make law enforcement-related requests for records 
          maintained by other agencies.
2003.8 General exemptions.
2003.9 Specific exemptions.

    Authority: 5 U.S.C. 552a; 5 U.S.C. App. 3 (Inspector General Act of 
1978); 42 U.S.C. 3535(d).

    Source: 57 FR 62142, Dec. 29, 1992, unless otherwise noted.



Sec. 2003.1  Scope of the part and applicability of other HUD regulations.

    (a) General. This part contains the regulations of the Office of 
Inspector General (``OIG'') implementing the Privacy Act of 1974 (5 
U.S.C. 552a). The regulations inform the public that the Inspector 
General has the responsibility for carrying out the requirements of the 
Privacy Act and for issuing internal OIG orders and directives in 
connection with the Privacy Act. These regulations apply to all records 
that are contained in systems of records maintained by the OIG and that 
are retrieved by an individual's name or personal identifier.
    (b) Applicability of part 16. In addition to these regulations, the 
provisions of 24 CFR part 16 apply to the OIG, except that appendix A to 
part 16 is not applicable. The provisions of this part shall govern in 
the event of any conflict with the provisions of part 16.



Sec. 2003.2  Definitions.

    For purposes of this part:
    Department means the OIG, except that in the context of Sec. Sec. 
16.1(d); 16.11(b) (1), (3), and (4); and 16.12(e), when those sections 
are incorporated by reference, the term means the Department of Housing 
and Urban Development.
    Privacy Act Officer means an Assistant Inspector General.
    Privacy Appeals Officer means the Inspector General.

[59 FR 14098, Mar. 25, 1994]



Sec. 2003.3  Requests for records.

    (a) A request from an individual for an OIG record about that 
individual which is not contained in an OIG system of records will be 
considered to be a Freedom of Information Act (FOIA) request and will be 
processed under 24 CFR part 2002.
    (b) A request from an individual for an OIG record about that 
individual which is contained in an OIG system of records will be 
processed under both the Privacy Act and the FOIA in order to ensure 
maximum access under both statutes. This practice will be undertaken 
regardless of how an individual characterizes the request.
    (1) The procedures for inquiries and requirements for access to 
records under the Privacy Act are more specifically set forth in 24 CFR 
part 16, except that appendix A to part 16 does not apply to the OIG.
    (2) An individual will not be required to state a reason or 
otherwise justify his or her request for access to a record.



Sec. 2003.4  Officials to receive requests and inquiries.

    Officials to receive requests and inquiries for access to, or 
correction of, records in OIG systems of records are the Privacy Act 
Officers described in Sec. 2003.2 of this part. Written requests may be 
addressed to the appropriate Privacy Act Officer at: Office of Inspector 
General, Department of Housing and Urban Development, Washington, DC 
20410.

[57 FR 62142, Dec. 29, 1992, as amended at 59 FR 14098, Mar. 25, 1994]

[[Page 96]]



Sec. 2003.5  Initial denial of access to records.

    (a) Access by an individual to a record about that individual which 
is contained in an OIG system of records will be denied only upon a 
determination by the Privacy Act Officer that:
    (1) The record was compiled in reasonable anticipation of a civil 
action or proceeding; or the record is subject to a Privacy Act 
exemption under Sec. 2003.8 or Sec. 2003.9 of this part; and
    (2) The record is also subject to a FOIA exemption under Sec. 
2002.21(b) of this chapter.
    (b) If a request is partially denied, any portions of the responsive 
record that can be reasonably segregated will be provided to the 
individual after deletion of those portions determined to be exempt.
    (c) The provisions of 24 CFR 16.6(b) and 16.7, concerning 
notification of an initial denial of access and administrative review of 
the initial denial, apply to the OIG, except that:
    (1) The final determination of the Inspector General, as Privacy 
Appeals Officer for the OIG, will be in writing and will constitute 
final action of the Department on a request for access to a record in an 
OIG system of records; and
    (2) If the denial of the request is in whole or in part upheld, the 
final determination of the Inspector General will include notice of the 
right to judicial review.



Sec. 2003.6  Disclosure of a record to a person other than the 
individual to whom it pertains.

    (a) The OIG may disclose an individual's record to a person other 
than the individual to whom the record pertains in the following 
instances:
    (1) Upon written request by the individual, including authorization 
under 24 CFR 16.5(e);
    (2) With the prior written consent of the individual;
    (3) To a parent or legal guardian of the individual under 5 U.S.C. 
552a(h); or
    (4) When permitted by the provisions of 5 U.S.C. 552a(b) (1) through 
(12).
    (b) [Reserved]



Sec. 2003.7  Authority to make law enforcement-related requests for 
records maintained by other agencies.

    (a) The Inspector General is authorized by written delegation from 
the Secretary of HUD and under the Inspector General Act to make written 
requests under 5 U.S.C. 552a(b)(7) for transfer of records maintained by 
other agencies which are necessary to carry out an authorized law 
enforcement activity under the Inspector General Act.
    (b) The Inspector General delegates the authority under paragraph 
(a) of this section to the following OIG officials:
    (1) Deputy Inspector General;
    (2) Assistant Inspector General for Audit;
    (3) Assistant Inspector General for Investigation; and
    (4) Assistant Inspector General for Management and Policy.
    (c) The officials listed in paragraph (b) of this section may not 
redelegate the authority described in paragraph (a) of this section.



Sec. 2003.8  General exemptions.

    (a) The systems of records entitled ``Investigative Files of the 
Office of Inspector General,'' ``Hotline Complaint Files of the Office 
of Inspector General,'' ``Name Indices System of the Office of Inspector 
General,'' and ``AutoInvestigation of the Office of Inspector General'' 
consist, in part, of information compiled by the OIG for the purpose of 
criminal law enforcement investigations. Therefore, to the extent that 
information in these systems falls within the scope of exemption (j)(2) 
of the Privacy Act, 5 U.S.C. 552a(j)(2), these systems of records are 
exempt from the requirements of the following subsections of the Privacy 
Act, for the reasons stated in paragraphs (a)(1) through (6) of this 
section.
    (1) From subsection (c)(3), because release of an accounting of 
disclosures to an individual who is the subject of an investigation 
could reveal the nature and scope of the investigation and could result 
in the altering or destruction of evidence, improper influencing of 
witnesses, and other evasive actions that could impede or compromise the 
investigation.

[[Page 97]]

    (2) From subsection (d)(1), because release of investigative records 
to an individual who is the subject of an investigation could interfere 
with pending or prospective law enforcement proceedings, constitute an 
unwarranted invasion of the personal privacy of third parties, reveal 
the identity of confidential sources, or reveal sensitive investigative 
techniques and procedures.
    (3) From subsection (d)(2), because amendment or correction of 
investigative records could interfere with pending or prospective law 
enforcement proceedings, or could impose an impossible administrative 
and investigative burden by requiring the OIG to continuously retrograde 
its investigations attempting to resolve questions of accuracy, 
relevance, timeliness and completeness.
    (4) From subsection (e)(1), because it is often impossible to 
determine relevance or necessity of information in the early stages of 
an investigation. The value of such information is a question of 
judgment and timing; what appears relevant and necessary when collected 
may ultimately be evaluated and viewed as irrelevant and unnecessary to 
an investigation. In addition, the OIG may obtain information concerning 
the violation of laws other than those within the scope of its 
jurisdiction. In the interest of effective law enforcement, the OIG 
should retain this information because it may aid in establishing 
patterns of unlawful activity and provide leads for other law 
enforcement agencies. Further, in obtaining evidence during an 
investigation, information may be provided to the OIG which relates to 
matters incidental to the main purpose of the investigation but which 
may be pertinent to the investigative jurisdiction of another agency. 
Such information cannot readily be identified.
    (5) From subsection (e)(2), because in a law enforcement 
investigation it is usually counterproductive to collect information to 
the greatest extent practicable directly from the subject thereof. It is 
not always feasible to rely upon the subject of an investigation as a 
source for information which may implicate him or her in illegal 
activities. In addition, collecting information directly from the 
subject could seriously compromise an investigation by prematurely 
revealing its nature and scope, or could provide the subject with an 
opportunity to conceal criminal activities, or intimidate potential 
sources, in order to avoid apprehension.
    (6) From subsection (e)(3), because providing such notice to the 
subject of an investigation, or to other individual sources, could 
seriously compromise the investigation by prematurely revealing its 
nature and scope, or could inhibit cooperation, permit the subject to 
evade apprehension, or cause interference with undercover activities.
    (b) [Reserved]

[57 FR 62142, Dec. 29, 1992, as amended at 65 FR 50904, Aug. 21, 2000]



Sec. 2003.9  Specific exemptions.

    (a) The systems of records entitled ``Investigative Files of the 
Office of Inspector General,'' ``Hotline Complaint Files of the Office 
of Inspector General,'' ``Name Indices System of the Office of Inspector 
General,'' and ``AutoInvestigation of the Office of Inspector General'' 
consist, in part, of investigatory material compiled by the OIG for law 
enforcement purposes. Therefore, to the extent that information in these 
systems falls within the coverage of exemption (k)(2) of the Privacy 
Act, 5 U.S.C. 552a(k)(2), these systems of records are exempt from the 
requirements of the following subsections of the Privacy Act, for the 
reasons stated in paragraphs (a) (1) through (4) of this section.
    (1) From subsection (c)(3), because release of an accounting of 
disclosures to an individual who is the subject of an investigation 
could reveal the nature and scope of the investigation and could result 
in the altering or destruction of evidence, improper influencing of 
witnesses, and other evasive actions that could impede or compromise the 
investigation.
    (2) From subsection (d)(1), because release of investigative records 
to an individual who is the subject of an investigation could interfere 
with pending or prospective law enforcement proceedings, constitute an 
unwarranted invasion of the personal privacy of third parties, reveal 
the identity of

[[Page 98]]

confidential sources, or reveal sensitive investigative techniques and 
procedures.
    (3) From subsection (d)(2), because amendment or correction of 
investigative records could interfere with pending or prospective law 
enforcement proceedings, or could impose an impossible administrative 
and investigative burden by requiring the OIG to continuously retrograde 
its investigations attempting to resolve questions of accuracy, 
relevance, timeliness and completeness.
    (4) From subsection (e)(1), because it is often impossible to 
determine relevance or necessity of information in the early stages of 
an investigation. The value of such information is a question of 
judgment and timing; what appears relevant and necessary when collected 
may ultimately be evaluated and viewed as irrelevant and unnecessary to 
an investigation. In addition, the OIG may obtain information concerning 
the violation of laws other than those within the scope of its 
jurisdiction. In the interest of effective law enforcement, the OIG 
should retain this information because it may aid in establishing 
patterns of unlawful activity and provide leads for other law 
enforcement agencies. Further, in obtaining evidence during an 
investigation, information may be provided to the OIG which relates to 
matters incidental to the main purpose of the investigation but which 
may be pertinent to the investigative jurisdiction of another agency. 
Such information cannot readily be identified.
    (b) The systems of records entitled ``Investigative Files of the 
Office of Inspector General,'' ``Hotline Complaint Files of the Office 
of Inspector General,'' ``Name Indices System of the Office of Inspector 
General,'' and ``Autoinvestigation of the Office of Inspector General'' 
consist in part of investigatory material compiled by the OIG for the 
purpose of determining suitability, eligibility, or qualifications for 
Federal civilian employment or Federal contracts, the release of which 
would reveal the identity of a source who furnished information to the 
Government under an express promise that the identity of the source 
would be held in confidence. Therefore, to the extent that information 
in these systems fall within the coverage of exemption (k)(5) of the 
Privacy Act, 5 U.S.C. 552a(k)(5), these systems of records are exempt 
from the requirements of subsection (d)(1), because release would reveal 
the identity of a source who furnished information to the Government 
under an express promise of confidentiality. Revealing the identity of a 
confidential source could impede future cooperation by sources, and 
could result in harassment or harm to such sources.

[57 FR 62142, Dec. 29, 1992, as amended at 65 FR 50904, Aug. 21, 2000]



PART 2004_SUBPOENAS AND PRODUCTION IN RESPONSE TO SUBPOENAS OR DEMANDS
OF COURTS OR OTHER AUTHORITIES--Table of Contents



                     Subpart A_General Requirements

Sec.
2004.1 Scope and purpose.
2004.2 Applicability.
2004.3 Definitions.

             Subpart B_Office of Inspector General Subpoenas

2004.10 Service of an Office of Inspector General subpoena.

      Subpart C_Requests for Testimony and Production of Documents

2004.20 General prohibition.
2004.21 Factors OIG will consider.
2004.22 Filing requirements for demands or requests for documents or 
          testimony.
2004.23 Service of subpoenas or requests.
2004.24 Processing demands or requests.
2004.25 Final determination.
2004.26 Restrictions that apply to testimony.
2004.27 Restrictions that apply to released records.
2004.28 Procedure in the event of an adverse ruling.
2004.29 Fees.

    Authority: Inspector General Act of 1978, as amended (5 U.S.C. app.) 
and 42 U.S.C. 3535(d).

    Source: 68 FR 3366, Jan. 23, 2003, unless otherwise noted.

[[Page 99]]



                     Subpart A_General Requirements



Sec. 2004.1  Scope and purpose.

    (a) This part sets forth the policy for service of a subpoena issued 
by the Office of Inspector General (OIG), and policies and procedures 
that you must follow when you submit a demand or request to an employee 
of the OIG to produce official records and information, or provide 
testimony relating to official information, in connection with a legal 
proceeding. You must comply with these requirements when you request the 
release or disclosure of official records and information.
    (b) The OIG intends these provisions to:
    (1) Promote economy and efficiency in its programs and operations;
    (2) Minimize the possibility of involving OIG in controversial 
issues not related to OIG's functions;
    (3) Maintain OIG's impartiality among private litigants where OIG is 
not a named party; and
    (4) Protect sensitive, confidential information and the deliberative 
processes of OIG.
    (c) In providing for these requirements, OIG does not waive the 
sovereign immunity of the United States.
    (d) This part provides guidance for the internal operations of OIG. 
This part does not create any right or benefit, substantive or 
procedural, that a party may rely upon in any legal proceeding against 
the United States.



Sec. 2004.2  Applicability.

    This subpart applies to demands and requests to employees for 
factual or expert testimony relating to official information, or for 
production of official records or information, in legal proceedings in 
which HUD or OIG is not a named party. However, this subpart does not 
apply to:
    (a) Demands upon or requests for an OIG employee to testify as to 
facts or events that are unrelated to his or her official duties or that 
are unrelated to the functions of OIG;
    (b) Requests for the release of records under the Freedom of 
Information Act, 5 U.S.C. 552, or the Privacy Act, 5 U.S.C. 552a; and
    (c) Congressional demands and Congressional requests for testimony 
or records.



Sec. 2004.3  Definitions.

    Counsel means the Counsel to the Inspector General.
    Demand means a subpoena, or an order or other command of a court or 
other competent authority, for the production, disclosure, or release of 
records or for the appearance and testimony of an OIG employee that is 
issued in a legal proceeding.
    Legal proceeding means any matter before a court of law, 
administrative board or tribunal, commission, administrative law judge, 
hearing officer, or other body that conducts a legal or administrative 
proceeding. Legal proceeding includes all phases of litigation.
    OIG means the Office of Inspector General, U.S. Department of 
Housing and Urban Development.
    OIG employee or employee means:
    (1) Any current or former officer or employee of OIG;
    (2) Any other individual hired through contractual agreement by or 
on behalf of OIG or who has performed or is performing services under 
such an agreement for OIG; and
    (3) Any individual who served or is serving in any consulting or 
advisory capacity to OIG, whether formal or informal.
    Records or official records or information means:
    (1) All documents and materials that are OIG agency records under 
the Freedom of Information Act, 5 U.S.C. 552;
    (2) All other documents and materials contained in OIG files; and
    (3) All other information or materials acquired by an OIG employee 
in the performance of his or her official duties or because of his or 
her official status.
    Request means any informal request, by whatever method, for the 
production of records and information or for testimony that has not been 
ordered by a court or other competent authority.
    Testimony means any written or oral statements, including 
depositions, answers to interrogatories, affidavits, declarations, 
recorded interviews, and

[[Page 100]]

statements made by an individual in connection with a legal proceeding.



             Subpart B_Office of Inspector General Subpoenas



Sec. 2004.10  Service of an Office of Inspector General subpoena.

    Service of a subpoena issued by OIG may be accomplished as follows:
    (a) Personal service. Service may be made by delivering the subpoena 
to the person to whom it is addressed. If the subpoena is addressed to a 
corporation or other business entity, it may be served upon an employee 
of the corporation or entity. Service made to an employee, agent, or 
legal representative of the addressee shall constitute service upon the 
addressee.
    (b) Service by mail. Service may also be made by mailing the 
subpoena, certified mail--return receipt requested, to the addressee at 
his or her last known business or personal address.



      Subpart C_Requests for Testimony and Production of Documents



Sec. 2004.20  General prohibition.

    No employee may produce official records and information or provide 
any testimony relating to official information in response to a demand 
or request without the prior, written approval of the Inspector General 
or the Counsel.



Sec. 2004.21  Factors OIG will consider.

    The Counsel or Inspector General, in their discretion, may grant an 
employee permission to testify on matters relating to official 
information, or produce official records and information, in response to 
a demand or request. Among the relevant factors that the Inspector 
General or the Counsel may consider in making this decision are whether:
    (a) The purposes of this part are met;
    (b) OIG has an interest in the decision that may be rendered in the 
legal proceeding;
    (c) Allowing such testimony or production of records would assist or 
hinder OIG in performing its statutory duties or use OIG resources where 
responding to the request will interfere with the ability of OIG 
employees to do their work;
    (d) The records or testimony can be obtained from other sources;
    (e) The demand or request is unduly burdensome or otherwise 
inappropriate under the applicable rules of discovery or the rules of 
procedure governing the case or matter in which the demand or request 
arose;
    (f) Disclosure would violate or be inconsistent with a statute, 
Executive Order, or regulation;
    (g) Disclosure would reveal confidential or privileged information, 
trade secrets, or similar, confidential commercial, or financial 
information;
    (h) Disclosure would impede or interfere with an ongoing law 
enforcement investigation or proceedings, or compromise constitutional 
rights;
    (i) Disclosure would result in OIG appearing to favor one litigant 
over another;
    (j) Disclosure relates to documents that were produced by another 
agency;
    (k) The demand or request is in conformance with all other 
applicable rules;
    (l) The demand or request is sufficiently specific to be answered; 
and
    (m) For any other good cause.



Sec. 2004.22  Filing requirements for demands or requests for 
documents or testimony.

    You must comply with the following requirements whenever you issue 
demands or requests to an OIG employee for official records and 
information or testimony.
    (a) Your request must be in writing and must be submitted to the 
Counsel. If you serve a subpoena on OIG or on an OIG employee before 
submitting a written request and receiving a final determination from 
the Counsel, OIG will oppose the subpoena on grounds that your request 
was not submitted in accordance with this subpart.
    (b) Your written request must contain the following information:
    (1) The caption of the legal proceeding, docket number, and name and 
address of the court or other authority involved;

[[Page 101]]

    (2) A copy of the complaint or equivalent document setting forth the 
assertions in the case and any other pleading or document sufficient to 
show relevance;
    (3) A list of categories of records sought, a detailed description 
of how the information sought is relevant to the issues in the legal 
proceeding, and a specific description of the substance of the testimony 
or records sought;
    (4) A statement as to how the need for the information outweighs the 
need to maintain any confidentiality of the information and outweighs 
the burden on OIG to produce the records or provide testimony;
    (5) A statement indicating that the information sought is not 
available from another source, from other persons or entities, or from 
the testimony of someone other than an OIG employee, such as a retained 
expert;
    (6) If testimony is requested, the intended use of the testimony, a 
general summary of the desired testimony, and a showing that no document 
could be provided and used in lieu of testimony;
    (7) A description of all prior decisions, orders, or pending motions 
in the case that bear upon the relevance of the requested records or 
testimony;
    (8) The name, address, and telephone number of counsel to each party 
in the case; and
    (9) An estimate of the amount of time that the requester and other 
parties will require with each OIG employee for time spent by the 
employee to prepare for testimony, in travel, and for attendance in the 
legal proceeding.
    (c) The OIG reserves the right to require additional information to 
complete your request where appropriate.
    (d) Your request should be submitted at least 30 days before the 
date that records or testimony are required. Requests submitted less 
than 30 days before records or testimony are required must be 
accompanied by a written explanation stating the reasons for the late 
request and the reasons for expedited processing.
    (e) Failure to cooperate in good faith to enable the Counsel to make 
an informed decision may serve as the basis for a determination not to 
comply with your request.



Sec. 2004.23  Service of subpoenas or requests.

    Subpoenas or requests for official records or information or 
testimony must be served on the Counsel to the Inspector General, Office 
of Inspector General, U.S. Department of Housing and Urban Development, 
451 Seventh Street, SW, Room 8260, Washington, DC 20410-4500.



Sec. 2004.24  Processing demands or requests.

    (a) After service of a demand or request to testify, the Counsel 
will review the demand or request and, in accordance with the provisions 
of this subpart, determine whether, or under what conditions, to 
authorize the employee to testify on matters relating to official 
information and/or to produce official records and information.
    (b) The OIG will process requests in the order in which they are 
received. Absent exigent or unusual circumstances, OIG will respond 
within 30 days from the date that we receive all information necessary 
to the evaluation of the demand or request. The time for response will 
depend upon the scope of the request.
    (c) The Counsel may grant a waiver of any procedure described in 
this subpart where a waiver is considered necessary to promote a 
significant interest of OIG, HUD, and the United States, or for other 
good cause.



Sec. 2004.25  Final determination.

    The Counsel makes the final determination on demands and requests to 
employees for production of official records and information or 
testimony. All final determinations are within the sole discretion of 
the Counsel. The Counsel will notify the requester of the final 
determination, the reasons for the grant or denial of the demand or 
request, and any conditions that the Counsel may impose on the release 
of records or information, or on the testimony of an OIG employee.



Sec. 2004.26  Restrictions that apply to testimony.

    (a) The Counsel may impose conditions or restrictions on the 
testimony of OIG employees including, for example, limiting the areas of 
testimony or

[[Page 102]]

requiring the requester and other parties to the legal proceeding to 
agree that the transcript of the testimony will be kept under seal or 
will only be used or made available in the particular legal proceeding 
for which testimony was requested. The Counsel may also require a copy 
of the transcript of testimony at the requester's expense.
    (b) The OIG may offer the employee's written declaration in lieu of 
testimony.
    (c) If authorized to testify pursuant to this part, an employee may 
testify as to facts within his or her personal knowledge, but, unless 
specifically authorized to do so by the Counsel, the employee shall not:
    (1) Disclose confidential or privileged information;
    (2) Testify as to facts when the Counsel determines such testimony 
would not be in the best interest of OIG, HUD and the United States; or
    (3) Testify as an expert or opinion witness with regard to any 
matter arising out of the employee's official duties or the functions of 
OIG. This provision does not apply to requests from the United States 
for expert or opinion testimony.



Sec. 2004.27  Restrictions that apply to released records.

    (a) The Counsel may impose conditions or restrictions on the release 
of official records and information, including the requirement that 
parties to the proceeding obtain a protective order or execute a 
confidentiality agreement to limit access and any further disclosure. 
The terms of the protective order or of a confidentiality agreement must 
be acceptable to the Counsel. In cases where protective orders or 
confidentiality agreements have already been executed, OIG may condition 
the release of official records and information on an amendment to the 
existing protective order or confidentiality agreement.
    (b) If the Counsel so determines, original OIG records may be 
presented for examination in response to a demand or request, but they 
are not to be presented as evidence or otherwise used in a manner by 
which they could lose their identity as official OIG records, nor are 
they to be marked or altered. In lieu of the original records, certified 
copies will be presented for evidentiary purposes.



Sec. 2004.28  Procedure in the event of an adverse ruling.

    (a) Opportunity to review adverse ruling. Any person aggrieved by a 
decision made by the Counsel under this part denying a request for 
documents or testimony, or restricting the release of documents or 
testimony, may seek review of that decision pursuant to paragraph (c) of 
this section.
    (b) Procedure in the event of conflicting court order. If the 
Inspector General or Counsel declines to approve a demand for records or 
testimony and a court or other authority rules that the demand must be 
complied with irrespective of the instructions from the OIG not to 
produce the material or disclose the information sought, the employee or 
former employee upon whom the demand has been made shall respectfully 
decline to comply with the demand, citing United States ex rel. Touhy v. 
Ragen, 340 U.S. 462 (1951).
    (c) Procedure--(1) Notice of intention to petition for review. A 
party or any person aggrieved by the decision made pursuant to this part 
denying or restricting the release of documents or testimony may seek 
review of the decision by filing a written Notice of Intention to 
Petition for Review (Notice) within five business days of the date of 
this decision. The Notice shall identify the petitioner, the adverse 
decision, and any dates (such as deposition, hearing, or court dates) 
that are significant to the party. The Notice shall be served in 
accordance with Sec. 2004.23.
    (2) Petition for review. Within five business days of the filing of 
a Notice, the person or party seeking review shall file a Petition for 
Review (Petition) containing a clear and concise statement of the issues 
to be reviewed and the reasons why the review is appropriate. The 
petition shall include exceptions to any findings of fact or conclusions 
of law made, together with supporting reasons and arguments for such 
exceptions based on appropriate citations to such record or law as may 
exist. These reasons may be stated in

[[Page 103]]

summary form. Decisions on the Petition may be made by either the 
Inspector General or the Counsel and shall become the final decisions of 
the OIG. The Petition will be served in accordance with Sec. 2004.23.
    (d) Prerequisite to judicial review. Pursuant to Section 704 of the 
Administrative Procedure Act, 5 U.S.C. 704, a petition to the agency for 
review of a decision made under the authority of this part is a 
prerequisite to the seeking of judicial review of the final decision.

[70 FR 36791, June 24, 2005]



Sec. 2004.29  Fees.

    (a) Generally. The Counsel may condition the production of records 
or appearance for testimony upon advance payment of a reasonable 
estimate of the costs to OIG.
    (b) Fees for records. Fees for producing records will include fees 
for searching, reviewing, and duplicating records, costs of attorney 
time spent in reviewing the demand or request, and expenses generated by 
materials and equipment used to search for, produce, and copy the 
responsive information. Costs for employee time will be calculated on 
the basis of the hourly pay of the employee (including all pay, 
allowance, and benefits). Fees for duplication will be the same as those 
charged by OIG in its Freedom of Information Act Regulations at 24 CFR 
part 2002.
    (c) Witness fees. Fees for attendance by a witness will include 
fees, expenses, and allowances prescribed by the court's rules. If no 
such fees are prescribed, witness fees will be determined based upon the 
rule of the federal district court closest to the location where the 
witness will appear. Such fees will include cost of time spent by the 
witness to prepare for testimony, in travel, and for attendance in the 
legal proceeding.
    (d) Payment of fees. You must pay any applicable witness fees for 
current OIG employees and any records certification fees by submitting 
to the Counsel a check or money order for the appropriate amount made 
payable to the Treasury of the United States. In the case of testimony 
by former OIG employees, you must pay applicable fees directly to the 
former employee in accordance with applicable statutes.
    (e) Waiver or reduction of fees. The Counsel, in his or her sole 
discretion, may, upon a showing of reasonable cause, waive or reduce any 
fees in connection with the testimony or production of records. 
Additionally, fees will not be assessed if the total charge would be 
$10.00 or less.

[[Page 105]]



 CHAPTER XV--EMERGENCY MORTGAGE INSURANCE AND LOAN PROGRAMS, DEPARTMENT 
                    OF HOUSING AND URBAN DEVELOPMENT




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Part                                                                Page
2700            Emergency Homeowners' Loan Program..........         107

[[Page 107]]



PART 2700_EMERGENCY HOMEOWNERS' LOAN PROGRAM--Table of Contents



                            Subpart A_General

Sec.
2700.1 Purpose.
2700.5 Definitions.
2700.10 Determination of emergency.

                          Subpart B_Eligibility

2700.101 Eligible properties.
2700.105 Eligible institutions.
2700.110 Eligible homeowners.

                     Subpart C_Emergency Assistance

2700.201 Types and terms of emergency assistance.
2700.205 Emergency assistance amount.
2700.210 Finance charges.

                      Subpart D_Mortgage Insurance

2700.301 Loan applications.
2700.305 Conditions of insurance.
2700.310 Fees.
2700.315 Insurance premium.
2700.320 Servicing.
2700.325 Termination of mortgage insurance.
2700.330 Default.
2700.335 Claims.
2700.340 Payment of insurance benefits.
2700.345 Administrative reports and examinations.
2700.350 Sale, assignment, and pledge of insured loan.

                         Subpart E_Direct Loans

2700.401 Participation by lending institutions.
2700.405 Application for loans.
2700.410 Transmittal of Funds.
2700.415 Fees.
2700.420 Servicing.
2700.425 Default.
2700.430 Collection.
2700.435 Payment to HUD.
2700.440 Administrative report and examinations.

    Authority: 12 U.S.C. 2707; 42 U.S.C. 3535(d)

    Source: 76 FR 11950, Mar. 4, 2011, unless otherwise noted.



                            Subpart A_General



Sec. 2700.1  Purpose.

    This part establishes the Emergency Homeowners' Loan Program, a 
standby program authorized by the Emergency Homeowners Relief Act of 
1975, as amended, to prevent widespread mortgage foreclosures and 
distress sales of homes resulting from a homeowner's substantial 
reduction in income due to temporary involuntary loss of employment or 
underemployment resulting from adverse economic conditions or medical 
condition. Under this program, HUD is authorized to provide relief in 
the forms of emergency mortgage relief loans, advances of credit, or 
emergency mortgage relief payments to struggling unemployed or 
underemployed homeowners to help them avoid foreclosure, provided the 
homeowner meets certain specific conditions. HUD may provide such relief 
through approved institutions, including lending institutions, or 
intermediaries designated by HUD. HUD is also authorized to allow 
assistance under this program to be administered by a State that has an 
existing program that is determined by HUD to provide substantially 
similar assistance to homeowners.



Sec. 2700.5  Definitions.

    For purposes of this part, the following terms are defined as 
follows:
    Act means the Emergency Homeowners' Relief Act, title I of the 
Emergency Housing Act of 1975 (12 U.S.C. 2701), as amended by the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, 
approved July 21, 2010).
    Area Median Income (AMI) means the median family income for the 
metropolitan statistical area (MSA) or statewide nonmetropolitan area, 
as most recently determined and published by HUD, where the property 
meeting the eligibility requirements in Sec. 2700.1 is located.
    Delinquent mortgage means a first-lien mortgage secured by property 
meeting the eligibility requirements in Sec. 2700.101, where the 
homeowner and holder of the delinquent mortgage have certified that 
circumstances, including delinquent payments of at least 3 months, make 
it probable there will be a foreclosure and that the homeowner is in 
need of emergency mortgage relief.
    Emergency assistance includes, but is not limited to, an emergency 
mortgage

[[Page 108]]

relief loan, advance of credit, or emergency mortgage relief payment 
provided to an eligible homeowner, as authorized by the Act, and in 
accordance with the requirements of this part.
    Event refers to the involuntary unemployment or underemployment 
status of the homeowner due to adverse economic conditions or medical 
condition. See definition of involuntary unemployment or underemployment 
due to adverse economic conditions or adverse medical condition.
    Finance charge means the cost of credit as determined in 12 CFR 
226.4, a section in Regulation Z of the Federal Reserve System's 
regulations on Truth in Lending.
    Homeowner means an individual with a mortgage on the individual's 
principal residence, in which the individual resides, and who meets the 
requirements of Sec. 2700.10 and who is in need of emergency assistance 
pursuant to this part.
    HUD means the Department of Housing and Urban Development.
    Income means the cumulative annual adjusted gross income of the 
homeowner, co-makers, and co-signers on the note secured by the 
delinquent mortgage and the other mortgagors on the delinquent mortgage.
    Involuntary unemployment or underemployment due to adverse economic 
conditions or adverse medical condition means the status of a homeowner 
who was working, either as a wage or salaried worker or through self-
employment, is currently involuntarily unemployed or underemployed due 
to adverse economic conditions or medical condition, and is unable to 
meet the homeowner's monthly mortgage payments.
    Lender means a lending institution that provides an emergency 
mortgage relief loan or advance of credit insured under this part.
    Monthly income means one-twelfth of the income, as income is defined 
in this section.
    Monthly mortgage payment means the monthly amount of principal, 
interest, taxes, ground rents, hazard insurance, and mortgage insurance 
premiums due to be paid under a homeowner's delinquent mortgage.
    Mortgage means any mortgage, deed of trust, executor land sales 
contract, conditional sales contract, or other form of security and the 
obligation secured by a one- to four-family dwelling that is either real 
estate or a manufactured home. Mortgage includes a mortgage on a 
condominium unit and a security interest in stock in a housing 
cooperative.
    Mortgagee means a lending institution that is the holder of the 
delinquent mortgage. The mortgagee may be the same entity as the Lender.
    Secretary means the Secretary of Housing and Urban Development.
    Servicer means any entity which services an emergency loan made by 
HUD under this part.
    Servicing institution means any entity that services the delinquent 
mortgage. The servicing institution may also be the same entity as the 
Lender or Servicer.
    Term of monthly payments means a period of monthly payments provided 
under this part not to exceed 24 months. Eligible homeowners may receive 
assistance for up to 12 months, and in accordance with criteria 
established by HUD, and such assistance may be extended once for up to 
12 additional months, but in no case may monthly payments under this 
part exceed 24 months. The eligible homeowner may also receive 
assistance in an amount up to the statutory ceiling of $50,000, 
whichever occurs first.



Sec. 2700.10  Determination of emergency.

    (a) The Secretary is authorized to provide emergency assistance 
under the Emergency Homeowners' Loan Program when:
    (1) Funds have been explicitly appropriated or made available for 
this program and the statute making funding available directs the 
Secretary to commence making emergency assistance available to 
homeowners; or
    (2) The Secretary has announced that this program has been activated 
and provides the reasons for activation of this program in a document 
published in the Federal Register.
    (b) If the Emergency Homeowners' Loan Program is activated pursuant 
to paragraph (a) of this section, HUD

[[Page 109]]

shall publish a document in the Federal Register announcing the 
activation of the program and inviting one or more categories of 
eligible institutions, as defined in Sec. 2700.105, to participate in 
the Emergency Homeowners' Loan Program, to provide such emergency 
assistance as HUD may designate from among the eligible types of 
emergency relief provided in Sec. 2700.201, and provide such other 
information regarding participation in the program, as necessary and 
appropriate.



                          Subpart B_Eligibility



Sec. 2700.101  Eligible properties.

    (a) In order to qualify for an emergency assistance under this part, 
the property of the homeowner seeking assistance must:
    (1) Be a single-family residence in a one-to-four unit building, or 
a condominium or a housing cooperative or a manufactured home;
    (2) Be the principal residence of the homeowner, which means it is 
the residence where the homeowner resides;
    (3) Be subject to a delinquent mortgage, as defined in Sec. 2700.5, 
but not, unless otherwise specified by HUD, subject to liens having a 
total outstanding principal balance, as specified by HUD;
    (4) Have flood insurance, pursuant to the National Flood Insurance 
Program, in an amount equal to at least the initial principal amount of 
the emergency loan, if the property is located in an area that has been 
identified by HUD at least one year before the origination of the 
emergency loan as an area having special flood hazards; and
    (5) Meet such other requirements as may be prescribed by HUD for 
reasons including, but not limited to, the particular economic 
circumstances in which emergency assistance is being made available, or 
the type of emergency assistance being made available.
    (b) A property that meets the requirements of paragraph (a) of this 
section is referred to as the mortgaged property.



Sec. 2700.105  Eligible institutions.

    (a) Eligible lending institutions. (1) In order to participate in 
the Emergency Homeowners' Loan Program as a lender or servicer, a 
lending institution must be approved as a mortgagee by the Federal 
Housing Administration in accordance with the applicable requirements in 
24 CFR part 203, and meet such other requirements as may be prescribed 
by HUD as necessary or appropriate for participation in the Emergency 
Homeowners' Loan Program.
    (2) Approval of a lending institution pursuant to paragraph (a)(1) 
of this section may be withdrawn at any time by notice from HUD for the 
following reasons:
    (i) The transfer of an insured emergency mortgage relief loan or 
advance of credit to a nonapproved entity;
    (ii) The failure of a lending institution to submit the required 
annual audit report of its financial condition within 75 days of the 
close of its fiscal year, or within such other period as may be 
specified by HUD; or
    (iii) The failure of a lending institution to comply with the 
regulations of this part, or such additional program policies or 
requirements as specified by HUD. Withdrawal of a lending institution's 
approval shall not affect the insurance on the emergency mortgage relief 
loans or advances of credit accepted for insurance.
    (3) All approved lending institutions are responsible for servicing 
of emergency mortgage relief loans and advances of credit in accordance 
with acceptable mortgage practices of prudent lending institutions and 
pursuant to 24 CFR part 203.
    (b) Eligible participating organizations. HUD may delegate authority 
with respect to the processing of emergency mortgage relief payments as 
may be appropriate to facilitate the prompt and efficient implementation 
of assistance under the Emergency Homeowners' Loan Program.
    (c) States with comparable programs. HUD is authorized to allow 
funding for the Emergency Homeowners' Loan Program to be administered by 
a State that has an existing program that is determined by HUD to 
provide substantially similar assistance to homeowners. After such 
determination is made, any State that HUD authorizes to administer 
funding under this program shall not be required to modify its own 
program to comply with the provisions of this part.

[[Page 110]]



Sec. 2700.110  Eligible homeowners.

    In order to qualify for an emergency assistance under this part, the 
homeowner must:
    (a) Have a total pre-Event income that is equal to, or less than, 
120 percent of the area median income (AMI).
    (b) Have incurred a substantial reduction of income as evidenced by 
current monthly income that is at least 15 percent lower than the pre-
Event income, as a result of involuntary unemployment or underemployment 
due to adverse economic or medical conditions, or such other reduction 
in income as may be specified by HUD.
    (c) Have a delinquent mortgage, as defined in Sec. 2700.5;
    (d) Be financially unable at the time of application for emergency 
relief under this part to make full monthly mortgage payments;
    (e) Have a reasonable likelihood to resume full monthly mortgage 
payments, and repay the emergency assistance pursuant to the terms and 
conditions under which the emergency assistance was made available to 
the homeowner. The standard for meeting this requirement is debt-to-
income (DTI) ratio. The homeowner must have a back-end ratio of below 55 
percent (principal, interest, taxes, insurance, revolving and fixed 
installment debt divided by total monthly income), or such other DTI as 
may be specified by HUD. For this DTI calculation, income will be 
measured at the pre-Event level.
    (f) Have not received other emergency assistance pursuant to this 
part;
    (g) Have been notified that the mortgagee intends to foreclose;
    (h) Produce a certification from the mortgagee in which the 
homeowner also certifies that circumstances make it probable that the 
mortgagee will foreclose on the homeowner's delinquent mortgage; and
    (i) Meet such other requirements as may be prescribed by HUD for 
reasons including, but not limited to, the particular economic 
circumstances in which emergency assistance is being made available, or 
the type of emergency assistance being made available.



                     Subpart C_Emergency Assistance



Sec. 2700.201  Types and terms of emergency assistance.

    (a) Types of emergency assistance. Emergency assistance may be 
provided to an eligible homeowner in the form of emergency mortgage 
relief loans and advances of credit, or in the form of emergency 
mortgage relief payments. In accordance with Sec. 2700.205, the 
aggregate amount of assistance provided for any eligible homeowner shall 
not exceed $50,000 or extend beyond the term of monthly payments, as 
defined in Sec. 2700.5.
    (1) Emergency mortgage loans and advances. HUD is authorized, upon 
such terms and conditions as specified by HUD, to insure financial 
institutions, which HUD finds to be qualified by experience and 
facilities and approves as eligible for insurance, against losses that 
they may sustain as a result of providing emergency mortgage relief 
loans or advances of credit made under this part.
    (2) Emergency mortgage relief payments. (i) HUD is authorized to 
make emergency relief payments under such terms and conditions as HUD 
may prescribe. Emergency mortgage relief payments may be provided:
    (A) As payment of 100 percent of an eligible homeowner's delinquent 
mortgage arrearages, which may include mortgage principal, interest, 
insurance, taxes, hazard insurance, ground rent, homeowners' assessment 
fees or condominium fees, and foreclosure-related legal fees and late 
payments, in accordance with such terms and conditions as prescribed by 
HUD; and
    (B) As monthly payments due on such delinquent mortgage, for up to a 
period not to exceed the term of monthly payments, as provided in Sec. 
2700.5.
    (ii) Such emergency mortgage relief payments may be repayable in the 
form of a declining balance, non-recourse, zero-interest, subordinate 
loan secured by the same property securing the delinquent mortgage, for 
a term of up to 7 years.
    (3) Direct payments to mortgagees. HUD is authorized to make direct 
emergency mortgage relief payments to a

[[Page 111]]

mortgagee that elects not to participate in the Emergency Homeowners' 
Loan program as an approved mortgagee on behalf of homeowners:
    (i) Whose mortgages are held by such mortgagee; and
    (ii) Who meet the requirements of Sec. 2700.110.
    (b) Terms and conditions of assistance. Emergency mortgage relief 
loans and advances of credit made and insured under this part, and 
emergency mortgage relief payments made under this part, shall be 
repayable by the homeowner upon such terms and conditions prescribed by 
HUD, except that:
    (1) The rate of interest on any emergency mortgage relief loan or 
advance of credit insured shall be fixed for the life of the emergency 
mortgage relief loan or advance of credit and shall not exceed the rate 
of interest that is generally charged for mortgages on single-family 
housing insured by the Federal Housing Administration under title II of 
the National Housing Act at the time such emergency mortgage relief loan 
or advance of credit is made;
    (2) No interest shall be charged on interest that is deferred on an 
emergency mortgage relief loan or advance of credit made under this 
part. In establishing rates, terms, and conditions for emergency 
mortgage relief loans or advances of credit, HUD shall take into account 
a homeowner's ability to repay such emergency mortgage relief loan or 
advance of credit;
    (3) Any mortgage insurance premium charge or charges for any 
emergency mortgage relief loan or advance of credit made under this part 
shall not exceed an amount equivalent to one-half of one percent per 
annum of the principal obligation of such emergency mortgage relief loan 
or advance of credit outstanding at any one time;
    (4) Unless otherwise specified by HUD for a given fiscal year, the 
homeowner's contribution to the monthly mortgage payment will be set at 
31 percent of monthly income at the time of the application for 
assistance, but in no instance will such contribution to the monthly 
mortgage payment be less than $25 per month;
    (5) The homeowner may repay the emergency mortgage relief loan or 
advance of credit in full, without penalty, by lump sum or by 
installment payments at any time before the emergency mortgage relief 
loan or advance of credit becomes due and payable; and
    (6) With respect to the emergency mortgage relief payments repayable 
in the form of a declining balance, non-recourse, zero-interest, 
subordinate loan as described Sec. 2700.201(a)(2), no payment shall be 
due by the homeowner during the term of the loan so long as the 
homeowner remains current in his or her monthly homeowner contribution 
payments on the delinquent mortgage. If the homeowner meets this 
requirement, the balance due shall decline by such percentage as may be 
designated by HUD, until the loan is fully satisfied.
    (c) Termination of emergency assistance. Emergency assistance 
provided to a homeowner shall be terminated and the homeowner shall 
resume full responsibility for meeting the first mortgage payments if 
any of the following occur:
    (1) The maximum loan amount ($50,000) has been provided to the 
homeowner;
    (2) The homeowner fails to report changes in employment status or 
income within 15 days of the change;
    (3) The homeowner's income increases to 85 percent or more of its 
pre-Event income level, or such other percentage as may be prescribed by 
HUD;
    (4) The homeowner sells the mortgaged property or refinances the 
mortgaged property for cash-out;
    (5) The homeowner defaults on the monthly homeowner's contribution 
payment on the delinquent mortgage;
    (6) The homeowner has exhausted the full term of monthly payments, 
as defined in Sec. 2700.5; or
    (7) Such other event as may be specified by HUD.
    (d) Deferral of commencement of repayment. HUD may authorize the 
deferral of the commencement of the repayment of an emergency mortgage 
relief loan or advance of credit or emergency mortgage relief payments 
made under this part until one year following the date of the last 
disbursement of the proceeds of the emergency mortgage relief loan or 
advance of credit or emergency mortgage relief payments,

[[Page 112]]

or for such longer period as HUD determines would further the purpose of 
the Emergency Homeowners' Loan Program.



Sec. 2700.205  Emergency assistance amount.

    (a) Emergency assistance to an eligible homeowner may be made 
available in an amount up to the amount of the principal, interest, 
taxes, ground rents, hazard insurance, and mortgage insurance premiums 
due under the homeowner's mortgage and such other costs as may be 
specified by HUD. The amount of emergency assistance provided to the 
homeowner shall be an amount that is determined by HUD to be reasonably 
necessary to supplement such amount as the homeowner is capable of 
contributing toward the homeowner's delinquent first mortgage payments, 
except that the aggregate amount of emergency relief provided to any 
homeowner shall not exceed $50,000, including any fees allowed under 
Sec. Sec. 2700.310(a) and 2700.415(a).
    (b) Arrearage payments and monthly assistance payments may be made 
either with the proceeds of an insured emergency mortgage relief loan or 
advance of credit or with emergency mortgage relief payments for up to 
full term of the monthly payments, as defined in Sec. 2700.5.
    (c) Unless otherwise authorized by HUD, the lender or servicer shall 
not approve an emergency mortgage loan or advance of credit when the 
outstanding balance, including delinquent interest, of the delinquent 
mortgage when added to the other liens against the mortgaged property, 
plus the maximum emergency mortgage relief loan that may be advanced to 
the homeowner under this part, exceeds the value of the mortgaged 
property. (In determining the value of the property, the lender or 
servicer may rely upon previously obtained appraisals or other 
determinations of value of the property and need not obtain a current 
appraisal.)



Sec. 2700.210  Finance charges.

    The maximum permissible finance charge, exclusive of fees and 
charges as provided in Sec. Sec. 2700.310, and 2700.415, which may 
directly or indirectly be paid to or collected by the lender or the 
servicer in connection with an emergency mortgage relief loan or 
advance-of-credit transaction, shall not exceed simple interest on the 
outstanding principal balance at the annual interest rate for FHA-
insured home mortgages at such time the emergency mortgage relief loan 
or advance of credit is originated. Additionally, no points or discounts 
of any kind may be assessed or collected in connection with an emergency 
mortgage relief loan or advance-of-credit transaction.



                      Subpart D_Mortgage Insurance



Sec. 2700.301  Loan applications.

    (a) Lending institutions approved by HUD for participation in the 
Emergency Homeowners' Loan Program are authorized to accept, process, 
and approve applications for emergency mortgage relief loans or advances 
of credit under this part under such terms and conditions as HUD may 
prescribe.
    (b) An approved lender may make an emergency mortgage relief loan or 
advances of credit on the terms specified in this part if the lender is 
satisfied that the application meets all of the relevant requirements of 
this part. The lender shall prepare a note, loan agreement, if any, and 
mortgage as required by HUD, which the lender shall record against the 
property securing the delinquent mortgage upon the execution of those 
documents.
    (c) Except as may be otherwise specified by HUD, on the last working 
day of the month during which an emergency mortgage relief loan or 
advance of credit is closed, the lender shall submit to HUD an 
application for an insured emergency mortgage relief loan or advance of 
credit on such form as prescribed by HUD, signed by the mortgagor and 
holder of the mortgage and that certifies that:
    (1) The lender, homeowner, and property meet the eligibility 
requirements of this part;
    (2) Circumstances (such as the volume of delinquent loans in the 
investor's portfolio likely to remain uncured) make it probable that 
there

[[Page 113]]

would be a foreclosure of the delinquent mortgage if the emergency 
mortgage relief were not provided to the homeowner;
    (3) The homeowner is in need of such emergency assistance and the 
mortgagee has indicated to the homeowner its intention to foreclose on 
the delinquent mortgage; and
    (4) The first disbursement of the principal amount of the emergency 
mortgage relief loan or advance of credit has been paid or credited to 
the homeowner's account with the servicing institution.



Sec. 2700.305  Conditions of insurance.

    (a) When the requirements of this part have been met, the lender's 
mortgage insurance coverage under its mortgage insurance contract will 
apply to a particular loan as of the date of closing, if the lender has 
not exceeded the mortgage insurance authority allocation which HUD has 
given the lender.
    (b) From the effective date of the emergency mortgage relief loan or 
advance of credit until the termination of the insurance with respect to 
that loan, the lender shall be bound by the provisions of this part as 
such provisions relate to the emergency mortgage relief loan or advance 
of credit.



Sec. 2700.310  Fees.

    (a) The lender may collect from the homeowner during the year 
following the origination of the emergency mortgage relief loan or 
advance of credit the following fees or charges in conjunction with 
providing the emergency mortgage relief loan or advance of credit:
    (l) A charge to compensate the lender for expenses incurred in 
originating and closing the emergency relief loan, including preparation 
of a note, loan agreement, if any, and a mortgage in a form satisfactory 
for recordation, the total charge not to exceed such amount as specified 
by HUD;
    (2) Actual amounts charged by State or local governments or 
government officials for recording fees and recording taxes or other 
charges incident to making the emergency relief loan or advance of 
credit;
    (3) An amount equal to the annual premium for flood insurance 
required by Sec. 2700.101(a)(4) (the lender shall pay the homeowner's 
flood insurance premium for that year to the extent it collects such an 
amount); and
    (4) An amount equal to the annual mortgage insurance premium 
required under Sec. 2700.315.
    (b) Subsequent to the year following the origination of the 
emergency mortgage relief loan or advance of credit and up to the 
termination of mortgage insurance under Sec. 2700.325, the lender may 
collect from the homeowner the following fees and charges in connection 
with the emergency relief loan: An amount equal to the mortgage 
insurance premium required under Sec. 2700.315.



Sec. 2700.315  Insurance premium.

    (a) At such times as may be prescribed by HUD, the participating 
lender shall pay to HUD a mortgage insurance premium equal to one-half 
of one percent of the average outstanding balance of the emergency 
mortgage relief loan or advance of credit, during the previous calendar 
year, of all emergency mortgage relief loans or advances of credit that 
the lender held or serviced during that period pursuant to this part.
    (b) With respect to the payment provided for in paragraph (a) of 
this section, the lender shall submit a breakdown of the mortgage 
insurance premium in the form prescribed by HUD.
    (c) If a mortgage securing an emergency mortgage relief loan or 
advance of credit is sold, assigned, or pledged pursuant to Sec. 
2700.350, any adjustments of the mortgage insurance premium already paid 
in connection with a mortgage securing an emergency mortgage relief loan 
or advance of credit shall be made by and between the lenders, except 
that any unpaid installments of the mortgage insurance premium shall be 
paid to HUD by the purchasing lender.
    (d) There shall be no refund or abatement of any portion of the 
insurance premium except when the mortgage insurance premium relates to 
an emergency mortgage relief loan or advance of credit found to be 
ineligible. However, no refund shall be made unless a claim is denied by 
HUD or the ineligibility is reported by the lender promptly upon 
discovery and an application

[[Page 114]]

for refund is made. In no event shall charges be refunded when the 
application for refund is not made until after the emergency mortgage 
relief loan or advance of credit is paid in full.



Sec. 2700.320  Servicing.

    Servicing functions for the emergency mortgage relief loan or 
advance of credit during the period that the emergency loan or advance 
is insured shall be performed by the lender or the servicing institution 
acting for the lender. The lender is responsible for proper servicing, 
even though the actual servicing is not performed by the lender.



Sec. 2700.325  Termination of mortgage insurance.

    The mortgage insurance coverage and the insured lender's obligation 
to remit mortgage insurance premiums to HUD with respect to an emergency 
mortgage relief loan or advance of credit shall be terminated upon 
whichever of the following first occurs:
    (a) The emergency mortgage relief loan or advance of credit is paid 
in full;
    (b) The lender acquires the mortgaged property securing the 
emergency mortgage relief loan or advance of credit and notifies HUD 
that no claim for insurance benefits has been or will be made;
    (c) The homeowner and the lender jointly request termination; or
    (d) The lender files an insurance claim pursuant to Sec. 2700.335.



Sec. 2700.330  Default.

    (a) If the homeowner fails to make a scheduled payment or perform 
any other obligation required for the type of emergency assistance 
provided under this part, the homeowner shall be deemed to be in 
default.
    (b) For purposes of this subpart, the date of default shall be the 
earliest of:
    (1) 30 days after the first day the homeowner is delinquent on the 
mortgage securing the emergency mortgage relief loan or advance of 
credit, if the delinquency remains uncorrected;
    (2) The date the property securing the emergency mortgage relief 
loan or advance of credit is sold before full repayment of the emergency 
loan or advance of credit; and
    (3) The date a lien superior to that securing the emergency mortgage 
relief loan or advance of credit is foreclosed.
    (c) If, after default and prior to the foreclosure of the mortgage 
securing the emergency mortgage relief loan or advance of credit, the 
homeowner cures the default, the emergency loan or advance of credit 
shall be treated as if a default had not occurred, provided the 
homeowner pays the lender for any expenses the lender incurred in 
connection with the lender's attempt to collect on the emergency 
mortgage relief loan or advance of credit.



Sec. 2700.335  Claims.

    (a) Claims for mortgage insurance for reimbursement for loss on an 
emergency mortgage relief loan or advance of credit shall be made in 
such form and provide such information as specified by HUD.
    (b) Claims may be filed upon the homeowner's default on the 
emergency mortgage relief loan or advance of credit.
    (c) When the homeowner defaults on the emergency mortgage relief 
loan or advance of credit, the lender may elect to:
    (1) Proceed against the mortgage securing the emergency mortgage 
relief loan or advance of credit or attempt to collect on the note and 
then make a claim under its insurance contract if there is any net loss, 
or
    (2) Make a claim under its mortgage insurance contract without 
proceeding against the security or the note.
    (d) Except as may be otherwise specified by HUD, mortgage insurance 
claims shall be filed on the last working day of the month, no later 
than 90 days after the date of default, unless the lender proceeds 
against the mortgage securing the emergency relief loan or advance of 
credit, in which case the filing shall be no later than one year after 
the date of default, or such other time period as approved by HUD. If at 
the time of default or at any time subsequent to the default, a person 
primarily or secondarily liable for the repayment of a loan is a person 
in ``military service'', as such term is defined in the Servicemembers 
Civil Relief Act

[[Page 115]]

of 2003 (Pub. L. 108-189, approved December 19, 2003) (formerly known as 
Soldier's and Sailor's Civil Relief Act of 1940) (50 U.S.C. app. 501-
594), the lender shall refrain from instituting foreclosure proceedings 
during the period in which the servicemember is in military service and 
3 months thereafter and that period shall be excluded in computing the 
time within which a claim for insurance benefits under this subpart may 
be made.
    (e) An insured lender will be reimbursed for its losses on emergency 
mortgage relief loans and advances of credit made in accordance with 
this part, in an amount equal to 90 percent of the sum of the following:
    (1) The unpaid principal amount of the emergency mortgage relief 
loan or advance of credit less the amount recovered;
    (2) The uncollected interest earned up to the date of claim;
    (3) Uncollected court costs, including fees paid for issuing, 
serving, and filing summonses;
    (4) Attorney's fees actually paid, not exceeding the lesser of:
    (i) 25 percent of the amount collected by the attorney on the 
defaulted note, or
    (ii) 15 percent of the balance due on the note; and
    (5) Expenses actually incurred in recording assignments of mortgages 
to the United States of America, up to such amount as specified by HUD.
    (f) The note and any mortgage held or judgment taken by the claimant 
must be assigned in its entirety and if any claim has been filed in 
bankruptcy, insolvency, or probate proceedings, such claim shall be 
likewise assigned to the United States of America. The assignment shall 
be in the form approved by HUD.



Sec. 2700.340  Payment of insurance benefits.

    Upon receipt of a claim for insurance benefits that meets the 
requirements of Sec. 2700.335 and the other provisions of this part, 
HUD shall make a payment of insurance benefits in cash to the claimant 
in an amount equal to the amount specified in Sec. 2700.335(e).



Sec. 2700.345  Administrative reports and examinations.

    At any time, HUD may call upon an insured lender for such reports as 
are deemed to be necessary in connection with the regulations of this 
part and may inspect the books or accounts of the lender as they pertain 
to the emergency mortgage relief loans or advances of credit that are 
insured pursuant to this subpart.



Sec. 2700.350  Sale, assignment, and pledge of insured loan.

    (a) No lender may sell or otherwise dispose of any insured emergency 
mortgage relief loan or advance of credit except pursuant to this 
section.
    (b) An insured emergency mortgage relief loan or advance of credit 
may be sold to a lending institution eligible under Sec. 2700.105. Upon 
such sale, both the seller and the buyer shall notify HUD within 30 days 
of the date of sale.
    (c) When an insured emergency mortgage relief loan or advance of 
credit is sold to another lending institution eligible under Sec. 
2700.105, the buyer shall thereupon succeed to all the rights and become 
bound by all the obligations of the seller under the contract of 
insurance under this part, and the seller shall be released from its 
obligations under the contract of insurance.
    (d) An assignment, pledge, or transfer of an insured emergency 
mortgage relief loan or advance of credit not constituting an actual 
transfer of legal title may be made by the lender to another eligible 
lending institution, subject to the following conditions:
    (1) The assignor, pledgor, or transferor shall remain the lender for 
purposes of the contract of insurance under this part.
    (2) HUD shall have no obligation to recognize or deal with any party 
other than that lender with respect to the rights, benefits, and 
obligations of the lender under the contract of insurance. Notice to or 
approval of HUD is not required in connection with assignments, pledges, 
or transfers pursuant to this subpart.

[[Page 116]]



                         Subpart E_Direct Loans



Sec. 2700.401  Participation by lending institutions.

    A lending institution eligible under Sec. 2700.105 is authorized, 
except as may be otherwise prescribed by HUD, to accept, process, and 
approve applications for direct loans under this subpart in the form 
specified. That authority includes making determinations relating to the 
eligibility of the direct loan, homeowner, and property, pursuant to the 
provisions of this part. Direct loans, however, may be made pursuant to 
this part only when the investor cannot make an emergency loan under 
subpart D of this part for good cause, as determined by HUD.



Sec. 2700.405  Application for loans.

    (a) The agreement to process an application for a direct loan shall 
constitute an acceptance of the lending institution of the 
responsibility to act as the servicer of HUD with respect to that 
particular application. The servicer shall make a loan on behalf of HUD 
on the terms specified in subpart C of this part if the lending 
institution is satisfied that the application meets all of the 
requirements of this part.
    (b) The servicer shall prepare a note, loan agreement, if any, and 
mortgage in the form specified in Sec. 2700.201. The servicer shall 
record the mortgage upon the closing of the loan. The servicer shall 
make the first advance of the loan, as provided for in Sec. 
2700.201(d), using its own funds.
    (c) On the last working day of the month during which the loan is 
closed, the servicer shall submit to HUD a copy of the application 
signed by the agent and the homeowner certifying that: The agent, 
homeowner, and property qualify under subpart B of this part; 
circumstances (such as the volume of delinquent loans in the investor's 
portfolio likely to remain uncured) make it probable that there would be 
a foreclosure if emergency mortgage relief were not given; the homeowner 
is in need of such relief; the investor has indicated to the homeowner 
its intention to foreclose; and the first advance of the emergency loan 
has been paid or credited to the homeowner's account with the servicing 
institution.



Sec. 2700.410  Transmittal of funds.

    (a) When the requirements of this part have been met, HUD will 
transmit to the servicer, pursuant to the monthly accounting prescribed 
in Sec. 2700.420, the emergency loan proceeds, as long as the agent has 
not exceeded the lending authority allocation that HUD has given the 
servicer pursuant to Sec. 2700.10(c).
    (b) When the investor is the servicer, the transmittal of funds 
under this section shall be conditioned upon the investor's agreement, 
for a period up to one month after the last advance under the emergency 
mortgage relief loan, to refrain from instituting foreclosure 
proceedings against the homeowner, as long as the amount delinquent at 
the time of the origination of the emergency mortgage relief loan, 
excluding interest thereon, does not increase, unless HUD's prior 
approval is obtained.
    (c) From the processing of the application until the satisfaction of 
the debt or the final accounting pursuant to Sec. 2700.435, the 
servicer shall be bound by the provisions of this part with respect to a 
particular direct loan.



Sec. 2700.415  Fees.

    (a) The servicer may collect from the homeowner during the year 
following the origination of the emergency loan the following fees or 
charges in conjunction with providing the emergency loan:
    (1) A charge to compensate the servicer for expenses incurred in 
originating and closing the emergency mortgage relief loan, including 
preparation of a note, loan agreement, if any, and a mortgage in a form 
satisfactory for recordation, the total charge not to exceed such amount 
as may be specified by HUD;
    (2) Actual amounts charged by State or local governments or 
government officials for recording fees and recording taxes or other 
charges incident to making the emergency loan;
    (3) An amount equal to the annual premium for flood insurance 
required by Sec. 2700.101(c) (the servicer shall pay

[[Page 117]]

the homeowner's flood insurance premium for that year to the extent it 
collects such an amount); and
    (4) An amount equal to the annual premium required under Sec. 
2700.420(d).
    (b) Subsequent to the year following the origination of the 
emergency mortgage relief loan and up to the final accounting on the 
emergency mortgage relief loan under Sec. 2700.435, the servicer may 
collect from the homeowner the fees and charges as provided in this 
section.



Sec. 2700.420  Servicing.

    (a) Servicing functions during the period that the emergency 
mortgage relief loan is outstanding shall be performed by the servicer.
    (b) On the same day each month while the servicer is servicing 
emergency mortgage relief loans for HUD, the servicer shall submit a 
monthly accounting, in the form prescribed by HUD, for all of the 
emergency mortgage relief loans that it services. The accounting shall 
list the amount of funds that it advanced under emergency mortgage 
relief loans during the previous calendar month. In addition, the 
accounting shall list the amount paid to the servicer under the 
emergency mortgage relief loans serviced by the servicer during the 
previous calendar month.
    (c) If, pursuant to the monthly accounting, the amount HUD owes the 
servicer exceeds the amount the servicer owes HUD, HUD shall remit the 
difference to the servicers, as long as HUD finds the accounting in 
order. If, pursuant to the monthly accounting, the amount the servicer 
owes HUD exceeds the amount HUD owes the servicer, the servicer shall 
remit the difference when the servicer submits the monthly accounting to 
HUD.
    (d) At such times as may be prescribed by HUD, the servicer, in 
addition to making its monthly accounting, shall pay to HUD a premium 
equal to one-half of one percent of the average outstanding balance 
during the previous calendar year of all the emergency mortgage relief 
loans it serviced during that period. That payment shall be accompanied 
by a breakdown of the premium in the form prescribed by HUD.



Sec. 2700.425  Default.

    (a) If the homeowner fails to make any payment or to perform any 
other obligation under the mortgage securing the emergency mortgage 
relief loan, the homeowner shall be deemed to be delinquent on such 
loan.
    (b) For purposes of this subpart, the date of default shall be the 
earliest of:
    (1) 30 days after the first day the homeowner is delinquent on the 
emergency mortgage relief loan, if the delinquency remains uncorrected:
    (2) The date the mortgaged property is sold before full repayment of 
the emergency mortgage relief loan; and
    (3) The date a lien superior to that securing the emergency mortgage 
relief loan is foreclosed.
    (c) If, after default and prior to the foreclosure of the mortgage 
securing the emergency mortgage relief loan, the homeowner cures the 
default, the emergency mortgage relief loan shall be treated as if the 
default had not occurred, provided the homeowner pays the servicer for 
any expenses the servicer incurred in connection with the servicer's 
attempt to collect on the loan.



Sec. 2700.430  Collection.

    (a) If a homeowner defaults on an emergency mortgage loan, the 
servicer shall elect:
    (1) To wait while the Department of Justice proceeds against the 
mortgage securing the emergency mortgage relief loan or attempts to 
collect on the note, and then to make an accounting and payment to HUD, 
as provided in Sec. 2700.435, or
    (2) To make an accounting and payment, as provided in Sec. 
2700.435, without waiting while the Department of Justice proceeds 
against the mortgage or note.
    (b) If pursuant to paragraph (a) of this section, the servicer 
elects to make an accounting without waiting while the Department of 
Justice proceeds against the mortgage or note, the servicer at the time 
of that accounting will have the option of purchasing the emergency loan 
and underlying mortgage for a price equal to 0.5 times the unpaid 
principal balance.

[[Page 118]]



Sec. 2700.435  Payment to HUD.

    (a) Before the expiration of the period of 90 days after the date of 
default, or such other time period as HUD approves, the servicer shall 
transmit to HUD on the last working day of the month the complete credit 
and collection file pertaining to the emergency mortgage relief loan.
    (b) At the same time the servicer makes the transmittal as provided 
in paragraph (a) of this section, it shall share the loss on the 
emergency mortgage relief loan by making a payment to HUD in an amount 
equal to 10 percent of the sum of:
    (1) The unpaid principal amount of the emergency mortgage relief 
loan, less the amount recovered; and
    (2) The uncollected interest earned up to the date of the final 
accounting. Accompanying that payment shall be a final accounting of the 
emergency mortgage relief loan, in the form specified by HUD, and the 
note and mortgage executed in connection with the emergency mortgage 
relief loan.
    (c) Notwithstanding the provisions of paragraph (b) of this section, 
in the event that the aggregate loss borne by HUD reaches such percent, 
as specified in the Federal Register document activating the Emergency 
Homeowners' Loan Program, of the aggregate amount advanced by the 
servicer on behalf of HUD under this subpart, the servicer shall bear 
the burden of any loss in excess of that such percent by making an 
appropriate payment to HUD within the time period specified in paragraph 
(a) of this section.
    (d) If at the time of default or at any time subsequent to default, 
a person primarily or secondarily liable for the repayment of an 
emergency loan is a person in ``military service'', as such term is 
defined in the Servicemembers Civil Relief Act of 2003 (Pub. L. 108-189, 
approved December 19, 2003) (formerly known as Soldier's and Sailor's 
Civil Relief Act of 1940) (50 U.S.C. app. 501-594), the period the 
servicemember is in military service and 3 months thereafter and that 
period shall be excluded in computing the time within which an 
accounting and payment are to be made pursuant to paragraph (a) of this 
section.



Sec. 2700.440  Administrative report and examinations.

    HUD may at any time call for a report from any servicer on the 
delinquency status of the emergency mortgage relief loans serviced by 
the servicer on behalf of HUD or call for such reports as may be deemed 
to be necessary in connection with the provisions of this part, or HUD 
may inspect the books or accounts of the servicer as they pertain to 
those emergency mortgage relief loans.

[[Page 119]]



 CHAPTER XX--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING 
        COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




  --------------------------------------------------------------------
Part                                                                Page
3280            Manufactured home construction and safety 
                    standards...............................         121
3282            Manufactured home procedural and enforcement 
                    regulations.............................         216
3284            Manufactured housing program fee............         269
3285            Model manufactured home installation 
                    standards...............................         269
3286            Manufactured home installation program......         312
3288            Manufactured home dispute resolution program         335
3400            Safe Mortgage Licensing Act.................         344
3500            Real Estate Settlement Procedures Act.......         360
3800            Investigations in consumer regulatory 
                    programs................................         423

[[Page 121]]



PART 3280_MANUFACTURED HOME CONSTRUCTION AND SAFETY STANDARDS--
Table of Contents



                            Subpart A_General

Sec.
3280.1 Scope.
3280.2 Definitions.
3280.3 Manufactured home procedural and enforcement regulations and 
          consumer manual requirements.
3280.4 Incorporation by reference.
3280.5 Data plate.
3280.6 Serial number.
3280.7 Excluded structures.
3280.8 Waivers.
3280.9 Interpretative bulletins.
3280.10 Use of alternative construction.
3280.11 Certification label.

                    Subpart B_Planning Considerations

3280.101 Scope.
3280.102 Definitions.
3280.103 Light and ventilation.
3280.104 Ceiling heights.
3280.105 Exit facilities; exterior doors.
3280.106 Exit facilities; egress windows and devices.
3280.107 Interior privacy.
3280.108 Interior passage.
3280.109 Room requirements.
3280.110 Minimum room dimensions.
3280.111 Toilet compartments.
3280.112 Hallways.
3280.113 Glass and glazed openings.

                          Subpart C_Fire Safety

3280.201 Scope.
3280.202 Definitions.
3280.203 Flame spread limitations and fire protection requirements.
3280.204 Kitchen cabinet protection.
3280.205 Carpeting.
3280.206 Firestopping.
3280.207 Requirements for foam plastic thermal insulating materials.
3280.208 Smoke alarm requirements.
3280.209 Fire testing.

           Subpart D_Body and Frame Construction Requirements

3280.301 Scope.
3280.302 Definitions.
3280.303 General requirements.
3280.304 Materials.
3280.305 Structural design requirements.
3280.306 Windstorm protection.
3280.307 Resistance to elements and use.
3280.308 Formaldehyde emission controls for certain wood products.
3280.309 Health Notice on formaldehyde emissions.

                            Subpart E_Testing

3280.401 Structural load tests.
3280.402 Test procedure for roof trusses.
3280.403 Standard for windows and sliding glass doors used in 
          manufactured homes.
3280.404 Standard for egress windows and devices for use in manufactured 
          homes.
3280.405 Standard for swinging exterior passage doors for use in 
          manufactured homes.
3280.406 Air chamber test method for certification and qualification of 
          formaldehyde emission levels.

                      Subpart F_Thermal Protection

3280.501 Scope.
3280.502 Definitions.
3280.503 Materials.
3280.504 Condensation control and installation of vapor retarders.
3280.505 Air infiltration.
3280.506 Heat loss/heat gain.
3280.507 Comfort heat gain.
3280.508 Heat loss, heat gain and cooling load calculations.
3280.509 Criteria in absence of specific data.
3280.510 Heat loss certificate.
3280.511 Comfort cooling certificate and information.

                       Subpart G_Plumbing Systems

3280.601 Scope.
3280.602 Definitions.
3280.603 General requirements.
3280.604 Materials.
3280.605 Joints and connections.
3280.606 Traps and cleanouts.
3280.607 Plumbing fixtures.
3280.608 Hangers and supports.
3280.609 Water distribution systems.
3280.610 Drainage systems.
3280.611 Vents and venting.
3280.612 Tests and inspection.

           Subpart H_Heating, Cooling and Fuel Burning Systems

3280.701 Scope.
3280.702 Definitions.
3280.703 Minimum standards.
3280.704 Fuel supply systems.
3280.705 Gas piping systems.
3280.706 Oil piping systems.
3280.707 Heat producing appliances.
3280.708 Exhaust duct system and provisions for the future installation 
          of a clothes dryer.
3280.709 Installation of appliances.
3280.710 Venting, ventilation and combustion air.
3280.711 Instructions.
3280.712 Marking.
3280.713 Accessibility.
3280.714 Appliances, cooling.
3280.715 Circulating air systems.

[[Page 122]]

                      Subpart I_Electrical Systems

3280.801 Scope.
3280.802 Definitions.
3280.803 Power supply.
3280.804 Disconnecting means and branch-circuit protective equipment.
3280.805 Branch circuits required.
3280.806 Receptacle outlets.
3280.807 Fixtures and appliances.
3280.808 Wiring methods and materials.
3280.809 Grounding.
3280.810 Electrical testing.
3280.811 Calculations.
3280.812 Wiring of expandable units and dual units.
3280.813 Outdoor outlets, fixtures, air conditioning equipment, etc.
3280.814 Painting of wiring.
3280.815 Polarization.
3280.816 Examination of equipment for safety.

                        Subpart J_Transportation

3280.901 Scope.
3280.902 Definitions.
3280.903 General requirements for designing the structure to withstand 
          transportation shock and vibration.
3280.904 Specific requirements for designing the transportation system.

    Authority: 42 U.S.C. 3535(d), 5403, and 5424.

    Source: 40 FR 58752, Dec. 18, 1975, unless otherwise noted. 
Redesignated at 44 FR 20679, Apr. 6, 1979.



                            Subpart A_General



Sec. 3280.1  Scope.

    This standard covers all equipment and installations in the design, 
construction, transportation, fire safety, plumbing, heat-producing and 
electrical systems of manufactured homes which are designed to be used 
as dwelling units. This standard seeks to the maximum extent possible to 
establish performance requirements. In certain instances, however, the 
use of specific requirements is necessary.

[58 FR 55002, Oct. 25, 1993]



Sec. 3280.2  Definitions.

    Definitions in this subpart are those common to all subparts of the 
standard and are in addition to the definitions provided in individual 
parts. The definitions are as follows:
    Approved, when used in connection with any material, appliance or 
construction, means complying with the requirements of the Department of 
Housing and Urban Development.
    Bay window--a window assembly whose maximum horizontal projection is 
not more than two feet from the plane of an exterior wall and is 
elevated above the floor level of the home.
    Certification label means the approved form of certification by the 
manufacturer that, under Sec. 3280.8, is permanently affixed to each 
transportable section of each manufactured home manufactured for sale in 
the United States.
    Dwelling unit means one or more habitable rooms which are designed 
to be occupied by one family with facilities for living, sleeping, 
cooking and eating.
    Equipment includes materials, appliances, devices, fixtures, 
fittings or accessories both in the construction of, and in the fire 
safety, plumbing, heat-producing and electrical systems of manufactured 
homes.
    Federal manufactured home construction and safety standard means a 
reasonable standard for the construction, design, and performance of a 
manufactured home which meets the needs of the public including the need 
for quality, durability, and safety.
    Installations means all arrangements and methods of construction, as 
well as fire safety, plumbing, heat-producing and electrical systems 
used in manufactured homes.
    Labeled means a label, symbol or other identifying mark of a 
nationally recognized testing laboratory, inspection agency, or other 
organization concerned with product evaluation that maintains periodic 
inspection of production of labeled equipment or materials, and by whose 
labeling is indicated compliance with nationally recognized standards or 
tests to determine suitable usage in a specified manner.
    Length of a manufactured home means its largest overall length in 
the traveling mode, including cabinets and other projections which 
contain interior space. Length does not include bay windows, roof 
projections, overhangs, or eaves under which there is no interior space, 
nor does it include drawbars, couplings or hitches.

[[Page 123]]

    Listed or certified means included in a list published by a 
nationally recognized testing laboratory, inspection agency, or other 
organization concerned with product evaluation that maintains periodic 
inspection of production of listed equipment or materials, and whose 
listing states either that the equipment or material meets nationally 
recognized standards or has been tested and found suitable for use in a 
specified manner.
    Manufacturer means any person engaged in manufacturing or assembling 
manufactured homes, including any person engaged in importing 
manufactured homes for resale.
    Manufactured home means a structure, transportable in one or more 
sections, which in the traveling mode is 8 body feet or more in width or 
40 body feet or more in length or which when erected on-site is 320 or 
more square feet, and which is built on a permanent chassis and designed 
to be used as a dwelling with or without a permanent foundation when 
connected to the required utilities, and includes the plumbing, heating, 
air-conditioning, and electrical systems contained in the structure. 
This term includes all structures that meet the above requirements 
except the size requirements and with respect to which the manufacturer 
voluntarily files a certification pursuant to Sec. 3282.13 of this 
chapter and complies with the construction and safety standards set 
forth in this part 3280. The term does not include any self-propelled 
recreational vehicle. Calculations used to determine the number of 
square feet in a structure will include the total of square feet for 
each transportable section comprising the completed structure and will 
be based on the structure's exterior dimensions measured at the largest 
horizontal projections when erected on site. These dimensions will 
include all expandable rooms, cabinets, and other projections containing 
interior space, but do not include bay windows. Nothing in this 
definition should be interpreted to mean that a manufactured home 
necessarily meets the requirements of HUD's Minimum Property Standards 
(HUD Handbook 4900.1) or that it is automatically eligible for financing 
under 12 U.S.C. 1709(b).
    Manufactured home construction means all activities relating to the 
assembly and manufacture of a manufactured home including, but not 
limited to, those relating to durability, quality and safety.
    Manufactured home safety means the performance of a manufactured 
home in such a manner that the public is protected against any 
unreasonable risk of the occurrence of accidents due to the design or 
construction of such manufactured home, or any unreasonable risk of 
death or injury to the user or to the public if such accidents do occur.
    Registered Engineer or Architect means a person licensed to practice 
engineering or architecture in a state and subject to all laws and 
limitations imposed by the state's Board of Engineering and Architecture 
Examiners and who is engaged in the professional practice of rendering 
service or creative work requiring education, training and experience in 
engineering sciences and the application of special knowledge of the 
mathematical, physical and engineering sciences in such professional or 
creative work as consultation, investigation, evaluation, planning or 
design and supervision of construction for the purpose of securing 
compliance with specifications and design for any such work.
    Secretary means the Secretary of Housing and Urban Development, or 
an official of the Department delegated the authority of the Secretary 
with respect to title VI of Pub. L. 93-383.
    State includes each of the several States, the District of Columbia, 
the Commonwealth of Puerto Rico, Guam, the Virgin Islands, the Canal 
Zone, and American Samoa.
    Width of a manufactured home means its largest overall width in the 
traveling mode, including cabinets and other projections which contain 
interior space. Width does not include bay windows, roof projections, 
overhangs, or eaves under which there is no interior space.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 960, Jan. 4, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 47 FR 28092, 
June 29, 1982; 58 FR 55002, Oct. 25, 1993; 61 FR 5216, Feb. 9, 1996; 72 
FR 27228, May 14, 2007]

[[Page 124]]



Sec. 3280.3  Manufactured home procedural and enforcement regulations
and consumer manual requirements.

    A manufacturer must comply with the requirements of this part 3280, 
part 3282 of this chapter, and 42 U.S.C. 5416.

[61 FR 18250, Apr. 25, 1996]



Sec. 3280.4  Incorporation by reference.

    (a) The specifications, standards and codes of the following 
organizations are incorporated by reference in 24 CFR part 3280 (this 
Standard) pursuant to 5 U.S.C. 552(a) and 1 CFR part 51 as though set 
forth in full. The incorporation by reference of these standards has 
been approved by the Director of the Federal Register. Reference 
standards have the same force and effect as this Standard (24 CFR part 
3280) except that whenever reference standards and this Standard are 
inconsistent, the requirements of this Standard prevail to the extent of 
the inconsistency.
    (b) The abbreviations and addresses of organizations issuing the 
referenced standards appear below. Reference standards which are not 
available from their producer organizations may be obtained from the 
Office of Manufactured Housing and Regulatory Functions, Manufactured 
Housing and Construction Standards Division, U.S. Department of Housing 
and Urban Development, 451 Seventh Street, SW., room B-133, Washington, 
DC 20410.

AA--Aluminum Association, 900 19th Street NW., suite 300, Washington, DC 
20006.
AAMA--American Architectural Manufacturers Association, 1540 East Dundee 
Road, Palatine, Illinois 60067
AFPA [previously (N)FPA]--American Forest and Paper Association, 1250 
Connecticut Avenue, NW., Washington, DC 20036 [previously named (N)FPA-
National Forest Products Association]
AGA--American Gas Association, 8501 East Pleasant Valley Road, 
Cleveland, Ohio 44131
AISC--American Institute of Steel Construction, One East Wacker Drive, 
Chicago, IL 60601
AISI--American Iron and Steel Institute, 1101 17th Street, NW., 
Washington, DC 20036
AITC--American Institute of Timber Construction, 11818 SE Mill Plain 
Blvd., suite 415, Vancouver, Washington 98684
ANSI--American National Standards Institute, 1430 Broadway, New York, 
New York 10018
APA--American Plywood Association, P.O. Box 11700, Tacoma, Washington 
98411
ARI--Air Conditioning and Refrigeration Institute, 1501 Wilson Blvd., 
6th Floor, Arlington, VA 22209-2403
ASCE--American Society of Civil Engineers, 345 East 47th Street, New 
York, New York 10017-2398
ASHRAE--American Society of Heating, Refrigeration and Air Conditioning 
Engineers, 1791 Tulle Circle, NE., Atlanta, Georgia 30329
ASME--American Society of Mechanical Engineers, 345 East 47th Street, 
New York, New York 10017
ASSE--American Society of Sanitary Engineering, P.O. Box 40362, Bay 
Village, Ohio 44140
ASTM--American Society for Testing and Materials, 1916 Race Street, 
Philadelphia, Pennsylvania 19103
CISPI--Cast Iron Soil Pipe Institute, 5959 Shallowford Road, suite 419, 
Chattanooga, TN 37421
DOC--U.S. Department of Commerce, National Institute of Standards and 
Technology, Office of Engineering Standards, room A-166, Technical 
Building, Washington, DC 20234
FS--Federal Specifications, General Services Administration, 
Specifications Branch, room 6039, GSA Building, 7th and D Streets, SW., 
Washington, DC 20407
HPVA (previously HPMA)--Hardwood Plywood and Veneer Association, P.O. 
Box 2789, Reston, VA 22090 (previously named HPMA Hardwood Plywood 
Manufacturers Association)
HUD-FHA--Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC 20410
HUD User, 11491 Sunset Hills Road, Reston, VA 20190-5254
IAPMO--International Association of Plumbing and Mechanical Officials, 
20001 Walnut Drive South, Walnut, CA 91784-2825
IITRI--IIT Research Institute, 10 West 35th Street, Chicago, IL 60616
MIL--Military Specifications and Standards, Naval Publications and Forms 
Center, 5801 Tabor Avenue, Philadelphia, Pennsylvania 19120
NEMA--National Electrical Manufacturers Association, 1300 North 17th 
Street, Suite 1847, Rosslyn, VA 22209
NER--International Code Council Evaluation Service [Previously known as 
National Evaluation Service], 5360 Workman Mill Road, Whittier, CA 
90601-0543
NFPA--National Fire Protection Association, Batterymarch Park, Quincy, 
MA 02269
NPA--National Particleboard Association, 18928 Premiere Court, 
Gaithersburg, MD 20879
NFRC--National Fenestration Rating Council, 8984 Georgia Avenue, Suite 
320, Silver Spring, MD 20910

[[Page 125]]

NSF--National Sanitation Foundation, P.O. Box 1468, Ann Arbor, MI 48105
NWWDA--National Wood Window and Door Association, 1400 E. Toughy Avenue, 
suite G-54, Des Plaines, IL 60018
SAE--Society of Automotive Engineers, 400 Commonwealth Drive, 
Warrendale, Pennsylvania 15096
SJI--Steel Joist Institute, 1205 48th Avenue North, suite A, Myrtle 
Beach, SC 29577
TPI--Truss Plate Institute, 583 D'Onofrio Drive, suite 200, Madison, 
Wisconsin 53719
UL--Underwriters' Laboratories, Inc., 333 Pfingsten Road, Northbrook, 
Illinois 60062
    WDMA--Window and Door Manufacturers Association [Previously known as 
the National Wood Window and Door Association, NWWDA], 1400 East Touhy 
Avenue, Des Plaines, IL 60018

    (c) The Department will enforce the listed editions of material 
incorporated by reference into this standard. If a later edition is to 
be enforced, the Department will publish a notice of change in the 
Federal Register.

[47 FR 49385, Nov. 1, 1982, as amended at 52 FR 47553, Dec. 15, 1987; 58 
FR 55002, Oct. 25, 1993; 59 FR 15113, Mar. 31, 1994; 70 FR 72042, Nov. 
30, 2005]



Sec. 3280.5  Data plate.

    Each manufactured home shall bear a data plate affixed in a 
permanent manner near the main electrical panel or other readily 
accessible and visible location. Each data plate shall be made of 
material what will receive typed information as well as preprinted 
information, and which can be cleaned of ordinary smudges or household 
dirt without removing information contained on the data plate; or the 
data plate shall be covered in a permanent manner with materials that 
will make it possible to clean the data plate of ordinary dirt and 
smudges without obscuring the information. Each data plate shall contain 
not less than the following information:
    (a) The name and address of the manufacturing plant in which the 
manufactured home was manufactured.
    (b) The serial number and model designation of the unit, and the 
date the unit was manufactured.
    (c) The statement:

    This manufactured home is designed to comply with the Federal 
Manufactured Home Construction and Safety Standards in force at the time 
of manufacture.

    (d) A list of the certification label(s) number(s) that are affixed 
to each transportable manufactured section under Sec. 3280.8.
    (e) A list of major factory-installed equipment, including the 
manufacturer's name and the model designation of each appliance.
    (f) Reference to the roof load zone and wind load zone for which the 
home is designed and duplicates of the maps as set forth in Sec. 
3280.305(c). This information may be combined with the heating/cooling 
certificate and insulation zone map required by Sec. Sec. 3280.510 and 
3280.511. The Wind Zone Map on the Data Plate shall also contain the 
statement:

    This home has not been designed for the higher wind pressures and 
anchoring provisions required for ocean/coastal areas and should not be 
located within 1500[foot] of the coastline in Wind Zones II and III, 
unless the home and its anchoring and foundation system have been 
designed for the increased requirements specified for Exposure D in 
ANSI/ASCE 7-88.

    (g) The statement:

    This home has--has not--(appropriate blank to be checked by 
manufacturer) been equipped with storm shutters or other protective 
coverings for windows and exterior door openings. For homes designed to 
be located in Wind Zones II and III, which have not been provided with 
shutters or equivalent covering devices, it is strongly recommended that 
the home be made ready to be equipped with these devices in accordance 
with the method recommended in the manufacturers printed instructions.

    (h) The statement: ``Design Approval by'', followed by the name of 
the agency that approved the design.

[59 FR 2469, Jan. 14, 1994]



Sec. 3280.6  Serial number.

    (a) A manufactured home serial number which will identify the 
manufacturer and the state in which the manufactured home is 
manufactured, must be stamped into the foremost cross member. Letters 
and numbers must be \3/8\ inch minimum in height. Numbers must not be 
stamped into hitch assembly or drawbar.

[[Page 126]]



Sec. 3280.7  Excluded structures.

    Certain structures may be excluded from these Standards as modular 
homes under 24 CFR 3282.12.

[52 FR 4581, Feb. 12, 1987]



Sec. 3280.8  Waivers.

    (a) Where any material piece of equipment, or system which does not 
meet precise requirements or specifications set out in the standard is 
shown, to the satisfaction of the Secretary, to meet an equivalent level 
of performance, the Secretary may waive the specifications set out in 
the Standard for that material, piece of equipment, or system.
    (b) Where the Secretary is considering issuing a waiver to a 
Standard, the proposed waiver shall be published in the Federal Register 
for public comment, unless the Secretary, for good cause, finds that 
notice is impractical, unnecessary or contrary to the public interest, 
and incorporates into the waiver that finding and a brief statement of 
the reasons therefor.
    (c) Each proposed and final waiver shall include:
    (1) A statement of the nature of the waiver; and
    (2) Identification of the particular standard affected.
    (d) All waivers shall be published in the Federal Register and shall 
state their effective date. Where a waiver has been issued, the 
requirements of the Federal Standard to which the waiver relates may be 
met either by meeting the specifications set out in the Standard or by 
meeting the requirements of the waiver published in the Federal 
Register.

[58 FR 55003, Oct. 25, 1993]



Sec. 3280.9  Interpretative bulletins.

    Interpretative bulletins may be issued for the following purposes:
    (a) To clarify the meaning of the Standard; and
    (b) To assist in the enforcement of the Standard.

[58 FR 55003, Oct. 25, 1993]



Sec. 3280.10  Use of alternative construction.

    Requests for alternative construction can be made pursuant to 24 CFR 
3282.14 of this chapter.

[58 FR 55003, Oct. 25, 1993]



Sec. 3280.11  Certification label.

    (a) A permanent label shall be affixed to each transportable section 
of each manufactured home for sale or lease in the United States. This 
label shall be separate and distinct from the data plate which the 
manufacturer is required to provide under Sec. 3280.5 of the standards.
    (b) The label shall be approximately 2 in. by 4 in. in size and 
shall be permanently attached to the manufactured home by means of 4 
blind rivets, drive screws, or other means that render it difficult to 
remove without defacing it. It shall be etched on 0.32 in. thick 
aluminum plate. The label number shall be etched or stamped with a 3 
letter designation which identifies the production inspection primary 
inspection agency and which the Secretary shall assign. Each label shall 
be marked with a 6 digit number which the label supplier shall furnish. 
The labels shall be stamped with numbers sequentially.
    (c) The label shall read as follows:

    As evidenced by this label No. ABC 000001, the manufacturer 
certifies to the best of the manufacturer's knowledge and belief that 
this manufactured home has been inspected in accordance with the 
requirements of the Department of Housing and Urban Development and is 
constructed in conformance with the Federal manufactured home 
construction and safety standards in effect on the date of manufacture. 
See date plate.

    (d) The label shall be located at the tail-light end of each 
transportable section of the manufactured home approximately one foot up 
from the floor and one foot in from the road side, or as near that 
location on a permanent part of the exterior of the manufactured home 
unit as practicable. The road side is the right side of the manufactured 
home when one views the

[[Page 127]]

manufactured home from the tow bar end of the manufactured home.

[42 FR 960, Jan. 4, 1977. Redesignated at 44 FR 20679, Apr. 6, 1979, as 
amended at 52 FR 47553, Dec. 15, 1987. Redesignated and amended at 58 FR 
55003, Oct. 25, 1993]



                    Subpart B_Planning Considerations



Sec. 3280.101  Scope.

    Subpart B states the planning requirements in manufactured homes. 
The intent of this subpart is to assure the adequacy of architectural 
planning considerations which assist in determining a safe and healthful 
environment.



Sec. 3280.102  Definitions.

    (a) Gross floor area means all space, wall to wall, including 
recessed entries not to exceed 5 sq. ft. and areas under built-in 
vanities and similar furniture. Where the ceiling height is less than 
that specified in Sec. 3280.104, the floor area under such ceilings 
shall not be included. Floor area of closets shall not be included in 
the gross floor area.
    (b) Habitable room means a room or enclosed floor space arranged for 
living, eating, food preparation, or sleeping purposes not including 
bathrooms, foyers, hallways, and other accessory floor space.
    (c) Laundry area means an area containing or designed to contain a 
laundry tray, clothes washer and/or clothes dryer.



Sec. 3280.103  Light and ventilation.

    (a) Lighting. Each habitable room shall be provided with exterior 
windows and/or doors having a total glazed area of not less than 8 
percent of the gross floor area.
    (1) Kitchens, bathrooms, toilet compartments, laundry areas, and 
utility rooms may be provided with artificial light in place of windows.
    (2) Rooms and areas may be combined for the purpose of providing the 
required natural lighting provided that at least one half of the common 
wall area is open and unobstructed, and the open area is at least equal 
to 10 percent of the combined floor area or 25 square feet whichever is 
greater.
    (b) Whole-house ventilation. Each manufactured home must be provided 
with whole-house ventilation having a minimum capacity of 0.035 ft\3\/
min/ft\2\ of interior floor space or its hourly average equivalent. This 
ventilation capacity must be in addition to any openable window area. In 
no case shall the installed ventilation capacity of the system be less 
than 50 cfm nor more than 90 cfm. The following criteria must be adhered 
to:
    (1) The ventilation capacity must be provided by a mechanical system 
or a combination passive and mechanical system. The ventilation system 
or provisions for ventilation must not create a positive pressure in Uo 
Value Zone 2 and Zone 3 or a negative pressure condition in Uo Value 
Zone 1. Mechanical systems must be balanced. Combination passive and 
mechanical systems must have adequately sized inlets or exhaust to 
release any unbalanced pressure. Temporary pressure imbalances due to 
gusting or high winds are permitted.
    (2) The ventilation system or provisions for ventilation must 
exchange air directly with the exterior of the home, except the 
ventilation system, or provisions for ventilation must not draw or expel 
air with the space underneath the home. The ventilation system or 
provisions for ventilation must not draw or expel air into the floor, 
wall, or ceiling/roof systems, even if those systems are vented. The 
ventilation system must be designed to ensure that outside air is 
distributed to all bedrooms and main living areas. The combined use of 
undercut doors or transom grills connecting those areas to the room 
where the mechanical system is located is deemed to meet this 
requirement.
    (3) The ventilation system or a portion of the system is permitted 
to be integral with the home's heating or cooling system. The system 
must be capable of operating independently of the heating or cooling 
modes. A ventilation system that is integral with the heating or cooling 
system is to be listed as part of the heating and cooling system or 
listed as suitable for use with that system.
    (4) A mechanical ventilation system, or mechanical portion thereof, 
must be

[[Page 128]]

provided with a manual control, and must be permitted to be provided 
with automatic timers or humidistats.
    (5) A whole-house ventilation label must be attached to the whole-
house ventilation control, must be permanent, and must state: ``WHOLE-
HOUSE VENTILATION''.
    (6) Instructions for correctly operating and maintaining whole-house 
ventilation systems must be included with the homeowner's manual. The 
instructions must encourage occupants to operate these systems whenever 
the home is occupied, and must refer to the labeled whole-house 
ventilation control.
    (c) Additional ventilation. (1) At least half of the minimum 
required glazed area in paragraph (a) of this section shall be openable 
directly to the outside of the manufactured home for unobstructed 
ventilation. These same ventilation requirements apply to rooms combined 
in accordance with Sec. 3280.103(a)(2).
    (2) Kitchens shall be provided with a mechanical ventilation system 
that is capable of exhausting 100 cfm to the outside of the home. The 
exhaust fan shall be located as close as possible to the range or cook 
top, but in no case farther than 10 feet horizontally from the range or 
cook top.
    (3) Each bathroom and separate toilet compartment shall be provided 
with a mechanical ventilation system capable of exhausting 50 cfm to the 
outside of the home. A separate toilet compartment may be provided with 
1.5 square feet of openable glazed area in place of mechanical 
ventilation, except in Uo value Zone 3.

[58 FR 55003, Oct. 25, 1993, as amended at 70 FR 72042, Nov. 30, 2005]



Sec. 3280.104  Ceiling heights.

    (a) Every habitable room and bathroom shall have a minimum ceiling 
height of not less than 7 feet, 0 inches for a minimum of 50 percent of 
the room's floor area. The remaining area may have a ceiling with a 
minimum height of 5 feet, 0 inches. Minimum height under dropped ducts, 
beams, etc. shall be 6 feet, 4 inches.
    (b) Hallways and foyers shall have a minimum ceiling height of 6 
feet, 6 inches.



Sec. 3280.105  Exit facilities; exterior doors.

    (a) Number and location of exterior doors. Manufactured homes shall 
have a minimum of two exterior doors located remote from each other.
    (1) Required egress doors shall not be located in rooms where a 
lockable interior door must be used in order to exit.
    (2) In order for exit doors to be considered remote from each other, 
they must comply with all of the following:
    (i) Both of the required doors must not be in the same room or in a 
group of rooms which are not defined by fixed walls.
    (ii) Single wide units. Doors may not be less than 12 ft. c-c from 
each other as measured in any straight line direction regardless of the 
length of path of travel between doors.
    (iii) Double wide units. Doors may not be less than 20 ft. c-c from 
each other as measured in any straight line direction regardless of the 
length of path of travel between doors.
    (iv) One of the required exit doors must be accessible from the 
doorway of each bedroom without traveling more than 35 ft.
    (b) Door design and construction. (1) Exterior swinging doors shall 
be constructed in accordance with Sec. 3280.405 the ``Standard for 
Swinging Exterior Passage Doors for Use in Manufactured Homes''. 
Exterior sliding glass doors shall be constructed in accordance with 
Sec. 3280.403 the ``Standard for Windows and Sliding Glass Doors Used 
in Manufactured Homes''.
    (2) All exterior swinging doors shall provide a minimum 28 inch wide 
by 74 inch high clear opening. All exterior sliding glass doors shall 
provide a minimum 28 inch wide by 72 inch high clear opening.
    (3) Each swinging exterior door other than screen or storm doors 
shall have a key-operated lock that has a deadlocking latch or a key-
operated dead bolt with a passage latch. Locks shall not require the use 
of a key for operation from the inside.

[[Page 129]]

    (4) All exterior doors, including storm and screen doors, opening 
outward shall be provided with a safety door check.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 50 FR 9269, Mar. 7, 1985]



Sec. 3280.106  Exit facilities; egress windows and devices.

    (a) Every room designed expressly for sleeping purposes, unless it 
has an exit door (see Sec. 3280.105), shall have at least one outside 
window or approved exit device which meets the requirements of Sec. 
3280.404, the ``Standard for Egress Windows and Devices for Use in 
Manufactured Homes.''
    (b) The bottom of the window opening shall not be more than 36 
inches above the floor.
    (c) Locks, latches, operating handles, tabs, and any other window 
screen or storm window devices which need to be operated in order to 
permit exiting, shall not be located in excess of 54 inches from the 
finished floor.
    (d) Integral rolled-in screens shall not be permitted in an egress 
window unless the window is of the hinged-type.

[49 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 49 FR 36086, Sept. 14, 1984; 52 FR 4581, Feb. 12, 1987]



Sec. 3280.107  Interior privacy.

    Bathroom and toilet compartment doors shall be equipped with a 
privacy lock.



Sec. 3280.108  Interior passage.

    (a) Interior doors having passage hardware without a privacy lock, 
or with a privacy lock not engaged, shall open from either side by a 
single movement of the hardware mechanism in any direction.
    (b) Each manufactured home interior door, when provided with a 
privacy lock, shall have a privacy lock that has an emergency release on 
the outside to permit entry when the lock has been locked by a locking 
knob, lever, button, or other locking device on the inside.



Sec. 3280.109  Room requirements.

    (a) Every manufactured home shall have at least one living area with 
not less than 150 sq. ft. of gross floor area.
    (b) Rooms designed for sleeping purposes shall have a minimum gross 
square foot floor area as follows:
    (1) All bedrooms shall have at least 50 sq. ft. of floor area.
    (2) Bedrooms designed for two or more people shall have 70 sq. ft. 
of floor area plus 50 sq. ft. for each person in excess of two.
    (c) Every room designed for sleeping purposes shall have accessible 
clothes hanging space with a minimum inside depth of 22 inches and shall 
be equipped with a rod and shelf.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
and further redesignated at 58 FR 55004, Oct. 25, 1993]



Sec. 3280.110  Minimum room dimensions.

    The gross floor area required by Sec. 3280.110 (a) and (b) shall 
have no clear horizontal dimension less than 5 feet except as permitted 
by Sec. 3280.102(a).

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
and further redesignated at 58 FR 55004, Oct. 25, 1993]



Sec. 3280.111  Toilet compartments.

    Each toilet compartment shall be a minimum of 30 inches in width, 
except, when the toilet is located adjacent to the short dimension of 
the tub, the distance from the tub to the center line of the toilet 
shall not be less than 12 inches. At least 21 inches of clear space 
shall be provided in front of each toilet.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
and further redesignated at 58 FR 55004, Oct. 25, 1993]



Sec. 3280.112  Hallways.

    Hallways shall have a minimum horizontal dimension of 28 inches 
measured from the interior finished surface to the interior finished 
surface of the opposite wall. When appliances are installed in a laundry 
area, the measurement shall be from the front of the appliance to the 
opposite finished interior surface. When appliances are not installed 
and a laundry area is provided, the area shall have a minimum clear 
depth of 27 inches in addition to

[[Page 130]]

the 28 inches required for passage. In addition, a notice of the 
available clearance for washer/dryer units shall be posted in the 
laundry area. Minor protrusions into the minimum hallway width by 
doorknobs, trim, smoke alarms or light fixtures are permitted.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
and further redesignated at 58 FR 55004, Oct. 25, 1993; 67 FR 12817, 
Mar. 19, 2002]



Sec. 3280.113  Glass and glazed openings.

    (a) Windows and sliding glass doors. All windows and sliding glass 
doors shall meet the requirements of Sec. 3280.403 the ``Standard for 
Windows and Sliding Glass Doors Used in Manufactured Homes''.
    (b) Safety glazing. Glazing in all entrance or exit doors, sliding 
glass doors, units (fixed or moving sections), unframed glass doors, 
unbacked mirrored wardrobe doors (i.e., mirrors not secured to a backing 
capable of being the door itself), shower and bathtub enclosures and 
surrounds to a height of 6 feet above the bathroom floor level, storm 
doors or combination doors, and in panels located within 12 inches on 
either side of exit or entrance doors shall be of a safety glazing 
material. Safety glazing material is considered to be any glazing 
material capable of passing the requirements of Safety Performance 
Specifications and Methods of Test for Safety Glazing Materials Used in 
Buildings, ANSI Z97.1-1984.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4581, Feb. 12, 1987. Redesignated at 58 FR 55004, 
Oct. 25, 1993]



                          Subpart C_Fire Safety

    Source: 49 FR 32008, Aug. 9, 1984, unless otherwise noted.



Sec. 3280.201  Scope.

    The purpose of this subpart is to set forth requirements that will 
assure reasonable fire safety to the occupants by reducing fire hazards 
and by providing measures for early detection.



Sec. 3280.202  Definitions.

    The following definitions are applicable to subparts C, H, and I of 
the Standards:
    Combustible material: Any material not meeting the definition of 
limited-combustible or non-combustible material.
    Flame-spread rating: The measurement of the propagation of flame on 
the surface of materials or their assemblies as determined by recognized 
standard tests conducted as required by this subpart.
    Interior finish: The surface material of walls, fixed or movable 
partitions, ceilings, columns, and other exposed interior surfaces 
affixed to the home's structure including any materials such as paint or 
wallpaper and the substrate to which they are applied. Interior finish 
does not include:
    (1) Trim and sealant 2 inches or less in width adjacent to the 
cooking range and in furnace and water heater spaces provided it is 
installed in accordance with the requirements of Sec. 3280.203(b)(3) or 
(4), and trim 6 inches or less in width in all other areas;
    (2) Windows and frames;
    (3) Single doors and frames and a series of doors and frames not 
exceeding 5 feet in width;
    (4) Skylights and frames;
    (5) Casings around doors, windows, and skylights not exceeding 4 
inches in width;
    (6) Furnishings which are not permanently affixed to the home's 
structure;
    (7) Baseboards not exceeding 6 inches in height;
    (8) Light fixtures, cover plates of electrical receptacle outlets, 
switches, and other devices;
    (9) Decorative items attached to walls and partitions (i.e., 
pictures, decorative objects, etc.) constituting no more than 10% of the 
aggregate wall surface area in any room or space not more than 32 square 
feet in surface area, whichever is less;
    (10) Plastic light diffusers when suspended from a material which 
meets the interior finish provisions of Sec. 3280.203(b);
    (11) Coverings and surfaces of exposed wood beams; and
    (12) Decorative items including the following:

[[Page 131]]

    (i) Non-structural beams not exceeding 6 inches in depth and 6 
inches in width and spaced not closer than 4 feet on center;
    (ii) Non-structural lattice work;
    (iii) Mating and closure molding; and
    (iv) Other items not affixed to the home's structure.
    Limited combustible: A material meeting:
    (1) The definition contained in Chapter 2 of NFPA 220-1995, Standard 
on Types of Building Construction; or
    (2) \5/16\-inch or thicker gypsum board.
    Noncombustible material: A material meeting the definition contained 
in Chapter 2 of NFPA 220-1995, Standard on Types of Building 
Construction.
    Smoke alarm: An alarm device that is responsive to smoke.
    Tactile notification appliance: A notification appliance that alerts 
by the sense of touch or vibration.

[58 FR 55004, Oct. 25, 1993, as amended at 67 FR 12817, Mar. 19, 2002; 
70 FR 72042, Nov. 30, 2005]



Sec. 3280.203  Flame spread limitations and fire protection requirements.

    (a) Establishment of flame spread rating. The surface flame spread 
rating of interior-finish material must not exceed the value shown in 
Sec. 3280.203(b) when tested by Standard Test Method for Surface 
Burning Characteristics of Building Materials, ASTM E84-01, 2001, or 
Standard Method of Test of Surface Burning Characteristics of Building 
Materials NFPA 255, 1996, except that the surface flame spread rating of 
interior-finish materials required by Sec. 3280.203(b)(5) and (6) may 
be determined by using the Standard Test Method for Surface Flammability 
of Materials Using a Radiant Heat Energy Source, ASTM E 162-94. However, 
the following materials need not be tested to establish their flame 
spread rating unless a lower rating is required by the standards in this 
part:
    (1) Flame-spread rating--76 to 200.
    (i) .035-inch or thicker high pressure laminated plastic panel 
countertop;
    (ii) \1/4\-inch or thicker unfinished plywood with phenolic or urea 
glue;
    (iii) Unfinished dimension lumber (1-inch or thicker nominal 
boards);
    (iv) \3/8\-inch or thicker unfinished particleboard with phenolic or 
urea binder;
    (v) Natural gum-varnished or latex- or alkyd-painted:
    (A) \1/4\-inch or thicker plywood, or
    (B) \3/8\-inch or thicker particleboard, or
    (C) 1-inch or thicker nominal board;
    (vi) \5/16\-inch gypsum board with decorative wallpaper; and
    (vii) \1/4\-inch or thicker unfinished hardboard,
    (2) Flame-spread rating-25 to 200,
    (i) Painted metal;
    (ii) Mineral-base acoustic tile;
    (iii) \5/16\-inch or thicker unfinished gypsum wallboard (both 
latex- or alkyd-painted); and
    (iv) Ceramic tile.


(The above-listed material applications do not waive the requirements of 
Sec. 3280.203(c) or Sec. 3280.204 of this subpart.)
    (b) Flame-spread rating requirements.
    (1) The interior finish of all walls, columns, and partitions shall 
not have a flame spread rating exceeding 200 except as otherwise 
specified herein.
    (2) Ceiling interior finish shall not have a flame spread rating 
exceeding 75.
    (3) Walls adjacent to or enclosing a furnace or water heater and 
ceilings above them shall have an interior finish with a flame spread 
rating not exceeding 25. Sealants and other trim materials 2 inches or 
less in width used to finish adjacent surfaces within these spaces are 
exempt from this provision provided that all joints are completely 
supported by framing members or by materials having a flame spread 
rating not exceeding 25.
    (4) Exposed interior finishes adjacent to the cooking range shall 
have a flame spread rating not exceeding 50, except that backsplashes 
not exceeding 6 inches in height are exempted. Adjacent surfaces are the 
exposed vertical surfaces between the range top height and the overhead 
cabinets and/or ceiling and within 6 horizontal inches of the cooking 
range. (Refer also to Sec. 3280.204(a), Kitchen Cabinet Protection.) 
Sealants and other trim materials 2 inches or less in width used to 
finish adjacent surfaces are exempt from this provision provided that 
all

[[Page 132]]

joints are completely supported by a framing member.
    (5) Kitchen cabinet doors, countertops, backsplashes, exposed 
bottoms, and end panels shall have a flame spread rating not to exceed 
200. Cabinet rails, stiles, mullions, and top strips are exempted.
    (6) Finish surfaces of plastic bathtubs, shower units, and tub or 
shower doors shall not exceed a flame spread rating of 200.
    (c) Fire protective requirements.
    (1) Materials used to surface the following areas shall be of 
limited combustible material (e.g., \5/16\-inch gypsum board, etc.):
    (i) The exposed wall adjacent to the cooking range (see Sec. 
3280.203(b)(4));
    (ii) Exposed bottoms and sides of kitchen cabinets as required by 
Sec. 3280.204;
    (iii) Interior walls and ceilings enclosing furnace and/or water 
heater spaces; and
    (iv) Combustible doors which provide interior or exterior access to 
furnace and/or water heater spaces. The surface may be interrupted for 
louvers ventilating the enclosure. However, the louvers shall not be 
constructed of a material of greater combustibility than the door itself 
(e.g., plastic louvers on a wooden door).
    (2) No burner of a surface cooking unit shall be closer than 12 
horizontal inches to a window or an exterior door with glazing.

[49 FR 32008, Aug. 9, 1984, as amended at 58 FR 55005, Oct. 25, 1993; 70 
FR 72042, Nov. 30, 2005]



Sec. 3280.204  Kitchen cabinet protection.

    (a) The bottom and sides of combustible kitchen cabinets over 
cooking ranges to a horizontal distance of 6 inches from the outside 
edge of the cooking range shall be protected with at least \5/16\-inch 
thick gypsum board or equivalent limited combustible material. One-inch 
nominal framing members and trim are exempted from this requirement. The 
cabinet area over the cooking range or cooktops shall be protected by a 
metal hood (26-gauge sheet metal, or .017 stainless steel, or .024 
aluminum, or .020 copper) with not less than a 3-inch eyebrow projecting 
horizontally from the front cabinet face. The \5/16\-inch thick gypsum 
board or equivalent material which is above the top of the hood may be 
supported by the hood. A \3/8\-inch enclosed air space shall be provided 
between the bottom surface of the cabinet and the gypsum board or 
equivalent material. The hood shall be at least as wide as the cooking 
range.
    (b) The 3-inch metal eyebrow required by paragraph (a) of this 
section will project from the front and rear cabinet faces when there is 
no adjacent surface behind the range, or the \5/16\-inch thick gypsum 
board or equivalent material shall be extended to cover all exposed rear 
surfaces of the cabinet.
    (c) The metal hood required by paragraphs (a) and (b) of this 
section can be omitted when an oven of equivalent metal protection is 
installed between the cabinet and the range and all exposed cabinet 
surfaces are protected as described in paragraph (a) of this section.
    (d) When a manufactured home is designed for the future installation 
of a cooking range, the metal hood and cabinet protection required by 
paragraph (a) of this section and the wall-surfacing protection behind 
the range required by Sec. 3280.203 shall be installed in the factory.
    (e) Vertical clearance above cooking top. Ranges shall have a 
vertical clearance above the cooking top of not less than 24 inches to 
the bottom of combustible cabinets.



Sec. 3280.205  Carpeting.

    Carpeting shall not be used in a space or compartment designed to 
contain only a furnace and/or water heater. Carpeting may be used in 
other areas where a furnace or water heater is installed, provided that 
it is not located under the furnace or water heater.



Sec. 3280.206  Fireblocking.

    (a) General. Fireblocking must comply with the requirements of this 
section. The integrity of all fireblocking materials must be maintained.
    (b) Fireblocking materials. Fireblocking must consist of the 
following materials:
    (1) Minimum one inch nominal lumber, \5/16\ inch thick gypsum board, 
or equivalent fire resistive materials; or

[[Page 133]]

    (2) Other Listed or Approved Materials;
    (c) Fireblocking locations. (1) Fireblocking must be installed in 
concealed spaces of stud walls, partitions, and furred spaces at the 
floor and ceiling levels. Concealed spaces must not communicate between 
floor levels. Concealed spaces must not communicate between a ceiling 
level and a concealed roof area, or an attic space.
    (2) Fireblocking must be installed at the interconnection of a 
concealed vertical space and a concealed horizontal space that occurs:
    (i) Between a concealed wall cavity and the ceiling joists above; 
and
    (ii) At soffits, drop ceilings, cover ceilings, and similar 
locations.
    (3) Fireblocking must be installed around the openings for pipes, 
vents, and other penetrations in walls, floors, and ceilings of furnace 
and water heater spaces. Pipes, vents, and other penetrations that 
cannot be moved freely within their opening are considered to be 
fireblocked. Materials used to fireblock heat producing vent 
penetrations must be noncombustible or limited combustible types.

[71 FR 72042, Nov. 30, 2005]



Sec. 3280.207  Requirements for foam plastic thermal insulating 
materials.

    (a) General. Foam plastic thermal insulating materials shall not be 
used within the cavity of walls (not including doors) or ceilings or be 
exposed to the interior of the home unless:
    (1) The foam plastic insulating material is protected by an interior 
finish of \5/16\-inch thick gypsum board or equivalent material for all 
cavities where the material is to be installed; or
    (2) The foam plastic is used as a sheathing or siding backerboard, 
and it:
    (i) Has a flame spread rating of 75 or less and a smoke-developed 
rating of 450 or less (not including outer covering of sheathing);
    (ii) Does not exceed \3/8\-inch in thickness; and
    (iii) Is separated from the interior of the manufactured home by a 
minimum of 2 inches of mineral fiber insulation or an equivalent thermal 
barrier; or
    (3) The foam plastic insulating material has been previously 
accepted by the Department for use in wall and/or ceiling cavities of 
manufactured homes, and it is installed in accordance with any 
restrictions imposed at the time of that acceptance; or
    (4) The foam plastic insulating material has been tested as required 
for its location in wall and/or ceiling cavities in accordance with 
testing procedures described in the Illinois Institute of Technology 
Research Institute (IIT) Report, ``Development of Mobile Home Fire Test 
Methods to Judge the Fire-Safe Performance of Foam Plastic Sheathing and 
Cavity Insulation, IITRI Fire and Safety Research Project J-6461, 1979'' 
or other full-scale fire tests accepted by HUD, and it is installed in a 
manner consistent with the way the material was installed in the foam 
plastic test module. The materials must be capable of meeting the 
following acceptance criteria required for their location:
    (i) Wall assemblies. The foam plastic system shall demonstrate 
equivalent or superior performance to the control module as determined 
by:
    (A) Time to reach flashover (600 [deg]C in the upper part of the 
room);
    (B) Time to reach an oxygen (O2) level of 14% (rate of 
O2 depletion), a carbon monoxide (CO) level of 1%, a carbon 
dioxide (CO2) level of 6%, and a smoke level of 0.26 optical 
density/meter measured at 5 feet high in the doorway; and
    (C) Rate of change concentration for O2, CO, 
CO2 and smoke measured 3 inches below the top of the doorway.
    (ii) Ceiling assemblies. A minimum of three valid tests of the foam 
plastic system and one valid test of the control module shall be 
evaluated to determine if the foam plastic system demonstrates 
equivalent or superior performance to the control module. Individual 
factors to be evaluated include intensity of cavity fire (temperature-
time) and post-test damage.
    (iii) Post-test damage assessment for wall and ceiling assemblies. 
The overall performance of each total system shall also be evaluated in 
determining the acceptability of a particular foam plastic insulating 
material.
    (b) All foam plastic thermal insulating materials used in 
manufactured

[[Page 134]]

housing shall have a flame spread rating of 75 or less (not including 
outer covering or sheathing) and a maximum smoke-developed rating of 
450.

[49 FR 32008, Aug. 9, 1984, as amended at 70 FR 72043, Nov. 30, 2005]



Sec. 3280.208  Smoke alarm requirements.

    (a) Labeling. Each smoke alarm required under paragraph (b) of this 
section must conform with the requirements of UL 217, Single and 
Multiple Station Smoke Alarms, dated January 4, 1999 (incorporated by 
reference, see Sec. 3280.4), or UL 268, Smoke Detectors for Fire 
Protective Signaling Systems, dated January 4, 1999 (incorporated by 
reference, see Sec. 3280.4), and must bear a label to evidence 
conformance.
    (b) Required smoke alarm locations. (1) At least one smoke alarm 
must be installed in each of the following locations:
    (i) To protect both the living area and kitchen space. Manufacturers 
are encouraged to locate the alarm in the living area remote from the 
kitchen and cooking appliances. A smoke alarm located within 20 feet 
horizontally of a cooking appliance must incorporate a temporary 
silencing feature or be of a photoelectric type.
    (ii) In each room designed for sleeping.
    (iii) On the ceiling of the upper level near the top or above each 
stairway, other than a basement stairway, in any multistory home 
completed in accordance with this part or part 3282 of this chapter. The 
alarm must be located so that smoke rising in the stairway cannot be 
prevented from reaching the alarm by an intervening door or obstruction.
    (2) For each home designed to be placed over a basement, the 
manufacturer must provide a smoke alarm for the basement and must 
install at the factory an electrical junction box for the installation 
of this smoke alarm and for its interconnection to other smoke alarms 
required by this section. The instructions for installers and 
information for homeowners required in paragraph (f) of this section 
must clearly indicate that a smoke alarm should be installed and is to 
be located on the basement ceiling near the stairway.
    (3) A smoke alarm required under this section must not be placed in 
a location that impairs its effectiveness or in any of the following 
locations:
    (i) Within 3 feet horizontally from any discharge grille when a home 
is equipped or designed for future installation of a roof-mounted 
evaporative cooler or other equipment discharging conditioned air 
through a ceiling grille into the living space; and
    (ii) In any location or environment that is prohibited by the terms 
of its listing, except as permitted by this section.
    (c) Mounting requirements. (1) Except in rooms with peaked sloping 
or shed sloping ceilings with a slope of more than 1.5/12 or as 
permitted pursuant to paragraph (e) of this section, smoke alarms must 
be mounted either:
    (i) On the ceiling at least 4 inches from each wall; or
    (ii) On a wall with the top of the alarm not less than 4 inches 
below the ceiling, and not farther from the ceiling than 12 inches or 
the distance from the ceiling specified in the smoke alarm 
manufacturer's listing and instructions, whichever is less.
    (2) Except as permitted pursuant to paragraph (e) of this section, 
in rooms with peaked sloping ceilings with a slope of more than 1.5/12, 
smoke alarms must be mounted on the ceiling within 3 feet, measured 
horizontally, from the peak of the ceiling; at least 4 inches, measured 
vertically, below the peak of the ceiling; and at least 4 inches from 
any projecting structural element.
    (3) Except as permitted pursuant to paragraph (e) of this section, 
in rooms with shed sloping ceilings with a slope of more than 1.5/12, 
smoke alarms must be mounted on the ceiling within 3 feet, measured 
horizontally, of the high side of the ceiling, and not closer than 4 
inches from any adjoining wall surface and from any projecting 
structural element.
    (d) Connection to power source. (1) Each smoke alarm must be powered 
from:
    (i) The electrical system of the home as the primary power source 
and a battery as a secondary power source; or
    (ii) A battery rated for a 10-year life, provided the smoke alarm is 
listed for use with a 10-year battery.

[[Page 135]]

    (2) Each smoke alarm whose primary power source is the home 
electrical system must be mounted on an electrical outlet box and 
connected by a permanent wiring method to a general electrical circuit. 
More than one smoke alarm is permitted to be placed on the same 
electrical circuit. The wiring circuit for the alarm must not include 
any switches between the over-current protective device and the alarm, 
and must not be protected by a ground fault circuit interrupter.
    (3) Smoke alarms required under this section must be interconnected 
such that the activation of any one smoke alarm causes the alarm to be 
triggered in all required smoke alarms in the home.
    (e) Visible and tactile notification appliances. (1) In addition to 
the smoke alarms required pursuant to this section, the manufacturer 
must provide visible and listed tactile notification appliances if these 
appliances are ordered by the purchaser or retailer before the home 
enters the first stage of production. These appliances are required to 
operate from the primary power source, but are not required to operate 
from a secondary power source.
    (2) A visible notification appliance in a room designed for sleeping 
must have a minimum rating of 177 candela, except that when the visible 
notification appliance is wall-mounted or suspended more than 24 inches 
below the ceiling, a minimum rating of 110 candela is permitted.
    (3) A visible notification appliance in an area other than a room 
designed for sleeping must have a minimum rating of 15 candela.
    (f) Testing and maintenance. (1) Each required smoke alarm installed 
at the factory must be operationally tested, after conducting the 
dielectric test specified in Sec. 3280.810(a), in accordance with the 
alarm manufacturer's instructions. A smoke alarm that does not function 
as designed during the test and is not fixed so that it functions 
properly in the next retest must be replaced. Any replacement smoke 
alarm must be successfully tested in accordance with this paragraph.
    (2) Home manufacturers must provide specific written instructions 
for installers on how to inspect and test the operation of smoke alarms 
during installation of the home. These instructions must indicate that 
any smoke alarm that does not meet the inspection or testing 
requirements needs to be replaced and retested.
    (3) Home manufacturers must provide the homeowner with the alarm 
manufacturer's information describing the operation, method and 
frequency of testing, and proper maintenance of the smoke alarm. This 
information must be provided in same manner and location as the consumer 
manual required by Sec. 3282.207 of this chapter, but does not have to 
be incorporated into the consumer manual. No dealer, distributor, 
construction contractor, or other person shall interfere with the 
distribution of this information

[67 FR 12817, Mar. 19, 2002, as amended at 67 FR 49795, July 31, 2002]



Sec. 3280.209  Fire testing.

    All fire testing conducted in accordance with this subpart shall be 
performed by nationally recognized testing laboratories which have 
expertise in fire technology. In case of dispute, the Secretary shall 
determine if a particular agency is qualified to perform such fire 
tests.

[49 FR 32011, Aug. 9, 1984]



           Subpart D_Body and Frame Construction Requirements



Sec. 3280.301  Scope.

    This subpart covers the minimum requirements for materials, 
products, equipment and workmanship needed to assure that the 
manufactured home will provide:
    (a) Structural strength and rigidity,
    (b) Protection against corrosion, decay, insects and other similar 
destructive forces,
    (c) Protection against hazards of windstorm,
    (d) Resistance to the elements, and
    (e) Durability and economy of maintenance.



Sec. 3280.302  Definitions.

    The following definitions are applicable to subpart D only:

[[Page 136]]

    Anchor assembly means any device or other means designed to transfer 
home anchoring loads to the ground.
    Anchoring equipment means ties, straps, cables, turnbuckles, chains, 
and other approved components, including tensioning devices that are 
used to secure a manufactured home to anchor assemblies.
    Anchoring system means a combination of anchoring equipment and 
anchor assemblies that will, when properly designed and installed, 
resist the uplift, overturning, and lateral forces on the manufactured 
home and on its support and foundation system.
    Diagonal tie means a tie intended to resist horizontal or shear 
forces, but which may resist vertical, uplift, and overturning forces.
    Footing: means that portion of the support system that transmits 
loads directly to the soil.
    Foundation system means a system of support that is capable of 
transferring all design loads to the ground, including elements of the 
support system as defined in this section, or a site-built permanent 
foundation that meets the requirements of 24 CFR 3282.12.
    Ground anchor means a specific anchoring assembly device designed to 
transfer home anchoring loads to the ground.
    Loads: (1) Dead load: means the weight of all permanent construction 
including walls, floors, roof, partition, and fixed service equipment.
    (2) Live load: means the weight superimposed by the use and 
occupancy of the manufactured home, including wind load and snow load, 
but not including dead load.
    (3) Wind load: means the lateral or vertical pressure or uplift on 
the manufactured home due to wind blowing in any direction.
    Main frame: means the structural component on which is mounted the 
body of the manufactured home.
    Pier: means that portion of the support system between the footing 
and manufactured home exclusive of caps and shims.
    Sheathing: means material which is applied on the exterior side of a 
building frame under the exterior weather resistant covering.
    Stabilizing devices means all components of the anchoring and 
support systems, such as piers, footings, ties, anchoring equipment, 
anchoring assemblies, or any other equipment, materials, and methods of 
construction that support and secure the manufactured home to the 
ground.
    Support system: means a combination of footings, piers, caps, and 
shims that will, when properly installed, support the manufactured home.
    Support system means any pilings, columns, footings, piers, 
foundation walls, shims, and any combination thereof that, when properly 
installed, support the manufactured home.
    Tie: means straps, cable, or securing devices used to connect the 
manufactured home to ground anchors.
    Vertical tie: means a tie intended to resist the uplifting or 
overturning forces.

[58 FR 55005, Oct. 25, 1993; 59 FR 15113, Mar. 31, 1994, as amended at 
72 FR 59361, Oct. 19, 2007]



Sec. 3280.303  General requirements.

    (a) Minimum requirements. The design and construction of a 
manufactured home shall conform with the provisions of this standard. 
Requirements for any size, weight, or quality of material modified by 
the terms of minimum, not less than, at least, and similar expressions 
are minimum standards. The manufacturer or installer may exceed these 
standards provided such deviation does not result in any inferior 
installation or defeat the purpose and intent of this standard.
    (b) Construction. All construction methods shall be in conformance 
with accepted engineering practices to insure durable, livable, and safe 
housing and shall demonstrate acceptable workmanship reflecting 
journeyman quality of work of the various trades.
    (c) Structural analysis. The strength and rigidity of the component 
parts and/or the integrated structure shall be determined by engineering 
analysis or by suitable load tests to simulate the actual loads and 
conditions of application that occur. (See subparts E and J.)
    (d) [Reserved]
    (e) New materials and methods. (1) Any new material or method of 
construction not provided for in this standard

[[Page 137]]

and any material or method of questioned suitability proposed for use in 
the manufacture of the structure shall nevertheless conform in 
performance to the requirements of this standard.
    (2) Unless based on accepted engineering design for the use 
indicated, all new manufactured home materials, equipment, systems or 
methods of construction not provided for in this standard shall be 
subjected to the tests specified in paragraph (g) of this section.
    (f) Allowable design stress. The design stresses of all materials 
shall conform to accepted engineering practice. The use of materials not 
certified as to strength or stress grade shall be limited to the minimum 
allowable stresses under accepted engineering practice.
    (g) Alternative test procedures. In the absence of recognized 
testing procedures either in the Standards in this part or in the 
applicable provisions of those standards incorporated in this part by 
reference, the manufacturer electing this option must develop or cause 
to be developed testing procedures to demonstrate the structural 
properties and significant characteristics of the material, assembly, 
subassembly component, or member, except for testing methods involving 
one-piece metal roofing as would be required in Sec. 
3280.305(c)(1)(iii). Such testing procedures become part of the 
manufacturer's approved design. Such tests must be witnessed by an 
independent licensed professional engineer or architect or by a 
recognized testing organization. Copies of the test results must be kept 
on file by the manufactured home manufacturer.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55005, Oct. 25, 1993; 59 FR 2469, Jan. 14, 1994; 70 
FR 72043, Nov. 30, 2005]



Sec. 3280.304  Materials.

    (a) Dimension and board lumber shall not exceed 19 percent moisture 
content at time of installation.
    (b)(1) Standards for some of the generally used materials and 
methods of construction are listed in the following table:

                                Aluminum

    Aluminum Design Manual, Specifications and Guidelines for Aluminum 
Structures, Part 1-A, Sixth Edition, October 1994, and Part 1-B, First 
Edition, October 1994.

                                  Steel

    Specification for Structural Steel Buildings--Allowable Stress 
Design and Plastic Design--AISC-S335, 1989. The following parts of this 
reference standard are not applicable: 1.3.3, 1.3.4, 1.3.5, 1.3.6, 
1.4.6, 1.5.1.5, 1.5.5, 1.6, 1.7, 1.8, 1.9, 1.10.4 through 1.10.7, 
1.10.9, 1.11, 1.13, 1.14.5, 1.17.7 through 1.17.9, 1.19.1, 1.19.3, 1.20, 
1.21, 1.23.7, 1.24, 1.25.1 through 1.25.5, 1.26.4, 2.3, 2.4, 2.8 through 
2.10.
    Specification for the Design of Cold-Formed Steel Structural 
Members--AISI-1996.
    Specification for the Design of Cold-Formed Stainless Steel 
Structural Members--SEI/ASCE 8-02, 2002.
    Standard Specifications Load Tables and Weight Tables for Steel 
Joists and Joist Girders, SJI, Fortieth Edition, 1994.
    Structural Applications of Steel Cables for Buildings--ASCE19, 1996.
    Standard Specification for Strapping, Flat Steel and Seals--ASTM 
D3953, 1991.

                         Wood and Wood Products

    Basic Hardboard--ANSI/AHA A135.4-1995.
    Prefinished Hardboard Paneling--ANSI/AHA A135.5-1995.
    Hardboard Siding--ANSI/AHA A135.6-1998.
    American National Standard for Hardwood and Decorative Plywood--
ANSI/HPVA HP-1-1994 (Approved 1995).
    Structural Design Guide for Hardwood Plywood Wall Panels--HPVA 
Design Guide HP-SG-96, 1996.
    For wood products--Structural Glued Laminated Timber--ANSI/AITC 
A190.1-1992.
    Construction and Industrial Plywood (With Typical APA Trademarks)--
PS 1-95.
    APA Design/Construction Guide, Residential and Commercial--APA E30-
P-1996.
    Design Specifications for Metal Plate and Wood Connected Trusses--
TPI-85.
    Design and Fabrication of All-Plywood Beams--APA H-815E (PDS 
Supplement 5), 1995.
    Panel Design Specification--APA D410A, 2004.
    Design and Fabrication of Glued Plywood-Lumber Beams--APA-S 812Q, 
Suppl. 2-1992.
    Design and Fabrication of Plywood Curved Panels--APA-S 811M, Suppl. 
1, 1990.
    Design and Fabrication of Plywood Sandwich Panels--APA-U 814H, 
Suppl. 4, 1990.
    Voluntary Product Standard, Performance Standard for Wood-based 
Structural Use Panels--PS 2-92, 1992 (also known as NIST Standard PS 2-
96).

[[Page 138]]

    Design and Fabrication of Plywood Stressed-Skin Panels--APA-U 813L, 
Suppl. 3, 1990.
    National Design Specifications for Wood Construction, 2001 Edition, 
with Supplement, Design Values for Wood Construction, NDS-2001, ANSI/
AFPA.
    Wood Structural Design Data, 1989, Revised 1992, AFPA.
    Span Tables for Joists and Rafters--PS-20-70, 1993, AFPA.
    Design Values for Joists and Rafters 1992, AFPA.
    Particleboard--ANSI A208.1-1999.
    Voluntary Specifications for Aluminum, Vinyl (PVC) and Wood Windows 
and Glass Doors--ANSI/AAMA/NWWDA 101/I.S.2-97.
    Standard Test Methods for Puncture and Stiffness of Paperboard, and 
Corrugated and Solid Fiberboard--ASTM D781, 1973.
    Standard Test Methods for Direct Moisture Content Measurement of 
Wood and Wood-Base Materials--ASTM D 4442-92 (Re-approved 1997), 1997.
    Standard Test Methods for Use and Calibration of Hand-Held Moisture 
Meters--ASTM D4444, 1992.

                                  Other

    Standard Specification for Gypsum Wallboard--ASTM C 36/C 36M-99, 
1999.

                                Fasteners

    National Evaluation Report, Power Driven Staples, Nails, and Allied 
Fasteners for Use in All Types of Building Construction--NER-272, 1997.

                              Unclassified

    Minimum Design Loads for Buildings and Other Structures--ASCE 7-
1988.
    Safety Performance Specifications and Methods of Test for Safety 
Glazing Materials Used in Building--ANSI Z97.1-1984.

    (2) Materials and methods of construction utilized in the design and 
construction of manufactured homes which are covered by the standards in 
the following table, or any applicable portion thereof shall comply with 
these requirements.
    (3) Engineering analysis and testing methods contained in these 
references shall be utilized to judge conformance with accepted 
engineering practices required in Sec. 3280.303(c).
    (4) Materials and methods of installation conforming to these 
standards shall be considered acceptable when installed in conformance 
with the requirements of this part.
    (5) Materials meeting the standards (or the applicable portion 
thereof) are considered acceptable unless otherwise specified herein or 
unless substantial doubt exists as to conformance.
    (c) Wood products shall be identified as complying with the 
appropriate standards.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 961, Jan. 4, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 58 FR 55006, 
Oct. 25, 1993; 59 FR 15113, Mar. 31, 1994; 70 FR 72043, Nov. 30, 2005]



Sec. 3280.305  Structural design requirements.

    (a) General. Each manufactured home shall be designed and 
constructed as a completely integrated structure capable of sustaining 
the design load requirements of this standard, and shall be capable of 
transmitting these loads to stabilizing devices without exceeding the 
allowable stresses or deflections. Roof framing shall be securely 
fastened to wall framing, walls to floor structure, and floor structure 
to chassis to secure and maintain continuity between the floor and 
chassis, so as to resist wind overturning, uplift, and sliding as 
imposed by design loads in this part. Uncompressed finished flooring 
greater than 1/8 inch in thickness shall not extend beneath load-bearing 
walls that are fastened to the floor structure.
    (b) Design loads--(1) Design dead loads. Design dead loads shall be 
the actual dead load supported by the structural assembly under 
consideration.
    (2) Design live loads. The design live loads and wind and snow loads 
shall be as specified in this section and shall be considered to be 
uniformly distributed. The roof live load or snow load shall not be 
considered as acting simultaneously with the wind load and the roof live 
or snow load and floor live loads shall not be considered as resisting 
the overturning moment due to wind.
    (3) When engineering calculations are performed, allowable unit 
stresses may be increased as provided in the documents referenced in 
Sec. 3280.304 except as otherwise indicated in Sec. Sec. 
3280.304(b)(1) and 3280.306(a).
    (4) Whenever the roof slope does not exceed 20 degrees, the design 
horizontal wind loads required by Sec. 3280.305(c)(1) may be determined 
without including

[[Page 139]]

the vertical roof projection of the manufactured home. However, 
regardless of the roof slope of the manufactured home, the vertical roof 
projection shall be included when determining the wind loading for split 
level or clerestory-type roof systems.
    (c) Wind, snow, and roof loads--(1) Wind loads--design requirements. 
(i) Standard wind loads (Zone I). When a manufactured home is not 
designed to resist the wind loads for high wind areas (Zone II or Zone 
III) specified in paragraph (c)(1)(ii) of this section, the manufactured 
home and each of its wind resisting parts and portions shall be designed 
for horizontal wind loads of not less than 15 psf and net uplift load of 
not less than 9 psf.
    (ii) Wind loads for high wind areas (Zone II and Zone III). When 
designed for high wind areas (Zone II and Zone III), the manufactured 
home, each of its wind resisting parts (including, but not limited to, 
shear walls, diaphragms, ridge beams, and their fastening and anchoring 
systems), and its components and cladding materials (including, but not 
limited to, roof trusses, wall studs, exterior sheathing, roofing and 
siding materials, exterior glazing, and their connections and fasteners) 
shall be designed by a Professional Engineer or Architect to resist:
    (A) The design wind loads for Exposure C specified in ANSI/ASCE 7-
88, ``Minimum Design Loads for Buildings and Other Structures,'' for a 
fifty-year recurrence interval, and a design wind speed of 100 mph, as 
specified for Wind Zone II, or 110 mph, as specified for Wind Zone III 
(Basic Wind Zone Map); or
    (B) The wind pressures specified in the following table:

                     Table of Design Wind Pressures
------------------------------------------------------------------------
                                           Wind zone II    Wind zone III
                 Element                    design wind     design wind
                                           speed 100 MPH   speed 110 MPH
------------------------------------------------------------------------
Anchorage for lateral and vertical
 stability (See Sec. 3280.306(a)):
    Net Horizontal Drag \1,2\:..........      \3\ 39 PSF   thn-eq>47 PSF
     \1,2\..............................
    Ridge beams and other Main Roof              -30 PSF         -36 PSF
     Support Beams (Beams supporting
     expanding room sections, etc.).....
Components and cladding:
    Roof trusses \4\ in all areas;           \5\ -39 PSF     \5\ -47 PSF
     trusses shall be doubled within
     3[foot]-0[foot] from each end of
     the roof...........................
    Exterior roof coverings, sheathing       \5\ -39 PSF     \5\ -47 PSF
     and fastenings \4\,\6\,\7\ in all
     areas except the following.........
        Within 3[foot]-0[foot] from each     \5\ -73 PSF     \5\ -89 PSF
         gable end (overhang at end
         wall) of the roof or endwall if
         no overhang is provided
         \4\,\6\,\7\....................
        Within 3[foot]-0[foot] from the      \5\ -51 PSF     \5\ -62 PSF
         ridge and eave (overhang at
         sidewall) or sidewall if no
         eave is provided \4\,\6\,\7\...
    Eaves (Overhangs at Sidewalls)           \5\ -51 PSF     \5\ -62 PSF
     \4\,\6\,\7\........................
    Gables (Overhangs at Endwalls)           \5\ -73 PSF     \5\ -89 PSF
     \4\,\6\,\7\........................
Wall studs in sidewalls and endwalls,
 exterior windows and sliding glass
 doors (glazing and framing), exterior
 coverings, sheathing and fastenings
 \8\:
        Within 3[foot]-0[foot] from each  48 PSF   thn-eq>58 PSF
         endwall........................
        All other areas.................  38 PSF  thn-eq>46 PSF
------------------------------------------------------------------------
NOTES:
 
\1\ The net horizontal drag of 39 PSF to be used
  in calculating Anchorage for Lateral and Vertical Stability and for
  the design of Main Wind Force Resisting Systems is based on a
  distribution of wind pressures of +0.8 or +24 PSF to the windward wall
  and -0.5 or -15 PSF to the leeward wall.
\2\ Horizontal drag pressures need not be applied to roof projections
  when the roof slope does not exceed 20 degrees.
\3\ + sign would mean pressures are acting towards or on the structure;
   sign means pressures are acting away from the structure; sign means forces can act in either direction, towards
  or away from the structure.
\4\ Design values in this ``Table'' are only applicable to roof slopes
  between 10 degrees (nominal 2/12 slope) and 30 degrees.
\5\ The design uplift pressures are the same whether they are applied
  normal to the surface of the roof or to the horizontal projection of
  the roof.
\6\ Shingle roof coverings that are secured with 6 fasteners per shingle
  through an underlayment which is cemented to a 3/8'' structural rated
  roof sheathing need not be evaluated for these design wind pressures.
\7\ Structural rated roof sheathing that is at least 3/8'' in thickness,
  installed with the long dimension perpendicular to roof framing
  supports, and secured with fasteners at 4'' on center within 3[foot]-
  0[foot] of each gable end or endwall if no overhang is provided and
  6'' on center in all other areas, need not be evaluated for these
  design wind pressures.
\8\ Exterior coverings that are secured at 6 o.c. to a 3/8 structural rated sheathing that is fastened to wall framing
  members at 6 on center need not be evaluated for these
  design wind pressures.


[[Page 140]]

    (iii) One-piece metal roofing capable of resisting the design wind 
pressures for ``Components and Cladding: (Exterior roof coverings)'' in 
the Table for Design Wind Pressures in this section is allowed to be 
used without structural sheathing, provided the metal roofing is tested 
using procedures that have been approved by HUD and that meet all 
requirements of Sec. Sec. 3280.303(c) and (g) and 3280.401.
    (2) Wind loads--zone designations. The Wind Zone and specific wind 
design load requirements are determined by the fastest basic wind speed 
(mph) within each Zone and the intended location, based on the Basic 
Wind Zone Map, as follows:
    (i) Wind Zone I. Wind Zone I consists of those areas on the Basic 
Wind Zone Map that are not identified in paragraphs (c)(2)(ii) or (iii) 
of this section as being within Wind Zone II or III, respectively.
    (ii) Wind Zone II.....100 mph. The following areas are deemed to be 
within Wind Zone II of the Basic Wind Zone Map:

    Local governments: The following local governments listed by State 
(counties, unless specified otherwise):
    Alabama: Baldwin and Mobile.
    Florida: All counties except those identified in paragraph 
(c)(1)(i)(C) of this section as within Wind Zone III.
    Georgia: Bryan, Camden, Chatham, Glynn, Liberty, McIntosh.
    Louisiana: Parishes of Acadia, Allen, Ascension, Assumption, 
Calcasieu, Cameron, East Baton Rouge, East Feliciana, Evangeline, 
Iberia, Iberville, Jefferson Davis, LaFayette, Livingston, Pointe 
Coupee, St. Helena, St. James, St. John the Baptist, St. Landry, St. 
Martin, St. Tammany, Tangipahoa, Vermillion, Washington, West Baton 
Rouge, and West Feliciana.
    Maine: Hancock and Washington.
    Massachusetts: Barnstable, Bristol, Dukes, Nantucket, and Plymouth.
    Mississippi: George, Hancock, Harrison, Jackson, Pearl River, and 
Stone.
    North Carolina: Beaufort, Brunswick, Camden, Chowan, Columbus, 
Craven, Currituck, Jones, New Hanover, Onslow, Pamlico, Pasquotank, 
Pender, Perquimans, Tyrrell, and Washington.
    South Carolina: Beaufort, Berkeley, Charleston, Colleton, 
Dorchester, Georgetown, Horry, Jasper, and Williamsburg.
    Texas: Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston, 
Jefferson, Kenedy, Kleberg, Matagorda, Nueces, Orange, Refugio, San 
Patricio, and Willacy.
    Virginia: Cities of Chesapeake, Norfolk, Portsmouth, Princess Anne, 
and Virginia Beach.

    (iii) Wind Zone III.....110 mph. The following areas are considered 
to be within Wind Zone III of the Basic Wind Zone Map:
    (A) States and Territories: The entire State of Hawaii, the coastal 
regions of Alaska (as determined by the 90 mph isotach on the ANSI/ASCE 
7-88 map), and all of the U.S. Territories of American Samoa, Guam, 
Northern Mariana Islands, Puerto Rico, Trust Territory of the Pacific 
Islands, and the United States Virgin Islands.
    (B) Local governments: The following local governments listed by 
State (counties, unless specified otherwise):

    Florida: Broward, Charlotte, Collier, Dade, Franklin, Gulf, Hendry, 
Lee, Martin, Manatee, Monroe, Palm Beach, Pinellas, and Sarasota.
    Louisiana: Parishes of Jefferson, La Fourche, Orleans, Plaquemines, 
St. Bernard, St. Charles, St. Mary, and Terrabonne.
    North Carolina: Carteret, Dare, and Hyde.

    (iv) Consideration of local requirements. For areas where local 
building code requirements exceed the design wind speed requirements of 
these standards, the Department will consider the adoption through 
rulemaking of the more stringent requirements of the State or local 
building authority.
    (3) Snow and roof loads. (i) Flat, curved and pitched roofs shall be 
designed to resist the following live loads, applied downward on the 
horizontal projection as appropriate for the design zone marked on the 
manufactured home:

------------------------------------------------------------------------
                                                                 Pounds
                                                                   per
            Zone (see Map in Sec. 3280.305(c)(4))              square
                                                                  foot
------------------------------------------------------------------------
North Zone....................................................        40
Middle Zone...................................................        30
South Zone....................................................        20
------------------------------------------------------------------------

    (A) North Roof Load Zone. The following counties in each of the 
following states are deemed to be within the North Roof Load Zone:

    Maine--Aroostook, Piscataquis, Somerset, Penobscot, Waldo, Knox, 
Hancock, and Washington.
    Alaska--All Counties


[[Page 141]]


    (B) Middle Roof Load Zone. The following counties in each of the 
following states are deemed to be within the Middle Roof Load Zone:

----------------------------------------------------------------------------------------------------------------
                     States                          Counties
----------------------------------------------------------------------------------------------------------------
South Dakota...................................  Grant            Brookings       Hanson          Lincoln
                                                 Codington        Miner           Minnehaha       Yankton
                                                 Deuel            Lake            Hutchinson      Union
                                                 Hamlin           Moody           Turner          Clay
                                                 Kingsbury        McCook
----------------------------------------------------------------------------------------------------------------
Minnesota......................................  Koochiching      Stearns         Renville        Sibley
                                                 Itasca           Swift           McLeod          Nicollet
                                                 Hubbard          Kandiyohi       Carver          Blue Earth
                                                 Cass             Meeker          Dakota          Martin
                                                 Crow Wing        Wright          Goodhue         Watonwan
                                                 Aitkin           Lac qui Parle   Wabasha         Brown
                                                 St. Louis        Chippewa        Winona          Redwood
                                                 Lake             Yellow          Fillmore        Lyon
                                                                   Medicine
                                                 Cook             Mille Lacs      Mower           Lincoln
                                                 Carlton          Kanabec         Olmsted         Pipestone
                                                 Pine             Benton          Dodge           Murray
                                                 Wadena           Isanti          Rice            Cottonwood
                                                 Todd             Sherburne       Steele          Jackson
                                                 Morrison         Anoka           Freeborn        Nobles
                                                 Douglas          Chisapo         Faribault       Rock
                                                 Grant            Washington      Waseca
                                                 Stevens          Hennepin        Le Sueur
                                                 Pope             Ramsey          Scott
----------------------------------------------------------------------------------------------------------------
Iowa...........................................  Hancock          Mitchell        Hamilton        Buena Vista
                                                 Lyon             Howard          Webster         Cherokee
                                                 Osceola          Chickasaw       Calhoun         Plymouth
                                                 Dickinson        Butler          Sac             Sioux
                                                 Emmet            Floyd           Ida             O'Brien
                                                 Kossuth          Cerro Gordo     Humboldt        Clay
                                                 Winnebago        Franklin        Pocahontas      Wright
                                                 Worth            Hardin          Palo Alto
----------------------------------------------------------------------------------------------------------------
Wisconsin......................................  Douglas          Oconto          Pepin           Lincoln
                                                 Bayfield         Menominee       Pierce          Oneida
                                                 Ashland          Langlade        Dunn            Polk
                                                 Iron             Marathon        Eau Claire      Burnett
                                                 Vilas            Clark           Chippewa        Washburn
                                                 Forest           Jackson         Rusk            Sawyer
                                                 Florence         Trempealeau     Barron          Price
                                                 Marinette        Buffalo         Taylor          Door
                                                 St. Croix
----------------------------------------------------------------------------------------------------------------
Michigan.......................................  Houghton         Iron            Presque Isle    Wexford
                                                 Baraga           Dickinson       Charlevoix      Benzie
                                                 Marquette        Menominee       Montmorency     Grand Traverse
                                                 Alger            Delta           Alpena          Kalkaska
                                                 Luce             Schoolcraft     Alcona          Oscoda
                                                 Chippewa         Mackinac        Ogemaw          Otsego
                                                 Keweenaw         Cheyboygan      Roscommon       Leelanau
                                                 Ontonagon        Emmet           Missaukee       Antrim
                                                 Gogebic          Crawford
----------------------------------------------------------------------------------------------------------------
New York.......................................  St. Lawrence     Herkimer        Onondaga        Genesee
                                                 Franklin         Lewis           Madison         Orleans
                                                 Clinton          Oswego          Cayuga          Niagara
                                                 Essex            Jefferson       Seneca          Erie
                                                 Hamilton         Oneida          Wayne           Wyoming
                                                 Warren           Fulton          Ontario         Monroe
                                                 Saratoga         Montgomery      Yates
                                                 Washington       Schenectady     Livingston
----------------------------------------------------------------------------------------------------------------
Massachusetts..................................  Essex
----------------------------------------------------------------------------------------------------------------
Maine..........................................  Franklin         Kennebec        Lincoln         Cumberland
                                                 Oxford           Androscoggin    Sagadahoc       York
----------------------------------------------------------------------------------------------------------------
Montana........................................  All Counties
----------------------------------------------------------------------------------------------------------------
Idaho..........................................  All Counties
----------------------------------------------------------------------------------------------------------------

[[Page 142]]

 
Colorado.......................................  All Counties
----------------------------------------------------------------------------------------------------------------
Wyoming........................................  All Counties
----------------------------------------------------------------------------------------------------------------
Utah...........................................  All Counties
----------------------------------------------------------------------------------------------------------------
Vermont........................................  Franklin         Orleans         Caledonia       Addison
                                                 Grand Isle       Essex           Washington      Rutland
                                                 Lamoille         Chittenden      Orange          Windsor
----------------------------------------------------------------------------------------------------------------
New Hampshire..................................  All Counties
----------------------------------------------------------------------------------------------------------------

    (C) South Roof Load Zone. The states and counties that are not 
listed for the North Roof Load Zone in paragraph (c)(3)(i)(A) of this 
section, or the Middle Roof Load Zone in paragraph (c)(3)(i)(B) of this 
section, are deemed to be within the South Roof Load Zone.
    (ii) For exposures in areas (mountainous or other) where snow or 
wind records or experience indicate significant differences from the 
loads stated above, the Department may establish more stringent 
requirements for homes known to be destined for such areas. For snow 
loads, such requirements are to be based on a roof snow load of 0.6 of 
the ground snow load for areas exposed to wind and a roof snow load of 
0.8 of the ground snow load for sheltered areas.
    (iii) Eaves and cornices shall be designed for a net uplift pressure 
of 2.5 times the design uplift wind pressure cited in Sec. 
3280.305(c)(1)(i) for Wind Zone I, and for the design pressures cited in 
Sec. 3280.305(c)(1)(ii) for Wind Zones II and III.
    (iv) Skylights must be capable of withstanding roof loads as 
specified in paragraphs (c)(3)(i) or (c)(3)(ii) of this section. 
Skylights must be listed and tested in accordance with AAMA 1600/I.S.7-
00, 2003, Voluntary Specification for Skylights.
    (4) Data plate requirements. The Data Plate posted in the 
manufactured home (see Sec. 3280.5) shall designate the wind and roof 
load zones or, if designed for higher loads, the actual design external 
snow and wind loads for which the home has been designed. The Data Plate 
shall include reproductions of the Load Zone Maps shown in this 
paragraph (c)(4), with any related information. The Load Zone Maps shall 
be not less than either 3\1/2\ in. by 2\1/4\ in., or one-half the size 
illustrated in the Code of Federal Regulations.

[[Page 143]]

[GRAPHIC] [TIFF OMITTED] TR14JA94.000


[[Page 144]]


[GRAPHIC] [TIFF OMITTED] TR20OC97.004

    (d) Design load deflection. (1) When a structural assembly is 
subjected to total design live loads, the deflection for structural 
framing members shall not exceed the following (where L equals the clear 
span between supports or two times the length of a cantilever):


[[Page 145]]


Floor--L/240
Roof and ceiling--L/180
Headers, beams, and girders (vertical load)--L/180
Walls and partitions--L/180

    (2) The allowable eave or cornice deflection for uplift is to be 
measured at the design uplift load of 9 psf for Wind Zone I, and at the 
design uplift pressure cited in paragraph (c)(1)(ii) of this section for 
Wind Zones II and III. The allowable deflection shall be (2xLc)/180, 
where Lc is the measured horizontal eave projection from the wall.
    (e) Fastening of structural systems. (1) Roof framing must be 
securely fastened to wall framing, walls to floor structure, and floor 
structure to chassis, to secure and maintain continuity between the 
floor and chassis in order to resist wind overturning, uplift, and 
sliding, and to provide continuous load paths for these forces to the 
foundation or anchorage system. The number and type of fasteners used 
must be capable of transferring all forces between elements being 
joined.
    (2) For Wind Zone II and Wind Zone III, roof framing members must be 
securely fastened at the vertical bearing points to resist design 
overturning, uplift, and sliding forces. When engineered connectors are 
not installed, roof framing members must be secured at the vertical 
bearing points to wall framing members (studs), and wall framing members 
(studs) must be secured to floor framing members, with 0.016 inch base 
metal, minimum steel strapping or engineered connectors, or by a 
combination of 0.016 inch base metal, minimum steel strapping or 
engineered connectors, and structural-rated wall sheathing that overlaps 
the roof and floor system if substantiated by structural analysis or by 
suitable load tests. Steel strapping or engineered connectors are to be 
installed at a maximum spacing of 24 inches on center in Wind Zone II, 
and 16 inches on center in Wind Zone III. Exception: Where substantiated 
by structural analysis or suitable load tests, the 0.016 inch base metal 
minimum steel strapping or engineered connectors may be omitted at the 
roof to wall and/or wall to floor connections, when structural rated 
sheathing that overlaps the roof and wall and/or wall and floor is 
capable of resisting the applicable design wind loads.
    (f) Walls. The walls shall be of sufficient strength to withstand 
the load requirements as defined in Sec. 3280.305(c) of this part, 
without exceeding the deflections as specified in Sec. 3280.305(d). The 
connections between the bearing walls, floor, and roof framework members 
shall be fabricated in such a manner as to provide support for the 
material used to enclose the manufactured home and to provide for 
transfer of all lateral and vertical loads to the floor and chassis.
    (1) Except where substantiated by engineering analysis or tests, 
studs shall not be notched or drilled in the middle one-third of their 
length.
    (2) Interior walls and partitions shall be constructed with 
structural capacity adequate for the intended purpose and shall be 
capable of resisting a horizontal load of not less than five pounds per 
square foot. An allowable stress increase of 1.33 times the permitted 
published design values may be used in the design of wood framed 
interior partitions. Finish of walls and partitions shall be securely 
fastened to wall framing.
    (g) Floors. (1) Floor assemblies shall be designed in accordance 
with accepted engineering practice standards to support a minimum 
uniform live load of 40 lb/ft \2\ plus the dead load of the materials. 
In addition (but not simultaneously), floors shall be able to support a 
200-pound concentrated load on a one-inch diameter disc at the most 
critical location with a maximum deflection not to exceed one-eighth 
inch relative to floor framing. Perimeter wood joists of more than six 
inches depth shall be stabilized against overturning from superimposed 
loads as follows: at ends by solid blocking not less than two-inch 
thickness by full depth of joist, or by connecting to a continuous 
header not less than two-inch thickness and not less than the depth of 
the joist with connecting devices; at eight-feet maximum intermediate 
spacing by solid blocking or by wood cross-bridging of not less than one 
inch by three inches, metal cross-bridging of equal strength, or by 
other approved methods.

[[Page 146]]

    (2) Wood, wood fiber or plywood floors or subfloors in kitchens, 
bathrooms (including toilet compartments), laundry areas, water heater 
compartments, and any other areas subject to excessive moisture shall be 
moisture resistant or shall be made moisture resistant by sealing or by 
an overlay of nonabsorbent material applied with water-resistant 
adhesive. Use of one of the following methods would meet this 
requirement:
    (i) Sealing the floor with a water-resistant sealer; or
    (ii) Installing an overlay of a non-absorbent floor covering 
material applied with water-resistant adhesive; or
    (iii) Direct application of a water-resistant sealer to the exposed 
wood floor area when covered with a non-absorbent overlay; or
    (iv) The use of a non-absorbent floor covering which may be 
installed without a continuous application of a water-resistant adhesive 
or sealant when the floor covering meets the following criteria:
    (A) The covering is a continuous membrane with any seams or patches 
seam bonded or welded to preserve the continuity of the floor covering; 
and
    (B) The floor is protected at all penetrations in these areas by 
sealing with a compatible water-resistant adhesive or sealant to prevent 
moisture from migrating under the nonabsorbent floor covering; and
    (C) The covering is fastened around the perimeter of the subfloor in 
accordance with the floor covering manufacturer's instructions; and,
    (D) The covering is designed to be installed to prevent moisture 
penetration without the use of a water-resistant adhesive or sealer 
except as required in this paragraph (g). The vertical edges of 
penetrations for plumbing shall be covered with a moisture-resistant 
adhesive or sealant. The vertical penetrations located under the bottom 
plates of perimeter walls of rooms, areas, or compartments are not 
required to be sealed; this does not include walls or partitions within 
the rooms or areas.
    (3) Wood panel products used as floor or subfloor materials on the 
exterior of the home, such as in recessed entryways, must be rated for 
exterior exposure and protected from moisture by sealing or applying 
nonabsorbent overlay with water resistant adhesive.
    (4) Carpet or carpet pads shall not be installed under concealed 
spaces subject to excessive moisture, such as plumbing fixture spaces, 
floor areas under installed laundry equipment. Carpet may be installed 
in laundry space provided:
    (i) The appliances are not provided;
    (ii) The conditions of paragraph (g)(2) of this section are 
followed; and
    (iii) Instructions are provided to remove carpet when appliances are 
installed.
    (5) Except where substantiated by engineering analysis or tests:
    (i) Notches on the ends of joists shall not exceed one-fourth the 
joist depth.
    (ii) Holes bored in joists shall not be within 2 inches of the top 
or bottom of the joist, and the diameter of any such hole shall not 
exceed one-third the depth of the joist.
    (iii) Notches in the top or bottom of the joists shall not exceed 
one-sixth the depth and shall not be located in the middle third of the 
span.
    (6) Bottom board material (with or without patches) shall meet or 
exceed the level of 48 inch-pounds of puncture resistance as tested by 
the Beach Puncture Test in accordance with Standard Test Methods for 
Puncture and Stiffness of Paperboard, and Corrugated and Solid 
Fiberboard, ASTM D-781-1968 (73). The material shall be suitable for 
patches and the patch life shall be equivalent to the material life. 
Patch installation instruction shall be included in the manufactured 
home manufacturer's instructions.
    (h) Roofs. (1) Roofs shall be of sufficient strength to withstand 
the load requirements as defined in Sec. 3280.305 (b) and (c) without 
exceeding the deflections specified in Sec. 3280.305(d). The 
connections between roof framework members and bearing walls shall be 
fabricated in such a manner to provide for the transfer of design 
vertical and horizontal loads to the bearing walls and to resist uplift 
forces.
    (2) Roofing membranes shall be of sufficient rigidity to prevent 
deflection which would permit ponding of water or separation of seams 
due to wind, snow, ice, erection or transportation forces.

[[Page 147]]

    (3) Cutting of roof framework members for passage of electrical, 
plumbing or mechanical systems shall not be allowed except where 
substantiated by engineering analysis.
    (4) All roof penetrations for electrical, plumbing or mechanical 
systems shall be properly flashed and sealed. In addition, where a metal 
roof membrane is penetrated, a wood backer shall be installed. The 
backer plate shall be not less than \5/16\ inch plywood, with exterior 
glues, secured to the roof framing system beneath the metal roof, and 
shall be of a size to assure that all screws securing the flashing are 
held by the backer plate.
    (i) Frame construction. The frame shall be capable of transmitting 
all design loads to stabilizing devices without exceeding the allowable 
load and deflections of this section. The frame shall also be capable of 
withstanding the effects of transportation shock and vibration without 
degradation as required by subpart J.
    (1) [Reserved]
    (2) Protection of metal frames against corrosion. Metal frames shall 
be made corrosion resistant or protected against corrosion. Metal frames 
may be protected against corrosion by painting.
    (j) Welded connections. (1) All welds must be made in accordance 
with the applicable provisions of the Specification for Structural Steel 
Buildings, Allowable Stress Design and Plastic Design, AISC-S335, 1989; 
the Specification for the Design of Cold-Formed Steel Structural 
Members, AISI, 1996; and the Specification for the Design of Cold-Formed 
Stainless Steel Structural Members, SEI/ASCE 8-02, 2002.
    (2) Regardless of the provisions of any reference standard contained 
in this subpart, deposits of weld slag or flux shall be required to be 
removed only from welded joints at the following locations:
    (i) Drawbar and coupling mechanisms;
    (ii) Main member splices, and
    (iii) Spring hanger to main member connections.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 44 FR 66195, Nov. 19, 1979; 52 FR 4582, Feb. 12, 1987; 58 
FR 55006, Oct. 25, 1993; 59 FR 2469, Jan. 14, 1994; 59 FR 15113, 15114, 
Mar. 31, 1994; 62 FR 54547, Oct. 20, 1997; 70 FR 72043, Nov. 30, 2005; 
71 FR 19638, Apr. 17, 2006]



Sec. 3280.306  Windstorm protection.

    (a) Provisions for support and anchoring systems. Each manufactured 
home shall have provisions for support/anchoring or foundation systems 
that, when properly designed and installed, will resist overturning and 
lateral movement (sliding) of the manufactured home as imposed by the 
respective design loads. For Wind Zone I, the design wind loads to be 
used for calculating resistance to overturning and lateral movement 
shall be the simultaneous application of the wind loads indicated in 
Sec. 3280.305(c)(1)(i), increased by a factor of 1.5. The 1.5 factor of 
safety for Wind Zone I is also to be applied simultaneously to both the 
vertical building projection, as horizontal wind load, and across the 
surface of the full roof structure, as uplift loading. For Wind Zones II 
and III, the resistance shall be determined by the simultaneous 
application of the horizontal drag and uplift wind loads, in accordance 
with Sec. 3280.305(c)(1)(ii). The basic allowable stresses of materials 
required to resist overturning and lateral movement shall not be 
increased in the design and proportioning of these members. No 
additional shape or location factors need to be applied in the design of 
the tiedown system. The dead load of the structure may be used to resist 
these wind loading effects in all Wind Zones.
    (1) The provisions of this section shall be followed and the support 
and anchoring systems shall be designed by a Registered Professional 
Engineer or Architect.
    (2) The manufacturer of each manufactured home is required to make 
provision for the support and anchoring systems but is not required to 
provide the anchoring equipment or stabilizing devices. When the 
manufacturer's installation instructions provide for the main frame 
structure to be used as the

[[Page 148]]

points for connection of diagonal ties, no specific connecting devices 
need be provided on the main frame structure.
    (b) Contents of instructions. (1) The manufacturer must provide 
printed instructions with each manufactured home that specify the 
location and required capacity of stabilizing devices on which the 
home's design is based. The manufacturer must identify by paint, label, 
decal stencil, or other means: the location of each column support pier 
location required along the marriage line(s) of multi-section 
manufactured homes; each pier location required along the perimeter of 
the home; each required shear wall pier support; and any other special 
pier support locations specified in the manufacturer's printed 
instructions. Such identifications must be visible after the home is 
installed. The manufacturer must provide drawings and specifications, 
certified by a registered professional engineer or architect, that 
indicate at least one acceptable system of anchoring, including the 
details or required straps or cables, their end connections, and all 
other devices needed to transfer the wind loads from the manufactured 
home to an anchoring or foundation system.
    (2) For anchoring systems, the instructions shall indicate:
    (i) The minimum anchor capacity required;
    (ii) That anchors should be certified by a professional engineer, 
architect, or a nationally recognized testing laboratory as to their 
resistance, based on the maximum angle of diagonal tie and/or vertical 
tie loading (see paragraph (c)(3) of this section) and angle of anchor 
installation, and type of soil in which the anchor is to be installed;
    (iii) That ground anchors are to be embedded below the frost line, 
unless the foundation system is frost-protected in accordance with 
Sec. Sec. 3285.312(b) and 3285.404 of the Model Manufactured Home 
Installation Standards in this chapter.
    (iv) That ground anchors must be installed to their full depth, and 
stabilizer plates must be installed in accordance with the ground anchor 
listing or certification to provide required resistance to overturning 
and sliding.
    (v) That anchoring equipment should be certified by a registered 
professional engineer or architect to resist these specified forces in 
accordance with testing procedures in ASTM Standard Specification D3953-
91, Standard Specification for Strapping, Flat Steel and Seals.
    (c) Design criteria. The provisions made for anchoring systems shall 
be based on the following design criteria for manufactured homes.
    (1) The minimum number of ties provided per side of each home shall 
resist design wind loads required in Sec. 3280.305(c)(1).
    (2) Ties shall be as evenly spaced as practicable along the length 
of the manufactured home, with not more than two (2) feet open-end 
spacing on each end.
    (3) Vertical ties or straps shall be positioned at studs. Where a 
vertical tie and a diagonal tie are located at the same place, both ties 
may be connected to a single anchor, provided that the anchor used is 
capable of carrying both loadings, simultaneously.
    (4) Add-on sections of expandable manufactured homes shall have 
provisions for vertical ties at the exposed ends.
    (d) Requirements for ties. Manufactured homes in Wind Zone I require 
only diagonal ties. These ties shall be placed along the main frame and 
below the outer side walls. All manufactured homes designed to be 
located in Wind Zones II and III shall have a vertical tie installed at 
each diagonal tie location.
    (e) Protection requirements. Protection shall be provided at sharp 
corners where the anchoring system requires the use of external straps 
or cables. Protection shall also be provided to minimize damage to 
siding by the cable or strap.
    (f) Anchoring equipment--load resistance. Anchoring equipment shall 
be capable of resisting an allowable working load equal to or exceeding 
3,150 pounds and shall be capable of withstanding a 50 percent overload 
(4,725 pounds total) without failure of either the anchoring equipment 
or the attachment point on the manufactured home.
    (g) Anchoring equipment--weatherization. Anchoring equipment exposed 
to

[[Page 149]]

weathering shall have a resistance to weather deterioration at least 
equivalent to that provided by a coating of zinc on steel of not less 
than 0.30 ounces per square foot of surface coated, and in accordance 
with the following:
    (1) Slit or cut edges of zinc-coated steel strapping do not need to 
be zinc coated.
    (2) Type 1, Finish B, Grade 1 steel strapping, 1-1/4 inches wide and 
0.035 inches in thickness, certified by a registered professional 
engineer or architect as conforming with ASTM Standard Specification 
D3953-91, Standard Specification for Strapping, Flat Steel, and Seals.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4583, Feb. 12, 1987; 59 FR 2473, Jan. 14, 1994; 70 
FR 72045, Nov. 30, 2005; 72 FR 59362, Oct. 19, 2007]



Sec. 3280.307  Resistance to elements and use.

    (a) Exterior coverings shall be of moisture and weather resistive 
materials attached with corrosion resistant fasteners to resist wind, 
snow and rain. Metal coverings and exposed metal structural members 
shall be of corrosion resistant materials or shall be protected to 
resist corrosion. All joints between portions of the exterior covering 
shall be designed, and assembled to protect against the infiltration of 
air and water, except for any designed ventilation of wall or roof 
cavity.
    (b) Joints between dissimilar materials and joints between exterior 
coverings and frames of openings shall be protected with a compatible 
sealant suitable to resist infiltration of air or water.
    (c) Where adjoining materials or assemblies of materials are of such 
nature that separation can occur due to expansion, contraction, wind 
loads or other loads induced by erection or transportation, sealants 
shall be of a type that maintains protection against infiltration or 
penetration by air, moisture or vermin.
    (d) Exterior surfaces shall be sealed to resist the entrance of 
rodents.



Sec. 3280.308  Formaldehyde emission controls for certain wood 
products.

    (a) Formaldehyde emission levels. All plywood and particleboard 
materials bonded with a resin system or coated with a surface finish 
containing formaldehyde shall not exceed the following formaldehyde 
emission levels when installed in manufactured homes:
    (1) Plywood materials shall not emit formaldehyde in excess of 0.2 
parts per million (ppm) as measured by the air chamber test method 
specified in Sec. 3280.406.
    (2) Particleboard materials shall not emit formaldehyde in excess of 
0.3 ppm as measured by the air chamber test specified in Sec. 3280.406.
    (b) Product certification and continuing qualification. All plywood 
and particleboard materials to be installed in manufactured homes which 
are bonded with a resin system or coated with a surface finish 
containing formaldehyde, other than an exclusively phenol-formaldehyde 
resin system or finish, shall be certified by a nationally recognized 
testing laboratory as complying with paragraph (a) of this section.
    (1) Separate certification shall be done for each plant where the 
particleboard is produced or where the plywood or particleboard is 
surface-finished.
    (2) To certify plywood or particleboard, the testing laboratory 
shall witness or conduct the air chamber test specified in Sec. 
3280.406 on randomly selected panels initially and at least quarterly 
thereafter.
    (3) The testing laboratory must approve a written quality control 
plan for each plant where the particleboard is produced or finished or 
where the plywood is finished. The quality control plan must be designed 
to assure that all panels comply with paragraph (a) of this section. The 
plan must establish ongoing procedures to identify increases in the 
formaldehyde emission characteristics of the finished product resulting 
from the following changes in production.
    (i) In the case of plywood:
    (A) The facility where the unfinished panels are produced is 
changed;

[[Page 150]]

    (B) The thickness of the panels is changed so that the panels are 
thinner; or
    (C) The grooving pattern on the panels is changed so that the 
grooves are deeper or closer together.
    (ii) In the case of particleboard:
    (A) The resin formulation is changed so that the formaldehyde-to-
urea ratio is increased;
    (B) The amount of formaldehyde resin used is increased; or
    (C) The press time is decreased.
    (iii) In the case of plywood or particleboard:
    (A) The finishing or top coat is changed and the new finishing or 
top coat has a greater formaldehyde content; or
    (B) The amount of finishing or top coat used on the panels is 
increased, provided that such finishing or top coat contains 
formaldehyde.
    (4) The testing laboratory shall periodically visit the plant to 
monitor quality control procedures to assure that all certified panels 
meet the standard.
    (5) To maintain its certification, plywood or particleboard must be 
tested by the air chamber test specified in Sec. 3280.406 whenever one 
of the following events occurs:
    (i) In the case of particleboard, the resin formulation is changed 
so that the formaldehyde-to-urea ratio is increased; or
    (ii) In the case of particleboard or plywood, the finishing or top 
coat is changed and the new finishing or top coat contains formaldehyde; 
or
    (iii) In the case of particleboard or plywood, the testing 
laboratory determines that an air chamber test is necessary to assure 
that panels comply with paragraph (a) of this section.
    (6) In the event that an air chamber test measures levels of 
formaldehyde from plywood or particleboard in excess of those permitted 
under paragraph (a) of this section, then the tested product's 
certification immediately lapses as of the date of production of the 
tested panels. No panel produced on the same date as the tested panels 
or on any day thereafter may be used or certified for use in 
manufactured homes.
    (i) Provided, however, that a new product certification may be 
obtained by testing randomly selected panels which were produced on any 
day following the date of production of the tested panels. If such 
panels pass the air chamber test specified in Sec. 3280.406, then the 
plywood or particleboard produced on that day and subsequent days may be 
used and certified for use in manufactured homes.
    (ii) Provided further, that plywood or particleboard produced on the 
same day as the tested panels, and panels produced on subsequent days, 
if not certified pursuant to paragraph (b)(4)(i) of this section, may be 
used in manufactured homes only under the following circumstances:
    (A) Each panel is treated with a scavenger, sealant, or other means 
of reducing formaldehyde emissions which does not adversely affect the 
structural quality of the product; and
    (B) Panels randomly selected from the treated panels are tested by 
and pass the air chamber test specified in Sec. 3280.406.
    (c) Panel identification. Each plywood and particleboard panel to be 
installed in manufactured homes which is bonded or coated with a resin 
system containing formaldehyde, other than an exclusively phenol-
formaldehyde resin system, shall be stamped or labeled so as to identify 
the product manufacturer, date of production and/or lot number, and the 
testing laboratory certifying compliance with this section.
    (d) Treatment after certification. If certified plywood or 
particleboard subsequently is treated with paint, varnish, or any other 
substance containing formaldehyde, then the certification is no longer 
valid. In such a case, each stamp or label placed on the panels pursuant 
to paragraph (c) of this section must be obliterated. In addition, the 
treated panels may be recertified and reidentified in accordance with 
paragraphs (b) and (c) of this section.

[49 FR 32011, Aug. 9, 1984]



Sec. 3280.309  Health Notice on formaldehyde emissions.

    (a) Each manufactured home shall have a Health Notice on 
formaldehyde emissions prominently displayed in a

[[Page 151]]

temporary manner in the kitchen (i.e., countertop or exposed cabinet 
face). The Notice shall read as follows:

                         Important Health Notice

    Some of the building materials used in this home emit formaldehyde. 
Eye, nose, and throat irritation, headache, nausea, and a variety of 
asthma-like symptoms, including shortness of breath, have been reported 
as a result of formaldehyde exposure. Elderly persons and young 
children, as well as anyone with a history of asthma, allergies, or lung 
problems, may be at greater risk. Research is continuing on the possible 
long-term effects of exposure to formaldehyde.
    Reduced ventilation resulting from energy efficiency standards may 
allow formaldehyde and other contaminants to accumulate in the indoor 
air. Additional ventilation to dilute the indoor air may be obtained 
from a passive or mechanical ventilation system offered by the 
manufacturer. Consult your dealer for information about the ventilation 
options offered with this home.
    High indoor temperatures and humidity raise formaldehyde levels. 
When a home is to be located in areas subject to extreme summer 
temperatures, an air-conditioning system can be used to control indoor 
temperature levels. Check the comfort cooling certificate to determine 
if this home has been equipped or designed for the installation of an 
air-conditioning system.
    If you have any questions regarding the health effects of 
formaldehyde, consult your doctor or local health department.

    (b) The Notice shall be legible and typed using letters at least \1/
4\ inch in size. The title shall be typed using letters at least \3/4\ 
inch in size.
    (c) The Notice shall not be removed by any party until the entire 
sales transaction has been completed (refer to part 3282--Manufactured 
Home Procedural and Enforcement Regulations for provisions regarding a 
sales transaction).
    (d) A copy of the Notice shall be included in the Consumer Manual 
(refer to part 3283--Manufactured Home Consumer Manual Requirements).

[49 FR 32012, Aug. 9, 1984, as amended at 54 FR 46049, Nov. 1, 1989; 58 
FR 55007, Oct. 25, 1993]



                            Subpart E_Testing



Sec. 3280.401  Structural load tests.

    Every structural assembly tested shall be capable of meeting the 
Proof Load Test or the Ultimate Load Test as follows:
    (a) Proof load tests. Every structural assembly tested must be 
capable of sustaining its dead load plus superimposed live loads equal 
to 1.75 times the required live loads for a period of 12 hours without 
failure. Tests must be conducted with loads applied and deflections 
recorded in \1/4\ design live load increments at 10-minute intervals 
until 1.25 times design live load plus dead load has been reached. 
Additional load shall then be applied continuously until 1.75 times 
design live load plus dead load has been reached. Assembly failure shall 
be considered as design live load deflection (or residual deflection 
measured 12 hours after live load removal) that is greater than the 
limits set in Sec. 3280.305(d), rupture, fracture, or excessive 
yielding. Design live load deflection criteria do not apply when the 
structural assembly being evaluated does not include structural framing 
members. An assembly to be tested shall be of the minimum quality of 
materials and workmanship of the production. Each test assembly, 
component, or subassembly shall be identified as to type and quality or 
grade of material. All assemblies, components, or subassemblies 
qualifying under this test shall be subject to a continuing 
qualification testing program acceptable to HUD.
    (b) Ultimate load tests. Ultimate load tests must be performed on a 
minimum of three assemblies or components to generally evaluate the 
structural design. Every structural assembly or component tested must be 
capable of sustaining its total dead load plus the design live load 
increased by a factor of safety of at least 2.5. A factor of safety 
greater than 2.5 shall be used when required by an applicable reference 
standard in Sec. 3280.304(b)(1). Tests shall be conducted with loads 
applied and deflections recorded in 1/4 design live load increments at 
10-minute intervals until 1.25 times design live load plus dead load has 
been reached. Additional loading shall then be applied continuously 
until failure occurs, or the total of the factor of safety times the 
design live load plus the dead load is reached. Assembly failure shall 
be considered as design live load deflection greater than

[[Page 152]]

the limits set in Sec. 3280.305(d), rupture, fracture, or excessive 
yielding. Design live load deflection criteria do not apply when the 
structural assembly being evaluated does not include structural framing 
members. Assemblies to be tested shall be representative of average 
quality or materials and workmanship of the production. Each test 
assembly, component, or subassembly shall be identified as to type and 
quality or grade of material. All assemblies, components, or 
subassemblies qualifying under this test shall be subject to a periodic 
qualification testing program acceptable to HUD.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55007, Oct. 25, 1993; 70 FR 72045, Nov. 30, 2005]



Sec. 3280.402  Test procedure for roof trusses.

    (a) Roof load tests. The following is an acceptable test procedure, 
consistent with the provisions of Sec. 3280.401, for roof trusses that 
are supported at the ends and support design loads. Where roof trusses 
act as support for other members, act as cantilevers, or support 
concentrated loads, they shall be tested accordingly.
    (b) General. Trusses may be tested in pairs or singly in a suitable 
test facility. When tested singly, simulated lateral support of the test 
assembly may be provided, but in no case shall this lateral support 
exceed that which is specified for the completed manufactured home. When 
tested in pairs, the trusses shall be spaced at the design spacing and 
shall be mounted on solid support accurately positioned to give the 
required clear span distance (L) as specified in the design. The top and 
bottom chords shall be braced and covered with the material, with 
connections or method of attachment, as specified by the completed 
manufactured home.
    (1) As an alternate test procedure, the top chord may be sheathed 
with \1/4\ inch by 12 inch plywood strips. The plywood strips shall be 
at least long enough to cover the top chords of the trusses at the 
designated design truss spacing. Adjacent plywood strips must be 
separated by at least \1/8\ inch. The plywood strip shall be nailed with 
4d nails or equivalent staples not closer than 8 inches on center along 
the top chord. The bottom chords of the adjacent trusses may be either:
    (i) Unbraced,
    (ii) Laterally braced together (not cross braced) with 
1x2 stripping not closer than 24 inches on center 
nailed with only one 6d nail at each truss, or
    (iii) Covered with the material, with connections or methods of 
attachment, as specified for the completed manufactured home.
    (2) Truss deflections will be measured relative to a taut wire 
running over the support and weighted at the end to insure constant 
tension or other approved methods. Deflections will be measured at the 
two quarter points and at midspan. Loading shall be applied to the top 
chord through a suitable hydraulic, pneumatic, or mechanical system, 
masonry units, or weights to simulate design loads. Load units for 
uniformly distributed loads shall be separated so that arch action does 
not occur, and shall be spaced not greater than 12 inches on center so 
as to simulate uniform loading.
    (c) Nondestructive test procedure--(1) Dead load plus live load. (i) 
Noting figure A-1, measure and record initial elevation of the truss in 
test position at no load.

[[Page 153]]

[GRAPHIC] [TIFF OMITTED] TC17OC91.008

    (ii) Apply load units to the top chord of the truss equal to the 
full dead load of roof and ceiling. Measure and record deflections.
    (iii) Maintaining the dead load, add live load in approximate \1/4\ 
design live load increments. Measure the deflections after each loading 
increment.

[[Page 154]]

Apply incremental loads at a uniform rate such that approximately one-
half hour is required to establish the total design load condition. 
Measure and record the deflections five minutes after loads have been 
applied. The maximum deflection due to design live load (deflection 
measured in step (iii) minus step (ii)) shall not exceed L/180, where L 
is a clear span measured in the same units.
    (iv) Continue to load truss to dead load plus 1.75 times the design 
live load. Maintain this loading for 12 hours and inspect the truss for 
failure.
    (v) Remove the total superimposed live load. Trusses not recovering 
to at least the L/180 position within 12 hours shall be considered as 
failing.
    (2) Uplift loads. This test shall only be required for truss designs 
which may be critical under uplift load conditions.
    (i) Measure and record initial elevation of the truss in an inverted 
test position at no load. Bottom chord of the truss shall be mounted in 
the horizontal position.
    (ii) Apply the uplift load as stated in Sec. 3280.305(c) to the 
bottom chord of the truss. Measure and record the deflections 5 minutes 
after the load has been applied.
    (iii) Continue to load the truss to 1.75 times the design uplift 
load. Maintain this load for 3 hours and inspect the truss for failure.
    (iv) Remove applied loads and within three hours the truss must 
recover to at least L/180 position, where L is a clear span measured in 
the same units.
    (d) Destructive test procedure. (1) Destructive tests shall be 
performed on three trusses to generally evaluate the truss design.
    (2) Noting figure A-1, apply the load units to the top chord of the 
truss assembly equal to full dead load of roof and ceiling. Measure and 
record deflections. Then apply load and record deflections in \1/4\ 
design live load increments at 10-minute intervals until 1.25 times 
design live load plus dead load has been reached.
    (3) Additional loading shall then be applied continuously until 
failure occurs or the factor of safety times the design live load plus 
the dead load is reached.
    (4) Assembly failure shall be considered as design live load 
deflection greater than the limits set in Sec. 3280.305(d), rupture, 
fracture, or excessive yielding.
    (5) The assembly shall be capable of sustaining the dead load plus 
the applicable factor of safety times the design live load (the 
applicable factor of safety for wood trusses shall be taken as 2.50).
    (e) Trusses qualifying under the nondestructive test procedure. 
Tests Sec. 3208.402(c) (1) and (2) (when required), shall be subject to 
a continuing qualification testing program acceptable to the Department. 
Trusses qualifying under the destructive test procedures, Tests Sec. 
3280.402 (c)(2) (when required), and (d), shall be subject to periodic 
tests only.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 961, Jan. 4, 1977. 
Redesignated at 44 FR 20679. Apr. 6, 1979, as amended at 58 FR 55008, 
Oct. 25, 1993]



Sec. 3280.403  Standard for windows and sliding glass doors used in
manufactured homes.

    (a) Scope. This section sets the requirements for prime windows and 
sliding glass doors except for windows used in entry doors. Windows so 
mounted are components of the door and thus are excluded from this 
standard.
    (b) Standard. All primary windows and sliding glass doors shall 
comply with AAMA 1701.2-95, Voluntary Standard Primary Window and 
Sliding Glass Door for Utilization in Manufactured Housing, except the 
exterior and interior pressure tests must be conducted at the design 
wind loads required for components and cladding specified in Sec. 
3280.305(c)(1).
    (c) Installation. All primary windows and sliding glass doors shall 
be installed in a manner which allows proper operation and provides 
protection against the elements (see Sec. 3280.307).
    (d) Glass. (1) Safety glazing materials, where used, shall meet ANSI 
Z97.1-1984, ``Safety Performance Specifications and Methods of Test for 
Safety Glazing Materials Used in Buildings.''
    (2) Sealed insulating glass, where used, must meet all performance 
requirements for Class C in accordance

[[Page 155]]

with ASTM E 774-97, Standard Specification for the Classification of the 
Durability of Sealed Insulating Glass Units. The sealing system must be 
qualified in accordance with ASTM E 773-97, Standard Test Methods for 
Accelerated Weathering of Sealed Insulating Glass Units. Each glass unit 
must be permanently identified with the name of the insulating glass 
manufacturer.
    (e) Certification. All primary windows and sliding glass doors to be 
installed in manufactured homes must be certified as complying with AAMA 
1701.2-95. This certification must be based on tests conducted at the 
design wind loads specified in Sec. 3280.305(c)(1).
    (1) All such windows and doors must show evidence of certification 
by affixing a quality certification label to the product in accordance 
with ANSI Z34.1-1993, Third-Party Certification Programs for Products, 
Processes, and Services.
    (2) In determining certifiability of the products, an independent 
quality assurance agency shall conduct pre-production specimen tests in 
accordance with AAMA 1701.2-95. Further, such agency must inspect the 
product manufacturer's facility at least twice per year.
    (f) Protection of primary window and sliding glass door openings in 
high wind areas. For homes designed to be located in Wind Zones II and 
III, manufacturers shall design exterior walls surrounding the primary 
window and sliding glass door openings to allow for the installation of 
shutters or other protective covers, such as plywood, to cover these 
openings. Although not required, the Department encourages manufacturers 
to provide the shutters or protective covers and to install receiving 
devices, sleeves, or anchors for fasteners to be used to secure the 
shutters or protective covers to the exterior walls. If the manufacturer 
does not provide shutters or other protective covers to cover these 
openings, the manufacturer must provide to the homeowner instructions 
for at least one method of protecting primary window and sliding glass 
door openings. This method must be capable of resisting the design wind 
pressures specified in Sec. 3280.305 without taking the home out of 
conformance with the standards in this part. These instructions must be 
included in the printed instructions that accompany each manufactured 
home. The instructions shall also indicate whether receiving devices, 
sleeves, or anchors, for fasteners to be used to secure the shutters or 
protective covers to the exterior walls, have been installed or provided 
by the manufacturer.

[52 FR 4583, Feb. 12, 1987, as amended at 52 FR 35543, Sept. 22, 1987; 
58 FR 55009, Oct. 25, 1993; 59 FR 2474, Jan. 14, 1994; 70 FR 72046, Nov. 
30, 2005]



Sec. 3280.404  Standard for egress windows and devices for use in
manufactured homes.

    (a) Scope and purpose. The purpose of this section is to establish 
the requirements for the design, construction, and installation of 
windows and approved devices intended to be used as an emergency exit 
during conditions encountered in a fire or similar disaster.
    (b) Performance. Egress windows including auxiliary frame and seals, 
if any, shall meet all requirements of AAMA 1701.2-95, Voluntary 
Standard Primary Window and Sliding Glass Door for Utilization in 
Manufactured Housing and AAMA Standard 1704-1985, Voluntary Standard 
Egress Window Systems for Utilization in Manufactured Housing, except 
the exterior and interior pressure tests for components and cladding 
must be conducted at the design wind loads required by Sec. 
3280.305(c)(1).
    (c) Installation. (1) The installation of egress windows or devices 
shall be installed in a manner which allows for proper operation and 
provides protection against the elements. (See Sec. 3280.307.)
    (2) An operational check of each installed egress window or device 
shall be made at the manufactured home factory. All egress windows and 
devices shall be openable to the minimum required dimension without 
binding or requiring the use of tools. Any window or device failing this 
check shall be repaired or replaced. A repaired window shall conform to 
its certification. Any repaired or replaced window or device shall pass 
the operational check.

[[Page 156]]

    (d) Operating instructions. Operating instructions shall be affixed 
to each egress window and device and carry the legend ``Do Not Remove.''
    (e) Certification of egress windows and devices. Egress windows and 
devices shall be listed in accordance with the procedures and 
requirements of AAMA Standard 1704-1985. As of January 17, 1995, this 
certification must be based on tests conducted at the design wind loads 
specified in Sec. 3280.305(c)(1).
    (f) Protection of egress window openings in high wind areas. For 
homes designed to be located in Wind Zones II and III, manufacturers 
shall design exterior walls surrounding the egress window openings to 
allow for the installation of shutters or other protective covers, such 
as plywood, to cover these openings. Although not required, the 
Department encourages manufacturers to provide the shutters or 
protective covers and to install receiving devices, sleeves, or anchors 
for fasteners to be used to secure the shutters or protective covers to 
the exterior walls. If the manufacturer does not provide shutters or 
other protective covers to cover these openings, the manufacturer must 
provide to the homeowner instructions for at least one method of 
protecting egress window openings. This method must be capable of 
resisting the design wind pressures specified in Sec. 3280.305 without 
taking the home out of conformance with the standards in this part. 
These instructions must be included in the printed instructions that 
accompany each manufactured home. The instructions shall also indicate 
whether receiving devices, sleeves, or anchors, for fasteners to be used 
to secure the shutters or protective covers to the exterior walls, have 
been installed or provided by the manufacturer.

[52 FR 4583, Feb. 12, 1987, as amended at 59 FR 2474, Jan. 14, 1994; 70 
FR 72046, Nov. 30, 2005]



Sec. 3280.405  Standard for swinging exterior passage doors for use 
in manufactured homes.

    (a) Introduction. This standard applies to all exterior passage door 
units, excluding sliding doors and doors used for access to utilities 
and compartments. This standard applies only to the door frame 
consisting of jambs, head and sill and the attached door or doors.
    (b) Performance requirements. The design and construction of 
exterior door units must meet all requirements of AAMA 1702.2-95, 
Voluntary Standard Swinging Exterior Passage Door for Utilization in 
Manufactured Housing.
    (c) Materials and methods. Any material or method of construction 
shall conform to the performance requirements as outlined in paragraph 
(b) of this section. Plywood shall be exterior type and preservative 
treated in accordance with NWWDA I.S.4-81, Water Repellent Preservative 
Non-Pressure Treatment for Millwork.
    (d) Exterior doors. All swinging exterior doors shall be installed 
in a manner which allows proper operation and provides protection 
against the elements (see Sec. 3280.307).
    (e) Certification. All swinging exterior doors to be installed in 
manufactured homes must be certified as complying with AAMA 1702.2-95, 
Voluntary Standard Swinging Exterior Passage Door for Utilization in 
Manufactured Housing.
    (1) All such doors must show evidence of certification by affixing a 
quality certification label to the product in accordance with ANSI 
Z34.1-1993, Third Party Certification Programs for Products, Processes, 
and Services.
    (2) In determining certifiability of the products, an independent 
quality assurance agency must conduct a pre-production specimen test in 
accordance with AAMA 1702.2-95, Voluntary Standard Swinging Exterior 
Passage Door for Utilization in Manufactured Housing.
    (f) Protection of exterior doors in high wind areas. For homes 
designed to be located in Wind Zones II and III, manufacturers shall 
design exterior walls surrounding the exterior door openings to allow 
for the installation of shutters or other protective covers, such as 
plywood, to cover these openings. Although not required, the Department 
encourages manufacturers to provide the shutters or protective covers 
and to install receiving devices, sleeves, or anchors for fasteners to 
be used to secure the shutters or protective covers to the exterior 
walls. If the manufacturer does not provide shutters or

[[Page 157]]

other protective covers to cover these openings, the manufacturer must 
provide to the homeowner instructions for at least one method of 
protecting exterior door openings. This method must be capable of 
resisting the design wind pressures specified in Sec. 3280.305 without 
taking the home out of conformance with the standards in this part. 
These instructions must be included in the printed instructions that 
accompany each manufactured home. The instructions shall also indicate 
whether receiving devices, sleeves, or anchors, for fasteners to be used 
to secure the shutters or protective covers to the exterior walls, have 
been installed or provided by the manufacturer.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4583, Feb. 12, 1987; 52 FR 35543, Sept. 22, 1987; 58 
FR 55009, Oct. 25, 1993; 59 FR 2474, Jan. 14, 1994; 70 FR 72046, Nov. 
30, 2005]



Sec. 3280.406  Air chamber test method for certification and 
qualification of formaldehyde emission levels.

    (a) Preconditioning. Preconditioning of plywood or particleboard 
panels for air chamber tests shall be initiated as soon as practicable 
but not in excess of 30 days after the plywood or particleboard is 
produced or surface-finished, whichever is later, using randomly 
selected panels.
    (1) If preconditioning is to be initiated more than two days after 
the plywood or particleboard is produced or surface-finished, whichever 
is later, the panels must be dead-stacked or air-tight wrapped until 
preconditioning is initiated.
    (2) Panels selected for testing in the air chamber shall not be 
taken from the top or bottom of the stack.
    (b) Testing. Testing must be conducted in accordance with the 
Standard Test Method for Determining Formaldehyde Levels from Wood 
Products Under Defined Test Conditions Using a Large Chamber, ASTM E 
1333-96, with the following exceptions:
    (1) The chamber shall be operated indoors.
    (2) Plywood and particleboard panels shall be individually tested in 
accordance with the following loading ratios:
    (i) Plywood--0.29 Ft2/Ft3, and
    (ii) Particleboard--0.13 Ft2/Ft3.
    (3) Temperature to be maintained inside the chamber shall be 77[deg] 
plus or minus 2 [deg]F.
    (4) The test concentration (C) shall be standardized to a level 
(CO) at a temperature (tO) of 77 [deg]F and 50% 
relative humidity (HO) by the following formula:

C = CO x [1 + Ax (H - HO)] x 
    e-R(1 / t - 1 / t O)

where:

C = Test formaldehyde concentration
CO = Standardized formaldehyde concentration
e = Natural log base
R = Coefficient of temperature (9799)
t = Actual test condition temperature (O K)
tO = Standardized temperature (O K)
A = Coefficient of humidity (0.0175)
H = Actual relative humidity (%)
HO = Standardized relative humidity (%)


The standardized level (CO) is the concentration used to 
determine compliance with Sec. 3280.308(a).
    (5) The air chamber shall be inspected and recalibrated at least 
annually to insure its proper operation under test conditions.

[49 FR 32012, Aug. 9, 1984, as amended at 58 FR 55009, Oct. 25, 1993; 70 
FR 72046, Nov. 30, 2005]



                      Subpart F_Thermal Protection



Sec. 3280.501  Scope.

    This subpart sets forth the requirements for condensation control, 
air infiltration, thermal insulation and certification for heating and 
comfort cooling.



Sec. 3280.502  Definitions.

    (a) The following definitions are applicable to subpart F only:
    (1) Pressure envelope means that primary air barrier surrounding the 
living space which serves to limit air leakage. In construction using 
ventilated cavities, the pressure envelope is the interior skin.
    (2) Thermal envelope area means the sum of the surface areas of 
outside walls, ceiling and floor, including all openings. The wall area 
is measured by multiplying outside wall lengths by the inside wall 
height from floor to ceiling.

[[Page 158]]

The floor and ceiling areas are considered as horizontal surfaces using 
exterior width and length.



Sec. 3280.503  Materials.

    Materials used for insulation shall be of proven effectiveness and 
adequate durability to assure that required design conditions concerning 
thermal transmission are attained.



Sec. 3280.504  Condensation control and installation of vapor retarders.

    (a) Ceiling vapor retarders. (1) In Uo Value Zones 2 and 
3, ceilings must have a vapor retarder with a permeance of not greater 
than 1 perm (as measured by ASTM E 96-95 Standard Test Methods for Water 
Vapor Transmission of Materials) installed on the living space side of 
the roof cavity.
    (2) For manufactured homes designed for Uo Value Zone 1, the vapor 
retarder may be omitted.
    (b) Exterior walls. (1) Exterior walls must have a vapor retarder 
with a permeance no greater than 1 perm (dry cup method) installed on 
the living space side of the wall; or
    (2) Unventilated wall cavities must have an external covering and/or 
sheathing that forms the pressure envelope. The covering and/or 
sheathing must have a combined permeance of not less than 5.0 perms. In 
the absence of test data, combined permeance is permitted to be computed 
using the following formula: P total = (1/[(1/P1) + (1/
P2)]), where P1 and P2 are the 
permeance values of the exterior covering and sheathing in perms. Formed 
exterior siding applied in sections with joints not caulked or sealed, 
are not considered to restrict water vapor transmission; or
    (3) Wall cavities must be constructed so that ventilation is 
provided to dissipate any condensation occurring in these cavities; or
    (4) Homes manufactured to be sited in ``humid climates'' or ``fringe 
climates'' as shown on the Humid and Fringe Climate Map in this 
paragraph are permitted to have a vapor retarder specified in paragraph 
(b)(1) of this section installed on the exterior side of the wall 
insulation or be constructed with an external covering and sheathing 
with a combined permeance of not greater than 1.0 perms, provided the 
interior finish and interior wall panel materials have a combined 
permeance of not less than 5.0 perms. The following need not meet the 
minimum combined permeance rating of not less than 5.0 perms for 
interior finish or wall panel materials:
    (i) Kitchen back splash materials, less than 50 square feet in area 
installed around countertops, sinks, and ranges;
    (ii) Bathroom tub areas, shower compartments;
    (iii) Cabinetry and built-in furniture;
    (iv) Trim materials;
    (v) Hardboard wall paneling of less than 50 square feet in area 
under chair rails.

[[Page 159]]

[GRAPHIC] [TIFF OMITTED] TR30NO05.067

    (5) The following areas of local governments (counties or similar 
areas, unless otherwise specified), listed by state are deemed to be 
within the humid and fringe climate areas shown on the Humid and Fringe 
Climate Map in paragraph (b)(4) of this section, and the vapor retarder 
or construction methods specified in paragraph (b)(4) of this section 
may be applied to homes built to be sited within these jurisdictions:

                                 Alabama

    Baldwin, Barbour, Bullock, Butler, Choctaw, Clarke, Coffee, Conecuh, 
Covington, Crenshaw, Dale, Escambia, Geneva, Henry, Houston, Lowndes, 
Marengo, Mobile, Monroe, Montgomery, Pike, Washington, Wilcox.

                                 Florida

    All counties and locations within the State of Florida.

                                 Georgia

    Appling, Atkinson, Bacon, Baker, Ben Hill, Berrien, Brantley, 
Brooks, Bryan, Calhoun, Camden, Charlton, Chatham, Clay, Clinch, Coffee, 
Colquitt, Cook, Crisp, Decatur, Dougherty, Early, Echols, Effingham, 
Evans, Glynn, Wayne, Grady, Irwin, Jeff Davis, Lanier, Lee, Liberty, 
Long, Lowndes, McIntosh, Miller, Mitchell, Pierce, Quitman, Randolph, 
Seminole, Tattnall, Terrell, Thomas, Tift, Turner, Ware, Worth.

                                 Hawaii

    All counties and locations within the State of Hawaii.

                                Louisiana

    All counties and locations within the State of Louisiana.

                               Mississippi

    Adams, Amite, Claiborne, Clarke, Copiah, Covington, Forrest, 
Franklin, George, Greene, Hancock, Harrison, Hinds, Issaquena, Jackson, 
Jasper, Jefferson, Jefferson Davis, Jones, Lamar, Lawrence, Lincoln, 
Marion, Pearl River, Perry, Pike, Rankin, Simpson, Smith, Stone, 
Walthall, Warren, Wayne, Wilkinson.

                             North Carolina

    Brunswick, Carteret, Columbus, New Hanover, Onslow, Pender.

                             South Carolina

    Jasper, Beaufort, Colleton, Dorchester, Charleston, Berkeley, 
Georgetown, Horry.

                                  Texas

    Anderson, Angelina, Aransas, Atascosa, Austin, Bastrop, Bee, Bexar, 
Brazoria, Brazos, Brooks, Burleson, Caldwell, Calhoun,

[[Page 160]]

Cameron, Camp, Cass, Chambers, Cherokee, Colorado, Comal, De Witt, 
Dimmit, Duval, Falls, Fayette, Fort Bend, Franklin, Freestone, Frio, 
Galveston, Goliad, Gonzales, Gregg, Grimes, Guadalupe, Hardin, Harris, 
Harrison, Hays, Henderson, Hidalgo, Hopkins, Houston, Jackson, Jasper, 
Jefferson, Jim Hogg, Jim Wells, Karnes, Kaufman, Kennedy, Kinney, 
Kleberg, La Salle, Lavaca, Lee, Leon, Liberty, Limestone, Live Oak, 
Madison, Marion, Matagorda, Maverick, McMullen, Medina, Milam, 
Montgomery, Morris, Nacogdoches, Navarro, Newton, Nueces, Orange, 
Panola, Polk, Rains, Refugio, Robertson, Rusk, Sabine, San Augustine, 
San Jacinto, San Patricio, Shelby, Smith, Starr, Titus, Travis, Trinity, 
Tyler, Upshur, Uvalde, Val Verde, Van Zandt, Victoria, Walker, Waller, 
Washington, Webb, Wharton, Willacy, Williamson, Wilson, Wood, Zapata, 
Zavala.

    (c) Attic or roof ventilation. (1) Attic and roof cavities shall be 
vented in accordance with one of the following:
    (i) A minimum free ventilation area of not less than 1/300 of the 
attic or roof cavity floor area. At least 50 percent of the required 
free ventilation area shall be provided by ventilators located in the 
upper portion of the space to be ventilated. At least 40 percent shall 
be provided by eave, soffit or low gable vents. The location and spacing 
of the vent openings and ventilators shall provide cross-ventilation to 
the entire attic or roof cavity space. A clear air passage space having 
a minimum height of 1 inch shall be provided between the top of the 
insulation and the roof sheathing or roof covering. Baffles or other 
means shall be provided where needed to insure the 1 inch height of the 
clear air passage space is maintained.
    (ii) A mechanical attic or roof ventilation system may be installed 
instead of providing the free ventilation area when the mechanical 
system provides a minimum air change rate of 0.02 cubic feet per minute 
(cfm) per sq. ft. of attic floor area. Intake and exhaust vents shall be 
located so as to provide air movement throughout space.
    (2) Single section manufactured homes constructed with metal roofs 
and having no sheathing or underlayment installed, are not required to 
be provided with attic or roof cavity ventilation provided that the air 
leakage paths from the living space to the roof cavity created by 
electrical outlets, electrical junctions, electrical cable penetrations, 
plumbing penetrations, flue pipe penetrations and exhaust vent 
penetrations are sealed.
    (3) Parallel membrane roof section of a closed cell type 
construction are not required to be ventilated.
    (4) The vents provided for ventilating attics and roof cavities 
shall be designed to resist entry of rain and insects.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55009, Oct. 25, 1993; 70 FR 72046, Nov. 30, 2005; 71 
FR 19639, Apr. 17, 2006]



Sec. 3280.505  Air infiltration.

    (a) Envelope air infiltration. The opaque envelope shall be designed 
and constructed to limit air infiltration to the living area of the 
home. Any design, material, method or combination thereof which 
accomplishes this goal may be used. The goal of the infiltration control 
criteria is to reduce heat loss/heat gain due to infiltration as much as 
possible without impinging on health and comfort and within the limits 
of reasonable economics.
    (1) Envelope penetrations. Plumbing, mechanical and electrical 
penetrations of the pressure envelope not exempted by this part, and 
installations of window and door frames shall be constructed or treated 
to limit air infiltration. Penetrations of the pressure envelope made by 
electrical equipment, other than distribution panel boards and cable and 
conduit penetrations, are exempt from this requirement. Cable 
penetrations through outlet boxes are considered exempt.
    (2) Joints between major envelope elements. Joints not designed to 
limit air infiltration between wall-to-wall, wall-to-ceiling and wall-
to-floor connections shall be caulked or otherwise sealed. When walls 
are constructed to form a pressure envelope on the outside of the wall 
cavity, they are deemed to meet this requirement.



Sec. 3280.506  Heat loss/heat gain.

    The manufactured home heat loss/heat gain shall be determined by 
methods outlined in Sec. Sec. 3280.508 and 3280.509. The Uo 
(Coefficient of heat transmission) value zone for which the manufactured 
home is acceptable and the

[[Page 161]]

lowest outdoor temperature to which the installed heating equipment will 
maintain a temperature of 70 F shall be certified as specified in Sec. 
3280.510 of this subpart. The Uo value zone shall be determined from the 
map in figure 506.
[GRAPHIC] [TIFF OMITTED] TC17OC91.005


[[Page 162]]


    (a) Coefficient of heat transmission. The overall coefficient of 
heat transmission (Uo) of the manufactured home for the respective zones 
and an indoor design temperature of 70 F, including internal and 
external ducts, and excluding infiltration, ventilation and condensation 
control, shall not exceed the Btu/(hr.) (sq. ft.) (F) of the 
manufactured home envelope are as tabulated below:

------------------------------------------------------------------------
                                            Maximum coefficient of heat
              Uo value zone                         transmission
------------------------------------------------------------------------
1........................................  0.116 Btu/(hr.) (sq. ft.)
                                            (F).
2........................................  0.096 Btu/(hr.) (sq. ft.)
                                            (F).
3........................................  0.079 Btu/(hr.) (sq. ft.)
                                            (F).
------------------------------------------------------------------------

    (b) To assure uniform heat transmission in manufactured homes, 
cavities in exterior walls, floors, and ceilings shall be provided with 
thermal insulation.
    (c) Manufactured homes designed for Uo Value Zone 3 shall be factory 
equipped with storm windows or insulating glass.

[58 FR 55009, Oct. 25, 1993; 59 FR 15113, Mar. 31, 1994]



Sec. 3280.507  Comfort heat gain.

    Information necessary to calculate the home cooling load shall be 
provided as specified in this part.
    (a) Transmission heat gains. Homes complying with this section shall 
meet the minimum heat loss transmission coefficients specified in Sec. 
3280.506(a).



Sec. 3280.508  Heat loss, heat gain and cooling load calculations.

    (a) Information, values and data necessary for heat loss and heat 
gain determinations must be taken from the 1997 ASHRAE Handbook of 
Fundamentals, Inch-Pound Edition, chapters 22 through 27. The following 
portions of those chapters are not applicable:

23.1 Steel Frame Construction
23.2 Masonry Construction
23.3 Foundations and Floor Systems
23.15 Pipes
23.17 Tanks, Vessels, and Equipment
23.18 Refrigerated Rooms and Buildings
24.18 Mechanical and Industrial Systems
25.19 Commercial Building Envelope Leakage
27.9 Calculation of Heat Loss from Crawl Spaces

    (b) The calculation of the manufactured home's transmission heat 
loss coefficient (Uo) must be in accordance with the fundamental 
principles of the 1997 ASHRAE Handbook of Fundamentals, Inch-Pound 
Edition, and, at a minimum, must address all the heat loss or heat gain 
considerations in a manner consistent with the calculation procedures 
provided in the document, Overall U-values and Heating/Cooling Loads--
Manufactured Homes--February 1992-PNL 8006, HUD User No. 0005945.
    (c) Areas where the insulation does not fully cover a surface or is 
compressed shall be accounted for in the U-calculation (see Sec. 
3280.506). The effect of framing on the U-value must be included in the 
Uo calculation. Other low-R-value heat-flow paths (``thermal shorts'') 
shall be explicitly accounted for in the calculation of the transmission 
heat loss coefficient if in the aggregate all types of low-R-value paths 
amount to more than 1% of the total exterior surface area. Areas are 
considered low-R-value heat-flow paths if:
    (1) They separate conditioned and unconditioned space; and
    (2) They are not insulated to a level that is at least one-half the 
nominal insulation level of the surrounding building component.
    (d) High efficiency heating and cooling equipment credit. The 
calculated transmission heat loss coefficient (Uo) used for meeting the 
requirement in Sec. 3280.506(a) may be adjusted for heating and cooling 
equipment above that required by the National Appliance Energy 
Conservation Act of 1987 (NAECA) by applying the following formula:

Uo adjusted = Uo standardx[1+(0.6) (heating efficiency increase 
    factor)+(cooling multiplier) (cooling efficiency increase factor)]

where:

Uo standard = Maximum Uo for Uo Zone required by Sec. 3280.506(a)
Uo adjusted = Maximum Uo standard adjusted for high efficiency HVAC 
equipment
Heating efficiency increase factor = The increase factor in heating 
equipment efficiency measured by the Annual Fuel Utilization Efficiency 
(AFUE), or the Heating Seasonal Performance Factor (HSPF) for heat 
pumps, above that required by

[[Page 163]]

NAECA (indicated as ``NAECA'' in formula). The formula is heating 
efficiency increase factor = AFUE (HSPF) home - AFUE (or HSPF) NAECA 
divided by AFUE (HSPF) NAECA.
Cooling efficiency increase factor = the increase factor in the cooling 
equipment efficiency measured by the Seasonal Energy Efficiency Ratio 
(SEER) above that required by NAECA.
The formula being cooling equipment=SEER home--SEER NAECA divided by 
SEER NAECA.

    The cooling multiplier for the Uo Zone is from the following table:

------------------------------------------------------------------------
                 Uo zone                      Cooling multiplier (Cm)
------------------------------------------------------------------------
1........................................  0.60 (Florida only).
1........................................  0.20 (All other locations).
2........................................  0.07.
3........................................  0.03.
------------------------------------------------------------------------

    (e) U values for any glazing (e.g., windows, skylights, and the 
glazed portions of any door) must be based on tests using AAMA 1503.1-
1988, Voluntary Test Method for Thermal Transmittance and Condensation 
Resistance of Windows, Doors, and Glazed Wall Sections, or the National 
Fenestration Rating Council 100, 1997 Edition, Procedure for Determining 
Fenestration Product U-factors. In the absence of tests, manufacturers 
are to use the residential window U values contained in Chapter 29, 
Table 5 of the 1997 ASHRAE Handbook of Fundamentals, Inch-Pound Edition. 
In the event that the classification of the window type is 
indeterminate, the manufacturer must use the classification that gives 
the higher U value. Where a composite of materials from two different 
product types is used, the product is to be assigned the higher U value. 
For the purpose of calculating Uo values, storm windows are 
treated as an additional pane.
    (f) Annual energy used based compliance. As an alternative, homes 
may demonstrate compliance with the annual energy used implicit in the 
coefficient of heat transmission (Uo) requirement. The annual energy use 
determination must be based on generally accepted engineering practices. 
The general requirement is to demonstrate that the home seeking 
compliance approval has a projected annual energy use, including both 
heating and cooling, less than or equal to a similar ``base case'' home 
that meets the standard. The energy use for both homes must be 
calculated based on the same assumptions; including assuming the same 
dimensions for all boundaries between conditioned and unconditioned 
spaces, site characteristics, usage patterns and climate.

[58 FR 55011, Oct. 25, 1993, as amended at 70 FR 72047, Nov. 30, 2005]



Sec. 3280.509  Criteria in absence of specific data.

    In the absence of specific data, for purposes of heat-loss/gain 
calculation, the following criteria shall be used:
    (a) Infiltration heat loss. In the absence of measured infiltration 
heat loss data, the following formula shall be used to calculate heat 
loss due to infiltration and intermittently operated fans exhausting to 
the outdoors. The perimeter calculation shall be based on the dimensions 
of the pressure envelope.

Infiltration Heat-Loss=0.7 (T) (ft. of perimeter), BTU/hr.

where: T=70 minus the heating system capacity certification temperature 
stipulated in the Heating Certificate, in F.

    (b) Framing areas.

Wall.....................................  15 percent of wall area less
                                            windows and doors.
Floor and Ceiling........................  10 percent of the area.
 

    (c) Insulation compression. Insulation compressed to less than 
nominal thickness shall have its nominal R-values reduced for that area 
which is compressed in accordance with the following graph:

[[Page 164]]

[GRAPHIC] [TIFF OMITTED] TC17OC91.006


When insulation is installed over the framing members the thermal 
performance of the insulation is reduced due to compression at the 
framing members. The Resistance value of the insulation between the 
framing members is reduced by 12.5 percent for framing members 
16 O.C., 8.5 percent for framing members 24 O.C., 
and 4 percent for framing members 48 O.C.
    (d) Air supply ducts within floor cavity. Air supply ducts located 
within a floor cavity shall be assumed to be heating or cooling the 
floor cavity to living space temperatures unless the duct is 
structurally isolated by the framing system or thermally insulated from 
the rest of the floor cavity with a thermal insulation at least equal to 
R-4.
    (e) Air supply ducts within ceiling cavity. Where supply ducts are 
located in ceiling cavities, the influence of the duct on cavity 
temperatures shall be considered in calculating envelope heat loss or 
heat gain.
    (f) The supply duct loss (and/or heat gain where applicable--See 
Sec. 3280.511) shall be calculated using the actual duct surface area 
and the actual thickness of insulation between the duct and outside of 
the manufactured home. If there is an air space of at least \1/2\ inch 
between the duct and the insulation, heat loss/gain need not be 
calculated if the cavity in which the duct is located is assumed to be 
at living space temperature. The average temperature inside the supply 
duct, including ducts installed outside the manufactured home, shall be 
assumed to be 130 F for purposes of calculation of heat loss and 60 F 
for heat gain.
    (g) Return air cavities. Cavities used as return air plenums shall 
be considered to be at living space temperature.



Sec. 3280.510  Heat loss certificate.

    The manufactured home manufacturer shall permanently affix the 
following ``Certificate'' to an interior surface of the home that is 
readily visible to the homeowner. The ``Certificate'' shall specify the 
following:
    (a) Heating zone certification. The design zone at which the 
manufactured home heat loss complies with Sec. 3280.506(a).
    (b) Outdoor certification temperature. The lowest outdoor 
temperature at which the installed heating equipment will maintain a 70 
[deg]F temperature inside the home without storm sash or insulating 
glass for Zones 1 and 2, and with storm sash or insulating glass for 
Zone 3 and complying with Sec. 3280.508 and Sec. 3280.509.
    (c) Operating economy certification temperature. The temperature to 
be specified for operating economy and energy conservation shall be 20 
[deg]F or 30% of the design temperature difference, whichever is 
greater, added to the temperature specified as the heating system 
capacity certification temperature without storm windows or insulating 
glass in Zones 1 and 2 and with storm windows or insulating glass in 
Zone 3. Design temperature difference is 70[deg]

[[Page 165]]

minus the heating system capacity certification temperature in degrees 
Fahrenheit.

                           HEATING CERTIFICATE

Home Manufacturer_______________________________________________________
Plant Location__________________________________________________________
Home Model______________________________________________________________

                       (Include Uo Value Zone Map)

    This manufactured home has been thermally insulated to conform with 
the requirements of the Federal Manufactured Home Construction and 
Safety Standards for all locations within Uo Value Zone ----.

Heating Equipment Manufacturer__________________________________________
Heating Equipment Model_________________________________________________

    The above heating equipment has the capacity to maintain an average 
70F temperature in this home at outdoor temperatures of [see paragraph 
(b) of this section] F. To maximize furnace operating economy and to 
conserve energy, it is recommended that this home be installed where the 
outdoor winter design temperature (97 1/2%) is not higher than [see 
paragraph (c) of this section] F degrees Fahrenheit.
    The above information has been calculated assuming a maximum wind 
velocity of 15 MPH at standard atmospheric pressure.
    (d) The following additional statement must be provided on the 
heating certificate and data plate required by Sec. 3280.5 when the 
home is built with a vapor retarder of not greater than one perm (dry 
cup method) on the exterior side of the insulation: ``This home is 
designed and constructed to be sited only in humid or fringe climate 
regions as shown on the Humid and Fringe Climate Map.'' A reproduction 
of the Humid and Fringe Climate Map in Sec. 3280.504 is to be provided 
on the heating certificate and data plate. The map must be not less than 
3\1/2\ inch x 2\1/4\ inch in size and may be combined with the 
Uo Value Zone Map for Manufactured Housing in Sec. 3280.506.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55011, Oct. 25, 1993; 70 FR 72048, Nov. 30, 2005]



Sec. 3280.511  Comfort cooling certificate and information.

    (a) The manufactured home manufacturer shall permanently affix a 
``Comfort Cooling Certificate'' to an interior surface of the home that 
is readily visible to the home owner. This certificate may be combined 
with the heating certificate required in Sec. 3280.510. The 
manufacturer shall comply with one of the following three alternatives 
in providing the certificate and additional information concerning the 
cooling of the manufactured home:
    (1) Alternative I. If a central air conditioning system is provided 
by the home manufacturer, the heat gain calculation necessary to 
properly size the air conditioning equipment shall be in accordance with 
procedures outlined in chapter 22 of the 1989 ASHRAE Handbook of 
Fundamentals, with an assumed location and orientation. The following 
shall be supplied in the Comfort Cooling Certificate:

Air Conditioner Manufacturer____________________________________________
Air Conditioner Model___________________________________________________

    Certified Capacity ------ BTU/Hr. in accordance with the appropriate 
Air Conditioning and Refrigeration Institute Standards
    The central air conditioning system provided with this home has been 
sized, assuming an orientation of the front (hitch) end of the home 
facing ------ and is designed on the basis of a 75 [deg]F indoor 
temperature and an outdoor temperature of -- [deg]F dry bulb and -- 
[deg]F wet bulb.

                           Example Alternate I

                       COMFORT COOLING CERTIFICATE

Manufactured Home Mfg___________________________________________________
Plant Location__________________________________________________________
Manufactured Home Model_________________________________________________
Air Conditioner Manufacturer____________________________________________

    Certified Capacity ------ BTU/Hr. in accordance with the appropriate 
Air Conditioning and Refrigeration Institute Standards.
    The central air conditioning system provided with this home has been 
sized assuming an orientation of the front (hitch end) of the home 
facing ------. On this basis, the system is designed to maintain an 
indoor temperature of 75 [deg]F when outdoor temperatures are -- [deg]F 
dry bulb and -- [deg]F wet bulb.
    The temperature to which this home can be cooled will change 
depending upon the amount of exposure of the windows to the sun's 
radiant heat. Therefore, the home's heat gains will vary dependent upon 
its orientation to the sun and any permanent shading provided. 
Information concerning the calculation of cooling loads at various 
locations, window exposures and shadings are provided in chapter 22 of 
the 1989 edition of the ASHRAE Handbook of Fundamentals.

    (2) Alternative 2. For each home suitable for a central air cooling 
system,

[[Page 166]]

the manufacturer shall provide the following statement: ``This air 
distribution system of this home is suitable for the installation of a 
central air conditioning system.''

                           Example Alternate 2

                       COMFORT COOLING CERTIFICATE

Manufactured Home Manufacturer__________________________________________
Plant Location__________________________________________________________
Manufactured Home Model_________________________________________________
    This air distribution system of this home is suitable for the 
installation of central air conditioning.
    The supply air distribution system installed in this home is sized 
for Manufactured Home Central Air Conditioning System of up to ------ 
B.T.U./Hr. rated capacity which are certified in accordance with the 
appropriate Air Conditioning and Refrigeration Institute Standards. When 
the air circulators of such air conditioners are rated at 0.3 inch water 
column static pressure or greater for the cooling air delivered to the 
manufactured home supply air duct system.
    Information necessary to calculate cooling loads at various 
locations and orientations is provided in the special comfort cooling 
information provided with this manufactured home.

    (3) Alternative 3. If the manufactured home is not equipped with an 
air supply duct system, or if the manufacturer elects not to designate 
the home as being suitable for the installation of a central air 
conditioning system, the manufacturer shall provide the following 
statement: ``This air distribution system of this home has not been 
designed in anticipation of its use with a central air conditioning 
system.''

                           Example Alternate 3

                       COMFORT COOLING CERTIFICATE

Manufactured Home Mfg___________________________________________________
Plant Location__________________________________________________________
Manufactured Home Model_________________________________________________
    The air distribution system of this home has not been designed in 
anticipation of its use with a central air conditioning system.

    (b) For each home designated as suitable for central air 
conditioning the manufacturer shall provide the maximum central 
manufactured home air conditioning capacity certified in accordance with 
the ARI Standard 210/240-89 Unitary Air-Conditioning and Air-Source Heat 
Pump Equipment and in accordance with Sec. 3280.715(a)(3). If the 
capacity information provided is based on entrances to the air supply 
duct at other than the furnace plenum, the manufacturer shall indicate 
the correct supply air entrance and return air exit locations.
    (c) Comfort cooling information. For each manufactured home 
designated, either ``suitable for'' or ``provided with'' a central air 
conditioning system, the manufacturer shall provide comfort cooling 
information specific to the manufactured home necessary to complete the 
cooling load calculations. The comfort cooling information shall include 
a statement to read as follows:

    To determine the required capacity of equipment to cool a home 
efficiently and economically, a cooling load (heat gain) calculation is 
required. The cooling load is dependent on the orientation, location and 
the structure of the home. Central air conditioners operate most 
efficiently and provide the greatest comfort when their capacity closely 
approximates the calculated cooling load. Each home's air conditioner 
should be sized in accordance with chapter 22 of the American Society of 
Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) Handbook 
of Fundamentals, 1989 Edition, once the location and orientation are 
known.

Information Provided by the Manufacturer Necessary To Calculate Sensible 
                                Heat Gain

Walls (without windows and doors)...............................       U
Ceilings and roofs of light color...............................       U
Ceilings and roofs of dark color................................       U
Floors..........................................................       U
Air ducts in floor..............................................       U
Air ducts in ceiling............................................       U
Air ducts installed outside the home............................       U
 

Information necessary to calculate duct areas.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55012, Oct. 25, 1993]



                       Subpart G_Plumbing Systems



Sec. 3280.601  Scope.

    Subpart G of this standard covers the plumbing materials, fixtures, 
and equipment installed within or on manufactured homes. It is the 
intent of this subpart to assure water supply, drain, waste and vent 
systems which permit satisfactory functioning and provide for health and 
safety under all conditions of normal use.

[[Page 167]]



Sec. 3280.602  Definitions.

    The following definitions are applicable to subpart G only:
    Accessible, when applied to a fixture, connection, appliance or 
equipment, means having access thereto, but which may require removal of 
an access panel or opening of a door.
    Air gap (water distribution system) means the unobstructed vertical 
distance through the free atmosphere between the lowest opening from any 
pipe or faucet supplying water to a tank, plumbing fixture, water 
supplied appliances, or other device and the flood level rim of the 
receptacle.
    Anti-siphon trap vent device means a device which automatically 
opens to admit air to a fixture drain above the connection of the trap 
arm so as to prevent siphonage, and closes tightly when the pressure 
within the drainage system is equal to or greater than atmospheric 
pressure so as to prevent the escape of gases from the drainage system 
into the manufactured home.
    Backflow means the flow of water or other liquids, mixtures, or 
substances into the distributing pipes of a potable supply of water from 
any source or sources other than its intended sources.
    Backflow connection means any arrangement whereby backflow can 
occur.
    Backflow preventer means a device or means to prevent backflow.
    Branch means any part of the piping system other than a riser, main 
or stack.
    Common vent means a vent connecting at the junction of fixture 
drains and serving as a vent for more than one fixture.
    Continuous vent means a vertical vent that is a continuation of the 
drain to which it connects.
    Continuous waste means a drain from two or more fixtures connected 
to a single trap.
    Critical level means a point established by the testing laboratory 
(usually stamped on the device by the manufacturer) which determines the 
minimum elevation above the flood level rim of the fixture or receptacle 
served on which the device may be installed. When a backflow prevention 
device does not bear a critical level marking, the bottom of the vacuum 
breaker, combination valve, or of any such approved or listed device 
shall constitute the critical level.
    Cross connection means any physical connection or arrangement 
between two otherwise separate systems or sources, one of which contains 
potable water and the other either water, steam, gas or chemical of 
unknown or questionable safety whereby there may be a flow from one 
system or source to the other, the direction of flow depending on the 
pressure differential between the two systems.
    Developed length means that length of pipe measured along the center 
line of the pipe and fittings.
    Diameter, unless otherwise specifically stated, means the nominal 
(inside) diameter designated commercially.
    Drain means a pipe that carries waste, water, or water-borne waste 
in a drainage system.
    Drain connector means the removable extension, consisting of all 
pipes, fittings and appurtenances, from the drain outlet to the drain 
inlet serving the manufactured home.
    Drain outlet means the lowest end of the main or secondary drain to 
which a sewer connection is made.
    Drainage system means all piping within or attached to the structure 
that conveys sewage or other liquid waste to the drain outlet, not 
including the drain connector.
    Fixture drain means the drain from the trap of a fixture to the 
junction of that drain with any other drain pipe.
    Fixture supply means the water supply pipe connecting a fixture to a 
branch water supply pipe or directly to a main water supply pipe.
    Flood-level means the level in the receptacle over which water would 
overflow to the outside of the receptacle.
    Flooded means the condition which results when the liquid in a 
container or receptacle rises to the flood-level.
    Flush tank means that portion of a water closet that is designed to 
contain sufficient water to adequately flush the fixture.
    Flush valve means a device located at the bottom of a flush tank for 
flushing a water closet.

[[Page 168]]

    Flushometer tank: means a device integrated within an air 
accumulator vessel which is designed to discharge a predetermined 
quantity of water to fixtures for flushing purposes.
    Flushometer valve means a device which discharges a predetermined 
quantity of water to a fixture for flushing purposes and is closed by 
direct water pressure.
    Grade means the fall (slope) of a pipe in reference to a horizontal 
plane expressed in inches per foot length.
    Horizontal branch means any pipe extending laterally, which receives 
the discharge from one or more fixture drains and connects to the main 
drain.
    Horizontal pipe means any pipe or fitting which makes an angle of 
not more than 45 degrees with the horizontal.
    Individual vent means a pipe installed to vent a fixture drain.
    Inlet coupling means the terminal end of the water system to which 
the water service connection is attached. It may be a swivel fitting or 
threaded pipe end.
    Main means the principal artery of the system to which branches may 
be connected.
    Main drain means the lowest pipe of a drainage system which receives 
sewage from all the fixtures within a manufactured home and conducts 
these wastes to the drain outlet.
    Main vent means the principal artery of the venting system to which 
vent branches may be connected.
    Offset means a combination of pipe and/or fittings that brings one 
section of the pipe out of line but into a line parallel with the other 
section.
    Pitch. See Grade.
    Plumbing appliance: means any one of a special class of plumbing 
fixture which is intended to perform a special plumbing function. Its 
operation and/or control may be dependent upon one or more energized 
components, such as motors, control, heating elements, or pressure or 
temperature-sensing elements. Such fixture may operate automatically 
through one or more of the following actions: A time cycle, a 
temperature range, a pressure range, a measured volume or weight, or the 
fixture may be manually adjusted or controlled by the user or operator.
    Plumbing appurtenance: means a manufactured device, or a 
prefabricated assembly, or an on-the-job assembly of component parts, 
and which is an adjunct to the basic piping system and plumbing system 
and plumbing fixtures. An appurtenance demands no additional water 
supply, nor does it add any discharge load to a fixture or the drainage 
system.
    Plumbing fixtures means receptacles, devices, or appliances which 
are supplied with water or which receive liquid or liquid-borne wastes 
for discharge into the drainage system.
    Plumbing system means the water supply and distribution pipes; 
plumbing fixtures, faucets and traps; soil, waste and vent pipes; and 
water-treating or water-using equipment.
    Primary vent. See main vent.
    Relief vent means an auxiliary vent which permits additional 
circulation of air in or between drainage and vent systems.
    Secondary vent means any vent other than the main vent or those 
serving each toilet.
    Sewage means any liquid waste containing animal or vegetable matter 
in suspension or solution, and may include liquids containing chemicals 
in solution.
    Siphonage means the loss of water seal from fixture traps resulting 
from partial vacuum in the drainage system which may be of either of the 
following two types, or a combination of the two:
    (a) Self-siphonage resulting from vacuum in a fixture drain 
generated solely by the discharge of the fixture served by that drain, 
or,
    (b) Induced siphonage resulting from vacuum in the drainage system 
generated by the discharge of one or more fixtures other than the one 
under observation.
    Trap means a fitting or device designed and constructed to provide a 
liquid seal that will prevent the back passage of air without materially 
affecting the flow of liquid waste through it.
    Trap arm means the portion of a fixture drain between a trap and its 
vent.
    Trap seal means the vertical depth of liquid that a trap will 
retain.
    Vacuum breaker. See backflow preventer.
    Vent cap means the device or fitting which protects the vent pipe 
from foreign substance with an opening to the

[[Page 169]]

atmosphere equal to the area of the vent it serves.
    Vent system means that part of a piping installation which provides 
circulation of air within a drainage system.
    Vertical pipe means any pipe or fitting which makes an angle of not 
more than 45 degrees with the vertical.
    Water closet drain means that part of the drainage piping which 
receives the discharge from each individual water closet.
    Water connection means the fitting or point of connection for the 
manufactured home water distribution system designed for connection to a 
water supply.
    Water connector means the removable extension connecting the 
manufactured home water distribution system to the water supply.
    Water distribution system means potable water piping within or 
permanently attached to the manufactured home.
    Wet vent means a vent which also serves as a drain for one or more 
fixtures.
    Wet vented drainage system means the specially designed system of 
drain piping that also vents one or more plumbing fixtures by means of a 
common waste and vent pipe.
    Whirlpool bathtub means a plumbing appliance consisting of a bathtub 
fixture which is equipped and fitted with a circulation piping system, 
pump, and other appurtenances and is so designed to accept, circulate, 
and discharge bathtub water upon each use.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4584, Feb. 12, 1987; 52 FR 47553, Dec. 15, 1987; 58 
FR 55012, Oct. 25, 1993]



Sec. 3280.603  General requirements.

    (a) Minimum requirements. Any plumbing system installed in a 
manufactured home shall conform, at least, with the provisions of this 
subpart.
    (1) General. The plumbing system shall be of durable material, free 
from defective workmanship, and so designed and constructed as to give 
satisfactory service for a reasonable life expectancy.
    (2) Conservation. Water closets shall be selected and adjusted to 
use the minimum quantity of water consistent with proper performance and 
cleaning.
    (3) Connection to drainage system. All plumbing, fixtures, drains, 
appurtenances, and appliances designed or used to receive or discharge 
liquid waste or sewage shall be connected to the manufactured home 
drainage system in a manner provided by this standard.
    (4) Workmanship. All design, construction, and workmanship shall be 
in conformance with accepted engineering practices and shall be of such 
character as to secure the results sought to be obtained by this 
standard.
    (5) Components. Plumbing materials, devices, fixtures, fittings, 
equipment, appliances, appurtenance, and accessories intended for use in 
or attached to a manufactured home shall conform to one of the 
applicable standards referenced in Sec. 3280.604. Where an applicable 
standard is not referenced, or an alternative recognized standard is 
utilized, the plumbing component shall be listed by a nationally 
recognized testing laboratory, inspection agency or other qualified 
organization as suitable for the intended use.
    (6) Prohibited fittings and practices. (i) Drainage or vent piping 
shall not be drilled and tapped for the purpose of making connections.
    (ii) Except as specifically provided elsewhere in this standard, 
vent pipes shall not be used as waste or drain pipes.
    (iii) Fittings, connections, devices, or methods of installation 
that obstruct or retard the flow of sewage, or air in the drainage or 
venting systems in an amount greater than the normal frictional 
resistance to flow shall not be used unless their use is acceptable in 
this standard or their use is accepted as having a desirable and 
acceptable function of ultimate benefit to the proper and continued 
functioning of the plumbing system.
    (iv) Cracks, holes, or other imperfections in materials shall not be 
concealed by welding, brazing, or soldering or by paint, wax, tar, or 
other leak-sealing or repairing agents.
    (v) Piping, fixtures or equipment shall be located so as not to 
interfere with the normal use or with the normal operation and use of 
windows, doors or other required facilities.

[[Page 170]]

    (vi) Galvanized pipe shall not be bent or welded.
    (7) Alignment of fittings. All valves, pipes, and fittings shall be 
installed in correct relationship to the direction of flow.
    (b) Protective requirements. (1) Cutting structural members. 
Structural members shall not be unnecessarily or carelessly weakened by 
cutting or notching.
    (2) Exposed piping. All piping, pipe threads, hangers, and support 
exposed to the weather, water, mud, and road hazard, and subject to 
damage therefrom, shall be painted, coated, wrapped, or otherwise 
protected from deterioration.
    (3) Road damage. Pipes, supports, drains, outlets, or drain hoses 
shall not extend or protrude in a manner where they could be unduly 
subjected to damage during transit.
    (4) Freezing. All piping and fixtures subject to freezing 
temperatures shall be insulated or protected to prevent freezing, under 
normal occupancy. The manufacturer shall provide:
    (i) Written installation instructions for the method(s) required for 
compliance to this section;
    (ii) A statement in his installation instructions that if heat tape 
is used it shall be listed for use with manufactured homes;
    (iii) A receptacle outlet for the use of a heat tape located on the 
underside of the manufactured home within 2 feet of the water supply 
inlet. The receptacle outlet provided shall not be placed on a branch 
circuit which is protected by a ground fault circuit interrupter.
    (5) All piping, except the fixture trap, shall be designed to allow 
drainage.
    (6) Rodent resistance. All exterior openings around piping and 
equipment shall be sealed to resist the entrance of rodents.
    (7) Piping and electrical wiring shall not pass through the same 
holes in walls, floors or roofs. Plastic piping shall not be exposed to 
heat in excess of manufacturers recommendation or radiation from heat 
producing appliances.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 54383, Oct. 5, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 58 FR 55012, 
Oct. 25, 1993]



Sec. 3280.604  Materials.

    (a) Minimum standards. Materials, devices, fixtures, fittings, 
equipment, appliances, appurtenances and accessories shall conform to 
one of the standards in the following table and be free from defects. 
Where an appropriate standard is not indicated in the table or a 
standard not indicated in the table is preferred, the item may be used 
if it is listed. A listing is also required when so specified in other 
sections of this subpart.
    (b) Where more than one standard is referenced for a particular 
material or component, compliance with only one of those standards is 
acceptable. Exceptions:
    (1) When one of the reference standards requires evaluation of 
chemical, toxicity or odor properties which are not included in the 
other standard, then conformance to the applicable requirements of each 
standard shall be demonstrated;
    (2) When a plastic material or component is not covered by the 
Standards in the following table, it must be certified as non-toxic in 
accordance with ANSI/NSF 61-2001, Drinking water system components--
Health effects.

                        Ferrous Pipe and Fittings

Gray Iron Threaded Fittings--ANSI/ASME B16.4-1992.
Malleable Iron Threaded Fittings--ANSI/ASME B16.3-1992.
Material and Property Standard for Special Cast Iron Fittings--IAPMO PS 
5-84.
Welding and Seamless Wrought Steel Pipe--ANSI/ASME B36.10-1979.
Standard Specification for Pipe, Steel, Black and Hot-Dipped, Zinc-
Coated, Welded and Seamless--ASTM A53-93.
Pipe Threads, General Purpose (Inch)--ANSI/ASME B1.20.1-1983.
Standard Specification for Cast Iron Soil Pipe and Fittings--ASTM A74-
92.
Standard Specification for Hubless Cast Iron Soil Pipe and Fittings for 
Sanitary and Storm Drain, Waste, and Vent Piping Applications--CISPI-
301-90.

                      Nonferrous Pipe and Fittings

Standard Specification for Seamless Copper Pipe, Standard Sizes--ASTM 
B42-93.
Standard Specification for General Requirements for Wrought Seamless 
Copper and Copper-Alloy Tube--ASTM B251-93.
Standard Specification for Seamless Copper Water Tube--ASTM B88-93.

[[Page 171]]

Standard Specification for Copper Drainage Tube (DWV)--ASTM B306-92.
Wrought Copper and Copper Alloy Solder-Joint Pressure Fitting--ASME/ANSI 
B16.22-1989.
Wrought Copper and Wrought Copper Alloy Solder-Joint Drainage Fittings-
DWV--ASME/ANSI B16.29-1986.
Cast Copper Alloy Solder-Joint Pressure Fittings--ANSI B16.18-1984.
Cast Copper Alloy Solder-Joint Drainage Fittings-DWV--ASME B16.23-1992.
Cast Copper Alloy Fittings for Flared Copper Tubes--ASME/ANSI B16.26-
1988.
Standard Specification for Seamless Red Brass Pipe, Standard Sizes--ASTM 
B43-91.
Cast Bronze Threaded Fittings, Classes 125 and 250--ANSI/ASME B16.15-
1985.

                        Plastic Pipe and Fittings

Standard Specification Acrylonitrile-Butadiene-Styrene (ABS) Schedule 40 
Plastic Drain, Waste, and Vent Pipe and Fittings--ASTM D2661-91.
Standard Specification for Poly (Vinyl Chloride) (PVC) Plastic Drain, 
Waste, and Vent Pipe and Fittings--ASTM D2665-91b.
Standard Specification for Drain, Waste, and Vent (DWV) Plastic Fittings 
Patterns--ASTM D3311-92.
Standard Specification for Acrylonitrile-Butadiene-Styrene (ABS) 
Schedule 40, Plastic Drain, Waste, and Vent Pipe With a Cellular Core--
ASTM F628-91.
Standard Specification for Chlorinated Poly (Vinyl Chloride) (CPVC) 
Plastic Hot- and Cold-Water Distribution Systems--ASTM D2846-92.
Standard Specification for Polybutylene (PB) Plastic Hot- and Cold-Water 
Distribution Systems--ASTM D3309-92a.
Plastic Piping Components and Related Materials--ANSI/NSF 14-1990.

                              Miscellaneous

Standard Specification for Rubber Gaskets for Cast Iron Soil Pipe and 
Fittings--ASTM C564-88.
Backflow Valves--ANSI A112.14.1-1975.
Plumbing Fixture Setting Compound--TTP 1536A-1975.
Material and Property Standard for Cast Brass and Tubing P-Traps--IAPMO 
PS 2-89.
Relief Valves and Automatic Gas Shutoff Devices for Hot Water Supply 
Systems--ANSI Z21.22-1986, With Addendum Z21.22a-1990.
Standard Specification for Solvent Cement for Acrylonitrile-Butadiene-
Styrene (ABS) Plastic Pipe and Fittings--ASTM D2235-88.
Standard Specification for Solvent Cements for Poly (Vinyl Chloride) 
(PVC) Plastic Piping Systems--ASTM D2564-91a.
Specification for Neoprene Rubber Gaskets for HUB and Spigot Cast Iron 
Soil Pipe and Fittings--CISPI-HSN-85.
Plumbing System Components for Manufactured Homes and Recreational 
Vehicles--ANSI/NSF 24-1988.
Material and Property Standard for Diversion Tees and Twin Waste Elbow--
IAPMO PS 9-84.
Material and Property Standard for Flexible Metallic Water Connectors--
IAPMO PS 14-89.
Material and Property Standard for Dishwasher Drain Airgaps--IAPMO PS 
23-89.
Material and Property Standards for Backflow Prevention Assemblies--
IAPMO PS 31-91.
Performance Requirements for Air Admittance Valves for Plumbing Drainage 
Systems, Fixture and Branch Devices--ASSE Standard 1051, 1990 
Revised: 1996/ANSI 1998.
Drinking Water System Components-Health Effects--ANSI/NSF 61-2001.

                            Plumbing Fixtures

Plumbing Fixtures (General Specifications)--FS WW-P-541E/GEN-1980.
Vitreous China Plumbing Fixtures--ANSI/ASME A112.19.2(M)-1990.
Enameled Cast Iron Plumbing Fixtures--ANSI/ASME A112.19.1M-1987.
Porcelain Enameled Formed Steel Plumbing Fixtures--ANSI/ASME 
A112.19.4(M)-1984.
Plastic Bathtub Units with Addenda Z124.1a-1990 and Z124.16-1991--ANSI 
Z124.1-1987.
Standard for Porcelain Enameled Formed Steel Plumbing Fixtures--IAPMO 
TSC 22-85.
Plastic Shower Receptors and Shower Stalls with Addendum Z124.2a-1990--
ANSI Z124.2-1987.
Stainless Steel Plumbing Fixtures (Designed for Residential Use)--ANSI/
ASME A112.19.3M-1987.
Material and Property Standard for Drains for Prefabricated and Precast 
Showers--IAPMO PS 4-90.
Plastic Lavatories with Addendum Z124.3a-1990--ANSI Z124.3-1986.
Safety Performance Specifications and Methods of Test for Safety Glazing 
Materials Used in Building--ANSI Z97.1-1984.
Water Heater Relief Valve Drain Tubes--ASME A112.4.1-1993.
Flexible Water Connectors--ASME A112.18.6-1999.
Performance Requirements for Backflow Protection Devices and Systems in 
Plumbing Fixture Fittings--ASME A112.18.3M-1996.
Non-Vitreous Ceramic Plumbing Fixtures--ASME A112.19.9M-1991.
Dual Flush Devices for Water Closets--ASME A119.19.10-1994.
Deck Mounted Bath/Shower Transfer Valves with Integral Backflow 
Protection--ASME A112.18.7-1999.

[[Page 172]]

Plastic Fittings for Connecting Water Closets to the Sanitary Drainage 
System--ASME A112.4.3-1999.
Hydraulic Performance Requirements for Water Closets and Urinals, ASME 
A112.19.6-1995.
Plumbing Fixture Fittings--ASME/ANSI A112.18.1M-1989.
Trim for Water Closet, Bowls, Tanks, and Urinals--ANSI A112.19.5-1979.
Plastic Water Closets, Bowls, and Tanks with Addenda Z124.4a-1990--ANSI 
Z124.4-1986.
ANSI Z124.5, Plastic Toilet (Water Closets) Seats, 1997.
ANSI Z124.7, Prefabricated Plastic Spa Shells, 1997.
Whirlpool Bathtub Appliances--ASME/ANSI A112.19.7M-1987.
ANSI Z-124.9, Plastic Urinal Fixtures, 1994.
Performance Requirements for Individual Thermostatic Pressure Balancing 
and Combination Control for Bathing Facilities--ASSE 1016-1988 (ANSI 
1990).
Performance Requirements for Pressurized Flushing Devices (Flushometers) 
for Plumbing Fixtures--ASSE 1037-1990 (ANSI-1990).
Performance Requirements for Water Closet Flush Tank Fill Valves 
(Ballcocks)--ASSE 1002 Revision 5-1986 (ANSI/ASSE-1979).
Performance Requirements for Hand-held Showers--ASSE 1014-1989 (ANSI-
1990).
Hydrants for Utility and Maintenance Use--ANSI/ASME A112.21.3M-1985.
Performance Requirements for Home Laundry Equipment--ASSE 1007-1986.
Performance Requirements for Hot Water Dispensers, Household Storage 
Type Electrical--ASSE 1023, (ANSI/ASSE-1979).
Plumbing Requirements for Residential Use (Household) Dishwashers--ASSE 
1006, (ASSE/ANSI-1986).
Performance Requirements for Household Food Waste Disposer Units--ASSE 
1008-1986.
Performance Requirements for Temperature Activated Mixing Valves for 
Primary Domestic Use--ASSE 1017-1986.
Water Hammer Arresters--ANSI A112.26.1-1969 (R 1975).
Suction Fittings for Use in Swimming Pools, Wading Pools, Spas, Hot 
Tubs, and Whirlpool Bathtub Appliances--ASME/ANSI A112.19.8M-1989.
Air Gaps in Plumbing Systems--ASME A112.1.2-1991.
Performance Requirements for Diverters for Plumbing Faucets with Hose 
Spray, Anti-Siphon Type, Residential Applications--ASSE 1025 (ANSI/ASSE-
1978).
Performance Requirements for Pipe Applied Atmospheric Type Vacuum 
Breakers--ASSE 1001 (ASSE/ANSI-1990).
Performance Requirements for Hose Connection Vacuum Breakers--ASSE 1011-
1981 (ANSI-1982).
Performance Requirements for Wall Hydrants, Frost Proof Automatic 
Draining, Anti-Backflow Types--ANSI/ASSE 1019-1978.

[58 FR 55013, Oct. 25, 1993, as amended at 70 FR 72048, Nov. 30, 2005]



Sec. 3280.605  Joints and connections.

    (a) Tightness. Joints and connections in the plumbing system shall 
be gastight and watertight for the pressures required under testing 
procedures.
    (1) Assembling of pipe. All joints and connections shall be 
correctly assembled for tightness. Pipe threads shall be fully engaged 
with the threads of the fitting. Plastic pipe and copper tubing shall be 
inserted to the full depth of the solder cup or welding sockets of each 
fitting. Pipe threads and slip joints shall not be wrapped with string, 
paper, putty, or similar fillers.
    (2) Threaded joints. Threads for screw pipe and fittings shall 
conform to the approved or listed standard. Pipe ends shall be reamed 
out to size of bore. All burrs, chips, cutting oil and foreign matter 
shall be removed. Pipe joint cement or thread lubricant shall be of 
approved type and applied to male threads only.
    (3) Solder joints. Solder joints for tubing shall be made with 
approved or listed solder type fittings. Surfaces to be soldered shall 
be cleaned bright. The joints shall be properly fluxed with noncorrosive 
paste type flux and, for manufactured homes to be connected to a public 
water system, made with solder having not more than 0.2 percent lead.
    (4) Plastic pipe, fittings and joints. Plastic pipe and fittings 
shall be joined by installation methods recommended by the manufacturer 
or in accordance with the provisions of a recognized, approved, or 
listed standard.
    (5) Union joints. Metal unions in water piping shall have metal-to-
metal ground seats.
    (6) Flared joints. Flared joints for soft-copper water tubing shall 
be made with approved or listed fittings. The tubing shall be expanded 
with a proper flaring tool.
    (7) Cast iron soil pipe joints. Approved or listed cast iron pipe 
may be joined as follows:

[[Page 173]]

    (i) Approved or listed hubless pipe as per the manufacturer's 
recommendation.
    (ii) Hub and plain-end soil pipe may be joined by compression 
fittings per the manufacturer's recommendation.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 53 FR 23611, June 23, 1988]



Sec. 3280.606  Traps and cleanouts.

    (a) Traps--(1) Traps required. Each plumbing fixture, except listed 
toilets, shall be separately trapped by approved water seal ``P'' traps. 
All traps shall be effectively vented.
    (2) Dual fixtures. A two-compartment sink, two single sinks, two 
lavatories, or a single sink and a single lavatory with waste outlets 
not more than 30 inches apart and in the same room and flood level rims 
at the same level may be connected to one ``P'' trap and may be 
considered as a single fixture for the purpose of drainage and vent 
requirements.
    (3) Prohibited traps. A trap which depends for its seal upon 
concealed interior partitions shall not be used. Full ``S'' traps, bell 
traps, drum traps, crown-vented traps, and running traps are prohibited. 
Fixtures shall not be double-trapped.
    (4) Material and design. Each trap shall be self-cleaning with a 
smooth and uniform interior waterway. Traps shall be manufactured of 
cast iron, cast brass, or drawn brass tubing of not less than No. 20 
Brown and Sharpe gage, or approved or listed plastic, or other approved 
or listed material. Union joints for a trap shall be beaded to provide a 
shoulder for the union nut. Each trap shall have the manufacturer's name 
stamped or cast in the body of the trap, and each tubing trap shall show 
the gage of the tubing.
    (5) Trap seal. Each ``P'' trap shall have a water seal of not less 
than 2 inches and not more than 4 inches and shall be set true to its 
seal.
    (6) Size. Traps shall be not less than 1\1/4\ inches in diameter. A 
trap shall not be larger than the waste pipe to which it is connected.
    (7) Location. Each trap shall be located as close to its vent and to 
its fixture outlet as structural conditions will permit.
    (8) Length of tailpiece. The vertical distance from a trap to the 
fixture outlet shall not exceed 24 inches.
    (9) Installation. (i) Grade of trap arm. The piping between a ``P'' 
trap and the fixture tee or the vented waste line shall be graded \1/4\ 
inch per foot towards the vent and in no event shall have a slope 
greater than its diameter. The vent opening at fixture tees shall not be 
below the weir of the ``P'' trap outlet.
    (ii) Trap arm offset. The piping between the ``P'' trap and vent may 
change direction or be offset horizontally with the equivalent of no 
more than 180 degrees total change in direction with a maximum of 90 
degrees by any one fitting.
    (iii) Concealed traps. Traps with mechanical joints shall be 
accessible for repair and inspection.
    (iv) Removability of traps, etc. Traps shall be designed and 
installed so the ``U'' bend is removable without removing the strainers 
from the fixture. Continuous waste and tail pieces which are permanently 
attached to the ``U'' bend shall also be removable without removing the 
strainer from the fixture.
    (b) Cleanout openings--(1) Location of cleanout fittings. (i) 
Cleanouts shall be installed if the drainage system cannot be cleaned 
through fixtures, drains, or vents. Cleanouts shall also be provided 
when fittings of more than 45 degrees are used to affect an offset 
except where long turn ells are used which provide sufficient ``sweep'' 
for cleaning.
    (ii) A full size cleanout shall be installed at the upper end of any 
section of drain piping which does not have the required minimum slope 
of \1/4\ inch per foot grade.
    (iii) A cleaning tool shall not be required to pass through more 
than 360 degrees of fittings, excluding removable ``P'' traps, to reach 
any part of the drainage system. Water closets may be removed for 
drainage system access.
    (2) Access to cleanouts. Cleanouts shall be accessible through an 
unobstructed minimum clearance of 12 inches directly in front of the 
opening. Each cleanout fitting shall open in a direction opposite to the 
flow or at right angles to the pipe. Concealed cleanouts

[[Page 174]]

that are not provided with access covers shall be extended to a point 
above the floor or outside of the manufactured home, with pipe and 
fittings installed, as required, for drainage piping without sags and 
pockets.
    (3) Material. Plugs and caps shall be brass or approved or listed 
plastic, with screw pipe threads.
    (4) Design. Cleanout plugs shall have raised heads except that plugs 
at floor level shall have counter-sunk slots.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55014, Oct. 25, 1993]



Sec. 3280.607  Plumbing fixtures.

    (a) General requirements--(1) Quality of fixtures. Plumbing fixtures 
shall have smooth impervious surfaces, be free from defects and 
concealed fouling surfaces, be capable of resisting road shock and 
vibration, and shall conform in quality and design to listed standards. 
Fixtures shall be permanently marked with the manufacturer's name or 
trademark.
    (2) Strainers. The waste outlet of all plumbing fixtures, other than 
toilets, shall be equipped with a drain fitting that will provide an 
adequate unobstructed waterway.
    (3) Fixture connections. Fixture tailpieces and continuous wastes in 
exposed or accessible locations shall be not less than No. 20 Brown and 
Sharpe gage seamless drawn-brass tubing or other approved pipe or tubing 
materials. Inaccessible fixture connections shall be constructed 
according to the requirements for drainage piping. Each fixture 
tailpiece, continuous waste, or waste and overflow shall be not less 
than 1\1/2\ inches for sinks of two or more compartments, dishwashers, 
clothes washing machines, laundry tubs, bath tubs, and not less than 
1\1/4\ inches for lavatories and single compartment sinks having a 2 
inch maximum drain opening.
    (4) Concealed connections. Concealed slip joint connections shall be 
provided with adequately sized unobstructed access panels and shall be 
accessible for inspection and repair.
    (5) Directional fitting. An approved or listed ``Y'' or other 
directional-type branch fitting shall be installed in every tailpiece or 
continuous waste that receives the discharge from food waste disposal 
units, dishwashing, or other force-discharge fixture or appliance. (See 
also Sec. 3280.607(b)(4)(ii).)
    (6) Water conservation. All lavatory faucets, showerheads, and sink 
faucets must not exceed a flow of 2.5 gallons per minute (gpm).
    (b) Fixtures--(1) Spacing. All plumbing fixtures shall be so 
installed with regard to spacing as to be reasonably accessible for 
their intended use.
    (2) Water closets. (i) Water closets shall be designed and 
manufactured according to approved or listed standards and shall be 
equipped with a water flushing device capable of adequately flushing and 
cleaning the bowl at each operation of the flushing mechanism.
    (ii) Water closet flushing devices shall be designed to replace the 
water seal in the bowl after each operation. Flush valves, flushometer 
valves, flushometer tanks and ballcocks shall operate automatically to 
shut off at the end of each flush or when the tank is filled to 
operating capacity.
    (iii) All water closets must be low consumption (1.6 gallons per 
flush (gpf)) closets.
    (iv) Flush tanks shall be fitted with an overflow pipe large enough 
to prevent flooding at the maximum flow rate of the ball cock. Overflow 
pipes shall discharge into the toilet, through the tank.
    (v) Water closets that have fouling surfaces that are not thoroughly 
washed at each discharge shall be prohibited. Any water closet that 
might permit the contents of the bowl to be siphoned back into the water 
system shall be prohibited.
    (vi) Floor connection. Water closets shall be securely bolted to an 
approved flange or other approved fitting which is secured to the floor 
by means of corrosion-resistant screws. The bolts shall be of solid 
brass or other corrosion-resistant material and shall be not less than 
one-fourth inch in diameter. A watertight seal shall be made between the 
water closet and flange or other approved fitting by use of a gasket or 
sealing compound.
    (3) Shower compartment. (i) Each compartment stall shall be provided 
with an approved watertight receptor with sides and back extending at 
least 1 inch

[[Page 175]]

above the finished dam or threshold. In no case shall the depth of a 
shower receptor be less than 2 inches or more than 9 inches measured 
from the top of the finished dam or threshold to the top of the drain. 
The wall area shall be constructed of smooth, noncorrosive, and 
nonabsorbent waterproof materials to a height not less than 6 feet above 
the bathroom floor level. Such walls shall form a watertight joint with 
each other and with the bathtub, receptor or shower floor. The floor of 
the compartment shall slope uniformly to the drain at not less than one-
fourth nor more than one-half inch per foot.
    (ii) The joint around the drain connection shall be made watertight 
by a flange, clamping ring, or other approved listed means.
    (iii) Shower doors and tub and shower enclosures shall be 
constructed so as to be waterproof and, if glazed, glazing shall comply 
with the standard for Safety Performance Specifications and Methods of 
Test for Safety Glazing Materials Used in Buildings, ANSI Z97.1-1984.
    (iv) Prefabricated plumbing fixtures shall be approved or listed.
    (4) Dishwashing machines. (i) A dishwashing machine shall not be 
directly connected to any waste piping, but shall discharge its waste 
through a fixed air gap installed above the machine, or through a high 
loop as specified by the dishwashing machine manufacturer, or into an 
open standpipe-receptor with a height greater than the washing 
compartment of the machine. When a standpipe is used, it shall be at 
least 18 inches but not more than 30 inches above the trap weir. The 
drain connections from the air gap or high loop may connect to an 
individual trap, to a directional fitting installed in the sink 
tailpiece or to an opening provided on the inlet side of a food waste 
disposal unit.
    (ii) Drain from a dishwashing machine shall not be connected to a 
sink tailpiece, continuous waste line, or trap on the discharge side of 
a food waste disposal unit.
    (5) Clothes washing machines. (i) Clothes washing machines shall 
drain either into a properly vented trap, into a laundry tub tailpiece 
with watertight connections, into an open standpipe receptor, or over 
the rim of a laundry tub.
    (ii) Standpipes shall be 1\1/2\ inches minimum nominal iron pipe 
size, 1\1/2\ inches diameter nominal brass tubing not less than No. 20 
Brown and Sharpe gage, or 1\1/2\ inches approved plastic materials. 
Receptors shall discharge into a vented trap or shall be connected to a 
laundry tub tailpiece by means of an approved or listed directional 
fitting. Each standpipe shall extend not less than 18 inches or more 
than 30 inches above its trap and shall terminate in an accessible 
location no lower than the top of clothes washing machine. A removable 
tight fitting cap or plug shall be installed on the standpipe when 
clothes washer is not provided.
    (iii) Clothes washing machine drain shall not be connected to the 
tailpiece, continuous waste, or trap of any sink or dishwashing machine.
    (c) Installation--(1) Access. Each plumbing fixture and standpipe 
receptor shall be located and installed in a manner to be accessible for 
usage, cleaning, repair and replacement. Access to diverter valves and 
other connections from the fixture hardware is not required.
    (2) Alignment. Fixtures shall be set level and in true alignment 
with adjacent walls. Where practical, piping from fixtures shall extend 
to nearest wall.
    (3) Brackets. Wall-hung fixtures shall be rigidly attached to walls 
by metal brackets or supports without any strain being transmitted to 
the piping connections. Flush tanks shall be securely fastened to 
toilets or to the wall with corrosive-resistant materials.
    (4) Tub supports. Bathtub rims at wall shall be supported on metal 
hangers or on end-grain wood blocking attached to the wall unless 
otherwise recommended by the manufacturer of the tub.
    (5) Fixture fittings. Faucets and diverters shall be installed so 
that the flow of hot water from the fittings corresponds to the left-
hand side of the fitting.
    (6) Whirlpool bathtub appliances--(i) Access panel. A door or panel 
of sufficient size shall be installed to provide access to the pump for 
repair and/or replacement.

[[Page 176]]

    (ii) Piping drainage. The circulation pump shall be accessibly 
located above the crown weir of the trap. The pump drain line shall be 
properly sloped to drain the volute after fixture use.
    (iii) Piping. Whirlpool bathtub circulation piping shall be 
installed to be self-draining.
    (iv) Electrical. Wiring must comply with Articles 680.70, 680.71, 
and 680.72 of the National Electrical Code, NFPA No. 70-2005.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 961, Jan. 4, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 52 FR 4586, 
Feb. 12, 1987; 58 FR 55014, Oct. 25, 1993; 70 FR 72049, Nov. 30, 2005; 
71 FR 19639, Apr. 17, 2006]



Sec. 3280.608  Hangers and supports.

    (a) Strains and stresses. Piping in a plumbing system shall be 
installed without undue strains and stresses, and provision shall be 
made for expansion, contraction, and structural settlement.
    (b) Piping supports. Piping shall be secured at sufficiently close 
intervals to keep the pipe in alignment and carry the weight of the pipe 
and contents. Unless otherwise stated in the standards for specific 
materials shown in the table in Sec. 3280.604(a), or unless specified 
by the pipe manufacturer, plastic drainage piping shall be supported at 
intervals not to exceed 4 feet and plastic water piping shall be 
supported at intervals not to exceed 3 feet.
    (c) Hangers and anchors. (1) Hangers and anchors shall be of 
sufficient strength to support their proportional share of the pipe 
alignments and prevent rattling.
    (2) Piping shall be securely attached to the structure by hangers, 
clamps, or brackets which provide protection against motion, vibration, 
road shock, or torque in the chassis.
    (3) Hangers and straps supporting plastic pipe shall not compress, 
distort, cut or abrade the piping and shall allow free movement of the 
pipe.



Sec. 3280.609  Water distribution systems.

    (a) Water supply--(1) Supply piping. Piping systems shall be sized 
to provide an adequate quantity of water to each plumbing fixture at a 
flow rate sufficient to keep the fixture in a clean and sanitary 
condition without any danger of backflow or siphonage. (See table in 
Sec. 3280.609(f)(1)). The manufacturer shall include in his written 
installation instructions that the manufactured home has been designed 
for an inlet water pressure of 80 psi, and a statement that when the 
manufactured home is to be installed in areas where the water pressure 
exceeds 80 psi, a pressure reducing valve should be installed.
    (2) Hot water supply. Each manufactured home equipped with a kitchen 
sink, and bathtub and/or shower shall be provided with a hot water 
supply system including a listed water heater.
    (b) Water outlets and supply connections--(1) Water connection. Each 
manufactured home with a water distribution system shall be equipped 
with a \3/4\ inch threaded inlet connection. This connection shall be 
tagged or marked ``Fresh Water Connection'' (or marked ``Fresh Water 
Fill''). A matching cap or plug shall be provided to seal the water 
inlet when it is not in use, and shall be permanently attached to the 
manufactured home or water supply piping. When a master cold water 
shutoff full flow valve is not installed on the main feeder line in an 
accessible location, the manufacturer's installation instructions shall 
indicate that such a valve is to be installed in the water supply line 
adjacent to the home. When a manufactured home includes expandable rooms 
or is composed of two or more units, fittings or connectors designed for 
such purpose shall be provided to connect any water piping. When not 
connected, the water piping shall be protected by means of matching 
threaded caps or plugs.
    (2) Prohibited connections. (i) The installation of potable water 
supply piping or fixture or appliance connections shall be made in a 
manner to preclude the possibility of backflow.
    (ii) No part of the water system shall be connected to any drainage 
or vent piping.
    (3) Rim outlets. The outlets of faucets, spouts, and similar devices 
shall be spaced at least 1 inch above the flood level of the fixture.
    (4) Appliance connections. Water supplies connected to clothes 
washing or dishwashing machines shall be protected by an approved or 
listed fixed

[[Page 177]]

air gap provided within the appliance by the manufacturer.
    (5) Flushometer valves or manually operated flush valves. An 
approved or listed vacuum breaker shall be installed and maintained in 
the water supply line on the discharge side of a water closet 
flushometer valve or manually operated flush valve. Vacuum breakers 
shall have a minimum clearance of 6 inches above the flood level of the 
fixture to the critical level mark unless otherwise permitted in their 
approval.
    (6) Flush tanks. Water closet flush tanks shall be equipped with an 
approved or listed anti-siphon ball cock which shall be installed and 
maintained with its outlet or critical level mark not less than 1 inch 
above the full opening of the overflow pipe.
    (7) Hose bibbs. When provided, all exterior hose bibbs and laundry 
sink hose connections shall be protected by a listed non-removable 
backflow prevention device. This is not applicable to hose connections 
provided for automatic washing machines with built-in backflow 
prevention.
    (8) Flushometer tanks. Flushometer tanks shall be equipped with an 
approved air gap on the vacuum breaker assembly located above the flood 
level rim above the fixture.
    (c) Water heater safety devices--(1) Relief valves. (i) All water 
heaters shall be installed with approved and listed fully automatic 
valve or valves designed to provide temperature and pressure relief.
    (ii) Any temperature relief valve or combined pressure and 
temperature relief valve installed for this purpose shall have the 
temperature sensing element immersed in the hottest water within the 
upper 6 inches of the tank. It shall be set to start relieving at a 
pressure of 150 psi or the rated working pressure of the tank whichever 
is lower and at or below a water temperature of 210 [deg]F.
    (iii) Relief valves shall be provided with full-sized drains, with 
cross sectional areas equivalent to that of the relief valve outlet, 
which shall be directed downward and discharge beneath the manufactured 
home. Drain lines shall be of a material listed for hot water 
distribution and shall drain fully by gravity, shall not be trapped, and 
shall not have their outlets threaded, and the end of the drain shall be 
visible for inspection.
    (d) Materials--(1) Piping material. Water pipe shall be of standard 
weight brass, galvanized wrought iron, galvanized steel, Type K, L or M 
copper tubing, approved or listed plastic or other approved or listed 
material.
    (i) Plastic piping. All plastic water piping and fittings in 
manufactured homes must be listed for use with hot water.
    (ii) [Reserved]
    (2) Fittings. Appropriate fittings shall be used for all changes in 
size and where pipes are joined. The material and design of fittings 
shall conform to the type of piping used. Special consideration shall be 
given to prevent corrosion when dissimilar metals are joined.
    (i) Fittings for screw piping shall be standard weight galvanized 
iron for galvanized iron and steel pipe, and of brass for brass piping. 
They shall be installed where required for change in direction, 
reduction of size, or where pipes are joined together.
    (ii) Fittings for copper tubing shall be cast brass or drawn copper 
(sweat-soldered) or shall be approved or listed fittings for the purpose 
intended.
    (3) Prohibited material. Used piping materials shall not be 
permitted. Those pipe dopes, solder, fluxes, oils, solvents, chemicals, 
or other substances that are toxic, corrosive, or otherwise detrimental 
to the water system shall not be used. In addition, for those 
manufactured homes to be connected to a public water system, all water 
piping shall be lead-free (as defined in section 109(c)(2) of the Safe 
Drinking Water Act Amendments of 1986) with solders and flux containing 
not more than 0.2 percent lead and pipes and pipe fittings containing 
not more than 8.0 percent lead.
    (e) Installation of piping--(1) Minimum requirement. All piping 
equipment, appurtenances, and devices shall be installed in workmanlike 
manner and shall conform with the provisions and intent of this 
standard.
    (2) Screw pipe. Iron pipe-size brass or galvanized iron or steel 
pipe fittings shall be joined with approved or listed standard pipe 
threads fully engaged in the fittings. Pipe ends shall be reamed

[[Page 178]]

to the full bore of the pipe. Pipe-joint compound shall be insoluble in 
water, shall be nontoxic and shall be applied to male threads only.
    (3) Solder fittings. Joints in copper water tubes shall be made by 
the appropriate use of approved cast brass or wrought copper fittings, 
properly soldered together. The surface to be soldered shall be 
thoroughly cleaned bright mechanically. The joints shall be properly 
fluxed and made with a solder that contains no more than 0.2 percent 
lead.
    (4) Flared fittings. A flaring tool shall be used to shape the ends 
of flared tubing to match the flare of fittings.
    (5) Plastic pipe and fittings. Plastic pipe and fittings shall be 
joined by installation methods recommended by the manufacturer or in 
accordance with provisions of a listed standard.
    (f) Size of water supply piping--(1) Minimum size. The size of water 
supply piping and branch lines shall not be less than sizes shown in the 
following table:

       Minimum Size Tubing and Pipe for Water Distribution Systems
------------------------------------------------------------------------
                                         Tubing (nominal)
                                     ------------------------  Pipe iron
         Number of fixtures                          Outer     pipe size
                                       Diameter    diameter    (inches)
                                       (inches)    (inches)
------------------------------------------------------------------------
1...................................      *\1/4\       \3/8\       \1/2\
2...................................       \3/8\       \1/2\       \1/2\
3...................................       \1/2\       \5/8\       \1/2\
4...................................       \1/2\       \5/8\       \1/2\
5 or more...........................       \3/4\       \7/8\       \3/4\
------------------------------------------------------------------------
*6 ft maximum length.


Exceptions to table: \3/8\ inch nominal diameter or \1/2\ inch OD 
minimum size for clothes washing or dishwashing machines, unless larger 
size is recommended by the fixture manufacturer. \1/2\ inch nominal 
diameter or \5/8\ inch OD minimum size for flushometer or metering type 
valves unless otherwise specified in their listing. No galvanized screw 
piping shall be less than \1/2\ inch iron pipe size.
    (2) Sizing procedure. Both hot and cold water piping systems shall 
be computed by the following method:
    (i) Size of branch. Start at the most remote outlet on any branch of 
the hot or cold water piping and progressively count towards the water 
service connection, computing the total number of fixtures supplied 
along each section of piping. Where branches are joined together, the 
number of fixtures on each branch shall be totalled so that no fixture 
is counted twice. Following down the left-hand column of the preceding 
table a corresponding number of fixtures will be found. The required 
pipe or tubing size is indicated in the other columns on the same line.
    (ii) A water heater, food waste disposal unit, evaporative cooler or 
ice maker shall not be counted as a water-using fixture when computing 
pipe sizes.
    (g) Line valves. Valves, when installed in the water supply 
distribution system (except those immediately controlling one fixture 
supply) and when fully opened, shall have a cross-sectional area of the 
smallest orifice or opening, through which the water flows, at least 
equal to the cross-sectional area of the nominal size of the pipe in 
which the valve is installed.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4586, Feb. 12, 1987; 53 FR 23611, June 23, 1988; 58 
FR 55014, Oct. 25, 1993]



Sec. 3280.610  Drainage systems.

    (a) General. (1) Each fixture directly connected to the drainage 
system shall be installed with a water seal trap (Sec. 3280.606(a)).
    (2) The drainage system shall be designed to provide an adequate 
circulation of air in all piping with no danger of siphonage, 
aspiration, or forcing of trap seals under conditions of ordinary use.
    (b) Materials--(1) Pipe. Drainage piping shall be standard weight 
steel, wrought iron, brass, copper tube DWV, listed plastic, cast iron, 
or other listed or approved materials.
    (2) Fittings. Drainage fittings shall be recessed drainage pattern 
with smooth interior waterways of the same diameter as the piping and 
shall be of a material conforming to the type of piping used. Drainage 
fittings shall be designed to provide for a \1/4\ inch per foot grade in 
horizontal piping.
    (i) Fittings for screw pipe shall be cast iron, malleable iron, 
brass, or listed plastic with standard pipe threads.
    (ii) Fittings for copper tubing shall be cast brass or wrought 
copper.

[[Page 179]]

    (iii) Socket-type fittings for plastic piping shall comply with 
listed standards.
    (iv) Brass or bronze adaptor or wrought copper fittings shall be 
used to join copper tubing to threaded pipe.
    (c) Drain outlets. (1) Each manufactured home shall have only one 
drain outlet.
    (2) Clearance from drain outlet. The drain outlet shall be provided 
with a minimum clearance of 3 inches in any direction from all parts of 
the structure or appurtenances and with not less than 18 inches 
unrestricted clearance directly in front of the drain outlet.
    (3) Drain connector. The drain connector shall not be smaller than 
the piping to which it is connected and shall be equipped with a water-
tight cap or plug matching the drain outlet. The cap or plug shall be 
permanently attached to the manufactured home or drain outlet.
    (4) The drain outlet and drain connector shall not be less than 3 
inches inside diameter.
    (5) Preassembly of drain lines. Section(s) of the drain system, 
designed to be located underneath the home, are not required to be 
factory installed when the manufacturer designs the system for site 
assembly and also provides all materials and components, including 
piping, fittings, cement, supports, and instructions necessary for 
proper site installation.
    (d) Fixture connections. Drainage piping shall be provided with 
approved or listed inlet fittings for fixture connections, correctly 
located according to the size and type of fixture to be connected.
    (1) Water closet connection. The drain connection for each water 
closet shall be 3 inches minimum inside diameter and shall be fitted 
with an iron, brass, or listed plastic floor flange adaptor ring 
securely screwed, soldered or otherwise permanently attached to the 
drain piping, in an approved manner and securely fastened to the floor.
    (2) [Reserved]
    (e) Size of drainage piping--(1) Fixture load. Except as provided by 
Sec. 3280.611(d), drain pipe sizes shall be determined by the type of 
fixture and the total number connected to each drain.
    (i) A 1\1/2\ inch minimum diameter piping shall be required for one 
and not more than three individually vented fixtures.
    (ii) A 2-inch minimum diameter piping shall be required for four or 
more fixtures individually vented.
    (iii) A 3-inch minimum diameter piping shall be required for water 
closets.
    (f) Wet-vented drainage system. Plumbing fixture traps may connect 
into a wet-vented drainage system which shall be designed and installed 
to accommodate the passage of air and waste in the same pipe.
    (1) Horizontal piping. All parts of a wet-vented drainage system, 
including the connected fixture drains, shall be horizontal except for 
wet-vented vertical risers which shall terminate with a 1\1/2\ inch 
minimum diameter continuous vent. Where required by structural design, 
wet-vented drain piping may be offset vertically when other vented 
fixture drains or relief vents are connected to the drain piping at or 
below the vertical offsets.
    (2) Size. A wet-vented drain pipe shall be 2 inches minimum diameter 
and at least one pipe size larger than the largest connected trap or 
fixture drain. Not more than three fixtures may connect to a 2-inch 
diameter wet-vented drain system.
    (3) Length of trap arm. Fixture traps shall be located within the 
distance given in Sec. 3280.611(c)(5). Not more than one trap shall 
connect to a trap arm.
    (g) Offsets and branch fittings--(1) Changes in direction. Changes 
in direction of drainage piping shall be made by the appropriate use of 
approved or listed fittings, and shall be of the following angles: 11\1/
4\, 22\1/2\, 45, 60, or 90 degrees; or other approved or listed fittings 
or combinations of fittings with equivalent radius or sweep.
    (2) Horizontal to vertical. Horizontal drainage lines, connecting 
with a vertical pipe shall enter through 45-degree ``Y'' branches, 60-
degree ``Y'' branches, long-turn ``TY'' branches, sanitary ``T'' 
branches, or other approved or listed fittings or combination of 
fittings having equivalent sweep. Fittings having more than one branch 
at the same level shall not be used, unless the fitting is constructed 
so that

[[Page 180]]

the discharge from any one branch cannot readily enter any other branch. 
However, a double sanitary ``T'' may be used when the drain line is 
increased not less than two pipe sizes.
    (3) Horizontal to horizontal and vertical to horizontal. Horizontal 
drainage lines connecting with other horizontal drainage lines or 
vertical drainage lines connected with horizontal drainage lines shall 
enter through 45-degree ``Y'' branches, long-turn ``TY'' branches, or 
other approved or listed fittings or combination of fittings having 
equivalent sweep.
    (h) Grade of horizontal drainage piping. Except for fixture 
connections on the inlet side of the trap, horizontal drainage piping 
shall be run in practical alignment and have a uniform grade of not less 
than \1/4\ inch per foot toward the manufactured home drain outlet. 
Where it is impractical, due to the structural features or arrangement 
of any manufactured home, to obtain a grade of \1/4\ inch per foot, the 
pipe or piping may have a grade of not less than \1/8\ inch per foot, 
when a full size cleanout is installed at the upper end.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4586, Feb. 12, 1987; 58 FR 55015, Oct. 25, 1993]



Sec. 3280.611  Vents and venting.

    (a) General. Each plumbing fixture trap shall be protected against 
siphonage and back pressure, and air circulation shall be ensured 
throughout all parts of the drainage system by means of vents installed 
in accordance with the requirements of this section and as otherwise 
required by this standard.
    (b) Materials--(1) Pipe. Vent piping shall be standard weight steel, 
wrought iron, brass, copper tube DWV, listed plastic, cast iron or other 
approved or listed materials.
    (2) Fittings. Appropriate fittings shall be used for all changes in 
direction or size and where pipes are joined. The material and design of 
vent fittings shall conform to the type of piping used.
    (i) Fittings for screw pipe shall be cast iron, malleable iron, 
plastic, or brass, with standard pipe threads.
    (ii) Fittings for copper tubing shall be cast brass or wrought 
copper.
    (iii) Fittings for plastic piping shall be made to approved 
applicable standards.
    (iv) Brass adaptor fittings or wrought copper shall be used to join 
copper tubing to threaded pipe.
    (v) Listed rectangular tubing may be used for vent piping only 
providing it has an open cross section at least equal to the circular 
vent pipe required. Listed transition fittings shall be used.
    (c) Size of vent piping--(1) Main vent. The drain piping for each 
toilet shall be vented by a 1\1/2\ inch minimum diameter vent or 
rectangular vent of venting cross section equivalent to or greater than 
the venting cross section of a 1\1/2\ inch diameter vent, connected to 
the toilet drain by one of the following methods:
    (i) A 1\1/2\ inch diameter (min.) individual vent pipe or equivalent 
directly connected to the toilet drain within the distance allowed in 
Sec. 3280.611(c)(5), for 3-inch trap arms undiminished in size through 
the roof,
    (ii) A 1\1/2\ inch diameter (min.) continuous vent or equivalent, 
indirectly connected to the toilet drain piping within the distance 
allowed in Sec. 3280.611(c)(5) for 3 inch trap arms through a 2-inch 
wet vented drain that carries the waste of not more than one fixture, 
or,
    (iii) Two or more vented drains when at least one is wet-vented, or 
2-inch diameter (minimum), and each drain is separately connected to the 
toilet drain. At least one of the drains shall connect within the 
distance allowed in Sec. 3280.611(c)(5) for 3-inch trap arms.
    (2) Vent pipe areas. Each individually vented fixture with a 1\1/2\ 
inch or smaller trap shall be provided with a vent pipe equivalent in 
area to a 1\1/4\ inch nominal pipe size. The main vent, toilet vent and 
relief vent, and the continuous vent of wet-vented systems shall have an 
area equivalent to 1\1/2\ inch nominal pipe size.
    (3) Common vent. When two fixture traps located within the distance 
allowed from their vent have their trap arms connected separately at the 
same level into an approved double fitting, an individual vent pipe may 
serve as a common vent without any increase in size.
    (4) Intersecting vents. Where two or more vent pipes are joined 
together, no

[[Page 181]]

increase in size shall be required; however, the largest vent pipe shall 
extend full size through the roof.
    (5) Distance of fixture trap from vent shall not exceed the values 
given in the following table:

               Maximum Distance of Fixtures From Vent Trap
------------------------------------------------------------------------
      Size of fixture drain (inches)            Distance trap to vent
------------------------------------------------------------------------
1\1/4\....................................  4 ft. 6 in.
1\1/2\....................................  4 ft 6 in.
2.........................................  5 ft.
3.........................................  6 ft.
------------------------------------------------------------------------

    (d) Anti-siphon trap vent. An anti-siphon trap vent may be used as a 
secondary vent system for plumbing fixtures protected by traps not 
larger than 1\1/2\ inches, when installed in accordance with the 
manufacturers' recommendations and the following conditions:
    (1) Not more than two fixtures individually protected by the device 
shall be drained by a common 1\1/2\ inch drain.
    (2) Minimum drain size for three or more fixtures individually 
protected by the device shall be 2 inches.
    (3) A primary vent stack must be installed to vent the toilet drain 
at the point of heaviest drainage fixture unit loading.
    (4) The device shall be installed in a location that permits a free 
flow of air and shall be accessible for inspection, maintenance, and 
replacement and the sealing function shall be at least 6 inches above 
the top of the trap arm.
    (5) Materials for the anti-siphon trap vent shall be as follows:
    (i) Cap and housing shall be listed acrylonitrile-butadiene-styrene, 
DWV grade;
    (ii) Stem shall be DWV grade nylon or acetal;
    (iii) Spring shall be stainless steel wire, type 302;
    (iv) Sealing disc shall be neoprene, conforming to CISPI-HSN-85, the 
Specification for Neoprene Rubber Gaskets for HUB and Spigot Cast Iron 
Soil Pipe and Fittings, and ASTM C 564-88, Standard Specification for 
Rubber Gaskets for Case Iron Soil Pipe and Fittings, or, Silicone 
Rubber, Low and High Temperature and Tear Resistant, Conforming to 
Rubber, Silicone, FS ZZ-R-765B-1970, With 1971 Amendment 1; and Liners, 
Case, and Sheet, Overwrap; Water-Vapor Proof or Waterproof, Flexible, 
MIL-L-10547E-1975.
    (e) Grade and connections--(1) Horizontal vents. Each vent shall 
extend vertically from its fixture ``T'' or point of connection with the 
waste piping to a point not less than 6 inches above the extreme flood 
level of the fixture it is venting before offsetting horizontally or 
being connected with any other vent pipe. Vents for horizontal drains 
shall connect above the centerline of the drain piping ahead 
(downstream) of the trap. Where required by structural conditions, vent 
piping may offset below the rim of the fixture at the maximum angle or 
height possible.
    (f) Vent terminal--(1) Roof extension. Each vent pipe shall extend 
through its flashing and terminate vertically, undiminished in size, not 
less than 2 inches above the roof. Vent openings shall not be less than 
3 feet away from any motor-driven air intake that opens into habitable 
areas.
    (2) Flashing. The opening around each vent pipe shall be made 
watertight by an adequate flashing or flashing material.
    (g) Vent caps. Vent caps, if provided, shall be of the removable 
type (without removing the flashing from the roof). When vent caps are 
used for roof space ventilation and the caps are identical to vent caps 
used for the plumbing system, plumbing system caps shall be identified 
with permanent markings.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 961, Jan. 4, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 58 FR 55015, 
Oct. 25, 1993]



Sec. 3280.612  Tests and inspection.

    (a) Water system. All water piping in the water distribution system 
shall be subjected to a pressure test. The test shall be made by 
subjecting the system to air or water at 100 psi for 15 minutes without 
loss of pressure.
    (b) Drainage and vent system and plumbing fixtures. The waste and 
vent system shall be tested by one of the three following alternate 
methods for evidence or indication of leakage:
    (1) Water test. Before plumbing fixtures are connected, all of the 
openings into the piping shall be plugged and the entire piping system 
subjected to a

[[Page 182]]

static water test for 15 minutes by filling it with water to the top of 
the highest vent opening. There shall be no evidence of leakage.
    (2) Air test. After all fixtures have been installed, the traps 
filled with water, and the remaining openings securely plugged, the 
entire system shall be subjected to a 2-inch (manometer) water column 
air pressure test. If the system loses pressure, leaks may be located 
with smoke pumped into the system, or with soap suds spread on the 
exterior of the piping (Bubble test).
    (3) Flood level test. The manufactured home shall be in a level 
position, all fixtures shall be connected, and the entire system shall 
be filled with water to the rim of the water closet bowl. (Tub and 
shower drains shall be plugged). After all trapped air has been 
released, the test shall be sustained for not less than 15 minutes 
without evidence of leaks. Then the system shall be unplugged and 
emptied. The waste piping above the level of the water closet bowl shall 
then be tested and show no indication of leakage when the high fixtures 
are filled with water and emptied simultaneously to obtain the maximum 
possible flow in the drain piping.
    (c) Fixture test. The plumbing fixtures and connections shall be 
subjected to a flow test by filling them with water and checking for 
leaks and retarded flow while they are being emptied.
    (d) Shower compartments. Shower compartments and receptors shall be 
tested for leaks prior to being covered by finish material. Each pan 
shall be filled with water to the top of the dam for not less than 15 
minutes without evidence of leakage.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 961, Jan. 4, 1977; 42 
FR 54383, Oct. 5, 1977. Redesignated at 44 FR 20679, Apr. 6, 1979, as 
amended at 58 FR 55015, Oct. 25, 1993]



           Subpart H_Heating, Cooling and Fuel Burning Systems



Sec. 3280.701  Scope.

    Subpart H of this standard covers the heating, cooling and fuel 
burning equipment installed within, on, or external to a manufactured 
home.



Sec. 3280.702  Definitions.

    The definitions in this subpart apply to subpart H only.
    Accessible, when applied to a fixture, connection, appliance or 
equipment, means having access thereto, but which may require the 
removal of an access panel, door or similar obstruction.
    Air conditioner blower coil system means a comfort cooling appliance 
where the condenser section is placed external to the manufactured home 
and evaporator section with circulating blower attached to the 
manufactured home air supply duct system. Provision must be made for a 
return air system to the evaporator/blower section. Refrigerant 
connection between the two parts of the system is accomplished by 
tubing.
    Air conditioner split system means a comfort cooling appliance where 
the condenser section is placed external to the manufactured home and 
the evaporator section incorporated into the heating appliance or with a 
separate blower/coil section within the manufactured home. Refrigerant 
connection between the two parts of the system is accomplished by 
tubing.
    Air conditioning condenser section means that portion of a 
refrigerated air cooling or (in the case of a heat pump) heating system 
which includes the refrigerant pump (compressor) and the external heat 
exchanger.
    Air conditioning evaporator section means a heat exchanger used to 
cool or (in the case of a heat pump) heat air for use in comfort cooling 
(or heating) the living space.
    Air conditioning self contained system means a comfort cooling 
appliance combining the condenser section, evaporator and air 
circulating blower into one unit with connecting ducts for the supply 
and return air systems.
    Air duct means conduits or passageways for conveying air to or from 
heating, cooling, air conditioning or ventilation equipment, but not 
including the plenum.
    Automatic pump (oil lifter) means a pump, not an integral part of 
the oil-burning appliance, that automatically pumps oil from the supply 
tank and delivers the oil under a constant head to an oil-burning 
appliance.

[[Page 183]]

    Btu. British thermal units means the quantity of heat required to 
raise the temperature of one pound of water one degree Fahrenheit.
    Btuh means British thermal units per hour.
    Burner means a device for the final conveyance of fuel or a mixture 
of fuel and air to the combustion zone.
    Central air conditioning system means either an air conditioning 
split system or an external combination heating/cooling system.
    Class 0 air ducts means ducts of materials and connectors having a 
fire-hazard classification of zero.
    Class 1 air ducts means ducts of materials and connectors having a 
flame-spread rating of not over 25 without evidence of continued 
progressive combustion and a smoke-developed rating of not over 50.
    Class 2 air ducts means ducts of materials and connectors having a 
flame-spread rating of not over 50 without evidence of continued 
progressive combustion and a smoke-developed rating of not over 50 for 
the inside surface and not over 100 for the outside surface.
    Clearance means the distance between the appliance, chimney, vent, 
chimney or vent connector or plenum and the nearest surface.
    Connector-Gas appliance: means a flexible or semi-rigid connector 
used to convey fuel gas between a gas outlet and a gas appliance.
    Energy Efficiency Ratio (EER) means the ratio of the cooling 
capacity output of an air conditioner for each unit of power input.

EER=Capacity (Btuh)/Power input (watts)

    External combination heating/cooling system means a comfort 
conditioning system placed external to the manufactured home with 
connecting ducts to the manufactured home for the supply and return air 
systems.
    Factory-built fireplace means a hearth, fire chamber and chimney 
assembly composed of listed factory-built components assembled in 
accordance with the terms of listing to form a complete fireplace.
    Fireplace stove means a chimney connected solid fuel-burning stove 
having part of its fire chamber open to the room.
    Fuel gas piping system means the arrangement of piping, tubing, 
fittings, connectors, valves and devices designed and intended to supply 
or control the flow of fuel gas to the appliance(s).
    Fuel oil piping system means the arrangement of piping, tubing, 
fittings, connectors, valves and devices designed and intended to supply 
or control the flow of fuel oil to the appliance(s).
    Gas clothes dryer means a device used to dry wet laundry by means of 
heat derived from the combustion of fuel gases.
    Gas refrigerator means a gas-burning appliance which is designed to 
extract heat from a suitable chamber.
    Gas supply connection means the terminal end or connection to which 
a gas supply connector is attached.
    Gas supply connector, manufactured home means a listed flexible 
connector designed for connecting the manufactured home to the gas 
supply source.
    Gas vents means factory-built vent piping and vent fittings listed 
by an approved testing agency, that are assembled and used in accordance 
with the terms of their listings, for conveying flue gases to the 
outside atmosphere.
    (1) Type B gas vent means a gas vent for venting gas appliances with 
draft hoods and other gas appliances listed for use with Type B gas 
vents.
    (2) Type BW gas vent means a gas vent for venting listed gas-fired 
vented wall furnaces.
    Heat producing appliance means all heating and cooking appliances 
and fuel burning appliances.
    Heating appliance means an appliance for comfort heating or for 
domestic water heating.
    Liquefied petroleum gases. The terms Liquefied petroleum gases, LPG 
and LP-Gas as used in this standard shall mean and include any material 
which is composed predominantly of any of the following hydrocarbons, or 
mixtures of them: propane, propylene butanes (normal butane or 
isobutane), and butylenes.
    Plenum means an air compartment which is part of an air-distributing 
system, to which one or more ducts or outlets are connected.

[[Page 184]]

    (1) Furnace supply plenum is a plenum attached directly to, or an 
integral part of, the air supply outlet of the furnace.
    (2) Furnace return plenum is a plenum attached directly to, or an 
integral part of, the return inlet of the furnace.
    Quick-disconnect device means a hand-operated device which provides 
a means for connecting and disconnecting a gas supply or connecting gas 
systems and which is equipped with an automatic means to shut off the 
gas supply when the device is disconnected.
    Readily accessible means direct access without the necessity of 
removing any panel, door, or similar obstruction.
    Roof jack means that portion of a manufactured home heater flue or 
vent assembly, including the cap, insulating means, flashing, and 
ceiling plate, located in and above the roof of a manufactured home.
    Sealed combustion system appliance means an appliance which by its 
inherent design is constructed so that all air supplied for combustion, 
the combustion system of the appliance, and all products of combustion 
are completely isolated from the atmosphere of the space in which it is 
installed.
    Water heater means an appliance for heating water for domestic 
purposes other than for space heating.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4586, Feb. 12, 1987; 58 FR 55015, Oct. 25, 1993]



Sec. 3280.703  Minimum standards.

    Heating, cooling and fuel burning appliances and systems in 
manufactured homes shall be free of defects, and shall conform to 
applicable standards in the following table unless otherwise specified 
in this standard. (See Sec. 3280.4) When more than one standard is 
referenced, compliance with any one such standard shall meet the 
requirements of this standard.

                               Appliances

Heating and Cooling Equipment, Second Edition, with 1999 revisions--UL 
1995, 1995.
Liquid Fuel-Burning Heating Appliances for Manufactured Homes and 
Recreational Vehicles, Seventh Edition, with 1997 revisions--UL 307A-
1995.
Fixed and Location-Dedicated Electric Room Heaters, Second Edition, with 
1998 revisions--UL 2021-1997.
Electric Baseboard Heating Equipment, Fourth Edition, with 1998 
revisions--UL 1042-1994.
Electric Central Air Heating Equipment--UL 1096-Fourth Edition-1986 with 
revisions July 16, 1986, and January 30, 1988.
Gas Burning Heating Appliances for Manufactured Homes and Recreational 
Vehicles, Fourth Edition, with 1998 revisions--UL 307B-1995.
Gas Clothes Dryers Volume 1, Type 1 Clothes Dryers--ANSI Z21.5.1-/CSA 
7.1-M99--1999 with Addendum Z21.5.1a-1999.
Gas Fired Absorption Summer Air Conditioning Appliances--ANSI Z21.40.1/
CGA 2.91-M961996.
Gas-Fired Central Furnaces (Except Direct Vent System Central 
Furnaces)--ANSI Z21.47-1990 with Addendum Z21.47a-1990 and Z21.47b-1992.
Household Cooking Gas Appliances--ANSI Z21.1-2000.
Refrigerators Using Gas Fuel--ANSI Z21.19-1990, with Addendum ANSI 
Z21.19a-1992 and Z21.19b-1995.
Gas Water Heaters--Volume 1, Storage Water Heaters with Input Ratings of 
75,000 BTU per hour or Less--ANSI Z21.10.1-1998 with Addendum Z21.10.1a-
2000.
Household Electric Storage Tank Water Heaters, Tenth Edition--UL 174-
1996, with 1997 revisions.

                        Ferrous Pipe and Fittings

Standard Specification for Pipe, Steel, Black and Hot-Dipped, Zinc-
Coated, Welded and Seamless--ASTM A53-93.
Standard Specification for Electric-Resistance-Welded Coiled Steel 
Tubing for Gas and Fuel Oil Lines--ASTM A539-1999.
Pipe Threads, General Purpose (Inch)--ANSI/ASME B1.20.1-1983.
Welding and Seamless Wrought Steel Pipe--ANSI/ASME B36.10-1979.

                  Nonferrous Pipe, Tubing, and Fittings

Standard Specification for Seamless Copper Water Tube--ASTM B88-93.
Standard Specification for Seamless Copper Tube for Air Conditioning and 
Refrigeration Field Service--ASTM B280, A-95.
Connectors for Gas Appliances--ANSI Z21.24/CGA 6.10-M97-1997.
Manually Operated Gas Valves for Appliances, Appliance Connector Valves 
and Hose End Valves--ANSI Z21.15/CGA 9.1-M97-1997.
Standard for Gas Supply Connectors for Manufactured Homes--IAPMO TSC 9-
1997.
Standard Specification for General Requirements for Wrought Seamless 
Copper and Copper-Alloy Tubes--ASTM B251-93.

[[Page 185]]

Standard Specification for Seamless Copper Pipe, Standard Sizes--ASTM 
B42-93.

                              Miscellaneous

Factory-Made Air Ducts and Connectors, Ninth Edition--UL 181, 1996 with 
1998 revisions.
Standard for Safety Closure Systems for use with Rigid Air Ducts and Air 
Connectors, UL 181A, 1994, with 1998 revisions.
Standard for Safety Closure Systems for use with Flexible Air Ducts and 
Air Connectors, First Edition--UL 181B, 1995, with 1998 revisions.
Tube Fittings for Flammable and Combustible Fluids, Refrigeration 
Service, and Marine Use, Sixth Edition--UL 109-1997, with 2001 
revisions.
Pigtails and Flexible Hose Connectors for LP-Gas, Seventh Edition--UL 
569, 1995 with 2001 revisions.
Roof Jacks for Manufactured Homes and Recreational Vehicles, Eighth 
Edition--UL 311, 1994, with 1998 revisions.
Relief Valves and Automatic Gas Shutoff Devices for Hot Water Supply 
Systems--ANSI Z21.22/CSA 4.4-M99, 1999.
Automatic Gas Ignition Systems and Components--ANSI Z21.20 with Addendum 
Z21.20a-2000.
Automatic Valves for Gas Appliances--ANSI Z21.21/CSA 6.5-2000.
Gas Appliance Thermostats--ANSI Z21.23-1989, with Addendum Z21.23a-1991.
Gas Vents, Ninth Edition--UL 441, 1996 with 1999 revisions.
Standard for the Installation of Oil-Burning Equipment, NFPA 31, 1997 
Edition.
National Fuel Gas Code--NFPA 54-2002/ANSI Z223.1-2002.
Warm Air Heating and Air Conditioning Systems, NFPA 90B, 1996 Edition.
Liquefied Petroleum Gas Code, NFPA 58-2001 Edition.
Flares for Tubing--SAE-J533b-1992.
Factory-Built Chimneys for Residential Type and Building Heating 
Appliances, Ninth Edition--UL 103, 1995, with 1999 revisions.
Factory-Built Fireplaces, Seventh Edition--UL 127-1996, with 1999 
revisions.
Solid-Fuel Type Room Heaters, Fifth Edition--UL 1482, 1995, with 2000 
revisions.
Fireplace Stoves, Eight Edition, with 2000 revisions--UL 737, 1996.
Unitary Air-Conditioning and Air-Source Heat Pump Equipment--ANSI/ARI 
210/240-89.
AGA Requirements for Gas Connectors for Connection of Fixed Appliances 
for Outdoor Installation, Park Trailers, and Manufactured (Mobile) Homes 
to the Gas Supply--No. 3-87.

[58 FR 55015, Oct. 25, 1993, as amended at 70 FR 72046, Nov. 30, 2005]



Sec. 3280.704  Fuel supply systems.

    (a) LP--Gas system design and service line pressure. (1) Systems 
shall be of the vapor-withdrawal type.
    (2) Gas, at a pressure not over 14 inches water column (\1/2\ psi), 
shall be delivered from the system into the gas supply connection.
    (b) LP-gas containers--(1) Maximum capacity. No more than two 
containers having an individual water capacity of not more than 105 
pounds (approximately 45 pounds LP-gas capacity), shall be installed on 
or in a compartment of any manufactured home.
    (2) Construction of containers. Containers shall be constructed and 
marked in accordance with the specifications for LP-Gas Containers of 
the U.S. Department of Transportation (DOT) or the Rules for 
Construction of Pressure Vessels 1986, ASME Boiler and Pressure Vessel 
Code section VIII, Division 1 ASME Containers shall have a design 
pressure of at least 312.5 psig.
    (i) Container supply systems shall be arranged for vapor withdrawal 
only.
    (ii) Container openings for vapor withdrawal shall be located in the 
vapor space when the container is in service or shall be provided with a 
suitable internal withdrawal tube which communicates with the vapor 
space on or near the highest point in the container when it is mounted 
in service position, with the vehicle on a level surface. Containers 
shall be permanently and legibly marked in a conspicuous manner on the 
outside to show the correct mounting position and the position of the 
service outlet connection. The method of mounting in place shall be such 
as to minimize the possibility of an incorrect positioning of the 
container.
    (3) Location of LP-gas containers and systems. (i) LP-gas containers 
shall not be installed, nor shall provisions be made for installing or 
storing any LP-gas container, even temporarily, inside any manufactured 
home except for listed, completely self-contained hand torches, 
lanterns, or similar equipment with containers having a maximum water 
capacity of not more than 2\1/2\ pounds (approximately one pound LP-gas 
capacity).
    (ii) Containers, control valves, and regulating equipment, when 
installed,

[[Page 186]]

shall be mounted on the ``A'' frame of the manufactured home, or 
installed in a compartment that is vaportight to the inside of the 
manufactured home and accessible only from the outside. The compartment 
shall be ventilated at top and bottom to facilitate diffusion of vapors. 
The compartment shall be ventilated with two vents having an aggregate 
area of not less than two percent of the floor area of the compartment 
and shall open unrestricted to the outside atmosphere. The required 
vents shall be equally distributed between the floor and ceiling of the 
compartment. If the lower vent is located in the access door or wall, 
the bottom edge of the vent shall be flush with the floor level of the 
compartment. The top vent shall be located in the access door or wall 
with the bottom of the vent not more than 12 inches below the ceiling 
level of the compartment. All vents shall have an unrestricted discharge 
to the outside atmosphere. Access doors or panels of compartments shall 
not be equipped with locks or require special tools or knowledge to 
open.
    (iii) Permanent and removable fuel containers shall be securely 
mounted to prevent jarring loose, slipping or rotating and the 
fastenings shall be designed and constructed to withstand static loading 
in any direction equal to twice the weight of the tank and attachments 
when filled with fuel, using a safety factor of not less than four based 
on the ultimate strength of the material to be used.
    (4) LP-gas container valves and accessories. (i) Valves in the 
assembly of a two-cylinder system shall be arranged so that replacement 
of containers can be made without shutting off the flow of gas to the 
appliance(s). This provision is not to be construed as requiring an 
automatic change-over device.
    (ii) Shutoff valves on the containers shall be protected as follows, 
in transit, in storage, and while being moved into final utilization by 
setting into a recess of the container to prevent possibility of their 
being struck if container is dropped upon a flat surface, or by 
ventilated cap or collar, fastened to the container, capable of 
withstanding a blow from any direction equivalent to that of a 30-pound 
weight dropped 4 feet. Construction shall be such that the blow will not 
be transmitted to the valve.
    (iii) [Reserved]
    (iv) Regulators shall be connected directly to the container shutoff 
valve outlets or mounted securely by means of a support bracket and 
connected to the container shutoff valve or valves with listed high 
pressure connections. If the container is permanently mounted the 
connector shall be as required above or with a listed semi-rigid tubing 
connector.
    (5) LP-gas safety devices. (i) DOT containers must be provided with 
safety relief devices as required by the regulation of the U.S. 
Department of Transportation. ASME containers must be provided with 
relief valves in accordance with subsection 2.3.2 of NFPA 58-2001, 
Standard for the Storage and Handling Liquefied Petroleum Gases. Safety 
relief valves must have direct communication with the vapor space of the 
vessel.
    (ii) The delivery side of the gas pressure regulator shall be 
equipped with a safety relief device set to discharge at a pressure not 
less than two times and not more than three times the delivery pressure 
of the regulator.
    (iii) Systems mounted on the ``A'' frame assembly shall be so 
located that the discharge from the safety relief devices shall be into 
the open air and not less than three feet horizontally from any opening 
into the manufactured home below the level of such discharge.
    (iv) Safety relief valves located within liquefied petroleum gas 
container compartments may be less than three feet from openings 
provided the bottom vent of the compartment is at the same level or 
lower than the bottom of any opening into the vehicle, or the 
compartment is not located on the same wall plane as the opening(s) and 
is at least two feet horizontally from such openings.
    (6) LP-gas system enclosure and mounting. (i) Housings and 
enclosures shall be designed to provide proper ventilation at least 
equivalent to that specified in Sec. 3280.704(b)(3)(ii).
    (ii) Doors, hoods, domes, or portions of housings and enclosures 
required to be removed or opened for replacement of containers shall 
incorporate means

[[Page 187]]

for clamping them firmly in place and preventing them from working loose 
during transit.
    (iii) Provisions shall be incorporated in the assembly to hold the 
containers firmly in position and prevent their movement during transit.
    (iv) Containers shall be mounted on a substantial support or a base 
secured firmly to the vehicle chassis. Neither the container nor its 
support shall extend below the manufactured home frame.
    (c) Oil tanks--(1) Installation. Oil tanks and listed automatic 
pumps (oil lifters) installed for gravity flow of oil to heating 
equipment shall be installed so that the top of the tank is no higher 
than 8 feet above the appliance oil control and the bottom of the tank 
is not less than 18 inches above the appliance oil control.
    (2) Auxiliary oil storage tank. Oil supply tanks affixed to a 
manufactured home shall be so located as to require filling and draining 
from the outside and shall be in a place readily available for 
inspection. If the fuel supply tank is located in a compartment of a 
manufactured home, the compartment shall be ventilated at the bottom to 
permit diffusion of vapors and shall be insulated from the structural 
members of the body. Tanks so installed shall be provided with an 
outside fill and vent pipe and an approved liquid level gage.
    (3) Shutoff valve. A readily accessible, approved manual shutoff 
valve shall be installed at the outlet of an oil supply tank. The valve 
shall be installed to close against the supply.
    (4) Fuel oil filters. All oil tanks shall be equipped with an 
approved oil filter or strainer located downstream from the tank shutoff 
valve. The fuel oil filter or strainer shall contain a sump with a drain 
for the entrapment of water.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 47 FR 49390, Nov. 1, 1982; 52 FR 4587, Feb. 12, 1987; 58 
FR 55016, Oct. 25, 1993; 70 FR 72050, Nov. 30, 2005]



Sec. 3280.705  Gas piping systems.

    (a) General. The requirements of this section shall govern the 
installation of all fuel gas piping attached to any manufactured home. 
The gas piping supply system shall be designed for a pressure not 
exceeding 14 inch water column (\1/2\ psi) and not less than 7 inch 
water column (\1/4\ psi). The manufacturer shall indicate in his written 
installation instructions the design pressure limitations for safe and 
effective operation of the gas piping system. None of the requirements 
listed in this section shall apply to the piping supplied as a part of 
an appliance. All exterior openings around piping, ducts, plenums or 
vents shall be sealed to resist the entrance of rodents.
    (b) Materials. All materials used for the installation, extension, 
alteration, or repair of any gas piping system shall be new and free 
from defects or internal obstructions. It shall not be permissible to 
repair defects in gas piping or fittings. Inferior or defective 
materials shall be removed and replaced with acceptable material. The 
system shall be made of materials having a melting point of not less 
than 1,450 F, except as provided in Sec. 3280.705(e). They shall 
consist of one or more of the materials described in Sec. 3280.705(b) 
(1) through (4).
    (1) Steel or wrought-iron pipe shall comply with ANSI Standard 
B36.10-1979, Welded and Seamless Wrought Steel Pipe. Threaded brass pipe 
in iron pipe sizes may be used. Threaded brass pipe shall comply with 
ASTM B43-91, Standard Specification for Seamless Red Brass Pipe, 
Standard Sizes.
    (2) Fittings for gas piping shall be wrought iron, malleable iron, 
steel, or brass (containing not more than 75 percent copper).
    (3) Copper tubing must be annealed type, Grade K or L, conforming to 
the Standard Specification for Seamless Copper Water Tube, ASTM B88-93, 
or must comply with the Standard Specification for Seamless Copper Tube 
for Air Conditioning and Refrigeration Service, ASTM B280-1995. Copper 
tubing must be internally tinned.
    (4) Steel tubing must have a minimum wall thickness of 0.032 inch 
for tubing of \1/2\ inch diameter and smaller and 0.049 inch for 
diameters \1/2\ inch and larger. Steel tubing must be in accordance with 
ASTM Standard Specification for Electric-Resistance-Welded Coiled Steel 
Tubing for Gas and Fuel

[[Page 188]]

Oil Lines, ASTM A539-1999, and must be externally corrosion protected.
    (c) Piping design. Each manufactured home requiring fuel gas for any 
purpose shall be equipped with a natural gas piping system acceptable 
for LP-gas. Where fuel gas piping is to be installed in more than one 
section of an expandable or multiple unit home, the design and 
construction of the crossover(s) shall be as follows:
    (1) All points of crossover shall be readily accessible from the 
exterior of the home.
    (2) The connection(s) between units must be made with a connector(s) 
listed for exterior use or direct plumbing sized in accordance with 
Sec. 3280.705(d). A shutoff valve of the non-displaceable rotor type 
conforming to ANSI Z21.15-1997, Manually Operated Gas Valves for 
Appliances, Appliances Connector Valves, and Hose End Valves, suitable 
for outdoor use must be installed at each crossover point upstream of 
the connection.
    (3) The connection(s) may be made by a listed quick disconnect 
device which shall be designed to provide a positive seal of the supply 
side of the gas system when such device is separated.
    (4) The flexible connector, direct plumbing pipe, or ``quick 
disconnect'' device shall be provided with protection from mechanical 
and impact damage and located to minimize the possibility of tampering.
    (5) For gas line cross over connections made with either hard pipe 
or flexible connectors, the crossover point(s) shall be capped on the 
supply side to provide a positive seal and covered on the other side 
with a suitable protective covering.
    (6) Suitable protective coverings for the connection device(s) when 
separated, shall be permanently attached to the device or flexible 
connector.
    (7) When a quick disconnect device is installed, a 3 inch by 1\3/4\ 
inch minimum size tag made of etched, metal-stamped or embossed brass, 
stainless steel, anodized or alcalde aluminum not less than 0.020 inch 
thick or other approved material (e.g., 0.005 inch plastic laminates) 
shall be permanently attached on the exterior wall adjacent to the 
access to the ``quick disconnect'' device. Each tag shall be legibly 
inscribed with the following information using letters no smaller than 
\1/4\ inch high:

      Do Not Use Tools To Separate the ``Quick-Disconnect'' Device

    (d) Gas pipe sizing. Gas piping systems shall be sized so that the 
pressure drop to any appliance inlet connection from any gas supply 
connection, when all appliances are in operation at maximum capacity, is 
not more than 0.5 inch water column as determined on the basis of test, 
or in accordance with table 3280.705(d). When determining gas pipe 
sizing in the table, gas shall be assumed to have a specific gravity of 
0.65 and rated at 1000 B.T.U. per cubic foot. The natural gas supply 
connection(s) shall be not less than the size of the gas piping but 
shall be not smaller than \3/4\ inch nominal pipe size.
    (e) Joints for gas pipe. All pipe joints in the piping system, 
unless welded or brazed, shall be threaded joints that comply with Pipe 
Threads, General Purpose (Inch), adopted 25 October 1984, ANSI/ASME 
B1.20.1-1983. Right and left nipples or couplings shall not be used. 
Unions, if used, shall be of ground joint type. The material used for 
welding or brazing pipe connections shall have a melting temperature in 
excess of 1,000 F.
    (f) Joints for tubing. (1) Tubing joints shall be made with either a 
single or a double flare of 45 degrees in accordance with Flares For 
Tubing, SAE-J533b-1972 or with other listed vibration-resistant 
fittings, or joints may be brazed with material having a melting point 
exceeding 1,000 F. Metallic ball sleeve compression-type tubing fittings 
shall not be used.
    (2) Steel tubing joints shall be made with a double-flare in 
accordance with Flares For Tubing, SAE-J533b-1972.
    (g) Pipe joint compound. Screw joints shall be made up tight with 
listed pipe joint compound, insoluble in liquefied petroleum gas, and 
shall be applied to the male threads only.
    (h) Concealed tubing. Tubing shall not be run inside walls, floors, 
partitions, or roofs. Where tubing passes through walls, floors, 
partitions, roofs, or similar installations, such tubing shall be 
protected by the use of weather resistant grommets that shall snugly fit

[[Page 189]]

both the tubing and the hole through which the tubing passes.

[[Page 190]]



Part I--Maximum Capacity of Different Sizes of Pipe and Tubing in Thousands of Btu's Per Hour of Natural Gas For Gas Pressures of 0.5 Psig or Less and a
                                                    Maximum Pressure Drop of \1/2\ Inch Water Column
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Iron pipe sizes--Length in feet                                                   Tubing--Length in feet
--------------------------------------------------------------------------------------------------------------------------------------------------------
 I.D.    10     20     30     40     50     60     70     80     90    100    O.D.    10     20     30     40     50     60     70     80     90    100
--------------------------------------------------------------------------------------------------------------------------------------------------------
  \1/     43     29     24     20     18     16     15     14     13     12    \3/     27     18     15     13     11     10      9      9      8      8
 4\                                                               8\
  \3/     95     65     52     45     40     36     33     31     29     27    \1/     56     38     31     26     23     21     19     18     17     16
 8\                                                               2\
  \1/    175    120     97     82     73     66     61     57     53     50    \5/    113     78     62     53     47     43     39     37     34     33
 2\                                                               8\
  \3/    360    250    200    170    151    138    125    118    110    103    \3/    197    136    109     93     83     75     69     64     60     57
 4\                                                               4\
1
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 191]]

                           Part II [Reserved]

    (i) Concealed joints. Piping or tubing joints shall not be located 
in any floor, wall partition, or similar concealed construction space.
    (j) Gas supply connections. When gas appliances are installed, at 
least one gas supply connection shall be provided on each home. The 
connection shall not be located beneath an exit door. Where more than 
one connection is provided, the piping system shall be sized to provide 
adequate capacity from each supply connection.
    (k) Identification of gas supply connections. Each manufactured home 
shall have permanently affixed to the exterior skin at or near each gas 
supply connection or the end of the pipe, a tag of 3 inches by 1\3/4\ 
inches minimum size, made of etched, metal-stamped or embossed brass, 
stainless steel, anodized or alcalde aluminum not less than 0.020 inch 
thick, or other approved material (e.g., 0.005 inch plastic laminates), 
which reads as follows. The connector capacity indicated on this tag 
shall be equal to or greater than the total Btuh rating of all intended 
gas appliances.

   ------------------------------------------------------------------
                 Combination LP-Gas and Natural Gas System
          This gas piping system is designed for use of either 
      liquefied petroleum gas or natural gas.
          NOTICE: BEFORE TURNING ON GAS BE CERTAIN APPLIANCES ARE 
      DESIGNED FOR THE GAS CONNECTED AND ARE EQUIPPED WITH CORRECT 
      ORIFICES. SECURELY CAP THIS INLET WHEN NOT CONNECTED FOR 
      USE.
          When connecting to lot outlet, use a listed gas supply 
      connector for mobile homes rated at [ballot] 100,000 Btuh or 
      more; [ballot] 250,000 Btuh or more.
          Before turning on gas, make certain all gas connections 
      have been made tight, all appliance valves are turned off, 
      and any unconnected outlets are capped.
          After turning on gas, test gas piping and connections to 
      appliances for leakage with soapy water or bubble solution, 
      and light all pilots.

   ------------------------------------------------------------------

The connector capacity indicated on this tag shall be equal to or 
greater than the total Btuh rating of all intended gas appliances.
    (l) LP-gas supply connectors. (1) A listed LP-Gas flexible 
connection conforming to UL 569-1995, Pigtails and Flexible Hose 
Connectors for LP Gas, or equal must be supplied when LP-Gas 
cylinders(s) and regulator(s) are supplied.
    (2) Appliance connections. All gas burning appliances shall be 
connected to the fuel piping. Materials as provided in Sec. 3280.705(b) 
or listed appliance connectors shall be used. Listed appliance 
connectors when used shall not run through walls, floors, ceilings or 
partitions, except for cabinetry, and shall be 3 feet or less in length 
or 6 feet or less for cooking appliances. Connectors of aluminum shall 
not be used outdoors. A manufactured home containing a combination LP-
natural-gas-system may be provided with a gas outlet to supply exterior 
appliances when installed in accordance with the following:
    (i) No portion of the completed installation shall project beyond 
the wall of the manufactured home.
    (ii) The outlet must be provided with an approved quick-disconnect 
device, which must be designed to provide a positive seal on the supply 
side of the gas system when the appliance is disconnected. A shutoff 
valve of the non-displaceable rotor type conforming to ANSI Z21.15-1997, 
Manually Operated Gas Valves, must be installed immediately upstream of 
the quick-disconnect device. The complete device must be provided as 
part of the original installation.
    (iii) Protective caps or plugs for the ``quick-disconnect'' device, 
when disconnected, shall be permanently attached to the manufactured 
home adjacent to the device.
    (iv) A tag shall be permanently attached to the outside of the 
exterior wall of the manufactured home as close as possible to the gas 
supply connection. The tag shall indicate the type of gas and the Btuh 
capacity of the outlet and shall be legibly inscribed as follows:

    THIS OUTLET IS DESIGNED FOR USE WITH GAS PORTABLE APPLIANCES WHOSE 
TOTAL INPUT DO NOT EXCEED ------ BTUH. REPLACE PROTECTIVE COVERING OVER 
CONNECTOR WHEN NOT IN USE.


[[Page 192]]


    (3) Valves. A shutoff valve must be installed in the fuel piping at 
each appliance inside the manufactured home structure, upstream of the 
union or connector in addition to any valve on the appliance and so 
arranged to be accessible to permit servicing of the appliance and 
removal of its components. The shutoff valve must be located within 6 
feet of any cooking appliance and within 3 feet of any other appliance. 
A shutoff valve may serve more than one appliance if located as required 
by this paragraph (3). The shutoff valve must be of the non-displaceable 
rotor type and conform to ANSI Z21.15-1997, Manually Operated Gas 
Valves.
    (4) Gas piping system openings. All openings in the gas piping 
system shall be closed gas-tight with threaded pipe plugs or pipe caps.
    (5) Electrical ground. Gas piping shall not be used for an 
electrical ground.
    (6) Couplings. Pipe couplings and unions shall be used to join 
sections of threaded piping. Right and left nipples or couplings shall 
not be used.
    (7) Hangers and supports. All gas piping shall be adequately 
supported by galvanized or equivalently protected metal straps or 
hangers at intervals of not more than 4 feet, except where adequate 
support and protection is provided by structural members. Solid-iron-
pipe gas supply connection(s) shall be rigidly anchored to a structural 
member within 6 inches of the supply connection(s).
    (8) Testing for leakage. (i) Before appliances are connected, piping 
systems shall stand a pressure of at least six inches mercury or three 
PSI gage for a period of not less than ten minutes without showing any 
drop in pressure. Pressure shall be measured with a mercury manometer or 
slope gage calibrated so as to be read in increments of not greater than 
one-tenth pound, or an equivalent device. The source of normal operating 
pressure shall be isolated before the pressure tests are made. Before a 
test is begun, the temperature of the ambient air and of the piping 
shall be approximately the same, and constant air temperature be 
maintained throughout the test.
    (ii) After appliances are connected, the piping system shall be 
pressurized to not less than 10 inches nor more than 14 inches water 
column and the appliance connections tested for leakage with soapy water 
or bubble solution.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 54383, Oct. 5, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 52 FR 4587, 
Feb. 12, 1987; 58 FR 55016, Oct. 25, 1993; 70 FR 72050, Nov. 30, 2005]



Sec. 3280.706  Oil piping systems.

    (a) General. The requirements of this section shall govern the 
installation of all liquid fuel piping attached to any manufactured 
home. None of the requirements listed in this section shall apply to the 
piping in the appliance(s).
    (b) Materials. All materials used for the installation extension, 
alteration, or repair, of any oil piping systems shall be new and free 
from defects or internal obstructions. The system shall be made of 
materials having a melting point of not less than 1,450 F, except as 
provided in Sec. 280.706(d) and (e). They shall consist of one or more 
of the materials described in Sec. 3280.706(b) (1) through (4).
    (1) Steel or wrought-iron pipe shall comply with ANSI B 36.10-1979, 
Welded and Seamless Wrought Steel Pipe. Threaded copper or brass pipe in 
iron pipe sizes may be used.
    (2) Fittings for oil piping shall be wrought-iron, malleable iron, 
steel, or brass (containing not more than 75 percent copper).
    (3) Copper tubing must be annealed type, Grade K or L conforming to 
the Standard Specification for Seamless Copper Water Tube, ASTM B88-93, 
or shall comply with ASTM B280-1995, Standard Specification for Seamless 
Copper Tube for Air Conditioning and Refrigeration Field Service.
    (4) Steel tubing shall have a minimum wall thickness of 0.032 inch 
for diameters up to \1/2\ inch and 0.049 inch for diameters \1/2\ inch 
and larger. Steel tubing shall be constructed in accordance with the 
Specification for Electric-Resistance-Welded Coiled Steel Tubing for Gas 
and Field Oil Lines, ASTM, A539-90a, and shall be externally corrosion 
protected.
    (c) Size of oil piping. The minimum size of all fuel oil tank piping 
connecting outside tanks to the appliance

[[Page 193]]

shall be no smaller than \3/8\ inch OD copper tubing or \1/4\ inch IPS. 
If No. 1 fuel oil is used with a listed automatic pump (fuel lifter), 
copper tubing shall be sized as specified by the pump manufacturer.
    (d) Joints for oil piping. All pipe joints in the piping system, 
unless welded or brazed, shall be threaded joints which comply with 
ANSI/ASME B1.20.1-1983, Pipe Threads, General Purpose (Inch). The 
material used for brazing pipe connections shall have a melting 
temperature in excess of 1,000 F.
    (e) Joints for tubing. Joints in tubing shall be made with either a 
single or double flare of the proper degree, as recommended by the 
tubing manufacturer, by means of listed tubing fittings, or brazed with 
materials having a melting point in excess of 1,000 F.
    (f) Pipe joint compound. Threaded joints shall be made up tight with 
listed pipe joint compound which shall be applied to the male threads 
only.
    (g) Couplings. Pipe couplings and unions shall be used to join 
sections of threaded pipe. Right and left nipples or couplings shall not 
be used.
    (h) Grade of piping. Fuel oil piping installed in conjunction with 
gravity feed systems to oil heating equipment shall slope in a gradual 
rise upward from a central location to both the oil tank and the 
appliance in order to eliminate air locks.
    (i) Strap hangers. All oil piping shall be adequately supported by 
galvanized or equivalently protected metal straps or hangers at 
intervals of not more than 4 feet, except where adequate support and 
protection is provided by structural members. Solid-iron-pipe oil supply 
connection(s) shall be rigidly anchored to a structural member within 6 
inches of the supply connection(s).
    (j) Testing for leakage. Before setting the system in operation, 
tank installations and piping shall be checked for oil leaks with fuel 
oil of the same grade that will be burned in the appliance. No other 
material shall be used for testing fuel oil tanks and piping. Tanks 
shall be filled to maximum capacity for the final check for oil leakage.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4588, Feb. 12, 1987; 58 FR 55017, Oct. 25, 1993; 70 
FR 72050, Nov. 30, 2005]



Sec. 3280.707  Heat producing appliances.

    (a) Heat-producing appliances and vents, roof jacks and chimneys 
necessary for their installation in manufactured homes shall be listed 
or certified by a nationally recognized testing agency for use in 
manufactured homes.
    (1) A manufactured home shall be provided with a comfort heating 
system.
    (i) When a manufactured home is manufactured to contain a heating 
appliance, the heating appliance shall be installed by the manufacturer 
of the manufactured home in compliance with applicable sections of this 
subpart.
    (ii) When a manufactured home is manufactured for field application 
of an external heating or combination heating/cooling appliance, 
preparation of the manufactured home for this external application shall 
comply with the applicable sections of this part.
    (2) Gas and oil burning comfort heating appliances shall have a flue 
loss of not more than 25 percent, and a thermal efficiency of not less 
than that specified in nationally recognized standards (See Sec. 
3280.703).
    (b) Fuel-burning heat-producing appliances and refrigeration 
appliances, except ranges and ovens, shall be of the vented type and 
vented to the outside.
    (c) Fuel-burning appliances shall not be converted from one fuel to 
another fuel unless converted in accordance with the terms of their 
listing and the appliance manufacturer's instructions.
    (d) Performance efficiency. (1) All automatic electric storage water 
heaters installed in manufactured homes shall have a standby loss not 
exceeding 43 watts/meter\2\ (4 watts/ft\2\) of tank surface area. The 
method of test for standby loss shall be as described in section 4.3.1 
of Household Automatic Electric Storage Type Water Heaters, ANSI C72.1-
1972.

[[Page 194]]

    (2) All gas and oil-fired automatic storage water heaters shall have 
a recovery efficiency, E, and a standby loss, S, as described below. The 
method of test of E and S shall be as described in section 2.7 of Gas 
Water heaters, Vol. I, Storage Water Heaters with Input/Ratings of 
75,000 BTU per hour or less, ANSI Z21.10.1-1990, with addendums 
Z21.10.1a-1991 and Z21.10.1b-1992 except that for oil-fired units. 
CF=1.0, Q=total gallons of oil consumed and H=total heating value of oil 
in BTU/gallon.

------------------------------------------------------------------------
                                       Recovery
   Storage capacity in gallons        efficiency         Standby loss
------------------------------------------------------------------------
Less than 25....................  At least 75         Not more than 7.5
                                   percent.            percent.
25 up to 35.....................  00................  Not more than 7
                                                       percent.
35 or more......................  00................  Not more than 6
                                                       percent.
------------------------------------------------------------------------

    (e) Each space heating, cooling or combination heating and cooling 
system shall be provided with at least one readily adjustable automatic 
control for regulation of living space temperature. The control shall be 
placed a minimum of 3 feet from the vertical edge of the appliance 
compartment door. It shall not be located on an exterior wall or on a 
wall separating the appliance compartment from a habitable room.
    (f) Oil-fired heating equipment. All oil-fired heating equipment 
must conform to Liquid Fuel-burning Heating Appliances for Manufactured 
Homes and Recreational Vehicles, UL 307A--1995, with 1997 revisions, and 
be installed in accordance with Standard for the Installation of Oil 
Burning Equipment, NFPA 31-1997. Regardless of the requirements of the 
above-referenced standards, or any other standards referenced in this 
part, the following are not required:
    (1) External switches or remote controls which shut off the burner 
or the flow of oil to the burner, or
    (2) An emergency disconnect switch to interrupt electric power to 
the equipment under conditions of excessive temperature.

[40 FR 58752, Dec. 17, 1975, as amended at 42 FR 54383, Oct. 5, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 47 FR 49391, 
Nov. 1, 1982; 52 FR 4588, Feb. 12, 1987; 52 FR 47553, Dec. 15, 1987; 58 
FR 55017, Oct. 25, 1993; 70 FR 72050, Nov. 30, 2005]



Sec. 3280.708  Exhaust duct system and provisions for the future 
installation of a clothes dryer.

    (a) Clothes dryers. (1) All gas and electric clothes dryers shall be 
exhausted to the outside by a moisture-lint exhaust duct and termination 
fitting. When the clothes dryer is supplied by the manufacturer, the 
exhaust duct and termination fittings shall be completely installed by 
the manufacturer. However, if the exhaust duct system is subject to 
damage during transportation, it need not be completely installed at the 
factory when:
    (i) The exhaust duct system is connected to the clothes dryer, and
    (ii) A moisture lint exhaust duct system is roughed in and 
installation instructions are provided in accordance with paragraph 
(b)(3) or (c) of this section.
    (2) A clothes dryer moisture-lint exhaust duct shall not be 
connected to any other duct, vent or chimney.
    (3) The exhaust duct shall not terminate beneath the manufactured 
home.
    (4) Moisture-lint exhaust ducts shall not be connected with sheet 
metal screws or other fastening devices which extend into the interior 
of the duct.
    (5) Moisture-lint exhaust duct and termination fittings shall be 
installed in accordance with the appliance manufacturer's printed 
instructions.
    (b) Provisions for future installation of a gas clothes dryer. A 
manufactured home may be provided with ``stubbed in'' equipment at the 
factory to supply a gas clothes dryer for future installation by the 
owner provided it complies with the following provisions:
    (1) The ``stubbed in'' gas outlet shall be provided with a shutoff 
valve, the outlet of which is closed by threaded pipe plug or cap;
    (2) The ``stubbed in'' gas outlet shall be permanently labeled to 
identify it for use only as the supply connection for a gas clothes 
dryer;
    (3) A moisture lint duct system consisting of a complete access 
space (hole) through the wall or floor cavity with a cap or cover on the 
interior and exterior of the cavity secured in such a manner that they 
can be removed by a common household tool shall be provided. The cap or 
cover in place shall limit air infiltration and be designed to

[[Page 195]]

resist the entry of water or rodents. The manufacturer is not required 
to provide the moisture-lint exhaust duct or the termination fitting. 
The manufacturer shall provide written instructions to the owner on how 
to complete the exhaust duct installation in accordance with provisions 
of Sec. 3280.708(a)(1) through (5).
    (c) Provisions for future installation of electric clothes dryers. 
When wiring is installed to supply an electric clothes dryer for future 
installation by the owner, the manufacturer shall:
    (1) Provide a roughed in moisture-lint exhaust duct system 
consisting of a complete access space (hole) through the wall or floor 
cavity with a cap or cover on the interior and exterior of the cavity 
which are secured in such a manner that they can be removed by the use 
of common household tools. The cap or cover in place shall limit air 
filtration and be designed to resist the entry of water or rodents into 
the home. The manufacturer is not required to provide the moisture-lint 
exhaust duct or the termination fitting;
    (2) Install a receptacle for future connection of the dryer;
    (3) Provide written instructions on how to complete the exhaust duct 
installation in accordance with the provisions of paragraphs (a)(1) 
through (5) of this section.

[42 FR 54383, Oct. 5, 1977. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55018, Oct. 25, 1993]



Sec. 3280.709  Installation of appliances.

    (a) The installation of each appliance shall conform to the terms of 
its listing and the manufacturer's instructions. The installer shall 
leave the manufacturer's instructions attached to the appliance. Every 
appliance shall be secured in place to avoid displacement. For the 
purpose of servicing and replacement, each appliance shall be both 
accessible and removable.
    (b) Heat-producing appliances shall be so located that no doors, 
drapes, or other such material can be placed or swing closer to the 
front of the appliance than the clearances specified on the labeled 
appliances.
    (c) Clearances surrounding heat producing appliances shall not be 
less than the clearances specified in the terms of their listings.
    (1) Prevention of storage. The area surrounding heat producing 
appliances installed in areas with interior or exterior access shall be 
framed-in or guarded with noncombustible material such that the distance 
from the appliance to the framing or guarding material is not greater 
than three inches unless the appliance is installed in compliance with 
paragraph (c)(2), of this section. When clearance required by the 
listing is greater than three inches, the guard or frame shall not be 
closer to the appliance than the distance provided in the listing.
    (2) Clearance spaces surrounding heat producing appliances are not 
required to be framed-in or guarded when:
    (i) A space is designed specifically for a clothes washer or dryer;
    (ii) Dimensions surrounding the appliance do not exceed three 
inches; or
    (iii) The manufacturer affixes either to a side of an alcove or 
compartment containing the appliance, or to the appliance itself, in a 
clearly visible location, a 3x5 adhesive backed 
plastic laminated label or the equivalent which reads as follows:

                               ``Warning''

    This compartment is not to be used as a storage area. Storage of 
combustible materials or containers on or near any appliance in this 
compartment may create a fire hazard. Do not store such materials or 
containers in this compartment.

    (d) All fuel-burning appliances, except ranges, ovens, illuminating 
appliances, clothes dryers, solid fuel-burning fireplaces and solid 
fuel-burning fireplace stoves, shall be installed to provide for the 
complete separation of the combustion system from the interior 
atmosphere of the manufactured home. Combustion air inlets and flue gas 
outlets shall be listed or certified as components of the appliance. The 
required separation may be obtained by:
    (1) The installation of direct vent system (sealed combustion 
system) appliances, or
    (2) The installation of appliances within enclosures so as to 
separate the appliance combustion system and venting system from the 
interior atmosphere of the manufactured home. There

[[Page 196]]

shall not be any door, removable access panel, or other opening into the 
enclosure from the inside of the manufactured home. Any opening for 
ducts, piping, wiring, etc., shall be sealed.
    (e) A forced air appliance and its return-air system shall be 
designed and installed so that negative pressure created by the air-
circulating fan cannot affect its or another appliance's combustion air 
supply or act to mix products of combustion with circulating air.
    (1) The air circulating fan of a furnace installed in an enclosure 
with another fuel-burning appliance shall be operable only when any door 
or panel covering an opening in the furnace fan compartment or in a 
return air plenum or duct is in the closed position. This does not apply 
if both appliances are direct vent system (sealed combustion system) 
appliances.
    (2) If a warm air appliance is installed within an enclosure to 
conform to Sec. 3280.709(d)(2), each warm-air outlet and each return 
air inlet shall extend to the exterior of the enclosure. Ducts, if used 
for that purpose, shall not have any opening within the enclosure and 
shall terminate at a location exterior to the enclosure.
    (3) Cooling coils installed as a portion of, or in connection with, 
any forced-air furnace shall be installed on the downstream side unless 
the furnace is specifically otherwise listed.
    (4) An air conditioner evaporator section shall not be located in 
the air discharge duct or plenum of any forced-air furnace unless the 
manufactured home manufacturer has complied with certification required 
in Sec. 3280.511.
    (5) If a cooling coil is installed with a forced-air furnace, the 
coil shall be installed in accordance with its listing. When a furnace-
coil unit has a limited listing, the installation must be in accordance 
with that listing.
    (6) When an external heating appliance or combination cooling/
heating appliance is to be field installed, the home manufacturer shall 
make provision for proper location of the connections to the supply and 
return air systems. The manufacturer is not required to provide said 
appliance(s). The preparation by the manufacturer for connection to the 
home's supply and return air system shall include all fittings and 
connection ducts to the main duct and return air system such that the 
installer is only required to provide:
    (i) The appliance;
    (ii) Any appliance connections to the home; and
    (iii) The connecting duct between the external appliance and the 
fitting installed on the home by the manufacturer. The above connection 
preparations by the manufacturer do not apply to supply or return air 
systems designed only to accept external cooling (i.e., self contained 
air conditioning systems, etc.)
    (7) The installation of a self contained air conditioner comfort 
cooling appliance shall meet the following requirements:
    (i) The installation on a duct common with an installed heating 
appliance shall require the installation of an automatic damper or other 
means to prevent the cooled air from passing through the heating 
appliance unless the heating appliance is certified or listed for such 
application and the supply system is intended for such an application.
    (ii) The installation shall prevent the flow of heated air into the 
external cooling appliance and its connecting ducts to the manufactured 
home supply and return air system during the operation of the heating 
appliance installed in the manufactured home.
    (iii) The installation shall prevent simultaneous operation of the 
heating and cooling appliances.
    (f) Vertical clearance above cooking top. Ranges shall have a 
vertical clearance above the cooking top of not less than 24 inches. 
(See Sec. 3280.204).
    (g) Solid fuel-burning factory-built fireplaces and fireplace stoves 
listed for use in manufactured homes may be installed in manufactured 
homes provided they and their installation conform to the following 
paragraphs. A fireplace or fireplace stove shall not be considered as a 
heating facility for determining compliance with subpart F.
    (1) A solid fuel-burning fireplace or fireplace stove shall be 
equipped with integral door(s) or shutter(s) designed to close the 
fireplace or fireplace stove fire chamber opening and shall include 
complete means for venting through

[[Page 197]]

the roof, a combustion air inlet, a hearth extension, and means to 
securely attach the fireplace or the fireplace stove to the manufactured 
home structure. The installation shall conform to the following 
paragraphs (g)(1) (i) to (vii) inclusive:
    (i) A listed factory-built chimney designed to be attached directly 
to the fireplace or fireplace stove shall be used. The listed factory 
built chimney shall be equipped with and contain as part of its listing 
a termination device(s) and a spark arrester(s).
    (ii) A fireplace or fireplace stove, air intake assembly, hearth 
extension and the chimney shall be installed in accordance with the 
terms of their listings and their manufacturer's instructions.
    (iii) The combustion air inlet shall conduct the air directly into 
the fire chamber and shall be designed to prevent material from the 
hearth dropping onto the area beneath the manufactured home.
    (iv) The fireplace or fireplace stove shall not be installed in a 
sleeping room.
    (v) Hearth extension shall be of noncombustible material not less 
than \3/8\-inch thick. The hearth shall extend at least 16 inches in 
front or and at least 8 inches beyond each side of the fireplace or 
fireplace stove opening. Furthermore the hearth shall extend over the 
entire surface beneath a fireplace stove and beneath an elevated or 
overhanging fireplace.
    (vi) The label on each solid fuel-burning fireplace and solid fuel-
burning fireplace stove shall include the following wording: For use 
with solid fuel only.
    (vii) The chimney shall extend at least three feet above the part of 
the roof through which it passes and at least two feet above the highest 
elevation of any part of the manufactured home within 10 feet of the 
chimney. Portions of the chimney and termination that exceed an 
elevation of 13\1/2\ ft. above ground level may be designed to be 
removed for transporting the manufactured home.
    (h) A corrosion resistant water drip collection and drain pan must 
be installed under each water heater that will allow water leaking from 
the water heater to drain to the exterior of the manufactured home, or 
to a drain.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 44 FR 66195, Nov. 19, 1979; 58 FR 55018, Oct. 25, 1993; 70 
FR 72050, Nov. 30, 2005]



Sec. 3280.710  Venting, ventilation and combustion air.

    (a) The venting as required by Sec. 3280.707(b) shall be 
accomplished by one or more of the methods given in (a)(1) and (2) of 
this section:
    (1) An integral vent system listed or certified as part of the 
appliance.
    (2) A venting system consisting entirely of listed components, 
including roof jack, installed in accordance with the terms of the 
appliance listing and the appliance manufacturer's instructions.
    (b) Venting and combustion air systems shall be installed in 
accordance with the following:
    (1) Components shall be securely assembled and properly aligned at 
the factory in accordance with the appliance manufacturer's instructions 
except vertical or horizontal sections of a fuel fired heating appliance 
venting system that extend beyond the roof line or outside the wall line 
may be installed at the site. Sectional venting systems shall be listed 
for such applications and installed in accordance with the terms of 
their listings and manufacturers' instructions. In cases where sections 
of the venting system are removed for transportation, a label shall be 
permanently attached to the appliance indicating the following:

    Sections of the venting system have not been installed. Warning-do 
not operate the appliance until all sections have been assembled and 
installed in accordance with the manufacturer's instructions.

    (2) Draft hood connectors shall be firmly attached to draft hood 
outlets or flue collars by sheet metal screws or by equivalent effective 
mechanical fasteners.
    (3) Every joint of a vent, vent connector, exhaust duct and 
combustion air intake shall be secure and in alignment.
    (c) Venting systems shall not terminate underneath a manufactured 
home.
    (d) Venting system terminations shall be not less than three feet 
from

[[Page 198]]

any motor-driven air intake discharging into habitable areas.
    (e) The area in which cooking appliances are located shall be 
ventilated by a metal duct which may be single wall, not less than 12.5 
square inches in cross-sectional area (minimum dimension shall be two 
inches) located above the appliance(s) and terminating outside the 
manufactured home, or by listed mechanical ventilating equipment 
discharging outside the home, that is installed in accordance with the 
terms of listing and the manufacturer's instructions. Gravity or 
mechanical ventilation shall be installed within a horizontal distance 
of not more than ten feet from the vertical front of the appliance(s).
    (f) Mechanical ventilation which exhausts directly to the outside 
atmosphere from the living space of a home shall be equipped with an 
automatic or manual damper. Operating controls shall be provided such 
that mechanical ventilation can be separately operated without directly 
energizing other energy consuming devices.

[49 FR 32012, Aug. 9, 1984, as amended at 58 FR 55018, Oct. 25, 1993]



Sec. 3280.711  Instructions.

    Operating instructions shall be provided with each appliance. These 
instructions shall include directions and information covering the 
proper use and efficient operation of the appliance and its proper 
maintenance.



Sec. 3280.712  Marking.

    (a) Information on clearances, input rating, lighting and shutdown 
shall be attached to the appliances with the same permanence as the 
nameplate, and so located that it is easily readable when the appliance 
is properly installed or shutdown for transporting of manufactured home.
    (b) Each fuel-burning appliance shall bear permanent marking 
designating the type(s) of fuel for which it is listed.



Sec. 3280.713  Accessibility.

    Every appliance shall be accessible for inspection, service, repair, 
and replacement without removing permanent construction. For those 
purposes, inlet piping supplying the appliance shall not be considered 
permanent construction. Sufficient room shall be available to enable the 
operator to observe the burner, control, and ignition means while 
starting the appliance.

[58 FR 55018, Oct. 25, 1993]



Sec. 3280.714  Appliances, cooling.

    (a) Every air conditioning unit or a combination air conditioning 
and heating unit shall be listed or certified by a nationally recognized 
testing agency for the application for which the unit is intended and 
installed in accordance with the terms of its listing.
    (1) Mechanical air conditioners shall be rated in accordance with 
the ARI Standard 210/240-89 Unitary Air Conditioning and Air Source 
Unitary Heat Pump Equipment and certified by ARI or other nationally 
recognized testing agency capable of providing follow-up service.
    (i) Electric motor-driven unitary cooling systems with rated 
capacity less than 65,000 BTU/Hr when rated at ARI Standard rating 
conditions in ARI Standard 210/240-89 Unitary Air-Conditioning and Air-
Source Heat Pump Equipment, shall show energy efficiency (EER) values 
not less than 7.2.
    (ii) Heat pumps shall be certified to comply with all the 
requirements of the ARI Standard 210/240-89 Unitary Air Conditioning and 
Air Source Unitary Heat Pump Equipment. Electric motor-driven vapor 
compression heat pumps with supplemental electrical resistance heat 
shall be sized to provide by compression at least 60 percent of the 
calculated annual heating requirements for the manufactured home being 
served. A control shall be provided and set to prevent operation of 
supplemental electrical resistance heat at outdoor temperatures above 40 
F, except for defrost operation.
    (iii) Electric motor-driven vapor compression heat pumps with 
supplemental electric resistance heat conforming to ARI Standard 210/
240-89 Unitary Air-Conditioning and Air-Source Heat Pump Equipment shall 
show coefficient of performance ratios not less than shown below:

[[Page 199]]



                                   COP
------------------------------------------------------------------------
                                                             Coefficient
              Temperature degrees fahrenheit                     of
                                                             performance
------------------------------------------------------------------------
47........................................................           2.5
17........................................................           1.7
0.........................................................           1.0
------------------------------------------------------------------------

    (2) Gas fired absorption air conditioners must be listed or 
certified in accordance with ANSI Z21.40.1-1996, Gas Fired, Heat 
Activated, Air Conditioning and Heat Pump Appliances, and certified by a 
nationally recognized testing agency capable of providing follow-up 
service.
    (3) Direct refrigerating systems serving any air conditioning or 
comfort-cooling system installed in a manufactured home shall employ a 
type of refrigerant that ranks no lower than Group 5 in the 
Underwriters' Laboratories, Inc. ``Classification of Comparative Life 
Hazard of Various Chemicals.''
    (4) When a cooling or heat pump coil and air conditioner blower are 
installed with a furnace or heating appliance, they shall be tested and 
listed in combination for heating and safety performance by a nationally 
recognized testing agency.
    (5) Cooling or heat pump indoor coils and outdoor sections shall be 
certified, listed and rated in combination for capacity and efficiency 
by a nationally recognized testing agency(ies). Rating procedures shall 
be based on U.S. Department of Energy test procedures.
    (b) Installation and instructions. (1) The installation of each 
appliance shall conform to the terms of its listing as specified on the 
appliance and in the manufacturer's instructions. The installer shall 
include the manufacturer's installation instructions in the manufactured 
home. Appliances shall be secured in place to avoid displacement and 
movement from vibration and road shock.
    (2) Operating instructions shall be provided with the appliance.
    (c) Fuel-burning air conditioners shall also comply with Sec. 
280.707.
    (d) The appliance rating plate shall be so located that it is easily 
readable when the appliance is properly installed.
    (e) Every installed appliance shall be accessible for inspection, 
service, repair and replacement without removing permanent construction.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55018, Oct. 25, 1993; 70 FR 72051, Nov. 30, 2005]



Sec. 3280.715  Circulating air systems.

    (a) Supply system. (1) Supply ducts and any dampers contained 
therein shall be made from galvanized steel, tin-plated steel, or 
aluminum, or shall be listed Class 0, Class 1, or Class 2 air ducts. 
Class 2 air ducts shall be located at least 3 feet from the furnace 
bonnet or plenum. A duct system integral with the structure shall be of 
durable construction that can be demonstrated to be equally resistant to 
fire and deterioration. Ducts constructed from sheet metal shall be in 
accordance with the following table:

                  Minimum Metal Thickness for Ducts \1\
------------------------------------------------------------------------
                                                     Diameter    Width
                     Duct type                      14 in. or   over 14
                                                       less       in.
------------------------------------------------------------------------
Round.............................................      0.013      0.016
Enclosed rectangular..............................       .013       .016
Exposed rectangular...............................       .016       .019
------------------------------------------------------------------------
\1\ When ``nominal'' thicknesses are specified, 0.003 in. shall be added
  to these ``minimum'' metal thicknesses.

    (2) Sizing of ducts for heating. (i) Ducts shall be so designed that 
when a labeled forced-air furnace is installed and operated continuously 
at its normal heating air circulating rate in the manufactured home, 
with all registers in the full open position, the static pressure 
measured in the casing shall not exceed 90% of that shown on the label 
of the appliance. For upflow furnaces the static pressure shall be taken 
in the duct plenum. For external heating or combination heating/cooling 
appliances the static pressure shall be taken at the point used by the 
agency listing or certifying the appliance.
    (ii) When an evaporator-coil specifically designed for the 
particular furnace is installed between the furnace and the duct plenum, 
the total static pressure shall be measured downstream of the coil in 
accordance with the appliance label and shall not exceed 90 percent of 
that shown on the label of the appliance.
    (iii) When any other listed air-cooler coil is installed between the 
furnace and the duct plenum, the total static

[[Page 200]]

pressure shall be measured between the furnace and the coil and it shall 
not exceed 90 percent of that shown on the label of the furnace.
    (iv) The minimum dimension of any branch duct shall be at least 1\1/
2\ inches, and of any main duct, 2\1/2\ inches.
    (3) Sizing of ducts. (i) The manufactured home manufacturer shall 
certify the capacity of the air cooling supply duct system for the 
maximum allowable output of ARI certified central air conditioning 
systems. The certification shall be at operating static pressure of 0.3 
inches of water or greater. (See Sec. 3280.511).
    (ii) The refrigerated air cooling supply duct system including 
registers must be capable of handling at least 300 cfm per 10,000 btuh 
with a static pressure no greater than 0.3 inches of water when measured 
at room temperature. In the case of application of external self 
contained comfort cooling appliances or the cooling mode of combination 
heating/cooling appliances, either the external ducts between the 
appliance and the manufactured home supply system shall be considered 
part of, and shall comply with the requirements for the refrigerated air 
cooling supply duct system, or the connecting duct between the external 
appliance and the mobile supply duct system shall be a part of the 
listed appliance. The minimum dimension of any branch duct shall be at 
least 1\1/2\ inches, and of any main duct, 2\1/2\ inches.
    (4) Airtightness of supply duct systems. A supply duct system shall 
be considered substantially airtight when the static pressure in the 
duct system, with all registers sealed and with the furnace air 
circulator at high speed, is at least 80 percent of the static pressure 
measured in the furnace casing, with its outlets sealed and the furnace 
air circulator operating at high speed. For the purpose of this 
paragraph and Sec. 3280.715(b) pressures shall be measured with a water 
manometer or equivalent device calibrated to read in increments not 
greater than \1/10\ inch water column.
    (5) Expandable or multiple manufactured home connections. (i) An 
expandable or multiple manufactured home may have ducts of the heating 
system installed in the various units. The points of connection must be 
so designed and constructed that when the manufactured home is fully 
expanded or coupled, the resulting duct joint will conform to the 
requirements of this part.
    (ii) Installation instructions for supporting the crossover duct 
from the manufactured home shall be provided for onsite installation. 
The duct shall not be in contact with the ground.
    (6) Air supply ducts shall be insulated with material having an 
effective thermal resistance (R) of not less than 4.0 unless they are 
within manufactured home insulation having a minimum effective value of 
R-4.0 for floors or R-6.0 for ceilings.
    (7) Supply and return ducts exposed directly to outside air, such as 
under chassis crossover ducts or ducts connecting external heating, 
cooling or combination heating/cooling appliances shall be insulated 
with material having a minimum thermal resistance of R=4.0, with a 
continuous vapor barrier having a perm rating of not more than 1 perm. 
Where exposed underneath the manufactured home, all such ducts shall 
comply with Sec. 3280.715(a)(5)(ii).
    (b) Return air systems--(1) Return air openings. Provisions shall be 
made to permit the return of circulating air from all rooms and living 
spaces, except toilet room(s), to the circulating air supply inlet of 
the furnace.
    (2) Duct material. Return ducts and any diverting dampers contained 
therein shall be in accordance with the following:
    (i) Portions of return ducts directly above the heating surfaces, or 
closer than 2 feet from the outer jacket or casing of the furnace shall 
be constructed of metal in accordance with Sec. 3280.715(a)(1) or shall 
be listed Class 0 or Class 1 air ducts.
    (ii) Return ducts, except as required by paragraph (a) of this 
section, shall be constructed of one-inch (nominal) wood boards (flame 
spread classification of not more than 200), other suitable material no 
more flammable than one-inch board or in accordance with Sec. 
3280.715(a)(1).
    (iii) The interior of combustible ducts shall be lined with 
noncombustible material at points where there might be danger from 
incandescent

[[Page 201]]

particles dropped through the register or furnace such as directly under 
floor registers and the bottom return.
    (iv) Factory made air ducts used for connecting external heating, 
cooling or combination heating/cooling appliances to the supply system 
and return air system of a manufactured home shall be listed by a 
nationally recognized testing agency. Ducts applied to external heating 
appliances or combination heating/cooling appliances supply system 
outlets shall be constructed of metal in accordance with Sec. 
3280.715(a)(1) or shall be listed Class 0 or Class 1 air ducts for those 
portions of the duct closer than 2 feet from the outer casing of the 
appliance.
    (v) Ducts applied to external appliances shall be resistant to 
deteriorating environmental effects, including but not limited to 
ultraviolet rays, cold weather, or moisture and shall be resistant to 
insects and rodents.
    (3) Sizing. The cross-sectional areas of the return air duct shall 
not be less than 2 square inches for each 1,000 Btu per hour input 
rating of the appliance. Dampers shall not be placed in a combination 
fresh air intake and return air duct so arranged that the required 
cross-sectional area will not be reduced at all possible positions of 
the damper.
    (4) Permanent uncloseable openings. Living areas not served by 
return air ducts or closed off from the return opening of the furnace by 
doors, sliding partitions, or other means shall be provided with 
permanent uncloseable openings in the doors or separating partitions to 
allow circulated air to return to the furnace. Such openings may be 
grilled or louvered. The net free area of each opening shall be not less 
than 1 square inch for every 5 square feet of total living area closed 
off from the furnace by the door or partition serviced by that opening. 
Undercutting doors connecting the closed-off space may be used as a 
means of providing return air area. However, in the event that doors are 
undercut, they shall be undercut a minimum of 2 inches and not more than 
2\1/2\ inches, as measured from the top surface of the floor decking to 
the bottom of the door and no more than one half of the free air area so 
provided shall be counted as return air area.
    (c) Joints and seams. Joints and seams of sheet metal and factory-
made flexible ducts, including trunks, branches, risers, crossover 
ducts, and crossover duct plenums, shall be mechanically secured and 
made substantially airtight. Slip joints in sheet metal ducts shall have 
a lap of at least one inch and shall be mechanically fastened. Tapes or 
caulking compounds shall be permitted to be used for sealing 
mechanically secure joints. Sealants and tapes shall be applied only to 
surfaces that are dry and dust-, dirt-, oil-, and grease-free. Tapes and 
mastic closure systems for use with factory-made rigid fiberglass air 
ducts and air connectors shall be listed in accordance with UL Standard 
181A-1994, with 1998 revisions. Tapes and mastic closure systems used 
with factory-made flexible air ducts and air connectors shall be listed 
in accordance with UL Standard 181B-1995, with 1998 revisions.
    (d) Supports. Ducts shall be securely supported.
    (e) Registers and grilles. Fittings connecting the registers and 
grilles to the duct system must be constructed of metal or material that 
complies with the requirements of Class 1 or 2 ducts under UL 181-1996 
with 1998 revisions, Factory Made Air Ducts and Connectors. Air supply 
terminal devices (registers) when installed in kitchen, bedrooms, and 
bathrooms must be equipped with adjustable closeable dampers. Registers 
or grilles must be constructed of metal or conform with the following:
    (1) Be made of a material classified 94V-0 or 94V-1, when tested as 
described in UL 94-1996, with 2001 revisions, Test for Flammability of 
Plastic Materials for Parts in Devices and Appliances, Fifth Edition; 
and
    (2) Floor registers or grilles shall resist without structural 
failure a 200 lb. concentrated load on a 2-inch diameter disc applied to 
the most critical area of the exposed face of the register or grille. 
For this test the register or grille is to be at a temperature of not 
less than 165 [deg]F and is to be supported

[[Page 202]]

in accordance with the manufacturer's instructions.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4589, Feb. 12, 1987; 58 FR 55019, Oct. 25, 1993; 70 
FR 72051, Nov. 30, 2005]



                      Subpart I_Electrical Systems



Sec. 3280.801  Scope.

    (a) Subpart I of this part and Part II of Article 550 of the 
National Electrical Code (NFPA No. 70-2005) cover the electrical 
conductors and equipment installed within or on manufactured homes and 
the conductors that connect manufactured homes to a supply of 
electricity.
    (b) In addition to the requirements of this part and Part II of 
Article 550 of the National Electrical Code (NFPA No. 70-2005), the 
applicable portions of other Articles of the National Electrical Code 
must be followed for electrical installations in manufactured homes. The 
use of arc-fault breakers under Articles 210.12(A) and (B), 440.65, and 
550.25(A) and (B) of the National Electrical Code, NFPA No. 70-2005 is 
not required. However, if arc-fault breakers are provided, such use must 
be in accordance with the National Electrical Code, NFPA No. 70-2005. 
Wherever the requirements of this standard differ from the National 
Electrical Code, these standards apply.
    (c) The provisions of this standard apply to manufactured homes 
intended for connection to a wiring system nominally rated 120/240 
volts, 3-wire AC, with grounded neutral.
    (d) All electrical materials, devices, appliances, fittings and 
other equipment shall be listed or labeled by a nationally recognized 
testing agency and shall be connected in an approved manner when in 
service.
    (e) Aluminum conductors, aluminum alloy conductors, and aluminum 
core conductors such as copper clad aluminum; are not acceptable for use 
in branch circuit wiring in manufactured homes.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55019, Oct. 25, 1993; 70 FR 72051, Nov. 30, 2005; 71 
FR 19639, Apr. 17, 2006]



Sec. 3280.802  Definitions.

    (a) The following definitions are applicable to subpart I only.
    (1) Accessible (i) (As applied to equipment) means admitting close 
approach because not guarded by locked doors, elevation, or other 
effective means. (See readily accessible.)
    (ii) (As applied to wiring methods) means capable of being removed 
or exposed without damaging the manufactured home structure or finish, 
or not permanently closed-in by the structure or finish of the 
manufactured home (see concealed and exposed).
    (2) Air conditioning or comfort cooling equipment means all of that 
equipment intended or installed for the purpose of processing the 
treatment of air so as to control simultaneously its temperature, 
humidity, cleanliness, and distribution to meet the requirements of the 
conditioned space.
    (3)(i) Appliance means utilization equipment, generally other than 
industrial, normally built in standardized sizes or types, which is 
installed or connected as a unit to perform one or more functions, such 
as clothes washing, air conditioning, food mixing, deep frying, etc.
    (ii) Appliance, fixed means an appliance which is fastened or 
otherwise secured at a specific location.
    (iii) Appliance, portable means an appliance which is actually moved 
or can easily be moved from one place to another in normal use. For the 
purpose of this Standard, the following major appliances are considered 
portable if cord-connected: refrigerators, clothes washers, dishwashers 
without booster heaters, or other similar appliances.
    (iv) Appliance, stationary means an appliance which is not easily 
moved from one place to another in normal use.
    (4) Attachment plug (plug cap) (cap) means a device which, by 
insertion in a receptacle, establishes connection between the conductors 
of the attached flexible cord and the conductors connected permanently 
to the receptacle.
    (5) Bonding means the permanent joining of metallic parts to form an 
electrically conductive path which will assure electrical continuity and 
the capacity to conduct safely any current likely to be imposed.

[[Page 203]]

    (6) Branch circuit (i) means the circuit conductors between the 
final overcurrent device protecting the circuit and the outlet(s). A 
device not approved for branch circuit protection, such as a thermal 
cutout or motor overload protective device, is not considered as the 
overcurrent device protecting the circuit.
    (ii) Branch circuit--appliance means a branch circuit supplying 
energy to one or more outlets to which appliances are to be connected, 
such circuits to have no permanently connected lighting fixtures not a 
part of an appliance.
    (iii) Branch circuit--general purpose means a circuit that supplies 
a number of outlets for lighting and appliances.
    (iv) Branch circuit--individual means a branch circuit that supplies 
only one utilization equipment.
    (7) Cabinet means an enclosure designed either for surface or flush 
mounting, and provided with a frame, mat, or trim in which swinging 
doors are hung.
    (8) Circuit breaker means a device designed to open and close a 
circuit by nonautomatic means, and to open the circuit automatically on 
a predetermined overload of current without injury to itself when 
properly applied within its rating.
    (9) Concealed means rendered inaccessible by the structure or finish 
of the manufactured home. Wires in concealed raceways are considered 
concealed, even though they may become accessible by withdrawing them. 
(See accessible (As applied to wiring methods))
    (10) Connector, pressure (solderless) means a device that 
establishes a connection between two or more conductors or between one 
or more conductors and a terminal by means of mechanical pressure and 
without the use of solder.
    (11) Dead front (as applied to switches, circuit-breakers, 
switchboards, and distribution panelboard) means so designed, 
constructed, and installed that no current-carrying parts are normally 
exposed on the front.
    (12) Demand factor means the ratio of the maximum demand of a 
system, or part of a system, to the total connected load of a system or 
the part of the system under consideration.
    (13) Device means a unit of an electrical system that is intended to 
carry but not utilize electrical energy.
    (14) Disconnecting means means a device, or group of devices, or 
other means by which the conductors of a circuit can be disconnected 
from their source of supply.
    (15) Distribution panelboard means a single panel or a group of 
panel units designed for assembly in the form of a single panel, 
including buses, and with or without switches or automatic overcurrent 
protective devices or both, for the control of light, heat, or power 
circuits of small individual as well as aggregate capacity; designed to 
be placed in a cabinet placed in or against a wall or partition and 
accessible only from the front.
    (16) Enclosed means surrounded by a case that will prevent a person 
from accidentally contacting live parts.
    (17) Equipment means a general term, including material, fittings, 
devices, appliances, fixtures, apparatus, and the like used as a part 
of, or in connection with, an electrical installation.
    (18) Exposed (i) (As applied to live parts) means capable of being 
inadvertently touched or approached nearer than a safe distance by a 
person. It is applied to parts not suitably guarded, isolated, or 
insulated. (See accessible and concealed.)
    (ii) (As applied to wiring method) means on or attached to the 
surface or behind panels designed to allow access. (See Accessible (as 
applied to wiring methods))
    (19) Externally operable means capable of being operated without 
exposing the operator to contact with live parts.
    (20) Feeder assembly means the overhead or under-chassis feeder 
conductors, including the grounding conductor, together with the 
necessary fittings and equipment, or a power supply cord approved for 
manufactured home use, designed for the purpose of delivering energy 
from the source of electrical supply to the distribution panelboard 
within the manufactured home.
    (21) Fitting means an accessory, such as a locknut, bushing, or 
other part of a wiring system, that is intended primarily to perform a 
mechanical rather than an electrical function.

[[Page 204]]

    (22) Ground means a conducting connection, whether intentional or 
accidental, between an electrical circuit or equipment and earth, or to 
some conducting body that serves in place of the earth.
    (23) Grounded means connected to earth or to some conducting body 
that serves in place of the earth.
    (24) Grounded conductor means a system or circuit conductor that is 
intentionally grounded.
    (25) Grounding conductor means a conductor used to connect equipment 
or the grounded circuit of a wiring system to a grounding electrode or 
electrodes.
    (26) Guarded means covered, shielded, fenced, enclosed, or otherwise 
protected by means of suitable covers, casings, barriers, rails, 
screens, mats or platforms to remove the likelihood of approach or 
contact by persons or objects to a point of danger.
    (27) Isolated means not readily accessible to persons unless special 
means for access are used.
    (28) Laundry area means an area containing or designed to contain 
either a laundry tray, clothes washer and/or clothes dryer.
    (29) Lighting outlet means an outlet intended for the direct 
connection of a lampholder, a lighting fixture, or a pendant cord 
terminating in a lampholder.
    (30) Manufactured home accessory building or structure means any 
awning, cabana, ramada, storage cabinet, carport, fence, windbreak or 
porch established for the use of the occupant of the manufactured home 
upon a manufactured home lot.
    (31) Manufactured home service equipment means the equipment 
containing the disconnecting means, overcurrent protective devices, and 
receptacles or other means for connecting a manufactured home feeder 
assembly.
    (32) Outlet means a point on the wiring system at which current is 
taken to supply utilization equipment.
    (33) Panelboard means a single panel or group of panel units 
designed for assembly in the form of a single panel; including buses, 
automatic overcurrent protective devices, and with or without switches 
for the control of light, heat, or power circuits; designed to be placed 
in a cabinet or cutout box placed in or against a wall or partition and 
accessible only from the front.
    (34) Raceway means any channel for holding wires, cables, or busbars 
that is designed expressly for, and used solely for, this purpose. 
Raceways may be of metal or insulating material, and the term includes 
rigid metal conduit, rigid nonmetallic conduit, flexible metal conduit, 
electrical metallic tubing, underfloor raceways, cellular concrete floor 
raceways, cellular metal floor raceways, surface raceways, structural 
raceways, wireways, and busways.
    (35) Raintight means so constructed or protected that exposure to a 
beating rain will not result in the entrance of water.
    (36) Readily accessible means capable of being reached quickly for 
operation, renewal, or inspection, without requiring those to whom ready 
access is requisite to climb over or remove obstacles or to resort to 
portable ladders, chairs, etc. (See Accessible.)
    (37) Receptacle means a contact device installed at an outlet for 
the connection of a single attachment plug. A single receptacle is a 
single contact device with no other contact device on the same yoke. A 
multiple receptacle is a single device containing two or more 
receptacles.
    (38) Receptacle outlet means an outlet where one or more receptacles 
are installed.
    (39) Utilization equipment means equipment which utilizes electric 
energy for mechanical, chemical, heating, lighting, or similar purposes.
    (40) Voltage (of a circuit) means the greatest root-mean-square 
(effective) difference of potential between any two conductors of the 
circuit concerned. Some systems, such as 3-phase 4-wire, single-phase 3-
wire, and 3-wire direct-current may have various circuits of various 
voltages.
    (41) Weatherproof means so constructed or protected that exposure to 
the weather will not interfere with successful operation. Rainproof, 
raintight, or watertight equipment can fulfill the requirements for 
weatherproof where varying weather conditions other than wetness, such 
as snow, ice, dust, or temperature extremes, are not a factor.

[[Page 205]]



Sec. 3280.803  Power supply.

    (a) The power supply to the manufactured home shall be a feeder 
assembly consisting of not more than one listed 50 ampere manufactured 
home power-supply cords, or a permanently installed circuit. A 
manufactured home that is factory-equipped with gas or oil-fired central 
heating equipment and cooking appliances shall be permitted to be 
provided with a listed manufactured home power-supply cord rated 40 
amperes.
    (b) If the manufactured home has a power-supply cord, it shall be 
permanently attached to the distribution panelboard or to a junction box 
permanently connected to the distribution panelboard, with the free end 
terminating in an attachment plug cap.
    (c) Cords with adapters and pigtail ends, extension cords, and 
similar items shall not be attached to, or shipped with, a manufactured 
home.
    (d) A listed clamp or the equivalent shall be provided at the 
distribution panelboard knockout to afford strain relief for the cord to 
prevent strain from being transmitted to the terminals when the power-
supply cord is handled in its intended manner.
    (e) The cord shall be of an approved type with four conductors, one 
of which shall be identified by a continuous green color or a continuous 
green color with one or more yellow stripes for use as the grounding 
conductor.
    (f) The attachment plug cap shall be a 3-pole, 4-wire grounding 
type, rated 50 amperes, 125/250 volts with a configuration as shown 
herein and intended for use with the 50-ampere, 125/250 receptacle 
configuration shown. It shall be molded of butyl rubber, neoprene, or 
other approved materials which have been found suitable for the purpose, 
and shall be molded to the flexible cord so that it adheres tightly to 
the cord at the point where the cord enters the attachment-plug cap. If 
a right-angle cap is used, the configuration shall be so oriented that 
the grounding member is farthest from the cord.
[GRAPHIC] [TIFF OMITTED] TC17OC91.007

    50-ampere 125/250 volt receptacle and attachment-plug-cap 
configurations, 3 pole, 4-wire grounding types used for manufactured 
home supply cords and manufactured home parks. Complete details of the 
50-ampere cap and receptacle can be found in the American National 
Standard Dimensions of Caps, Plugs, and Receptacles, Grounding Type 
(ANSI/NEMA--WD-6-1997-Wiring Devices-Dimensional Specifications).

    (g) The overall length of a power-supply cord, measured from the end 
of the cord, including bared leads, to the face of the attachment-plug 
cap shall not be less than 21 feet and shall not exceed 36\1/2\ feet. 
The length of cord from the face of the attachment-plug cap to the point 
where the cord enters the manufactured home shall not be less than 20 
feet.
    (h) The power supply cord shall bear the following marking: ``For 
use with manufactured homes--40 amperes'' or ``For use with manufactured 
homes--50 amperes.''
    (i) Where the cord passes through walls or floors, it shall be 
protected by means of conduit and bushings or equivalent. The cord may 
be installed within the manufactured home walls, provided a continuous 
raceway is installed from the branch-circuit panelboard to the underside 
of the manufactured home floor. The raceway may be rigid conduit, 
electrical metallic tubing or polyethylene (PE), poly-vinylchloride 
(PVC) or acrylonitrile-butadiene-styrene (ABS) plastic tubing having a 
minimum wall thickness of nominal \1/8\ inch.
    (j) Permanent provisions shall be made for the protection of the 
attachment-plug cap of the power supply cord and any connector cord 
assembly or receptacle against corrosion and mechanical damage if such 
devices are in an exterior location while the manufactured home is in 
transit.
    (k) Where the calculated load exceeds 50 amperes or where a 
permanent feeder is used, the supply shall be by means of:

[[Page 206]]

    (1) One mast weatherhead installation installed in accordance with 
Article 230 of the National Electrical Code, NFPA No. 70-2005, 
containing four continuous insulated, color-coded, feeder conductors, 
one of which shall be an equipment grounding conductor; or
    (2) An approved raceway from the disconnecting means in the 
manufactured home to the underside of the manufactured home with 
provisions for the attachment of a suitable junction box or fitting to 
the raceway on the underside of the manufactured home. The manufacturer 
shall provide in his written installation instructions, the proper 
feeder conductor sizes for the raceway and the size of the junction box 
to be used; or
    (3) Service equipment installed on the manufactured home in 
accordance with Article 230 of the National Electrical Code, NFPA No. 
70-2005, and the following requirements:
    (i) The installation shall be completed by the manufacturer except 
for the service connections, the meter and the grounding electrode 
conductor;
    (ii) Exterior equipment, or the enclosure in which it is installed 
must be weatherproof and installed in accordance with Article 312.2(A) 
of the National Electrical Code, NFPA No. 70-2005, and conductors must 
be suitable for use in wet locations;
    (iii) Each neutral conductor must be connected to the system 
grounding conductor on the supply side of the main disconnect in 
accordance with Articles 250.24, 250.26, and 250.28 of the National 
Electrical Code, NFPA No. 70-2005.
    (iv) The manufacturer shall include in its written installation 
instructions one method of grounding the service equipment at the 
installation site;
    (v) The minimum size grounding electrode conductor shall be 
specified in the instructions; and
    (vi) A red ``Warning'' label shall be mounted on or adjacent to the 
service equipment. The label shall state:

    ``Warning--do not provide electrical power until the grounding 
electrode is installed and connected (see installation instructions).''

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 4589, Feb. 12, 1987; 58 FR 55019, Oct. 25, 1993; 70 
FR 72051, Nov. 30, 2005]



Sec. 3280.804  Disconnecting means and branch-circuit protective 
equipment.

    (a) The branch-circuit equipment is permitted to be combined with 
the disconnecting means as a single assembly. Such a combination is 
permitted to be designated as a distribution panelboard. If a fused 
distribution panelboard is used, the maximum fuse size of the mains must 
be plainly marked with lettering at least \1/4\-inch high and that is 
visible when fuses are changed. (See Article 110.22 of NFPA 70-2005, 
National Electrical Code, concerning identification of each 
disconnecting means and each service, feeder, or branch circuit at the 
point where it originated and the type marking needed.)
    (b) Plug fuses and fuseholders shall be tamper-resistant, Type 
``S,'' enclosed in dead-front fuse panelboards. Electrical distribution 
panels containing circuit breakers shall also be dead-front type.
    (c) Disconnecting means. A single disconnecting means shall be 
provided in each manufactured home consisting of a circuit breaker, or a 
switch and fuses and their accessories installed in a readily accessible 
location near the point of entrance of the supply cord or conductors 
into the manufactured home. The main circuit breakers or fuses shall be 
plainly marked ``Main.'' This equipment shall contain a solderless type 
of grounding connector or bar for the purposes of grounding with 
sufficient terminals for all grounding conductors. The neutral bar 
termination of the grounded circuit conductors shall be insulated.
    (d) The disconnecting equipment shall have a rating suitable for the 
connected load. The distribution equipment, either circuit breaker or 
fused type, shall be located a minimum of 24 inches from the bottom of 
such equipment to the floor level of the manufactured home.
    (e) A distribution panelboard employing a main circuit breaker shall 
be rated 50 amperes and employ a 2-pole circuit breaker rated 40 amperes 
for a 40-ampere supply cord, or 50 amperes for a 50-ampere supply cord. 
A distribution panelboard employing a disconnect switch and fuses shall 
be rated 60 amperes and shall employ a single 2-

[[Page 207]]

pole, 60-ampere fuseholder with 40- or 50-ampere main fuses for 40- or 
50-ampere supply cords, respectively. The outside of the distribution 
panelboard shall be plainly marked with the fuse size.
    (f) The distribution panelboard shall not be located in a bathroom, 
or in any other inaccessible location, but shall be permitted just 
inside a closet entry if the location is such that a clear space of 6 
inches to easily ignitable materials is maintained in front of the 
distribution panelboard, and the distribution panelboard door can be 
extended to its full open position (at least 90 degrees). A clear 
working space at least 30 inches wide and 30 inches in front of the 
distribution panelboard shall be provided. This space shall extend from 
floor to the top of the distribution panelboard.
    (g) Branch-circuit distribution equipment shall be installed in each 
manufactured home and shall include overcurrent protection for each 
branch circuit consisting of either circuit breakers or fuses.
    (1) The branch circuit overcurrent devices shall be rated:
    (i) Not more than the circuit conductors; and
    (ii) Not more than 150 percent of the rating of a single appliance 
rated 13.3 amperes or more which is supplied by an individual branch 
circuit; but
    (iii) Not more than the fuse size marked on the air conditioner or 
other motor-operated appliance.
    (h) A 15-ampere multiple receptacle shall be acceptable when 
connected to a 20-ampere laundry circuit.
    (i) When circuit breakers are provided for branch-circuit protection 
240 circuits shall be protected by 2-pole common or companion trip, or 
handle-tied paired circuit breakers.
    (j) A 3 inch by 1-3/4 inch minimum size tag made of etched, metal-
stamped or embossed brass, stainless steel, anodized or alclad aluminum 
not less than 0.020 inch thick, or other approval material (e.g., 0.005 
inch plastic laminates) shall be permanently affixed on the outside 
adjacent to the feeder assembly entrance and shall read: This connection 
for 120/240 Volt, 3-Pole, 4-Wire, 60 Hertz, -------- Ampere Supply. The 
correct ampere rating shall be marked on the blank space.
    (k) When a home is provided with installed service equipment, a 
single disconnecting means for disconnecting the branch circuit 
conductors from the service entrance conductors must be provided in 
accordance with Article 230, Part VI of the National Electrical Code, 
NFPA No. 70-2005. The disconnecting means shall be listed for use as 
service equipment. The disconnecting means may be combined with the 
disconnect required by Sec. 3280.804(c). The disconnecting means shall 
be rated not more than the ampere supply or service capacity indicated 
on the tag required by paragraph (l) of this section.
    (l) When a home is provided with installed service equipment, the 
electrical nameplate required by Sec. 3280.804(j) shall read: ``This 
connection for 120/240 volt, 3 pole, 3 wire, 60 Hertz, -------- Ampere 
Supply.'' The correct ampere rating shall be marked in the blank space.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 961, Jan. 4, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 52 FR 4589, 
Feb. 12, 1987; 58 FR 55019, Oct. 25, 1993; 70 FR 72051, Nov. 30, 2005]



Sec. 3280.805  Branch circuits required.

    (a) The number of branch circuits required shall be determined in 
accordance with the following:
    (1) Lighting, based on 3 volt-amperes per square foot times outside 
dimensions of the manufactured home (coupler excluded) divided by 120 
volts times amperes to determine number of 15 or 20 ampere lighting area 
circuits. e.g. [3 x length x width--[120 x (15 or 20)] = number of 15 or 
20 ampere circuits.
    (2) Small appliances. For the small appliance load in kitchen, 
pantry dining room and breakfast rooms of manufactured homes, two or 
more 20-ampere appliance branch circuits, in addition to the branch 
circuit specified in Sec. 3280.805(a)(1), shall be provided for all 
receptacle outlets in these rooms, and such circuits shall have no other 
outlets. Receptacle outlets supplied by at least two appliance 
receptacle branch circuits shall be installed in the kitchen.

[[Page 208]]

    (3) General appliances (Including furnace, water heater, range, and 
central or room air conditioner, etc.). There shall be one or more 
circuits of adequate rating in accordance with the following:
    (i) Ampere rating of fixed appliances not over 50 percent of circuit 
rating if lighting outlets (receptacles, other than kitchen, dining 
area, and laundry, considered as lighting outlets) are on same circuit;
    (ii) For fixed appliances on a circuit without lighting outlets, the 
sum of rated amperes shall not exceed the branch-circuit rating. Motor 
loads or other continuous duty loads shall not exceed 80 percent of the 
branch circuit rating.
    (iii) The rating of a single cord and plug connected appliances on a 
circuit having no other outlets, shall not exceed 80 percent of the 
circuit rating.
    (iv) The rating of the range branch circuit is based on the range 
demand as specified for ranges in Sec. 3280.811(a)(5). For central air 
conditioning, see Article 440 of the National Electrical Code, NFPA No. 
70-2005.
    (v) Where a laundry area is provided, a 20 ampere branch circuit 
shall be provided to supply laundry receptacle outlets. This circuit 
shall have no other outlets. See Sec. 3280.806(a)(7).
    (b) [Reserved]

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55020, Oct. 25, 1993; 70 FR 72051, Nov. 30, 2005]



Sec. 3280.806  Receptacle outlets.

    (a) All receptacle outlets shall be:
    (1) Of grounding type;
    (2) Installed according to Article 406.3 of the National Electrical 
Code, NFPA No. 70-2005.
    (3) Except when supplying specific appliances, be parallel-blade, 
15-ampere, 125-volt, either single or duplex.
    (b) All 120 volt single phase, 15 and 20 ampere receptacle outlets, 
including receptacles in light fixtures, installed outdoors, in 
compartments accessible from the outdoors, in bathrooms, and within 6 
feet of a kitchen sink to serve counter top surfaces shall have ground-
fault circuit protection for personnel. Feeders supplying branch 
circuits may be protected by a ground-fault circuit-interrupter in lieu 
of the provision for such interrupters specified above. Receptacles 
dedicated for washer and dryers, also located in a bathroom, are exempt 
from this requirement.
    (c) There shall be an outlet of the grounding type for each cord-
connected fixed appliance installed.
    (d) Receptacle outlets required. Except in the bath and hall areas, 
receptacle outlets shall be installed at wall spaces 2 feet wide or 
more, so that no point along the floor line is more than 6 feet, 
measured horizontally, from an outlet in that space. In addition, a 
receptacle outlet shall be installed:
    (1) Over or adjacent to counter tops in the kitchen (at least one on 
each side of the sink if counter tops are on each side and 12 inches or 
over in width).
    (2) Adjacent to the refrigerator and free-standing gas-range space. 
A duplex receptacle may serve as the outlet for a countertop and a 
refrigerator.
    (3) At counter top spaces for built-in vanities.
    (4) At counter top spaces under wall-mounted cabinets.
    (5) In the wall, at the nearest point where a bar type counter 
attaches to the wall.
    (6) In the wall at the nearest point where a fixed room divider 
attaches to the wall.
    (7) In laundry areas within 6 feet of the intended location of the 
appliance(s).
    (8) At least one receptacle outlet shall be installed outdoors.
    (9) At least one wall receptacle outlet shall be installed in 
bathrooms within 36 inches (914 mm) of the outside edge of each basin. 
The receptacle outlet must be located on a wall that is adjacent to the 
basin location. This receptacle is in addition to any receptacle that is 
part of a lighting fixture or appliance. The receptacle must not be 
enclosed within a bathroom cabinet or vanity.
    (10) Receptacle outlets are not required in the following locations:
    (i) Wall space occupied by built-in kitchen or wardrobe cabinets,
    (ii) Wall space behind doors which may be opened fully against a 
wall surface,
    (iii) Room dividers of the lattice type, less than 8 feet long, not 
solid within 6 inches of the floor,

[[Page 209]]

    (iv) Wall space afforded by bar type counters.
    (e) Receptacle outlets shall not be installed in or within reach (30 
inches) of a shower or bathtub space.
    (f) Receptacle outlets shall not be installed above electric 
baseboard heaters.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55020, Oct. 25, 1993; 70 FR 72052, Nov. 30, 2005]



Sec. 3280.807  Fixtures and appliances.

    (a) Electrical materials, devices, appliances, fittings, and other 
equipment installed, intended for use in, or attached to the 
manufactured home shall be approved for the application and shall be 
connected in an approved manner when in service. Facilities shall be 
provided to securely fasten appliances when the manufactured home is in 
transit. (See Sec. 3280.809.)
    (b) Specifically listed pendant-type fixtures or pendant cords shall 
be permitted in manufactured homes.
    (c) If a lighting fixture is provided over a bathtub or in a shower 
stall, it must be of the enclosed and gasketed type, and be listed for 
use in wet locations. See also Article 410.4(D) of the National 
Electrical Code, NFPA No. 70-2005.
    (d) The switch for shower lighting fixtures and exhaust fans located 
over a tub or in a shower stall shall be located outside the tub shower 
space. (See Sec. 3280.806(e).)
    (e) Any combustible wall or ceiling finish exposed between the edge 
of a fixture canopy, or pan and an outlet box shall be covered with non-
combustible or limited combustible material.
    (f) Every appliance shall be accessible for inspection, service, 
repair, or replacement without removal of permanent construction.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 52 FR 35543, Sept. 22, 1987; 58 FR 55020, Oct. 25, 1993; 
70 FR 72052, Nov. 30, 2005]



Sec. 3280.808  Wiring methods and materials.

    (a) Except as specifically permitted by this part, the wiring 
methods and materials specified in the National Electrical Code, NFPA 
No. 70-2005, must be used in manufactured homes.
    (b) Nonmetallic outlet boxes shall be acceptable only with 
nonmetallic cable.
    (c) Nonmetallic cable located 15 inches or less above the floor, if 
exposed, shall be protected from physical damage by covering boards, 
guard strips, or conduit. Cable likely to be damaged by stowage shall be 
so protected in all cases.
    (d) Nonmetallic sheathed cable shall be secured by staples, straps, 
or similar fittings so designed and installed as not to injure any 
cable. Cable shall be secured in place at intervals not exceeding 4\1/2\ 
feet and within 12 inches from every cabinet, box or fitting.
    (e) Metal-clad and nonmetallic cables shall be permitted to pass 
through the centers of the wide side of 2-inch by 4-inch studs. However, 
they shall be protected where they pass through 2-inch by 2-inch studs 
or at other studs or frames where the cable or armor would be less than 
1\1/2\ inches from the inside or outside surface of the studs when the 
wall covering materials are in contact with the studs. Steel plates on 
each side of the cable, or a tube, with not less than No. 16 MSG wall 
thickness shall be required to protect the cable. These plates or tubes 
shall be securely held in place.
    (f) Where metallic faceplates are used they shall be effectively 
grounded.
    (g) If the range, clothes dryer, or similar appliance is connected 
by metalclad cable or flexible conduit, a length of not less than three 
feet of free cable or conduit shall be provided to permit moving the 
appliance. Type NM or Type SE cable shall not be used to connect a range 
or a dryer. This shall not prohibit the use of Type NM or Type SE cable 
between the branch circuit overcurrent protective device and a junction 
box or range or dryer receptacle.
    (h) Threaded rigid metal conduit shall be provided with a locknut 
inside and outside the box, and a conduit bushing shall be used on the 
inside. Rigid nonmetallic conduit shall be permitted. Inside ends of the 
conduit shall be reamed.
    (i) Switches shall be rated as follows:

[[Page 210]]

    (1) For lighting circuits, switches, shall have a 10-ampere, 120-125 
volt rating; or higher if needed for the connected load.
    (2) For motors or other loads, switches shall have ampere or 
horsepower ratings, or both, adequate for loads controlled. (An ``AC 
general-use'' snap switch shall be permitted to control a motor 2 
horsepower or less with full-load current not over 80 percent of the 
switch ampere rating).
    (j) At least 4 inches of free conductor shall be left at each outlet 
box except where conductors are intended to loop without joints.
    (k) When outdoor or under-chassis line-voltage wiring is exposed to 
moisture or physical damage, it shall be protected by rigid metal 
conduit. The conductors shall be suitable for wet locations. Electrical 
metallic tubing may be used when closely routed against frames, and 
equipment enclosures.
    (l) The cables or conductors shall be Type NMC, TW, or equivalent.
    (m) Outlet boxes of dimensions less than those required in Table 
314.16(A) of the National Electrical Code, NFPA No. 70-2005, are 
permitted provided the box has been tested and approved for that 
purpose.
    (n) Boxes, fittings, and cabinets shall be securely fastened in 
place, and shall be supported from a structural member of the home, 
either directly or by using a substantial brace. Snap-in type boxes 
provided with special wall or ceiling brackets that securely fasten 
boxes in walls or ceilings shall be permitted.
    (o) Outlet boxes must fit closely to openings in combustible walls 
and ceilings and must be flush with the finish surface or project 
therefrom. In walls and ceilings of noncombustible material, outlet 
boxes and fittings must be installed so that the front edge of the box 
or fitting will not be set back from the finished surface more than \1/
4\ inch. Plaster, drywall, or plasterboard surfaces that are broken or 
incomplete must be repaired so that there will be no gaps or open spaces 
greater than \1/8\ inch at the edge of the box or fitting.
    (p) Appliances having branch-circuit terminal connections which 
operate at temperatures higher than 60 [deg]C (140 [deg]F) shall have 
circuit conductors as described in paragraphs (p) (1) and (2) of this 
section:
    (1) Branch-circuit conductors having an insulation suitable for the 
temperature encountered shall be permitted to run directly to the 
appliance.
    (2) Conductors having an insulation suitable for the temperature 
encountered shall be run from the appliance terminal connections to a 
readily accessible outlet box placed at least one foot from the 
appliance. These conductors shall be in a suitable raceway which shall 
extend for at least 4 feet.
    (q) A substantial brace for securing a box, fitting, or cabinet must 
be as described in the National Electrical Code, NFPA 70-2005, Article 
314.23(B), or the brace, including the fastening mechanism to attach the 
brace to the home structure, must withstand a force of 50 lbs. applied 
to the brace at the intended point(s) of attachment for the box in a 
direction perpendicular to the surface on which the box is installed.
    (r) Where the sheathing of NM cable has been cut or damaged and 
visual inspection reveals that the conductor and its insulation has not 
been damaged, it shall be permitted to repair the cable sheath with 
electrical tape which provides equivalent protection to the sheath.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55020, Oct. 25, 1993; 70 FR 72052, Nov. 30, 2005]



Sec. 3280.809  Grounding.

    (a) General. Grounding of both electrical and nonelectrical metal 
parts in a manufactured home shall be through connection to a grounding 
bus in the manufactured home distribution panelboard. The grounding bus 
shall be grounded through the green-colored conductor in the supply cord 
or the feeder wiring to the service ground in the service-entrance 
equipment located adjacent to the manufactured home location. Neither 
the frame of the manufactured home nor the frame of any appliance shall 
be connected to the neutral conductor in the manufactured home.
    (b) Insulated neutral. (1) The grounded circuit conductor (neutral) 
shall be insulated from the grounding conductors and from equipment 
enclosures and other grounded parts. The grounded

[[Page 211]]

(neutral) circuit terminals in the distribution panelboard and in 
ranges, clothes dryers, counter-mounted cooking units, and wall-mounted 
ovens shall be insulated from the equipment enclosure. Bonding screws, 
straps, or buses in the distribution panelboard or in appliances shall 
be removed and discarded. However, when service equipment is installed 
on the manufactured home, the neutral and the ground bus may be 
connected in the distribution panel.
    (2) Connection of ranges and clothes dryers with 120/240 volt, 3-
wire ratings shall be made with 4 conductor cord and 3 pole, 4-wire 
grounding type plugs, or by type AC metal clad conductors enclosed in 
flexible metal conduit. For 120 volt rated devices a 3-conductor cord 
and a 2-pole, 3-wire grounding type plug shall be permitted.
    (c) Equipment grounding means. (1) The green-colored grounding wire 
in the supply cord or permanent feeder wiring shall be connected to the 
grounding bus in the distribution panelboard or disconnecting means.
    (2) In the electrical system, all exposed metal parts, enclosures, 
frames, lamp fixture canopies, etc., shall be effectively bonded to the 
grounding terminal or enclosure of the distribution panelboard.
    (3) Cord-connected appliances, such as washing machines, clothes 
dryers, refrigerators, and the electrical system of gas ranges, etc., 
shall be grounded by means of an approved cord with grounding conductor 
and grounding-type attachment plug.
    (d) Bonding of noncurrent-carrying metal parts. (1) All exposed 
noncurrent-carrying metal parts that may become energized shall be 
effectively bonded to the grounding terminal or enclosure of the 
distribution panelboard. A bonding conductor shall be connected between 
each distribution panelboard and an accessible terminal on the chassis.
    (2) Grounding terminals shall be of the solderless type and approved 
as pressure-terminal connectors recognized for the wire size used. Star 
washers or other approved paint-penetrating fitting shall be used to 
bond terminals to chassis or other coated areas. The bonding conductor 
shall be solid or stranded, insulated or bare and shall be No. 8 copper 
minimum, or equal. The bonding conductor shall be routed so as not to be 
exposed to physical damage. Protection can be afforded by the 
configuration of the chassis.
    (3) Metallic gas, water and waste pipes and metallic air-circulating 
ducts shall be considered bonded if they are connected to the terminal 
on the chassis (see Sec. 3280.809) by clamps, solderless connectors, or 
by suitable grounding-type straps.
    (4) Any metallic roof and exterior covering shall be considered 
bonded if (i) the metal panels overlap one another and are securely 
attached to the wood or metal frame parts by metallic fasteners, and 
(ii) if the lower panel of the metallic exterior covering is secured by 
metallic fasteners at a cross member of the chassis by two metal straps 
per manufactured home unit or section at opposite ends. The bonding 
strap material shall be a minimum of 4 inches in width of material 
equivalent to the skin or a material of equal or better electrical 
conductivity. The straps shall be fastened with paint-penetrating 
fittings (such as screws and star washers or equivalent).

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55020, Oct. 25, 1993]



Sec. 3280.810  Electrical testing.

    (a) Dielectric strength test. The wiring of each manufactured home 
shall be subjected to a 1-minute, 900 to 1079 volt dielectric strength 
test (with all switches closed) between live parts and the manufactured 
home ground, and neutral and the manufactured home ground. 
Alternatively, the test may be performed at 1080 to 1250 volts for 1 
second. This test shall be performed after branch circuits are complete 
and after fixtures or appliances are installed. Fixtures or appliances 
which are listed shall not be required to withstand the dielectric 
strength test.
    (b) Each manufactured home shall be subject to:
    (1) A continuity test to assure that metallic parts are properly 
bonded;
    (2) Operational test to demonstrate that all equipment, except water 
heaters, electric furnaces, dishwashers, clothes washers/dryers, and 
portable

[[Page 212]]

appliances, is connected and in working order; and
    (3) Polarity checks to determine that connections have been properly 
made. Visual verification shall be an acceptable check.

[58 FR 55020, Oct. 25, 1993]



Sec. 3280.811  Calculations.

    (a) The following method shall be employed in computing the supply 
cord and distribution-panelboard load for each feeder assembly for each 
manufactured home and shall be based on a 3-wire, 120/240 volt supply 
with 120 volt loads balanced between the two legs of the 3-wire system. 
The total load for determining power supply by this method is the 
summation of:
    (1) Lighting and small appliance load as calculated below:
    (i) Lighting volt-amperes: Length time width of manufactured home 
(outside dimensions exclusive of coupler) times 3 volt-amperes per 
square foot; e.g. Length x width x 3=lighting volt-amperes.
    (ii) Small appliance volt-amperes: Number of circuits time 1,500 
volt-amperes for each 20-ampere appliance receptacle circuit (see 
definition of ``Appliance Portable'' with Note): e.g. Number of circuits 
x 1,500=small appliance volt-amperes.
    (iii) Total volts-amperes: Lighting volts-amperes plus small 
appliance=total volt-amperes.
    (iv) First 3,000 total volts-amperes at 100 percent plus remainder 
at 35 percent=watts to be divided by 240 volts to obtain current 
(amperes) per leg.
    (2) Nameplate amperes for motors and heater loads (exhaust fans, air 
conditioners, electric, gas, or oil heating). Omit smaller of air 
conditioning and heating except include blower motor if used as air 
conditioner evaporator motor. When an air conditioner is not installed 
and a 40-ampere power supply cord is provided, allow 15 amperes per leg 
for air conditioning.
    (3) 25 percent of current of largest motor in paragraph (a)(2) of 
this section.
    (4) Total of nameplate amperes for: Disposal, dishwasher, water 
heater, clothes dryer, wall-mounted oven, cooking units. Where number of 
these appliances exceeds three, use 75 percent of total.
    (5) Derive amperes for free-standing range (as distinguished from 
separate ovens and cooking units) by dividing values below by 240 volts.

------------------------------------------------------------------------
        Nameplate rating (in watts)                Use (in watts)
------------------------------------------------------------------------
10,000 or less............................  80 percent of rating.
10,001 to 12,500..........................  8,000.
12,501 to 13,500..........................  8,400.
13,501 to 14,500..........................  8,800.
14,501 to 15,500..........................  9,200.
15,501 to 16,500..........................  9,600.
16,501 to 17,500..........................  10,000.
------------------------------------------------------------------------

    (6) If outlets or circuits are provided for other than factory-
installed appliances, include the anticipated load. The following 
example is given to illustrate the application of this Method of 
Calculation:

    Example: A manufactured home is 70x10 feet and has two portable 
appliance circuits, a 1000 volt-ampere 240 volt heater, a 200 volt-
ampere 120 volt exhaust fan, a 400 volts-ampere 120 volt dishwasher and 
a 7000 volt-ampere electric range.

------------------------------------------------------------------------
                                                                  Volt-
               Lighting and small appliance load                ampheres
------------------------------------------------------------------------
Lighting 70x10x3..............................................     2,100
Small Appliance...............................................     3,000
                                                               ---------
      Total...................................................     5,100
1st. 3,000 Volt-Ampheres at 100%..............................     3,000
Remainder (5,100 -3,000 =2,100, at 35%........................       735
                                                               ---------
      Total...................................................     3,735
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                     Amperes    Amperes
                                                    per leg A  per leg B
------------------------------------------------------------------------
Lighting and small Appliance......................       15.5       15.5
Heater 240 volt...................................        4.1        4.1
Fan 120 volt......................................        1.7  .........
Dishwasher 120 volt...............................  .........        3.3
Range.............................................       23.3       23.3
                                                   ---------------------
      Total.......................................       44.6      46.2
------------------------------------------------------------------------
Note: Based on the higher current calculated for either leg, use one 50-
  A supply cord.

    (b) The following is an optional method of calculation for lighting 
and appliance loads for manufactured homes served by single 3-wire 120/
240 volt set of feeder conductors with an ampacity of 100 or greater. 
The total load for determining the feeder ampacity may be computed in 
accordance with the following table instead of the method previously 
specified. Feeder conductors whose demand load is determined by this 
optional calculation are permitted to have the neutral load

[[Page 213]]

determined by Article 220.61 of the National Electrical Code, NFPA No. 
70-2005. The loads identified in the table as ``other load'' and as 
``Remainder of other load'' must include the following:
    (1) 1500 volt-amperes for each 2-wire, 20-ampere small appliance 
branch circuit and each laundry branch circuit specified.
    (2) 3 volt-amperes per square foot for general lighting and general-
use receptacles.
    (3) The nameplate rating of all fixed appliances, ranges, wall-
mounted ovens, counter-mounted cooking units, and including 4 or more 
separately controlled space heating loads.
    (4) The nameplate ampere or kVA rating of all motors and of all low-
power-factor loads.
    (5) The largest of the following:
    (i) Air conditioning load;
    (ii) The 65 percent diversified demand of the central electric space 
heating load;
    (iii) The 65 percent diversified demand of the load of less than 
four separately-controlled electric space heating units.
    (iv) The connected load of four or more separately-controlled 
electric space heating units.

  Optional Calculation for Manufactured Homes With 110-Ampere or Larger
                                 Service
------------------------------------------------------------------------
                                                                Demand
            Load (in kilowatt or kilovoltampere)                factor
                                                               (percent)
------------------------------------------------------------------------
Air-conditioning and cooling including heat pump compressors         100
Central electric space heating..............................          65
Less than 4 separately controlled electric space heating              65
 units......................................................
1st 10 kW of all other load.................................         100
Remainder of other load.....................................          40
------------------------------------------------------------------------


[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55021, Oct. 25, 1993; 70 FR 72052, Nov. 30, 2005]



Sec. 3280.812  Wiring of expandable units and dual units.

    (a) Expandable or multiple unit manufactured homes shall use fixed-
type wiring methods and materials for connecting such units to each 
other.
    (b) Expandable or multiple unit manufactured homes not having 
permanently installed feeders and which are to be moved from one 
location to another, shall be permitted to have disconnecting means with 
branch circuit protective equipment in each unit when so located that 
after assembly or joining together of units the requirements of Sec. 
3280.803 will be met.



Sec. 3280.813  Outdoor outlets, fixtures, air-conditioning equipment, etc.

    (a) Outdoor fixtures and equipment shall be listed for use in wet 
locations, except that if located on the underside of the home or 
located under roof extensions or similarly protected locations, they may 
be listed for use in damp locations.
    (b) A manufactured home provided with an outlet designed to energize 
heating and/or air conditioning equipment located outside the 
manufactured home, shall have permanently affixed, adjacent to the 
outlet, a metal tag which reads:

    This Connection Is for Air Conditioning Equipment Rated at Not More 
Than ------ Amperes, at ------ Volts, 60 Hertz. A disconnect shall be 
located within sight of the appliance.


The correct voltage and ampere ratings shall be given. The tag shall not 
be less than 0.020 inch, etched Brass, stainless steel, anodized or 
alclad aluminum or equivalent or other approved material (e.g., .005 
inch plastic laminates). The tag shall be not less than 3 inches by 1\3/
4\ inches minimum size.

[40 FR 58752, Dec. 18, 1975, as amended at 42 FR 961, Jan. 4, 1977. 
Redesignated at 44 FR 20679, Apr. 6, 1979, as amended at 58 FR 55021, 
Oct. 25, 1993]



Sec. 3280.814  Painting of wiring.

    During painting or staining of the manufactured home, it shall be 
permitted to paint metal raceways (except where grounding continuity 
would be reduced) or the sheath of the nonmetallic cable. Some 
arrangement, however, shall be made so that no paint shall be applied to 
the individual wires, as the color coding may be obliterated by the 
paint.



Sec. 3280.815  Polarization.

    (a) The identified (white) conductor shall be employed for grounding 
circuit conductors only and shall be connected to the identified (white) 
terminal or

[[Page 214]]

lead on receptacle outlets and fixtures. It shall be the unswitched wire 
in switched circuits, except that a cable containing an identified 
conductor (white) shall be permitted for single-pole three-way or four-
way switch loops where the connections are made so that the unidentified 
conductor is the return conductor from the switch to the outlet. 
Painting of the terminal end of the wire shall not be required.
    (b) If the identified (white) conductor of a cable is used for other 
than grounded conductors or for other than switch loops as explained 
above (for a 240 volt circuit for example), the conductor shall be 
finished in a color other than white at each outlet where the conductors 
are visible and accessible.
    (c) Green-colored wires or green with yellow stripe shall be used 
for grounding conductors only.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 58 FR 55021, Oct. 25, 1993]



Sec. 3280.816  Examination of equipment for safety.

    The examination or inspection of equipment for safety, according to 
this standard, shall be conducted under uniform conditions and by 
organizations properly equipped and qualified for experimental testing, 
inspections of the run of goods at factories, and service-value 
determinations through field examinations.



                        Subpart J_Transportation



Sec. 3280.901  Scope.

    Subpart J of this standard covers the general requirement for 
designing the structure of the manufactured home to fully withstand the 
adverse effects of transportation shock and vibration without 
degradation of the integrated structure or of its component parts and 
the specific requirements pertaining to the transportation system and 
its relationship to the structure.



Sec. 3280.902  Definitions.

    (a) Chassis means the entire transportation system comprising the 
following subsystems: drawbar and coupling mechanism, frame, running 
gear assembly, and lights.
    (b) Drawbar and coupling mechanism means the rigid assembly, 
(usually an A frame) upon which is mounted a coupling mechanism, which 
connects the manufactured home's frame to the towing vehicle.
    (c) Frame means the fabricated rigid substructure which provides 
considerable support to the affixed manufactured home structure both 
during transport and on-site; and also provides a platform for 
securement of the running gear assembly, the drawbar and coupling 
mechanism.
    (d) Running gear assembly means the subsystem consisting of 
suspension springs, axles, bearings, wheels, hubs, tires, and brakes, 
with their related hardware.
    (e) Lights means those safety lights and associated wiring required 
by applicable U.S. Department of Transportation regulations.
    (f) Transportation system, (Same as chassis, above).
    (g) Highway, includes all roads and streets to be legally used in 
transporting the manufactured home.

[40 FR 58752, Dec. 18, 1975. Redesignated at 44 FR 20679, Apr. 6, 1979, 
as amended at 47 FR 28093, June 29, 1982]



Sec. 3280.903  General requirements for designing the structure to 
withstand transportation shock and vibration.

    (a) The cumulative effect of highway transportation shock and 
vibration upon a manufactured home structure may result in incremental 
degradation of its designed performance in terms of providing a safe, 
healthy and durable dwelling. Therefore, the manufactured home shall be 
designed, in terms of its structural, plumbing, mechanical and 
electrical systems, to fully withstand such transportation forces during 
its intended life. (See Sec. Sec. 3280.303(c) and 3280.305(a)).
    (b) Particular attention shall be given to maintaining watertight 
integrity and conserving energy by assuring that structural components 
in the roof and walls (and their interfaces with vents, windows, doors, 
etc.) are capable of resisting highway shock and vibration forces during 
primary and subsequent secondary transportation moves.

[[Page 215]]

    (c) In place of an engineering analysis, either of the following may 
be accepted:
    (1) Documented technical data of suitable highway tests which were 
conducted to simulate transportation loads and conditions; or
    (2) Acceptable documented evidence of actual transportation 
experience which meets the intent of this subpart.



Sec. 3280.904  Specific requirements for designing the transportation
system.

    (a) General. The entire system (frame, drawbar and coupling 
mechanism, running gear assembly, and lights) shall be designed and 
constructed as an integrated, balanced and durable unit which is safe 
and suitable for its specified use during the intended life of the 
manufactured home. In operation, the transportation system (supporting 
the manufactured home structure and its contents) shall effectively 
respond to the control of the braking, while traveling at applicable 
towing vehicle in terms of tracking and highway speeds and in normal 
highway traffic conditions.
    Note: While the majority of manufactured homes utilize a fabricated 
steel frame assembly, upon which the manufactured home structure is 
constructed, it is not the intent of this standard to limit innovation. 
Therefore, other concepts, such as integrating the frame function into 
the manufactured home structure, are acceptable provided that such 
design meets the intent and requirements of this part).
    (b) Specific requirements--(1) Drawbar. The drawbar shall be 
constructed of sufficient strength, rigidity and durability to safely 
withstand those dynamic forces experienced during highway 
transportation. It shall be securely fastened to the manufactured home 
frame by either a continuous weld or by bolting.
    (2) Coupling mechanism. The coupling mechanism (which is usually of 
the socket type) shall be securely fastened to the drawbar in such a 
manner as to assure safe and effective transfer of the maximum loads, 
including dynamic loads, between the manufactured home structure and the 
hitch-assembly of the towing vehicle. The coupling shall be equipped 
with a manually operated mechanism so adapted as to prevent 
disengagement of the unit while in operation. The coupling shall be so 
designed that it can be disconnected regardless of the angle of the 
manufactured home to the towing vehicle. With the manufactured home 
parked on level ground, the center of the socket of the coupler shall 
not be less than 20 inches nor more than 26 inches from ground level.
    (3) Chassis. The chassis, in conjunction with the manufactured home 
structure, shall be designed and constructed to effectively sustain the 
designed loads consisting of the dead load plus a minimum of 3 pounds 
per square foot floor load, (example: free-standing range, refrigerator, 
and loose furniture) and the superimposed dynamic load resulting from 
highway movement but shall not be required to exceed twice the dead 
load. The integrated design shall be capable of insuring rigidity and 
structural integrity of the complete manufactured home structure and to 
insure against deformation of structural or finish members during the 
intended life of the home.
    (4) Running gear assembly. (i) The running gear assembly, as part of 
the chassis, shall be designed to perform, as a balanced system, in 
order to effectively sustain the designed loads set forth in Sec. 
3280.904(b)(3) and to provide for durable dependable safe mobility of 
the manufactured home. It shall be designed to accept shock and 
vibration, both from the highway and the towing vehicle and effectively 
dampen these forces so as to protect the manufactured home structure 
from damage and fatigue. Its components shall be designed to facilitate 
routine maintenance, inspection and replacement.
    (ii) Location of the running gear assembly shall be determined by 
documented engineering analysis, taking into account the gross weight 
(including all contents), total length of the manufactured home, the 
necessary coupling hitch weight, span distance, and turning radius. The 
coupling weight shall be not less than 12 percent nor more than 25 
percent of the gross weight.
    (5) Spring assemblies. Spring assemblies (springs, hangers, 
shackles, bushings and mounting bolts) shall be capable of withstanding 
all the design loads

[[Page 216]]

as outlined in Sec. 3280.904(b)(3) without exceeding maximum allowable 
stresses for design spring assembly life as recommended by the spring 
assembly manufacturer. The capacity of the spring system shall assure, 
that under maximum operating load conditions, sufficient clearance shall 
be maintained between the tire and manufactured home frame or structure 
to permit unimpeded wheel movement and for changing tires.
    (6) Axles. Axles, and their connecting hardware, shall be capable of 
withstanding all of the design loads outlined in Sec. 3280.904(b)(3) 
without exceeding maximum allowable stresses for design axle life as 
recommended by the axle manufacturer. The number of axles required to 
provide a safe tow and good ride characteristics shall be determined and 
documented by engineering analysis. Those alternatives listed in Sec. 
3280.903(c) may be accepted in place of such an analysis.
    (7) Hubs and bearings. Hubs and bearings shall meet the requirements 
of Sec. 3280.904(b)(3) and good engineering practice. Both of these 
components shall be accessible for inspection, routine maintenance and 
replacement of parts.
    (8) Tires, wheels and rims. Tires, wheels and rims shall meet the 
requirements of Sec. 3280.904(b)(3). Tires shall be selected for 
anticipated usage.
    (9) Brake assemblies. (i) The number, type, size and design of brake 
assemblies required to assist the towing vehicle in providing effective 
control and stopping of the manufactured home shall be determined and 
documented by engineering analysis. Those alternatives listed in Sec. 
3280.903(c) may be accepted in place of such an analysis.
    (ii) Brakes on the towing vehicle and the manufactured home shall be 
capable of assuring that the maximum stopping distance from an initial 
velocity of 20 miles per hour does not exceed 40 feet (U.S. Department 
of Transportation Regulations).
    (10) Lights and associated wiring. Highway safety electrical lights 
and associated wiring shall conform to applicable Federal requirements 
in terms of location and performance. The manufacturer shall have the 
option of meeting this requirement by utilizing a temporary light/wiring 
harness provided by the manufactured home transportation carrier.



PART 3282_MANUFACTURED HOME PROCEDURAL AND ENFORCEMENT REGULATIONS--
Table of Contents



                            Subpart A_General

Sec.
3282.1 Scope and purpose.
3282.6 Separability of provisions.
3282.7 Definitions.
3282.8 Applicability.
3282.9 Computation of time.
3282.10 Civil and criminal penalties.
3282.11 Preemption and reciprocity.
3282.12 Excluded structures--modular homes.
3282.13 Voluntary certification.
3282.14 Alternative construction of manufactured homes.

                       Subpart B_Formal Procedures

3282.51 Scope.
3282.52 Address of communications.
3282.53 Service of process on foreign manufacturers and importers.
3282.54 Public information.

                Subpart C_Rules and Rulemaking Procedures

3282.101 Generally.
3282.111 Petitions for reconsideration of final rules.
3282.113 Interpretative bulletins.

   Subpart D_Informal and Formal Presentations of Views, Hearings and 
                             Investigations

3282.151 Applicability and scope.
3282.152 Procedures to present views and evidence.
3282.153 Public participation in formal or informal presentation of 
          views.
3282.154 Petitions for formal or informal presentations of views, and 
          requests for extraordinary interim relief.
3282.155 Investigations.
3282.156 Petitions for investigations.

    Subpart E_Manufacturer Inspection and Certification Requirements

3282.201 Scope and purpose.
3282.202 Primary inspection agency contracts.
3282.203 DAPIA services.
3282.204 IPIA services.
3282.205 Certification requirements.
3282.206 Disagreement with IPIA or DAPIA.

[[Page 217]]

3282.207 Manufactured home consumer manual requirements.
3282.208 Remedial actions--general description.
3282.209 Report requirements.
3282.210 Payment of monitoring fee.
3282.211 Record of purchasers.

            Subpart F_Dealer and Distributor Responsibilities

3282.251 Scope and purpose.
3282.252 Prohibition of sale.
3282.253 Removal of prohibition of sale.
3282.254 Distributor and dealer alterations.
3282.255 Completion of information card.
3282.256 Distributor or dealer complaint handling.

                 Subpart G_State Administrative Agencies

3282.301 General--scope.
3282.302 State plan.
3282.303 State plan--suggested provisions.
3282.304 Inadequate State plan.
3282.305 State plan approval.
3282.306 Withdrawal of State approval.
3282.307 Monitoring inspection fee establishment and distribution.
3282.308 State participation in monitoring of primary inspection 
          agencies.
3282.309 Formal and informal presentations of views held by SAAs.

                  Subpart H_Primary Inspection Agencies

3282.351 General.
3282.352 State exclusive IPIA functions.
3282.353 Submission format.
3282.354 Submittal of false information or refusal to submit 
          information.
3282.355 Submission acceptance.
3282.356 Disqualification and requalification of primary inspection 
          agencies.
3282.357 Background and experience.
3282.358 Personnel.
3282.359 Conflict of interest.
3282.360 PIA acceptance of product certification programs or listings.
3282.361 Design Approval Primary Inspection Agency (DAPIA).
3282.362 Production Inspection Primary Inspection Agencies (IPIAs).
3282.363 Right of entry and inspection.
3282.364 Inspection responsibilities and coordination.
3282.365 Forwarding monitoring fee.
3282.366 Notification and correction campaign responsibilities.

       Subpart I_Consumer Complaint Handling and Remedial Actions

3282.401 Purpose and scope.
3282.402 General principles.
3282.403 Consumer complaint and information referral.
3282.404 Notification pursuant to manufacturer's determination.
3282.405 SAA responsibilities.
3282.406 Required manufacturer correction.
3282.407 Notification and correction pursuant to administrative 
          determination.
3282.408 Reimbursement for prior correction by owner.
3282.409 Manufacturer's plan for notification and correction.
3282.410 Contents of notice.
3282.411 Time for implementation.
3282.412 Completion of remedial actions and report.
3282.413 Replacement or repurchase of manufactured home from purchaser.
3282.414 Manufactured homes in the hands of dealers and distributors.
3282.415 Notices, bulletins and other communications.
3282.416 Supervision of notification and correction actions.

           Subpart J_Monitoring of Primary Inspection Agencies

3282.451 General.
3282.452 Participation in monitoring.
3282.453 Frequency and extent of monitoring.

                    Subpart K_Departmental Oversight

3282.501 General.
3282.502 Departmental implementation.
3282.503 Determinations and hearings.

              Subpart L_Manufacturer, IPIA and SAA Reports

3282.551 Scope and purpose.
3282.552 Manufacturer reports for joint monitoring fees.
3282.553 IPIA reports.
3282.554 SAA reports.

    Authority: 28 U.S.C. 2461 note; 42 U.S.C. 3535(d) and 5424.

    Source: 41 FR 19852, May 13, 1976, unless otherwise noted.



                            Subpart A_General



Sec. 3282.1  Scope and purpose.

    (a) The National Manufactured Housing Construction and Safety 
Standards Act of 1974 (title VI of Pub. L. 93-383, 88 Stat. 700, 42 
U.S.C. 5401, et seq.) (hereinafter referred to as the Act), requires the 
Secretary of the Department of Housing and Urban Development to 
establish Federal manufactured home construction and safety standards 
and to issue regulations to carry out the

[[Page 218]]

purpose of the Act. The standards promulgated pursuant to the Act appear 
at part 3280 of chapter XX of this title, and apply to all manufactured 
homes manufactured for sale to purchasers in the United States on or 
after the effective date of the standards (June 15, 1976). A 
manufactured home is manufactured on or after June 15, 1976, if it 
enters the first stage of production on or after that date.
    (b) The Secretary is also authorized by the Act to conduct 
inspections and investigations necessary to enforce the standards, to 
determine that a manufactured home fails to comply with an applicable 
standard or contains a defect or an imminent safety hazard, and to 
direct the manufacturer to furnish notification thereof, and in some 
cases, to remedy the defect or imminent safety hazard. The purpose of 
this part is to prescribe procedures for the implementation of these 
responsibilities of the Secretary under the Act through the use of 
private and State inspection organizations and cooperation with State 
manufactured home agencies. It is the policy of the Department to 
involve State agencies in the enforcement of the Federal manufactured 
home standards to the maximum extent possible consistent with the 
capabilities of such agencies and the public interest. The procedures 
for investigations and investigational proceedings are set forth in 24 
CFR part 3800.

[41 FR 19852, May 13, 1976, as amended at 61 FR 10442, Mar. 13, 1996]



Sec. 3282.6  Separability of provisions.

    If any clause, sentence, paragraph, section or other portion of part 
3282 shall, for any reason, be adjudged by any court of competent 
jurisdiction to be invalid, such judgment shall not affect, impair, or 
invalidate the remainder thereof, but shall be confined by its operation 
to the clause, sentence, paragraph, or part thereof directly involved in 
the controversy in which such judgment shall have been rendered.



Sec. 3282.7  Definitions.

    The terms Department, HUD, and Secretary are defined in 24 CFR part 
5.
    (a) Act means the National Manufactured Housing Construction and 
Safety Standards Act of 1974, title VI of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5401 et seq.)
    (b) Add-on means any structure (except a structure designed or 
produced as an integral part of a manufactured home) which, when 
attached to the basic manufactured home unit, increases the area, either 
living or storage, of the manufactured home.
    (c) Alteration means the replacement, addition, and modification, or 
removal of any equipment or installation after sale by a manufacturer to 
a dealer or distributor but prior to sale by a dealer to a purchaser 
which may affect the construction, fire safety, occupancy, plumbing, 
heat-producing or electrical system. It includes any modification made 
in the manufactured home which may affect the compliance of the home 
with the standards, but it does not include the repair or replacement of 
a component or appliance requiring plug-in to an electrical receptacle 
where the replaced item is of the same configuration and rating as the 
one being replaced. It also does not include the addition of an 
appliance requiring plug-in to an electrical receptacle, which appliance 
was not provided with the manufactured home by the manufacturer, if the 
rating of the appliance does not exceed the rating of the receptacle to 
which it is connected.
    (d) Certification label see label.
    (e) Certification report means the report prepared by an IPIA (see 
definition z) for each manufactured home manufacturing plant under Sec. 
3282.203 in which the IPIA provides a complete description of the 
initial comprehensive inspection of the plant, an evaluation of the 
quality assurance program under the approved quality assurance manual, 
and the identity of the DAPIA (see definition z) which approved the 
designs and quality assurance manual used in the plant. Where 
appropriate under Sec. 3282.362(b)(5), the certification report may be 
made by a DAPIA.
    (f) Component means any part, material or appliance which is built 
in as an integral part of the manufactured home during the manufacturing 
process.
    (g) Cost information means information submitted by a manufacturer

[[Page 219]]

under section 607 of the Act with respect to alleged cost increases 
resulting from action by the Secretary, in such form as to permit the 
public and the Secretary to make an informed judgment on the validity of 
the manufacturer's statements. Such term includes both the 
manufacturer's cost and the cost to retail purchasers.
    (h) Date of manufacture means the date on which the label required 
by Sec. 3282.205(c) is affixed to the manufactured home.
    (i) Dealer means any person engaged in the sale, leasing, or 
distribution of new manufactured homes primarily to persons who in good 
faith purchase or lease a manufactured home for purposes other than 
resale.
    (j) Defect means a failure to comply with an applicable Federal 
manufactured home safety and construction standard that renders the 
manufactured home or any part or component thereof not fit for the 
ordinary use for which it was intended, but does not result in an 
unreasonable risk of injury or death to occupants of the affected 
manufactured home. See related definitions of imminent safety hazard 
(definition q), noncompliance (definition x), and serious defect 
(definition ff).
    (k) Design means drawings, specifications, sketches and the related 
engineering calculations, tests and data in support of the 
configurations, structures and systems to be incorporated in 
manufactured homes manufactured in a plant.
    (l) Director means the Director of the Manufactured Housing 
Standards Division.
    (m) Distributor means any person engaged in the sale and 
distribution of manufactured homes for resale.
    (n) Failure to conform means an imminent safety hazard related to 
the standards, a serious defect, defect, or noncompliance and is used as 
a substitute for all of those terms.
    (o) [Reserved]
    (p) Imminent safety hazard means a hazard that presents an imminent 
and unreasonable risk of death or severe personal injury that may or may 
not be related to failure to comply with an applicable Federal 
manufactured home construction or safety standard. See related 
definitions of defect (definition j), noncompliance (paragraph x) and 
serious defect (paragraph ff).
    (q) Joint monitoring team means a monitoring inspection team 
composed of personnel provided by the various State Administrative 
Agencies, or by HUD or its contract agent, operating under a contract 
with HUD for the purpose of monitoring, or otherwise aiding in the 
enforcement of the Federal standards.
    (r) Label or certification label means the approved form of 
certification by the manufacturer that, under Sec. 3282.362(c)(2)(i), 
is permanently affixed to each transportable section of each 
manufactured home manufactured for sale to a purchaser in the United 
States.
    (s) (Same as Sec. 3280.2(a)(13).)
    (t) Manufacturer means any person engaged in manufacturing or 
assembling manufactured homes, including any person engaged in importing 
manufactured homes for resale.
    (u) (Same as Sec. 3280.2(a)(16).)
    (v) Manufactured home construction means all activities relating to 
the assembly and manufacture of a manufactured home including but not 
limited to those relating to durability, quality, and safety.
    (w) Manufactured home safety means the performance of a manufactured 
home in such a manner that the public is protected against any 
unreasonable risk of the occurrence of accidents due to the design or 
construction of such manufactured home, or any unreasonable risk of 
death or injury to the user or to the public if such accidents do occur.
    (x) Noncompliance means a failure of a manufactured home to comply 
with a Federal manufactured home construction or safety standard that 
does not constitute a defect, serious defect, or imminent safety hazard. 
See related definitions or defect (definition j), imminent safety hazard 
(definition q), and serious defect (definition ff).
    (y) Owner means any person purchasing a manufactured home from any 
other person after the first purchase of the manufactured home, in good 
faith, for purposes other than resale.
    (z) Primary Inspection Agency (PIA) means a State/or private 
organization

[[Page 220]]

that has been accepted by the Secretary in accordance with the 
requirement of subpart H of this part. There are two types of PIA:
    (1) Design Approval PIA (DAPIA), which evaluates and approves or 
disapproves manufactured home designs and quality control procedures, 
and
    (2) Production Inspection PIA (IPIA), which evaluates the ability of 
manufactured home manufacturing plants to follow approved quality 
control procedures and provides ongoing surveillance of the 
manufacturing process. Organizations may act as one or both of these 
types.
    (aa) Purchaser means the first person purchasing a manufactured home 
in good faith for purposes other than resale.
    (bb) Quality Assurance Manual means a manual, prepared by each 
manufacturer for its manufacturing plants and approved by a DAPIA which 
contains: a statement of the manufacturer's quality assurance program, a 
chart of the organization showing, by position, all personnel 
accountable for quality assurance, a list of tests and test equipment 
required, a station-by-station description of the manufacturing process, 
a list of inspections required at each station, and a list by title of 
personnel in the manufacturer's organization to be held responsible for 
each inspection. Where necessary, the quality assurance manual used in a 
particular plant shall contain information specific to that plant.
    (cc) To red tag means to affix a notice to a manufactured home which 
has been found to contain an imminent safety hazard or a failure to 
conform with any applicable standard. A red tag is the notice so affixed 
to the manufactured home.
    (dd) [Reserved]
    (ee) Secretary's agent means a party operating as an independent 
contractor under a contract with HUD.
    (ff) Serious defect means any failure to comply with an applicable 
Federal manufactured home construction and safety standard that renders 
the manufactured home or any part thereof not fit for the ordinary use 
for which it was intended and which results in an unreasonable risk of 
injury or death to occupants of the affected manufactured home.
    (gg) Standards means the Federal manufactured home construction and 
safety standards promulgated under section 604 of the Act, 42 U.S.C. 
5403, as part 3280 of these regulations.
    (hh) State includes each of the several States, the District of 
Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands, the 
Canal Zone, and American Samoa.
    (ii) State Administrative Agency (SAA) means an agency of a State 
which has been approved or conditionally approved to carry out the State 
plan for enforcement of the standards pursuant to section 623 of the 
Act, 42 U.S.C. 5422, and subpart G of this part.
    (jj) State plan application means the application of any State 
organization which is submitted to the Secretary for approval as a State 
Administrative Agency under subpart G.
    (kk) System means a set or arrangement of materials or components 
related or connected as to form an operating entity, i.e., heating, 
ventilating and air-conditioning systems, evaporative coolers.
    (ll) [Reserved]
    (mm) United States District Courts means the Federal district courts 
of the United States and the United States courts of the Commonwealth of 
Puerto Rico, Guam, the Virgin Islands, the Canal Zone, and American 
Samoa.
    (nn) (Same as Sec. 3280.2(a)(22).)

[41 FR 19852, May 13, 1976, as amended at 41 FR 24971, June 21, 1976; 47 
FR 28093, June 29, 1982; 61 FR 5216, Feb. 9, 1996; 61 FR 10859, Mar. 15, 
1996]



Sec. 3282.8  Applicability.

    (a) Mobile homes. This part applies to all manufactured homes that 
enter the first stage of production on or after June 15, 1976, and to 
all manufactured homes that enter the first stage of production before 
June 15, 1976, to which labels are applied under Sec. 3282.205(d).
    (b) States. This part applies to States that desire to assume 
responsibility under the Federal manufactured home construction and 
safety standards enforcement program. It includes requirements which 
must be met in order for State agencies to be approved by the Secretary 
under section 623(c) of

[[Page 221]]

the Act, 42 U.S.C. 5422(c). It also includes requirements for States 
wishing to act as primary inspection agencies, as defined in Sec. 
3282.7, or to participate in monitoring activities under Sec. 3282.308.
    (c) Primary inspection and engineering organizations. This part 
applies to each private inspection and engineering organization that 
wishes to qualify as a primary inspection agency under subpart H.
    (d) Manufactured home manufacturers. This part applies to all 
manufacturers producing manufactured homes for sale in the United 
States. It includes:
    (1) Inspection procedures to be carried out in the manufacturing 
plants.
    (2) Procedures by which a manufacturer obtains approval of 
manufactured home designs.
    (3) Procedures by which a manufacturer obtains approval of 
manufacturing quality control and assurance programs.
    (4) Procedures by which a manufacturer may obtain production 
inspections and certification labels for its manufactured homes.
    (e) Manufactured home dealers and distributors. This part applies to 
any person selling, leasing, or distributing new manufactured homes for 
use in the United States. It includes prohibitions of the sale of new 
manufactured homes to which labels have not been affixed pursuant to 
subpart H of these regulations or that have been altered, damaged, or 
otherwise caused not to be in compliance with the Federal standards.
    (f) Purchasers, owners and consumers. This part applies to 
purchasers, owners and consumers of manufactured homes in that it sets 
out procedures to be followed when purchasers, owners and consumers 
complain to manufacturers, States, the Secretary or others concerning 
problems in manufactured homes for which remedies are provided under the 
Act.
    (g) Recreational vehicles. Recreational vehicles are not subject to 
this part, part 3280, or part 3283. A recreational vehicle is a vehicle 
which is:
    (1) Built on a single chassis;
    (2) 400 Square feet or less when measured at the largest horizontal 
projections;
    (3) Self-propelled or permanently towable by a light duty truck; and
    (4) Designed primarily not for use as a permanent dwelling but as 
temporary living quarters for recreational, camping, travel, or seasonal 
use.
    (h) Imported manufactured homes. Imported manufactured homes are 
covered by the regulations except as modified by regulations promulgated 
jointly by the Secretary and the Secretary of the Treasury.
    (i) Export manufactured homes. Manufactured Homes intended solely 
for export are not governed by this part or by part 3280 of this title 
if a label or tag stating that the manufactured home is intended solely 
for export is placed on the manufactured home or the outside of the 
container, if any, in which it is to be exported. However, any 
manufactured home so tagged or labeled that is not exported but is sold 
to a purchaser in the United States is subject to this part and part 
3280 of this title.
    (j) Add-on. An add-on added by the dealer or some other party not 
the manufacturer (except where the manufacturer acts as a dealer) as 
part of a simultaneous transaction involving the sale of a new 
manufactured home, is not governed by the standards and is not subject 
to these regulations. However, the addition of the add-on must not 
affect the ability of the basic manufactured home to comply with the 
standards. If the addition of an add-on causes the basic manufactured 
home to fail to conform to the standards, sale, lease, and offer for 
sale or lease of the home is prohibited until the manufactured home is 
brought into conformance with the standards. While the standards do not 
govern add-ons, the Secretary has the authority to promulgate standards 
for add-ons and may do so in the future.
    (k) A structure (including an expandable room, tip-out, or tag-along 
unit) which is designed and produced as an integral part of a 
manufactured home when assembled on site, is governed by the standards 
and these regulations regardless of the dimensions of such structure.
    (l) Multifamily homes. Mobile homes designed and manufactured with 
more than one separate living unit are not

[[Page 222]]

covered by the standards and these regulations.

[41 FR 19852, May 13, 1976, as amended at 41 FR 24970, June 21, 1976; 42 
FR 35013, July 7, 1977; 44 FR 68733, Nov. 29, 1979; 47 FR 28093, June 
29, 1982]



Sec. 3282.9  Computation of time.

    (a) In computing any period of time prescribed by the regulations in 
this part, refer to Sec. 26.16(a) of this title.
    (b) Extensions of any of the time periods set out in these 
regulations may be granted by the Secretary or, as appropriate, by a 
State Administrative Agency, upon a showing of good cause by the party 
governed by the time period.

[42 FR 2580, Jan. 12, 1977, as amended at 61 FR 10859, Mar. 15, 1996]



Sec. 3282.10  Civil and criminal penalties.

    Failure to comply with these regulations may subject the party in 
question to the civil and criminal penalties provided for in section 611 
of the Act, 42 U.S.C. 5410. The maximum amount of penalties imposed 
under section 611 of the Act shall be $1,100 for each violation, up to a 
maximum of $1,375,000 for any related series of violations occurring 
within one year from the date of the first violation.

[72 FR 5589, Feb. 6, 2007]



Sec. 3282.11  Preemption and reciprocity.

    (a) No State manufactured home standard regarding manufactured home 
construction and safety which covers aspects of the manufactured home 
governed by the Federal standards shall be established or continue in 
effect with respect to manufactured homes subject to the Federal 
standards and these regulations unless it is identical to the Federal 
standards.
    (b) No State may require, as a condition of entry into or sale in 
the State, a manufactured home certified (by the application of the 
label required by Sec. 3282.362(c)(2)(i)) as in conformance with the 
Federal standards to be subject to State inspection to determine 
compliance with any standard covering any aspect of the manufactured 
home covered by the Federal standards. Nor may any State require that a 
State label be placed on the manufactured home certifying conformance to 
the Federal standard or an identical standard. Certain actions that 
States are permitted to take are set out in Sec. 3282.303.
    (c) States may participate in the enforcement of the Federal 
standards enforcement program under these regulations either as SAAs or 
PIAs or both. These regulations establish the exclusive system for 
enforcement of the Federal standards. No State may establish or keep in 
effect through a building code enforcement system or otherwise, 
procedures or requirements which constitute systems for enforcement of 
the Federal standards or of identical State standards which are outside 
the system established in these regulations or which go beyond this 
system to require remedial actions which are not required by the Act and 
these regulations. A State may establish or continue in force consumer 
protections, such as warranty or warranty performance requirements, 
which respond to individual consumer complaints and so do not constitute 
systems of enforcement of the Federal standards, regardless of whether 
the State qualifies as an SAA or PIA.
    (d) No State or locality may establish or enforce any rule or 
regulation or take any action that stands as an obstacle to the 
accomplishment and execution of the full purposes and objectives of 
Congress. The test of whether a State rule or action is valid or must 
give way is whether the State rule can be enforced or the action taken 
without impairing the Federal superintendence of the manufactured home 
industry as established by the Act.

[42 FR 2580, Jan. 12, 1977, as amended at 56 FR 65186, Dec. 16, 1991; 61 
FR 10859, Mar. 15, 1996]



Sec. 3282.12  Excluded structures--modular homes.

    (a) The purpose of this section is to provide the certification 
procedure authorized by section 604(h) of the National Manufactured 
Housing Construction and Safety Standards Act under which modular homes 
may be excluded from coverage of the Act if the manufacturer of the 
structure elects to have

[[Page 223]]

them excluded. If a manufacturer wishes to construct a structure that is 
both a manufactured home and a modular home, the manufacturer need not 
make the certification provided for by this section and may meet both 
the Federal manufactured home requirements and any modular housing 
requirements. When the certification is not made, all provisions of the 
Federal requirements shall be met.
    (b) Any structure that meets the definition of manufactured home at 
24 CFR 3282.7(u) is excluded from the coverage of the National 
Manufactured Housing Construction and Safety Standards Act, 42 U.S.C. 
5401 et seq., if the manufacturer certifies as prescribed in paragraph 
(c) of this section that:
    (1) The structure is designed only for erection or installation on a 
site-built permanent foundation;
    (i) A structure meets this criterion if all written materials and 
communications relating to installation of the structure, including but 
not limited to designs, drawings, and installation or erection 
instructions, indicate that the structure is to be installed on a 
permanent foundation.
    (ii) A site-built permanent foundation is a system of supports, 
including piers, either partially or entirely below grade which is:
    (A) Capable of transferring all design loads imposed by or upon the 
structure into soil or bedrock without failure,
    (B) Placed at an adequate depth below grade to prevent frost damage, 
and
    (C) Constructed of concrete, metal, treated lumber or wood, or 
grouted masonry; and
    (2) The structure is not designed to be moved once erected or 
installed on a site-built permanent foundation;
    (i) A structure meets this criterion if all written materials and 
communications relating to erection or installation of the structure, 
including but not limited to designs, drawings, calculations, and 
installation or erection instructions, indicate that the structure is 
not intended to be moved after it is erected or installed and if the 
towing hitch or running gear, which includes axles, brakes, wheels and 
other parts of the chassis that operate only during transportation, are 
removable and designed to be removed prior to erection or installation 
on a site-built permanent foundation; and
    (3) The structure is designed and manufactured to comply with the 
currently effective version of one of the following:
    (i) One of the following nationally recognized building codes:
    (A) That published by Building Officials and Code Administrators 
(BOCA) and the National Fire Protection Association (NFPA) and made up 
of the following:
    (1) BOCA Basic Building Code,
    (2) BOCA Basic Industrialized Dwelling Code,
    (3) BOCA Basic Plumbing Code,
    (4) BOCA Basic Mechanical Code, and
    (5) National Electrical Code, or
    (B) That published by the Southern Building Code Congress (SBCC) and 
the NFPA and made up of the following:
    (1) Standard Building Code,
    (2) Standard Gas Code,
    (3) Standard Mechanical Code,
    (4) Standard Plumbing Code, and
    (5) National Electrical Code, or
    (C) That published by the International Conference of Building 
Officials (ICBO), the International Association of Plumbing and 
Mechanical Officials (IAPMO), and the NFPA and made up of the following:
    (1) Uniform Building Code,
    (2) Uniform Mechanical Code,
    (3) Uniform Plumbing Code, and
    (4) National Electrical Code or
    (D) The codes included in paragraphs (b)(3)(i)(A), (B), or (C) in 
connection with the One- and Two-Family Dwelling Code, or
    (E) Any combination of the codes included in paragraphs 
(b)(3)(i)(A), (B), (C), and (D), that is approved by the Secretary, 
including combinations using the National Standard Plumbing Code 
published by the National Association of Plumbing, Heating and Cooling 
Contractors (PHCC), or
    (F) Any other building code accepted by the Secretary as a 
nationally recognized model building code, or
    (ii) Any local code or State or local modular building code accepted 
as generally equivalent to the codes included under paragraph (b)(3)(i), 
(the Secretary will consider the manufacturer's certification under 
paragraph (c) of

[[Page 224]]

this section to constitute a certification that the code to which the 
structure is built is generally equivalent to the referenced codes. This 
certification of equivalency is subject to the provisions of paragraph 
(f) of this section) or
    (iii) The minimum property standards adopted by the Secretary 
pursuant to title II of the National Housing Act; and
    (4) To the manufacturer's knowledge, the structure is not intended 
to be used other than on a site-built permanent foundation.
    (c) When a manufacturer makes a certification provided for under 
paragraph (b) of this section, the certification shall state as follows:

    The manufacturer of this structure, Name --------------------; 
Address --------------------; (location where structure was 
manufactured).

    Certifies that this structure (Ser. No. --------) is not a 
manufactured home subject to the provisions of the National Manufactured 
Housing Construction and Safety Standards Act and is--
    (1) designed only for erection or installation on a site-built 
permanent foundation,
    (2) not designed to be moved once so erected or installed,
    (3) designed and manufactured to comply with -------------- (Here 
state which code included in paragraph (b)(3) of this section has been 
followed), and
    (4) to the manufacturer's knowledge is not intended to be used other 
than on a site-built permanent foundation.

    (d) This certification shall be affixed in a permanent manner near 
the electrical panel, on the inside of a kitchen cabinet door, or in any 
other readily accessible and visible location.
    (e) As part of this certification, the manufacturer shall identify 
each certified structure by a permanent serial number placed on the 
structure during the first stage of production. If the manufacturer also 
manufactures manufactured homes that are certified under Sec. Sec. 
3282.205 and 3282.362(c), the series of serial numbers for structures 
certified under this section shall be distinguishable on the structures 
and in the manufacturer's records from the series of serial numbers for 
the manufactured homes that are certified under Sec. Sec. 3282.205 and 
3282.362(c).
    (1) If a manufacturer wishes to certify a structure as a 
manufactured home under Sec. Sec. 3282.205 and 3282.362(c) after having 
applied a serial number identifying it as exempted under this section, 
the manufacturer may do so only with the written consent of the 
Production Inspection Primary Inspection Agency (IPIA) after thorough 
inspection of the structure by the IPIA at at least one stage of 
production and such removal or equipment, components, or materials as 
the IPIA may require to perform inspections to assure that the structure 
conforms to the Federal manufactured home standards. The manufacturer 
shall remove the original serial number and add the serial number 
required by Sec. 3280.6.
    (2) A manufacturer may not certify a structure under this section 
after having applied the manufactured home serial number under Sec. 
3280.6.
    (f) All certifications made under this section are subject to 
investigation by the Secretary to determine their accuracy. If a 
certification is false or inaccurate, the certification for purposes of 
this section is invalid and the structures that have been or may be the 
subject of the certification are not excluded from the coverage of the 
Act, the Federal Manufactured Home Construction and Safety Standards, or 
these Regulations.
    (1) If the Secretary has information that a certification may be 
false or inaccurate, the manufacturer will be given written notice of 
the nature of this information by certified mail and the procedure of 
this subparagraph will be followed.
    (i) The manufacturer must investigate this matter and report its 
findings in writing as to the validity of this information to the 
Secretary within 15 days from the receipt of the Secretary's notice.
    (ii) If a written report is received within the time prescribed in 
paragraph (f)(1)(i) of this section, the Secretary will review this 
report before determining whether a certification is false or 
inaccurate. If a report is not received within 15 days from the receipt 
of the Secretary's notice, the Secretary will make the determination on 
the basis of the information presented.

[[Page 225]]

    (iii) If the Secretary determines that a certification is false or 
inaccurate, the manufacturer will be given written notice and the 
reasons for this determination by certified mail.
    (2) The Secretary may seek civil and criminal penalties provided for 
in section 611 of the Act, 42 U.S.C. 5410, if the party in question in 
the exercise of due care has reason to know that such certification is 
false or misleading as to any material fact.

[44 FR 68733, Nov. 29, 1979, as amended at 49 FR 10666, Mar. 22, 1984]



Sec. 3282.13  Voluntary certification.

    (a) The purpose of this section is to provide a procedure for 
voluntary certification of non-conforming manufactured homes as required 
by 42 U.S.C. 5402(6) as amended by section 308(d)(B) of the Housing and 
Community Development Act of 1980.
    (b) Structures which meet all of the requirements of a manufactured 
home as set out in Sec. 3282.7(u), except the size requirements, shall 
be manufactured homes if the manufacturer files with the Secretary a 
certification in the following form:

    [Name of manufacturer and address where structures are to be 
manufactured] certifies that it intends to manufacture structures that 
meet all of the requirements of manufactured homes set forth at 42 
U.S.C. 5402(6) except the size requirements. Such structures are to be 
treated as manufactured homes for the purposes of the National 
Manufactured Housing Construction and Safety Standards Act of 1974 and 
the regulations promulgated pursuant thereto. Such structures will be 
built in conformance with the Standards. [Name of manufacturer] further 
certifies that if, at any time it manufactures structures which are not 
manufactured homes, it will identify each such structure by a permanent 
serial number placed on the structure during the first stage of 
production and that the series of serial numbers for such structures 
shall be distinguishable on the structures and in its records from the 
series of serial numbers used for manufactured homes.

    (c) Whenever a manufacturer which has filed a certification pursuant 
to Sec. 3282.13(b) produces structures which are not manufactured 
homes, it must identify each such structure by placing a permanent 
serial number on the structure during the first stage of production. The 
series of serial numbers placed on these structures shall be 
distinguishable on the structure and in the manufacturer's records from 
the series of serial numbers used for manufactured homes.
    (d) A manufacturer may certify a structure as a manufactured home 
after having applied a serial number identifying it as a structure which 
is not a manufactured home. To do so, the manufacturer must secure the 
written consent of the IPIA. This consent may only be given after a 
DAPIA has approved the manufacturer's design and quality assistance 
manual in accordance with Sec. 3282.361, and after the IPIA has 
thoroughly inspected the structure in at least one stage of production 
and after such removal of equipment, components or materials as the IPIA 
may require to assure that the structure conforms to the standards. 
After certification as a manufactured home has been approved, the 
manufacturer shall remove the original serial number and add the serial 
number required by Sec. 3280.6.
    (e) Once a manufacturer has certified under Sec. 3282.13(b) that it 
intends to build structures which are manufactured homes in all respects 
except size, the manufacturer must then, with respect to those 
structures, comply with all of the requirements of the Act and its 
regulations. The structures may not thereafter be exempted under any 
other section of these regulations.

[47 FR 28093, June 29, 1982]



Sec. 3282.14  Alternative construction of manufactured homes.

    (a) Policy. In order to promote the purposes of the Act, the 
Department will permit the sale or lease of one or more manufactured 
homes not in compliance with the Standards under circumstances wherein 
no affirmative action is needed to protect the public interest. The 
Department encourages innovation and the use of new technology in 
manufactured homes. Accordingly, HUD will permit manufacturers to 
utilize new designs or techniques not in compliance with the Standards 
in cases:
    (1) Where a manufacturer proposes to utilize construction that would 
be prohibited by the Standards;

[[Page 226]]

    (2) Where such construction would provide performance that is 
equivalent to or superior to that required by the Standards; and
    (3) Where (i) compliance with the Standards would be unreasonable 
because of the circumstances of the particular case, or (ii) the 
alternative construction would be for purposes of research, testing or 
development of new techniques or designs. If a request for alternative 
construction is submitted and the facts are consistent with these 
principles, the Secretary may issue a letter under paragraph (c) of this 
section stating that no action will be taken under the Act based upon 
specific failures to conform to the Standards or these regulations, 
provided that certain conditions are met. The issuance of a letter under 
paragraph (c) of this section will not affect any right that any 
purchaser may have under the Act or other applicable law and will not 
preclude any further agency action that may become necessary.
    (b) Request for alternative construction. A manufacturer may submit 
a request for alternative construction of a manufactured home. The 
request should be sent to the U.S. Department of Housing and Urban 
Development, Manufactured Housing Standards Division, 451 Seventh 
Street, SW., Washington, DC 20410. The request must include:
    (1) A copy of the manufactured design or plan for each nonconforming 
model which a manufacturer plans to build;
    (2) An explanation of the manner in which the design fails to 
conform with the Standards, including a list of the specific standards 
involved;
    (3) An explanation of how the design will result in homes that 
provide the same level of performance, quality, durability and safety as 
would be provided under the Standards;
    (4) A copy of data adequate to support the request, including 
applicable test data, engineering calculations or certifications from 
nationally recognized laboratories;
    (5) An estimate of the maximum number of manufactured home units 
affected and the location, if known, to which the units will be shipped;
    (6) An indication of the period of time during which the 
manufacturer proposes to engage in the manufacture, sale or lease of the 
nonconforming homes;
    (7) A copy of the proposed notice to be provided to home purchasers;
    (8) A list of the names and addresses of any dealers that would be 
selling the nonconforming homes; and
    (9) A letter from the manufacturer's DAPIA indicating that the 
design(s) to which any nonconforming homes would be built meet the 
Standards in all other respects.
    (c) Issuance of the letter by the Secretary--(1) Contents of the 
letter. If the Secretary issues a letter in response to a request for 
alternative construction, the letter shall include the specific 
standards affected, an explanation of the proposed activity or design, 
an explanation of how the request is consistent with the objectives of 
the Act, and any conditions that the manufacturer must meet.
    (2) Letter sent to IPIA, DAPIA and SAA. The Secretary shall forward 
a copy of the letter to the manufacturer's IPIA and DAPIA along with a 
letter authorizing the DAPIA to approve plans containing the alternative 
construction, and authorizing the IPIA to permit use of the alternative 
construction, provided that the conditions set forth in the letter are 
met. The Secretary shall also forward a copy of the letter to the SAAs 
in the State of manufacture and the State(s) in which the homes are to 
be located, if known.
    (3) Alternative construction in additional models. In cases where 
the Secretary grants a letter under this paragraph that is not model-
specific, the Secretary may permit the manufacturer to include the 
alternative construction in additional models. In such cases, the DAPIA 
shall notify the Department of additional models that incorporate the 
alternative construction.
    (d) Revocation. The Secretary may revoke or amend a letter issued 
under paragraph (c) of this section at any time. Such revocation or 
amendment will be prospective only. Where manufacturers have requested 
alternative construction for research, testing or development such 
alternative construction may not achieve the anticipated results. 
Therefore, the Secretary may require a manufacturer to bring

[[Page 227]]

those homes into compliance with the standards if, after the alternative 
construction has been in use for a period of time specified by the 
Secretary, these homes are not, in the Secretary's judgment, providing 
the levels of safety, quality and durability which would have been 
provided had the homes been built in compliance with the Standards.
    (e) Notice to prospective purchasers. Manufacturers receiving 
letters under paragraph (c) of this section shall provide notice to 
prospective purchasers that the home does not conform to the Standards. 
Such notice shall be delivered to each prospective purchase before he or 
she enters into an agreement to purchase the home. The notice shall be 
in the following form or in such other form as may be approved by the 
Secretary:

                          Notice to Purchasers

    The Department of Housing and Urban Development has issued a letter 
to (Name of Manufacturer) concerning the homes in (location if known). 
As designed, the homes do not meet Federal Manufactured Home 
Construction and Safety Standards regarding (brief statement of 
manufacturer's nonconformance).
    HUD has evaluated the alternative construction and believes that it 
provides an equivalent level of quality, durability and safety to that 
provided by the Standards.
    For further information about the specific Federal Standards 
involved, a copy of the letter issued pursuant to 24 CFR 3282.14(c) is 
available from this dealer or manufacturer upon request.

    (f) Serial numbers of homes constructed using alternative 
construction. Manufacturers shall provide the Department with the serial 
numbers assigned to each home produced in conformance with the letter 
issued under paragraph (c) of this section within 90 days of their date 
of manufacture. Each serial number shall include the letters ``AC'' to 
indicate that the homes was produced under alternative construction 
procedures.

[49 FR 1967, Jan. 16, 1984]



                       Subpart B_Formal Procedures



Sec. 3282.51  Scope.

    This subpart contains rules of procedure generally applicable to the 
transaction of official business under the National Manufactured Housing 
Construction and Safety Standards Act, including the rules governing 
public availability of information.



Sec. 3282.52  Address of communications.

    Unless otherwise specified, communications shall be addressed to the 
Director, Manufactured Housing Standards Division, Department of Housing 
and Urban Development, 451 Seventh Street, SW., Washington, DC 20410.



Sec. 3282.53  Service of process on foreign manufacturers and importers.

    The designation of an agent required by section 612(e) of the Act, 
42 U.S.C. 5411(e), shall be in writing, dated, and signed by the 
manufacturer and the designated agent.

[61 FR 10860, Mar. 15, 1996]



Sec. 3282.54  Public information.

    (a) General. Subject to the provisions of 24 CFR part 15 covering 
the production or disclosure of material or information and the 
provisions of 24 CFR part 16 at 40 FR 39729 relating to the Privacy Act, 
and except as otherwise provided by paragraphs (b), (c), (d), and (e) of 
this section, the Secretary may make available to the public:
    (1) Any information which may indicate the existence of an imminent 
safety hazard, and
    (2) Any information which may indicate the failure of a manufactured 
home to comply with applicable manufactured home construction and safety 
standards, and
    (3) Such other information as the Secretary determines is necessary 
to carry out the Secretary's functions under the Act.
    (b) Protected information. Data and information submitted or 
otherwise provided to the Secretary or an agent of the Secretary or a 
PIA or SAA which fall within the definitions of a trade secret or 
confidential commercial or financial information are exempt from 
disclosure under this section, only if

[[Page 228]]

the party submitting or providing the information so requests under 
paragraph (c) of this section. However, the Secretary may disclose such 
information to any person requesting it after deletion of the portions 
which are exempt, or in such combined or summary form as does not 
disclose the portions which are exempt from disclosure or in its 
entirety in accordance with section 614 of the Act, U.S.C. 5413.
    (c) Obtaining exemption. Any party submitting any information to the 
Secretary in any form under this part, or otherwise in relation to the 
program established by the Act shall, if the party desires the 
information to be exempt from disclosure, at the time of submittal of 
the information or at any time thereafter, request that the information 
or any part thereof be protected from disclosure. The request for 
nondisclosure shall include the basis for the request under the Act or 
other authority and complete justification supporting the claim that the 
material should be exempt from disclosure. The request should also 
include a statement of the information in such combined or summary form 
that alleged trade secrets or other protected information and the 
identity of the submitting party would not be disclosed. This request 
need not be made with respect to information which was submitted to the 
Secretary, an SAA or a PIA prior to the effective date of these 
regulations.
    (d) Request for information from PIAs or SAAs. Whenever a PIA or SAA 
receives requests for disclosure of information, it shall disclose the 
information unless the party from which the information was originally 
obtained has submitted to the PIA or SAA a request that the information 
not be disclosed under paragraph (c) of this section, except that the 
PIA or SAA shall be governed by the provisions of 24 CFR part 16 (40 FR 
39729) relating to the Privacy Act which may limit the disclosure of 
information. If a request for nondisclosure under paragraph (c) of this 
section has been received with respect to information whose disclosure 
is requested, the PIA or SAA shall refer the matter to the Secretary 
within 5 days of the request for disclosure. If a PIA or SAA receives a 
request for disclosure of information related to this program, which 
information was submitted to the PIA or SAA prior to the effective date 
of these regulations, the PIA or SAA shall refer the request for 
nondisclosure and required information to the Secretary.

[41 FR 19852, May 13, 1976, as amended at 61 FR 10860, Mar. 15, 1996]



                Subpart C_Rules and Rulemaking Procedures



Sec. 3282.101  Generally.

    Procedures that apply to the formulation, issuance, amendment, and 
revocation of rules pursuant to the Act are governed by the Act, the 
Administrative Procedure Act, 5 U.S.C. 551 et seq., and part 10 of this 
title, except that the Secretary shall respond to a petition for 
rulemaking by an interested party within 180 days of receipt of the 
petition.

[61 FR 10860, Mar. 15, 1996]



Sec. 3282.111  Petitions for reconsideration of final rules.

    (a) Definition. A petition for reconsideration of a final rule 
issued by the Secretary is a request in writing from any interested 
person which must be received not later than 60 days after publication 
of the rule in the Federal Register. The petition shall state that it is 
a petition for reconsideration of a final rule, and shall contain an 
explanation as to why compliance with the rule is not practicable, is 
unreasonable, or is not in the public interest. If the petitioner 
requests the consideration of additional facts, the petitioner shall 
state the reason they were not presented to be treated as petitions for 
rulemaking.
    (b) Proceedings on petitions for reconsideration. The Secretary may 
grant or deny, in whole or in part, any petition for reconsideration 
without further proceedings. The Secretary may issue a final decision on 
reconsideration without further proceeding, or may provide such 
opportunity to submit comments or information and data as the Secretary 
deems appropriate.
    (c) Unless the Secretary determines otherwise, the filing of a 
petition under

[[Page 229]]

this section does not stay the effectiveness of the rule in question.
    (d) Any party seeking to challenge any rule or regulation issued 
under the Act, except orders issued under section 604 42 U.S.C. 5403, if 
the challenge is brought before the expiration of the 60 day period set 
out in paragraph (a) of this section, shall file a timely petition for 
reconsideration under this section prior to seeking any other remedy.



Sec. 3282.113  Interpretative bulletins.

    When appropriate, the Secretary shall issue interpretative bulletins 
interpreting the standards under the authority of Sec. 3280.9 of this 
chapter or interpreting the provisions of this part. Issuance of 
interpretative bulletins shall be treated as rulemaking under this 
subpart C unless the Secretary deems such treatment not to be in the 
public interest and the interpretation is not otherwise required to be 
treated as rulemaking. All interpretative bulletins shall be indexed and 
made available to the public at the Manufactured Housing Standards 
Division and a copy of the index shall be published periodically in the 
Federal Register.

[61 FR 10860, Mar. 15, 1996]



   Subpart D_Informal and Formal Presentations of Views, Hearings and 
                             Investigations



Sec. 3282.151  Applicability and scope.

    (a) This subpart sets out procedures to be followed when an 
opportunity to present views provided for in the Act is requested by an 
appropriate party. Section 3282.152 provides for two types of procedures 
that may be followed, one informal and nonadversary, and one more formal 
and adversary. Section 3282.152 also sets out criteria to govern which 
type of procedure will be followed in particular cases.
    (b) The procedures of Sec. 3282.152 also apply to:
    (1) Proceedings held by the Secretary whenever the suspension or 
disqualification of a primary inspection agency, which has been granted 
final approval, is recommended under Sec. 3282.356 of these 
regulations, and
    (2) Resolution of disputes where an SAA or manufacturer disagrees 
with a determination of a DAPIA under Sec. 3282.361 that a manufactured 
home design does or does not conform to the standards or that a quality 
assurance manual is or is not adequate with a decision by an IPIA to red 
tag or not to red tag or to provide or not to provide a certification 
label for a manufactured home under Sec. 3282.362 when the IPIA 
believes that the manufactured home does or does not conform to the 
standards.
    (c) The procedures set out in Sec. 3282.152 shall also be followed 
whenever State Administrative Agencies hold Formal or Informal 
Presentations of Views under Sec. 3282.309.
    (d) To the extent that these regulations provide for Formal or 
Informal Presentations of Views for parties that would otherwise qualify 
for hearings under 2 CFR part 2424, the procedures of 2 CFR part 2424 
shall not be available and shall not apply.

[41 FR 19852, May 13, 1976, as amended at 51 FR 34467, Sept. 29, 1986; 
61 FR 10442, Mar. 13, 1996; 72 FR 73497, Dec. 27, 2007]



Sec. 3282.152  Procedures to present views and evidence.

    (a) Policy. All Formal and Informal Presentations of Views under 
this subpart shall be public, unless, for good cause, the Secretary 
determines it is in the public interest that a particular proceeding 
should be closed. If the Secretary determines that a proceeding should 
be closed, the Secretary shall state and make publicly available the 
basis for that determination.
    (b) Request. Upon receipt of a request to present views and evidence 
under the Act, the Secretary shall determine whether the proceeding will 
be a Formal or an Informal Presentation of Views, and shall issue a 
notice under paragraph (c) of this section.
    (c) Notice. When the Secretary decides to conduct a Formal or an 
Informal Presentation of Views under this section, the Secretary shall 
provide notice as follows:
    (1) Except where the need for swift resolution of the question 
involved prohibits it, notice of a proceeding hereunder shall be 
published in the Federal Register at least 10 days prior to the date of 
the proceeding. In any case, notice shall be provided to interested

[[Page 230]]

persons to the maximum extent practicable. Direct notice shall be sent 
by certified mail to the parties involved in the hearing.
    (2) The notice, whether published or mailed, shall include a 
statement of the time, place and nature of the proceeding; reference to 
the authority under which the proceeding will be held; a statement of 
the subject matter of the proceeding, the parties and issues involved; 
and a statement of the manner in which interested persons shall be 
afforded the opportunity to participate in the hearing.
    (3) The notice shall designate the official who shall be the 
presiding officer for the proceedings and to whom all inquiries should 
be directed concerning such proceedings.
    (4) The notice shall state whether the proceeding shall be held in 
accordance with the provisions of paragraph (f)--(Informal Presentation 
of Views) or paragraph (g)--(Formal Presentation of Views) of this 
section, except that when the Secretary makes the determinations 
provided for in sections 623 (d) and (f) of the Act, the requirements of 
paragraph (g) of this section shall apply. In determining whether the 
requirements of paragraph (f) or those of paragraph (g) of this section 
shall apply the Secretary shall consider the following:
    (i) The necessity for expeditious action;
    (ii) The risk of injury to affected members of the public;
    (iii) The economic consequences of the decisions to be rendered; and
    (iv) Such other factors as the Secretary determines are appropriate.
    (d) Department representative. If the Department is to be 
represented by Counsel, such representation shall be by a Department 
hearing attorney designated by the General Counsel.
    (e) Reporting and transcription. Oral proceedings shall be 
stenographically or mechanically reported and transcribed under the 
supervision of the presiding officer, unless the presiding officer and 
the parties otherwise agree, in which case a summary approved by the 
presiding officer shall be kept. The original transcript or summary 
shall be a part of the record and the sole official transcript, or 
summary. A copy of the transcript or summary shall be available to any 
person at a fee established by the Secretary, which fee the Secretary 
may waive in the public interest. Any information contained in the 
transcript or summary which would be exempt from required disclosure 
under Sec. 3282.54 of these regulations may be protected from 
disclosure if appropriate under that section upon a request for such 
protection under Sec. 3282.54(c).
    (f) Informal presentation of views. (1) An Informal Presentation of 
Views may be written or oral, and may include an opportunity for an oral 
presentation, whether requested or not, whenever the Secretary concludes 
that an oral presentation would be in the public interest, and so states 
in the notice. A presiding officer shall preside over all oral 
presentations held under this subsection. The purpose of any such 
presentation shall be to gather information to allow fully informed 
decision making. Informal Presentations of Views shall not be adversary 
proceedings. Oral presentations shall be conducted in an informal but 
orderly manner. The presiding officer shall have the duty and authority 
to conduct a fair proceeding, to take all necessary action to avoid 
delay, and to maintain order. In the absence of extraordinary 
circumstances, the presiding officer at an oral Informal Presentation of 
Views shall not require that testimony be given under an oath or 
affirmation, and shall not permit either cross-examination of witnesses 
by other witnesses or their representatives, or the presentation of 
rebuttal testimony by persons who have already testified. The rules of 
evidence prevailing in courts of law or equity shall not control the 
conduct of oral Informal Presentations of Views.
    (2) Within 10 days after an Informal Presentation of Views, the 
presiding officer shall refer to the Secretary all documentary evidence 
submitted, the transcript, if any, a summary of the issues involved and 
information presented in the Informal Presentation of Views and the 
presiding official's recommendations, with the rationale therefor. The 
presiding officer shall

[[Page 231]]

make any appropriate statements concerning the apparent veracity of 
witnesses or the validity of factual assertions which may be within the 
competence of the presiding officer. The Secretary shall issue a Final 
Determination concerning the matters at issue within 30 days of receipt 
of the presiding officer's summary. The Final Determination shall 
include:
    (i) A statement of findings, with specific references to principal 
supporting items of evidence in the record and conclusions, as well as 
the reasons or bases therefor, upon all of the material issues of fact, 
law, or discretion as presented on the record, and
    (ii) An appropriate order. Notice of the Final Determination shall 
be given in writing and transmitted by certified mail, return receipt 
requested, to all participants in the presentation of views. The Final 
Determination shall be conclusive, with respect to persons whose 
interests were represented.
    (g) Formal presentation of views. (1) A Formal Presentation of Views 
is an adversary proceeding and includes an opportunity for the oral 
presentation of evidence. All witnesses shall testify under oath or 
affirmation, which shall be administered by the presiding officer. 
Participants shall have the right to present such oral or documentary 
evidence and to conduct such cross-examination as the presiding officer 
determines is required for a full and true disclosure of facts. The 
presiding officer shall receive relevant and material evidence, rule 
upon offers of proof and exclude all irrelevant, immaterial or unduly 
repetitious evidence. However, the technicalities of the rules of 
evidence prevailing in courts of law or equity shall not control the 
conduct of a Formal Presentation of Views. The presiding officer shall 
take all necessary action to regulate the course of the Formal 
Presentation of Views to avoid delay and to maintain order. The 
presiding officer may exclude the attorney or witness from further 
participation in the particular Formal Presentation of Views and may 
render a decision adverse to the interests of the excluded party in his 
absence.
    (2) Decision. The presiding officer shall make and file an initial 
written decision on the matter in question. The decision shall be filed 
within 10 days after completion of the oral presentation. The decision 
shall include:
    (i) A statement of findings of fact, with specific references to 
principal supporting items of evidence in the record and conclusions, as 
well as the reasons or bases therefor, upon all of the material issues 
of law or discretion presented on the record, and
    (ii) An appropriate order.

The presiding officer's decision shall be final and shall constitute the 
Final Determination of the Secretary unless reversed or modified within 
30 days by the Secretary. Notice of the Final Determination shall be 
given in writing, and transmitted by registered or certified mail, 
return receipt requested, to all participants in the proceeding. The 
Final Determination shall be conclusive with respect to persons whose 
interests were represented.

[41 FR 19852, May 13, 1976, as amended at 51 FR 34467, Sept. 29, 1986]



Sec. 3282.153  Public participation in formal or informal presentation
of views.

    (a) Any interested persons may participate, in writing, in any 
Formal or Informal Presentation of Views held under the provisions of 
paragraph (f) or (g) of Sec. 3282.152. The presiding officer shall, to 
the extent practicable, consider any such written materials.
    (b) Any interested person may participate in the oral portion of any 
Formal or Informal Presentation of Views held under paragraphs (f) and 
(g) of Sec. 3282.152 unless the presiding officer determines that 
participation should be limited or barred so as not unduly to prejudice 
the rights of the parties directly involved or unnecessarily to delay 
the proceedings.

[51 FR 34468, Sept. 29, 1986]



Sec. 3282.154  Petitions for formal or informal presentations of views,
and requests for extraordinary interim relief.

    Any person entitled to a Formal or an Informal Presentation of Views 
under paragraph (f) or paragraph (g) of Sec. 3282.152 in order to 
address issues as provided for in Sec. 3282.151(a) may petition the 
Secretary to initiate such a Presentation of Views. The petition

[[Page 232]]

may be accompanied by a request that the Secretary provide appropriate 
interim relief pending the issuance of the final determination or 
decision. No interim relief will be granted unless there is a showing of 
extraordinary cause. Upon receipt of a petition, the Secretary shall 
grant the petition and issue the notice provided for in Sec. 
3282.152(b) for Formal or Informal Presentation of Views, and may grant, 
deny or defer decision on any request for interim relief.

[51 FR 34468, Sept. 29, 1986]



Sec. 3282.155  Investigations.

    The procedures for investigations and investigational proceedings 
are set forth in part 3800 of this chapter.

[61 FR 10442, Mar. 13, 1996]



Sec. 3282.156  Petitions for investigations.

    (a) Any person may petition the Secretary in writing to open an 
investigation into whether noncompliances, defects, serious defects, or 
imminent safety hazards exist in manufactured homes. A petition shall 
include the reasons that the petitioner believes warrant an 
investigation, and it shall state any steps which have previously been 
taken to remedy the situation. The petition shall include all 
information known to the petitioner concerning the identity of 
manufactured homes which may be affected and where those manufactured 
homes were manufactured. The Secretary shall respond to petitions 
concerning alleged imminent safety hazards and serious defects within 60 
days and to petitions alleging the existence of defects or 
noncompliances within 120 days.
    (b) Any person may petition the Secretary in writing to undertake an 
investigation for the purpose of determining whether a primary 
inspection agency should be disqualified. The petition shall set out all 
facts and information on which the petition is based and a detailed 
statement of why such information justifies disqualification. The 
Secretary shall consider such petitions when making determinations on 
final acceptance and continued acceptance. The Secretary shall respond 
to such petition within 120 days.



    Subpart E_Manufacturer Inspection and Certification Requirements



Sec. 3282.201  Scope and purpose.

    (a) This subpart sets out requirements which must be met by 
manufacturers of manufactured homes for sale to purchasers in the United 
States with respect to certification of manufactured home designs, 
inspection of designs, quality assurance programs, and manufactured home 
production, and certification of manufactured homes. Other than 
references and a general description of responsibilities, this subpart 
does not set out requirements with respect to remedial actions or 
reports which must be taken or filed under the Act and these 
regulations.
    (b) The purpose of this subpart is to require manufacturers to 
participate in a system of design approvals and inspections which serve 
to assist them in assuring that manufactured homes which they 
manufacture will conform to Federal standards. Such approvals and 
inspections provide significant protection to the public by decreasing 
the number of manufactured homes with possible defects in them, and 
provide protection to manufacturers by reducing the number of instances 
in which costly remedial actions must be undertaken after manufactured 
homes are sold.



Sec. 3282.202  Primary inspection agency contracts.

    Each manufacturer shall enter into a contract or other agreement 
with as many Design Inspection Primary Inspection Agencies (DAPIAs) as 
it wishes and with enough Production Inspection Primary Inspection 
Agencies (IPIAs) to provide IPIA services for each manufacturing plant 
as set out in this subpart and in subpart H of this part. In return for 
the services provided by the DAPIAs and IPIAs, each manufacturer shall 
pay such reasonable fees as are agreed upon between the manufacturer and 
the primary inspection agency or, in the case of a State acting as an 
exclusive IPIA under Sec. 3282.3 such fees as may be established by the 
State.

[[Page 233]]



Sec. 3282.203  DAPIA services.

    (a) Each manufacturer shall have each manufactured home design and 
each quality assurance manual which it intends to follow approved by a 
DAPIA under Sec. 3282.361. The manufacturer is free to choose which 
DAPIA will evaluate and approve its designs and quality assurance 
materials manufacturer may obtain design and quality assurance manual 
approval from a single DAPIA regardless of the number of plants in which 
the design and quality assurance manual will be followed. A manufacturer 
may also obtain approval for the same design and quality assurance 
manual from more than one DAPIA. The choice of which DAPIA or DAPIAs to 
employ is left to the manufacturer.
    (b) The manufacturer shall submit to the DAPIA such information as 
the DAPIA may require in order to carry out design approvals. This 
information shall, except where the manufacturer demonstrates to the 
DAPIA that it is not necessary, include the following:
    (1) Construction drawings and/or specifications showing structural 
details and layouts of frames, floors, walls and roofs, and chassis; 
material specifications, framing details, door locations, etc., for each 
floor plan proposed to be manufactured,
    (2) Structural analysis and calculations, test data and/or other 
accepted engineering practices used by the manufacturer to validate the 
design,
    (3) Complete heat loss calculations for each significant variation 
of home design,
    (4) Floor plans showing room arrangement and sizes, window sizes, 
emergency exists and locations, locations of smoke alarms, fixed 
appliance range hoods, and other standards related aspects of the 
manufactured home that can be shown on the floor plans,
    (5) Diagrams of the fuel supply system, potable water system and 
drain, waste and vent systems. The diagrams shall specify the types of 
materials used, types of fittings and methods of installing required 
safety equipment,
    (6) Wiring diagrams, including circuit allocation of electrical load 
and branch circuit calculations, a table of the branch circuit 
protection provided, the type of wiring used, and wiring methods,
    (7) Details showing the design of air supply and return systems,
    (8) Details of chassis construction, components, connections and 
running gear including rating capacities of tires,
    (9) A list of fixed and portable appliances furnished with the 
manufactured home, including type of appliance, rating of appliance, and 
applicable minimum and maximum performance ratings and/or energy 
requirements,
    (10) Detailed manufacturer installation instructions including 
specifications and procedures for the erection and hook-up of the home 
at its permanent location, and
    (11) Reports of all tests that were run to validate the conformance 
of the design to the standards.
    (c) The manufacturer shall submit to the DAPIA such information as 
the DAPIA may require in order to carry out quality assurance manual 
approvals. At a minimum, this information shall include the quality 
assurance manual for which approval is sought. That manual shall include 
the manufacturer's quality assurance program, an organizational chart 
showing the accountability, by position, of the manufacturer's quality 
control personnel, a description of production tests and test equipment 
required for compliance with the standards, a station-by-station 
description of the manufacturing process, a list of quality control 
inspections required by the manufacturer at each station, and 
identification by title of each person who will be held accountable for 
each quality control inspection.
    (d) Manufacturers may be required to furnish supplementary 
information to the DAPIA if the design information or the quality 
assurance manual is not complete or if any information is not in 
accordance with accepted engineering practice.
    (e) When a manufacturer wishes to make a change in an approved 
design or quality assurance manual, the manufacturer shall obtain the 
approval of the DAPIA which approved the design or manual prior to 
production for sale. The procedures for obtaining such approval are set 
out in Sec. 3282.361.

[[Page 234]]

    (f) The information to be submitted to a DAPIA under Sec. 3282.203 
(b) and (c) may be prepared by the manufacturer's staff or outside 
consultants, including other DAPIAs. However, a DAPIA may not perform 
design or quality assurance manual approvals for any manufacturer whose 
design or manual has been created or prepared in whole or in part by 
members of the DAPIA's organization or of any affiliated organization.
    (g) Each manufacturer shall maintain a copy of the drawings, 
specifications, and sketches from each approved design received from a 
DAPIA under Sec. 3282.361(b)(4) in each plant in which manufactured 
homes are being produced to the design. Each manufacturer shall also 
maintain in each manufacturing plant a copy of the approved quality 
assurance manual received from a DAPIA under Sec. 3282.361(c)(3) that 
is being followed in the plant. These materials shall be kept current 
and shall be readily accessible for use by the Secretary or other 
parties acting under these regulations.

[41 FR 19852, May 13, 1976, as amended at 67 FR 12818, Mar. 19, 2002]



Sec. 3282.204  IPIA services.

    (a) Each manufacturer shall obtain the services of an IPIA as set 
out in Sec. 3282.362 for each manufacturing plant operated by the 
manufacturer.
    (b) The manufacturer shall make available to the IPIA operating in 
each of its plants a copy of the drawings and specifications from the 
DAPIA approved design and the quality assurance manual for that plant, 
and the IPIA shall perform an initial factory inspection as set out in 
Sec. 3282.362(b). If the IPIA issues a deviation report after the 
initial factory inspection, the manufacturer shall make any corrections 
or adjustments which are necessary to conform with the DAPIA approved 
designs and manuals. After the corrections required by the deviation 
report are completed to the satisfaction of the IPIA, the IPIA shall 
issue the certification report as described in Sec. 3282.362(b)(2). In 
certain instances a DAPIA may provide the certification report. (See 
Sec. 3282.362) The manufacturer shall maintain a current copy of each 
certification report in the plant to which the certification report 
relates.
    (c) After the certification report has been signed by the IPIA, the 
manufacturer shall obtain labels from the IPIA and shall affix them to 
completed manufactured homes as set out in Sec. 3282.362(c)(2). During 
the initial factory certification, the IPIA may apply labels to 
manufactured homes which it knows to be in compliance with the standards 
if it is performing complete inspections of all phases of production of 
each manufactured home and the manufacturer authorizes it to apply 
labels.
    (d) During the course of production the manufacturer shall maintain 
a complete set of approved drawings, specifications, and approved design 
changes for the use of the IPIA's inspector and always available to that 
inspector when in the manufacturing plant.
    (e) If, during the course of production, an IPIA finds that a 
failure to conform to a standard exists in a manufactured home in 
production, the manufacturer shall correct the failure to confirm in any 
manufactured homes still in the factory and held by distributors or 
dealers and shall carry out remedial actions under Sec. Sec. 3282.404 
and 3282.405 with respect to any other manufactured homes which may 
contain the same failure to conform.



Sec. 3282.205  Certification requirements.

    (a) Every manufacturer shall make a record of the serial number of 
each manufactured home produced, and a duly authorized representative of 
the manufacturer shall certify that each manufactured home has been 
constructed in accordance with the Federal standards. The manufacturer 
shall furnish a copy of that certification to the IPIA for the purpose 
of determining which manufactured homes are subject to the notification 
and correction requirements of subpart I of this part.
    (b) Every manufacturer of manufactured homes shall certify on the 
data plate as set out in Sec. 3280.5 of chapter XX of 24 CFR and Sec. 
3282.362(c)(3) that the manufactured home is designed to comply with the 
Federal manufactured

[[Page 235]]

home construction and safety standards in force at the time of 
manufacture in addition to providing other information required to be 
completed on the data plate.
    (c) Every manufacturer of manufactured homes shall furnish to the 
dealer or distributor of each of its manufactured homes a certification 
that such manufactured home, to the best of the manufacturer's knowledge 
and belief, conforms to all applicable Federal construction and safety 
standards. This certification shall be in the form of the label provided 
by the IPIA under Sec. 3282.362(c)(2). The label shall be affixed only 
at the end of the last stage of production of the manufactured home.
    (d) The manufacturer shall apply a label required or allowed by the 
regulations in this part only to a manufactured home that the 
manufacturer knows by its inspections to be in compliance with the 
standards.

[41 FR 19852, May 13, 1976, as amended at 41 FR 24970, June 21, 1976; 61 
FR 10860, Mar. 15, 1996]



Sec. 3282.206  Disagreement with IPIA or DAPIA.

    Whenever a manufacturer disagrees with a finding by a DAPIA or an 
IPIA acting in accordance with subpart H of this part, the manufacturer 
may request a Formal or Informal Presentation of Views as provided in 
Sec. 3282.152. The manufacturer shall not, however, produce 
manufactured homes pursuant to designs which have not been approved by a 
DAPIA or produce manufactured homes which the relevant IPIA believes not 
to conform to the standards unless and until:
    (a) The Secretary determines that the manufacturer is correct in 
believing the design of the manufactured home conforms to the standards; 
or
    (b) Extraordinary interim relief is granted under Sec. 3282.154; or
    (c) The DAPIA or IPIA otherwise resolves the disagreement.

[41 FR 19852, May 13, 1976, as amended at 51 FR 34468, Sept. 29, 1986; 
61 FR 10860, Mar. 15, 1996]



Sec. 3282.207  Manufactured home consumer manual requirements.

    (a) The manufacturer shall provide a consumer manual with each 
manufactured home that enters the first stage of production on or after 
July 31, 1977, pursuant to section 617 of the National Manufactured 
Housing Construction and Safety Standards Act, 42 U.S.C. 5416.
    (b) The manufacturer shall provide the consumer manual by placing a 
manual in each such manufactured home before the manufactured home 
leaves the manufacturing plant. The manual shall be placed in a 
conspicuous location in a manner likely to assure that it is not removed 
until the purchaser removes it.
    (c) If a manufacturer is informed that a purchaser did not receive a 
consumer manual, the manufacturer shall provide the appropriate manual 
to the purchaser within 30 days of being so informed.
    (d) No dealer or distributor may interfere with the distribution of 
the consumer manual. When necessary, the dealer or distributor shall 
take any appropriate steps to assure that the purchaser receives a 
consumer manual from the manufacturer.
    (e) Dispute resolution information. (1) The manufacturer must 
include the following language under a heading of ``Dispute Resolution 
Process'' in the consumer manual:

    Many states have a consumer assistance or dispute resolution program 
that homeowners may use to resolve problems with manufacturers, 
retailers, or installers concerning defects in their manufactured homes 
that render part of the home unfit for its intended use. Such state 
programs may include a process to resolve a dispute among a 
manufacturer, a retailer, and an installer about who will correct the 
defect. In states where there is not a dispute resolution program that 
meets the federal requirements, the HUD Manufactured Home Dispute 
Resolution Program will operate. These are ``HUD-administered states.'' 
The HUD Manufactured Home Dispute Resolution Program is not for cosmetic 
or minor problems in the home. You may contact the HUD Manufactured 
Housing Program Office at (202) 708-6423 or (800) 927-2891, or visit the 
HUD website at www.hud.gov to determine whether your state has a state 
program or whether you should use the HUD Manufactured Home

[[Page 236]]

Dispute Resolution Program. Contact information for state programs is 
also available on the HUD website. If your state has a state program, 
please contact the state for information about the program, how it 
operates, and what steps to take to request dispute resolution. When 
there is no state dispute resolution program, a homeowner may use the 
HUD Manufactured Home Dispute Resolution Program to resolve disputes 
among the manufacturer, retailer, and installer about responsibility for 
the correction or repair of defects in the manufactured home that were 
reported during the 1-year period starting on the date of installation. 
Even after the 1-year period, manufacturers have continuing 
responsibility to review certain problems that affect the intended use 
of the manufactured home or its parts, but for which correction may no 
longer be required under federal law.

    (2) The manufacturer must include the following language under a 
heading of ``Additional Information `` HUD Manufactured Home Dispute 
Resolution Program'' in the consumer manual:

    The steps and information outlined below apply only to the HUD 
Manufactured Home Dispute Resolution Program that operates in HUD-
administered states, as described under the heading ``Dispute Resolution 
Information'' in this manual. Under the HUD Manufactured Home Dispute 
Resolution Program, homeowners must report defects to the manufacturer, 
retailer, installer, a State Administrative Agency, or HUD within 1 year 
after the date of the first installation. Homeowners are encouraged to 
report defects in writing, including, but not limited to, email, written 
letter, certified mail, or fax, but they may also make a report by 
telephone. To demonstrate that the report was made within 1 year after 
the date of installation, homeowners should report defects in a manner 
that will create a dated record of the report: for example, by certified 
mail, by fax, or by email. When making a report by telephone, homeowners 
are encouraged to make a note of the phone call, including names of 
conversants, date, and time. No particular format is required to submit 
a report of an alleged defect, but any such report should at a minimum 
include a description of the alleged defect, the name of the homeowner, 
and the address of the home.
    Homeowners are encouraged to send reports of an alleged defect first 
to the manufacturer, retailer, or installer of the manufactured home, or 
a State Administrative Agency. Reports of alleged defects may also be 
sent to HUD at: HUD, Office of Regulatory Affairs and Manufactured 
Housing, Attn: Dispute Resolution, 451 Seventh Street, SW., Washington, 
DC 20410-8000; faxed to (202) 708-4213; e-mailed to [email protected], or 
reported telephonically at (202) 708-6423 or (800) 927-2891.
    If, after taking the steps outlined above, the homeowner does not 
receive a satisfactory response from the manufacturer, retailer, or 
installer, the homeowner may file a dispute resolution request with the 
dispute resolution provider in writing, or by making a request by phone. 
No particular format is required to make a request for dispute 
resolution, but the request should generally include the following 
information:
    (1) The name, address, and contact information of the homeowner;
    (2) The name and contact information of the manufacturer, retailer, 
and installer of the manufactured home;
    (3) The date or dates the report of the alleged defect was made;
    (4) Identification of the entities or persons to whom each report of 
the alleged defect was made and the method that was used to make the 
report;
    (5) The date of installation of the manufactured home affected by 
the alleged defect; and
    (6) A description of the alleged defect.
    Information about the dispute resolution provider and how to make a 
request for dispute resolution is available at http://www.hud.gov or by 
contacting the Office of Manufactured Housing Programs at (202) 708-6423 
or (800) 927-2891.
    A screening agent will review the request and, as appropriate, 
forward the request to the manufacturer, retailer, installer, and 
mediator. The mediator will mediate the dispute and attempt to 
facilitate a settlement. The parties to a settlement include, as 
applicable, the manufacturer, retailer, and installer. If the parties 
are unable to reach a settlement that results in correction or repair of 
the alleged defect, any party or the homeowner may request nonbinding 
arbitration. Should any party refuse to participate, the arbitration 
shall proceed without that party's input. Once the arbitrator makes a 
non-binding recommendation, the arbitrator will forward it to the 
parties and HUD. HUD will have the option of adopting, modifying, or 
rejecting the recommendation when issuing an order requiring the 
responsible party or parties to make any corrections or repairs in the 
home. At any time before HUD issues a final order, the parties may 
submit an offer of settlement to HUD that may, at HUD's discretion, be 
incorporated into the order.
    In circumstances where the parties agree that one or more of them, 
and not the homeowner, is responsible for the alleged defect, the 
parties will have the opportunity to resolve the dispute outside of the 
HUD Mediation and Arbitration process by using the Alternative Process. 
Homeowners will maintain the right to be informed in writing of

[[Page 237]]

the outcome when the Alternative Process is used, within 5 days of the 
outcome. At any time after 30 days of the Alternative Process 
notification, any participant or the homeowner may invoke the HUD 
Manufactured Home Dispute Resolution Program and proceed to mediation.
    The HUD Manufactured Home Dispute Resolution Program is not a 
warranty program and does not replace the manufacturer's or any other 
warranty program.

    (f) If a consumer manual or a change or revision to a manual does 
not substantially comply with the guidelines issued by HUD, the 
manufacturer shall cease distribution of the consumer manual and shall 
provide a corrected manual for each manufactured home for which the 
inadequate or incorrect manual or revision was provided. A manual 
substantially complies with the guidelines if it includes the language 
in paragraph (e) of this section and presents current material on each 
of the subjects covered in the guidelines in sufficient detail to inform 
consumers about the operation, maintenance, and repair of manufactured 
homes. An updated copy of guidelines published in the Federal Register 
on March 15, 1996, can be obtained by contacting the Office of 
Manufactured Housing and Regulatory Functions, Department of Housing and 
Urban Development, 451 Seventh Street, SW., Washington, DC, 20410; the 
Information Center, Department of Housing and Urban Development, Room 
1202, 451 Seventh Street, SW., Washington, DC, 20410; or any HUD Area or 
State Office.

[61 FR 10860, Mar. 15, 1996, as amended at 72 FR 27228, May 14, 2007]



Sec. 3282.208  Remedial actions--general description.

    (a) Notification. A manufacturer may be required to provide formal 
notice to manufactured home owners and dealers, as set out in subpart I 
of this part, if the manufacturer, the Secretary, or a State 
Administrative Agency determines under that subpart that an imminent 
safety hazard, serious defect, defect, or noncompliance exists or may 
exist in a manufactured home produced by that manufacturer.
    (b) Correction. A manufacturer may be required to correct imminent 
safety hazards and serious defects which the manufacturer or the 
Secretary determines under subpart I exist in manufactured homes 
produced by the manufacturer. This correction would be carried out in 
addition to the sending of formal notice as described in paragraph (a) 
of this section.
    (c) Cooperation. The manufacturer shall be responsible for working 
with the DAPIA, IPIA, any SAA, the Secretary, and the Secretary's agent 
as necessary in the course of carrying out investigations and remedial 
actions under subpart I.
    (d) Avoidance of formalities. The provisions for notification and 
required correction outlined in paragraphs (a) and (b) of this section 
and described more fully in subpart I may be waived or avoided in 
certain circumstances under that subpart.



Sec. 3282.209  Report requirements.

    The manufacturer shall submit reports to the PIAs, SAAs, and the 
Secretary as required by subpart L of these regulations.



Sec. 3282.210  Payment of monitoring fee.

    (a) Each manufacturer shall pay the monitoring fee established under 
Sec. Sec. 3282.307 and 3282.454 for each transportable section of each 
manufactured housing unit that it manufactures under the Federal 
standards.
    (b) The monitoring fee shall be paid in the form of a check made 
payable to the Secretary or the Secretary's agent. The manufacturer 
shall give to the IPIA (or to any other person or agency designated in 
writing by the Secretary) the required check in the amount of the number 
of labels, as required by Sec. 3282.365, multiplied by the amount of 
the fee per transportable section of each manufactured housing unit.

[50 FR 28398, July 12, 1985]



Sec. 3282.211  Record of purchasers.

    (a) Information requirements for purchasers. (1) Every manufacturer 
of manufactured homes shall, for each manufactured home manufactured 
under the Federal standards, provide with the manufactured home a 
booklet containing at least 3 detachable cards as described in paragraph 
(a)(2) of this section. On the front of the booklet, in

[[Page 238]]

bold faced type, shall be printed the following language:

    ``Keep this booklet with your manufactured home. Title VI of the 
Housing and Community Development Act of 1974 provides you with 
protection against certain construction and safety hazards in your 
manufactured home. To help assure your protection, the manufacturer of 
your manufactured home needs the information which these cards, when 
completed and mailed, will supply. If you bought your home from a 
dealer, please be sure that your dealer has completed and mailed a card 
for you. If you acquired your home from someone who is not a dealer, you 
should promptly fill out and send a card to the manufacturer. It is 
important that you keep this booklet and give it to any person who buys 
the manufactured home from you.''

    (2) The detachable cards shall contain blanks for the following 
information:
    (i) Name and address of the dealer or other person selling the 
manufactured home to the purchaser;
    (ii) Name and complete mailing address of the manufactured home 
purchaser;
    (iii) Address where the manufactured home will be located, if not 
the same as item (a)(2)(ii) of this section.
    (iv) Date of sale to the purchaser;
    (v) Month, day and year of manufacture;
    (vi) Identification number of the manufactured home;
    (vii) Model and/or type designation of the manufactured home as 
provided by the manufacturer; and
    (viii) A designation of the zones for which the manufactured home is 
equipped, as set forth in Sec. 3280.305 in this title.

Additionally, the cards shall have the name and address of the 
manufacturer printed clearly on the reverse side and shall contain 
adequate postage or business reply privileges to ensure return to the 
manufacturer. The manufacturer shall have the responsibility for filing 
in the blanks on the cards for paragraphs (a)(2) (v), (vi), (vii), and 
(viii) of this section.
    (3) The manufacturer shall maintain all cards received so that the 
manufacturer has a readily accessible record of the current purchaser or 
owner and the current address of all manufactured homes manufactured by 
it for which a card has been received.



            Subpart F_Dealer and Distributor Responsibilities



Sec. 3282.251  Scope and purpose.

    (a) This subpart sets out the responsibilities which shall be met by 
distributors and dealers with respect to manufactured homes manufactured 
after the effective date of the standards for sale to purchasers in the 
United States. It prohibits the sale, lease, or offer for sale or lease 
of manufactured homes known by the distributor or dealer not to be in 
conformance with the standards, and it includes responsibilities for 
maintaining certain records and assisting in the gathering of certain 
information.
    (b) The purpose of this subpart is to inform distributors and 
dealers when they may sell manufactured homes, when they are prohibited 
from selling manufactured homes, and what they may do in order to 
prepare a manufactured home for sale if it is not in conformance with 
the standards.
    (c) For purposes of this part, any manufacturer or distributor who 
sells, leases, or offers for sale or lease a manufactured home to a 
purchaser shall be a dealer for purposes of that transaction.



Sec. 3282.252  Prohibition of sale.

    (a) No distributor or dealer shall make use of any means of 
transportation affecting interstate or foreign commerce or the mails to 
sell, lease, or offer for sale or lease in the United States any 
manufactured home manufactured on or after the effective date of an 
applicable standard unless:
    (1) There is affixed to the manufactured home a label certifying 
that the manufactured home conforms to applicable standards as required 
by Sec. 3282.205(c), and
    (2) The distributor or dealer, acting as a reasonable distributor or 
dealer, does not know that the manufactured home does not conform to any 
applicable standards.
    (b) This prohibition applies to any affected manufactured homes 
until the

[[Page 239]]

completion of the entire sales transaction. A sales transaction with a 
purchaser is considered completed when all the goods and services that 
the dealer agreed to provide at the time the contract was entered into 
have been provided. Completion of a retail sale will be at the time the 
dealer completes set-up of the manufactured home if the dealer has 
agreed to provide the set-up, or at the time the dealer delivers the 
home to a transporter, if the dealer has not agreed to transport or set 
up the manufactured home, or to the site if the dealer has not agreed to 
provide set-up.
    (c) This prohibition of sale does not apply to manufactured homes 
which are placed in production prior to the effective date of the 
standards, and it does not apply to ``used'' manufactured homes which 
are being sold or offered for sale after the first purchase in good 
faith for purposes other than the resale.



Sec. 3282.253  Removal of prohibition of sale.

    (a) If a distributor or dealer has a manufactured home in its 
possession or a manufactured home with respect to which the sales 
transaction has not been completed, and the distributor or dealer, 
acting as a reasonable distributor or dealer, knows as a result of 
notification by the manufacturer or otherwise that the manufactured home 
contains a failure to conform or imminent safety hazard, the distributor 
or dealer may seek the remedies available to him under Sec. 3282.415.
    (b) When, in accordance with Sec. 3282.415, a manufacturer corrects 
a failure to conform to the applicable standard or an imminent safety 
hazard, the distributor or dealer, acting as a reasonable distributor or 
dealer, may accept the remedies provided by the manufacturer as having 
corrected the failure to conform or imminent safety hazard. The 
distributor or dealer, therefore, may sell, lease, or offer for sale or 
lease any manufactured home so corrected by the manufacturer.
    (c) When a distributor or dealer is authorized by a manufacturer to 
correct a failure to conform to the applicable standard or an imminent 
safety hazard and completes the correction in accordance with the 
manufacturer's instructions, the distributor or dealer may sell, or 
lease or offer for sale or lease the manufactured home in question, 
provided that the distributor or dealer, acting as a reasonable 
distributor or dealer knows that the manufactured home conforms to the 
standards. A distributor or dealer and a manufacturer, at the 
manufacturer's option, may agree in advance that the distributor or 
dealer is authorized to make such corrections as the manufacturer 
believes are within the expertise of the dealer.
    (d) If the corrections made under paragraphs (b) and (c) of this 
section do not bring the manufactured home into conformance or correct 
the imminent safety hazard, the provisions of Sec. 3282.415 will 
continue in effect prior to completion of the sales transaction.



Sec. 3282.254  Distributor and dealer alterations.

    (a) If a distributor or dealer alters a manufactured home in such a 
way as to create an imminent safety hazard or to create a condition 
which causes a failure to conform with applicable Federal standards, the 
manufactured home affected may not be sold, leased, or offered for sale 
or lease.
    (b) After correction by the distributor or dealer of the failure to 
conform or imminent safety hazard, the corrected manufactured home may 
be sold, leased, or offered for sale or lease.
    (c) Distributors and dealers shall maintain complete records of all 
alterations made under paragraphs (a) and (b) of this section.



Sec. 3282.255  Completion of information card.

    (a) Whenever a distributor or dealer sells a manufactured home 
subject to the standards to a purchaser, the distributor or dealer shall 
fill out the card with information provided by the purchaser and shall 
send the card to the manufacturer. (See Sec. 3282.211.)
    (b) Whenever a distributor or dealer sells a manufactured home to an 
owner which was originally manufactured under the standards, the 
distributor or dealer shall similarly use one of the detachable cards 
which was originally provided with the manufactured home.

[[Page 240]]

If such a card is no longer available, the distributor or dealer shall 
obtain the information which the card would require and send it to the 
manufacturer of the manufactured home in an appropriate format.



Sec. 3282.256  Distributor or dealer complaint handling.

    (a) When a distributor or dealer believes that a manufactured home 
in its possession which it has not yet sold to a purchaser contains an 
imminent safety hazard, serious defect, defect, or noncompliance, the 
distributor or dealer shall refer the matter to the manufacturer for 
remedial action under Sec. 3282.415. If the distributor or dealer is 
not satisfied with the action taken by the manufacturer, it may refer 
the matter to the SAA in the state in which the manufactured home is 
located, or to the Secretary if there is no such SAA.
    (b) Where a distributor or dealer receives a consumer complaint or 
other information concerning a manufactured home sold by the distributor 
or dealer, indicating the possible existence of an imminent safety 
hazard, serious defect, defect, or noncompliance in the manufactured 
home, the distributor or dealer shall refer the matter to the 
manufacturer.



                 Subpart G_State Administrative Agencies



Sec. 3282.301  General--scope.

    This subpart sets out procedures to be followed and requirements to 
be met by States which wish to participate as State Administrative 
Agencies (SAA) under the Federal standards enforcement program. 
Requirements relating to States which wish to participate as primary 
inspection agencies under the Federal standards enforcement program are 
set out in subpart H of this part. Requirements which States must meet 
in order to receive full or conditional approval as SAAs and the 
responsibilities of such agencies are set out in Sec. 3282.302. 
Reporting requirements for approved and conditionally approved SAAs are 
set out in subpart L.



Sec. 3282.302  State plan.

    A State wishing to qualify and act as a SAA under this subpart shall 
make a State Plan Application under this section. The State Plan 
Application shall be made to the Director, Manufactured Housing 
Standards Division, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410, and shall include:
    (a) An original and one copy of a cover sheet which shall show the 
following:
    (1) The name and address of the State agency designated as the sole 
agency responsible for administering the plan throughout the State,
    (2) The name of the administrator in charge of the agency,
    (3) The name, title, address, and phone number of the person 
responsible for handling consumer complaints concerning standards 
related problems in manufactured homes under subpart I of this part,
    (4) A list of personnel who will carry out the State plan,
    (5) The number of manufactured home manufacturing plants presently 
operating in the State,
    (6) The estimated total number of manufactured homes manufactured in 
the State per year,
    (7) The estimated total number of manufactured homes set up in the 
State per year, and
    (8) A certification signed by the administrator in charge of the 
designated State agency stating that, if it is approved by the 
Secretary, the State plan will be carried out in full, and that the 
regulations issued under the Act shall be followed,
    (b) An original and one copy of appropriate materials which:
    (1) Demonstrate how the designated State agency shall ensure 
effective handling of consumer complaints and other information referred 
to it that relate to noncompliances, defects, serious defects or 
imminent safety hazards as set out in subpart I of this part, including 
the holding of Formal and Informal Presentations of Views and the 
fulfilling of all other responsibilities of SAAs as set out in this 
subpart G,
    (2) Provide that personnel of the designated agency shall, under 
State law or as agents of HUD, have the right at

[[Page 241]]

any reasonable time to enter and inspect all factories, warehouses, or 
establishments in the State in which manufactured homes are 
manufactured,
    (3) Provide for the imposition under State authority of civil and 
criminal penalties which are identical to those set out in section 611 
of the Act, 42 U.S.C. 5410 except that civil penalties shall be payable 
to the State rather than to the United States,
    (4) Provide for the notification and correction procedures under 
subpart I of this part where the State Administrative Agency is to act 
under that subpart by providing for and requiring approval by the State 
Administrative Agency of the plan for notification and correction 
described in Sec. 3282.410, including approval of the number of units 
that may be affected and the proposed repairs, and by providing for 
approval of corrective actions where appropriate under subpart I,
    (5) Provide for oversight by the SAA of:
    (i) Remedial actions carried out by manufacturers for which the SAA 
approved the plan for notification or correction under Sec. 3282.405, 
or Sec. 3282.407, or for which the SAA has waived formal notification 
under Sec. 3282.405 or Sec. 3282.407, and
    (ii) A manufacturer's handling of consumer complaints and other 
information under Sec. 3282.404 as to plants located within the State,
    (6) Provide for the setting of monitoring inspection fees in 
accordance with guidelines established by the Secretary and provide for 
participation in the fee distribution system set out in Sec. 3282.307.
    (7) Contain satisfactory assurances in whatever form is appropriate 
under State law that the designated agency has or will have the legal 
authority necessary to carry out the State plan as submitted for full or 
conditional approval,
    (8) Contain satisfactory assurances that the designated agency has 
or will have, in its own staff or provided by other agencies of the 
state or otherwise, the personnel, qualified by education or experience 
necessary to carry out the State plan,
    (9) Include the resumes of administrative personnel in policy making 
positions and of all inspectors and engineers to be utilized by the 
designated agency in carrying out the State plan,
    (10) Include a certification that none of the personnel who may be 
involved in carrying out the State plan in any way are subject to any 
conflict of interest of the type discussed in Sec. 3282.359 or 
otherwise, except that members of councils, committees, or similar 
bodies providing advice to the designated agency are not subject to the 
requirement,
    (11) Include an estimate of the cost to the State of carrying out 
all activities called for in the State plan, under this section and 
Sec. 3282.303, which estimate shall be broken down by particular 
function and indicate the correlation between the estimate and the 
number of manufactured homes manufactured in the State and the number of 
manufactured homes imported into the State, and the relationship of 
these factors to any fees currently charged and any fees charged during 
the preceding two calendar years. A description of all current and past 
State activities with respect to manufactured homes shall be included 
with this estimate.
    (12) Give satisfactory assurances that the State shall devote 
adequate funds to carrying out its State plan,
    (13) Indicate that State Law requires manufacturers, distributors, 
and dealers in the State to make reports pursuant to section 614 of the 
Act 42 U.S.C. 5413 and this chapter of these regulations in the same 
manner and to the same extent as if the State plan were not in effect,
    (14) Provide that the designated agency shall make reports to the 
Secretary as required by subpart L of this part in such form and 
containing such information as the Secretary shall from time to time 
require,
    (c) A state plan may be granted conditional approval if all of the 
requirements of Sec. 3282.302 (a) and (b) are met except paragraphs 
(b)(2), (b)(3), (b)(6) or (b)(13). When conditional approval is given, 
the state shall not be considered approved under section 623 of the Act, 
42 U.S.C. 5422, but it will participate in all phases of the program as 
called for

[[Page 242]]

in its State plan. Conditional approval shall last for a maximum of five 
years, by which time all requirements shall be met for full approval, or 
conditional approval shall lapse. However, the Secretary may for good 
cause grant an extension of conditional approval upon petition by the 
SAA.
    (d) If a State wishes to discontinue participation in the Federal 
enforcement program as an SAA, it shall provide the Secretary with a 
minimum of 90 days notice.
    (e) Exclusive IPIA status. (1) A State that wishes to act as an 
exclusive IPIA under Sec. 3282.352 shall so indicate in its State Plan 
and shall include in the information provided under paragraph (b)(11) of 
this section the fee schedule for the State's activities as an IPIA and 
the relationship between the proposed fees and the other information 
provided under paragraph (b)(11) of this section. If the Secretary 
determines that the fees to be charged by a State acting as an IPIA are 
unreasonable, the Secretary shall not grant the State status as an 
exclusive IPIA.
    (2) The State shall also demonstrate in its State Plan that it has 
the present capability to act as an IPIA for all plants operating in the 
State.

[41 FR 19852, May 13, 1976, as amended at 47 FR 5888, Feb. 9, 1982; 51 
FR 34468, Sept. 29, 1986; 61 FR 10860, Mar. 15, 1996]



Sec. 3282.303  State plan--suggested provisions.

    The following are not required to be included in the State plan, but 
they are urged as necessary to provide full consumer protection and 
assurances of manufactured home safety:
    (a) Provision for monitoring of dealers' lots within the State for 
transit damage, seal tampering, and dealer performance generally,
    (b) Provision of approvals of all alterations made to certified 
manufactured homes by dealer in the State. Under this program, the State 
would assure that alterations did not result in the failure of the 
manufactured home to comply with the standards.
    (c) Provision for monitoring of the installation of manufactured 
homes set up in the State to assure that the homes are properly 
installed and, where necessary, tied down,
    (d) Provision for inspection of used manufactured homes and 
requirements under State authority that used manufactured homes meet a 
minimal level of safety and durability at the time of sale, and,
    (e) Provision for regulation of manufactured home transportation 
over the road to the extent that such regulation is not preempted by 
Federal authority.



Sec. 3282.304  Inadequate State plan.

    If the Secretary determines that a State plan submitted under this 
subpart is not adequate, the designated State agency shall be informed 
of the additions and corrections required for approval. A revised State 
plan shall be submitted within 30 days of receipt of such determination. 
If the revised State plan is inadequate or if the State fails to 
resubmit within the 30 day period or otherwise indicates that it does 
not intend to change its State plan as submitted, the Secretary shall 
notify the designated State agency that the State plan is not approved 
and that it has a right to a hearing on the disapproval in accordance 
with subpart D of this part.



Sec. 3282.305  State plan approval.

    The Secretary's approval or conditional approval of a State plan 
Application shall qualify that State to perform the functions for which 
it has been approved.



Sec. 3282.306  Withdrawal of State approval.

    The Secretary shall, on the basis of reports submitted by the State, 
and on the basis of HUD monitoring, make a continuing evaluation of the 
manner in which each State is carrying out its State plan and shall 
submit the reports of such evaluation to the appropriate committees of 
the Congress. Whenever the Secretary finds, after affording due notice 
and opportunity for a hearing in accordance with subpart D of this part, 
that in the administration of the State program there is a failure to 
comply substantially with any provision of the State plan or that the 
State plan has become inadequate, the Secretary shall notify the State 
of withdrawal of approval or conditional approval of the State program. 
The State program

[[Page 243]]

shall cease to be in effect at such time as the Secretary may establish.



Sec. 3282.307  Monitoring inspection fee establishment and distribution.

    (a) Each approved State shall establish a monitoring inspection fee 
in an amount required by the Secretary. This fee shall be an amount paid 
by each manufactured home manufacturer in the State for each 
transportable section of each manufactured housing unit produced by the 
manufacturer in that State. In non-approved and conditionally-approved 
States, the fee shall be set by the Secretary.
    (b) The monitoring inspection fee shall be paid by the manufacturer 
to the Secretary or to the Secretary's Agent, who shall distribute a 
portion of the fees collected from all manufactured home manufacturers 
among the approved and conditionally-approved States in accordance with 
an agreement between the Secretary and the States and based upon the 
following formula:
    (1) $9.00 of the monitoring inspection fee collected for each 
transportable section of each new manufactured housing unit that, after 
leaving the manufacturing plant, is first located on the premises of a 
dealer, distributor, or purchaser in that State; plus
    (2) $2.50 of the monitoring inspection fee collected for each 
transportable section of each new manufactured housing unit produced in 
a manufacturing plant in that State.
    (c) A portion of the monitoring inspection fee collected also shall 
be distributed by the Secretary or the Secretary's Agent based on the 
extent of participation of the State in the Joint Team Monitoring 
Program set out in Sec. 3282.308.
    (d) To assure that a State devotes adequate funds to carry out its 
State Plan, a State may impose an additional reasonable inspection fee 
to offset expenses incurred by that State in conducting inspections. 
Such fee shall not exceed that amount which is the difference between 
the amount of funds distributed to the State as provided in paragraph 
(b) of this section and the amount necessary to cover the costs of 
inspections. Such fee shall be part of the State Plan pursuant to Sec. 
3282.302(b) (11) and (12) and shall be subject to the approval of the 
Secretary pursuant to Sec. 3282.305.
    (e) The Secretary may establish by notice in the Federal Register a 
monitoring inspection fee which is to be paid by manufacturers for each 
transportable section of each manufactured housing unit manufactured in 
nonapproved and conditionally approved States as described in Sec. 
3282.210. To determine the amount of the inspection fee to be paid for 
each transportable section of each manufactured home, the Secretary 
shall divide the (estimated) number of transportable sections of 
manufactured homes (based on recent industry production figures) into 
the anticipated aggregate cost of conducting the inspection program in 
the foreseeable feature. The time period selected for projecting the 
Department's inspection-related costs and number of transportable 
sections need not always be the same, but must be for a period of 
sufficient duration to provide for access to reasonable underlying data. 
To determine the aggregate cost of conducting the inspection program, 
the Secretary shall calculate the sum necessary to support:
    (1) Inspection-related activities of State Administrative Agencies;
    (2) Inspection-related activities performed by the Department of 
Housing and Urban Development;
    (3) Inspection-related activities performed by monitoring inspection 
contractors;
    (4) Miscellaneous activities involving the performance of 
inspection-related activities by the Department, including on-site 
inspections on an ad hoc basis; and
    (5) Maintenance of adequate funds to offset short-term fluctuations 
in costs that do not warrant revising the fee under the authority of 
this section.
    (f) The Secretary may at any time revise the amount of the fees 
established under paragraph (a) or (e) of this section by placing a 
notice of the amount of the revised fee in the Federal Register.

[50 FR 28398, July 12, 1985, as amended at 56 FR 65186, Dec. 16, 1991]

[[Page 244]]



Sec. 3282.308  State participation in monitoring of primary inspection
agencies.

    (a) An SAA may provide personnel to participate in joint team 
monitoring of primary inspection agencies as set out in subpart J. If an 
SAA wishes to do so, it must include in its State plan a list of what 
personnel would be supplied for the teams, their qualifications, and how 
many person-years the State would supply. All personnel will be subject 
to approval by the Secretary or the Secretary's agent. A person-year is 
2,080 hours of work.
    (b) If an SAA wishes to monitor the performance of primary 
inspection agencies acting within the State, it must include in its 
State plan a description of how extensively, how often, and by whom this 
will be carried out. This monitoring shall be coordinated by the 
Secretary, or the Secretary's agent with monitoring carried out by joint 
monitoring teams, and in no event shall an SAA provide monitoring where 
the State is also acting as a primary inspection agency.



Sec. 3282.309  Formal and informal presentations of views held by SAAs.

    (a) When an SAA is the appropriate agency to hold a Formal or 
Informal Presentation of Views under Sec. 3282.407 of subpart I, the 
SAA shall follow the procedures set out in Sec. Sec. 3282.152 and 
3282.153, with the SAA acting as the Secretary otherwise would under 
that section. Where Sec. 3282.152 requires publication of notice in the 
Federal Register, the SAA shall, to the maximum extent possible, provide 
equivalent notice throughout the State by publication in the newspaper 
or newspapers having State-wide coverage or otherwise. The determination 
of whether to provide an Informal Presentation of Views under Sec. 
3282.152(f), or a Formal Presentation of Views under Sec. 3282.152(g), 
is left to the SAA.
    (b) Notwithstanding the provisions of Sec. 3282.152(f)(2) and 
(g)(2) relating to the conclusive effect of a final determination, any 
party, in a proceeding held at an SAA under this section, including 
specifically the owners of affected manufactured homes, States in which 
affected manufactured homes are located, consumer groups representing 
affected owners and manufacturers (but limited to parties with similar 
substantial interest) may appeal to the Secretary in writing any Final 
Determination by an SAA which is adverse to the interest of that party. 
This appeal on the record shall be made within 30 days of the date on 
which the Final Determination was made by the SAA.

[41 FR 19852, May 13, 1976, as amended at 51 FR 34468, Sept. 29, 1986]



                  Subpart H_Primary Inspection Agencies



Sec. 3282.351  General.

    (a) This subpart sets out the requirements which must be met by 
States or private organizations which wish to qualify as primary 
inspection agencies under these regulations. It also sets out the 
various functions which will be carried out by primary inspection 
agencies.
    (b) There are four basic functions which are performed by primary 
inspection agencies:
    (1) Approval of the manufacturer's manufactured home design to 
assure that it is in compliance with the standard;
    (2) Approval of the manufacturer's quality control program to assure 
that it is compatible with the design;
    (3) Approval of the manufacturer's plant facility and manufacturing 
process to assure that the manufacturer can perform its approved quality 
control program and can produce manufactured homes in conformance with 
its approved design, and
    (4) Performance of ongoing inspections of the manufacturing process 
in each manufacturing plant to assure that the manufacturer is 
continuing to perform its approved quality control program and, with 
respect to those aspects of manufactured homes inspected, is continuing 
to produce manufactured homes in performance with its approved designs 
and in conformance with the standards (see Sec. 3282.362(c)(1)).
    (c) There are two types of primary inspection agencies which perform 
these functions:

[[Page 245]]

    (1) Those which approve designs and quality control programs (Design 
Approval Primary Inspection Agencies--DAPIAs) and
    (2) Those which approve plants and perform ongoing inspections in 
the manufacturing plants (Production Inspection Primary Inspection 
Agencies--IPIAs).
    (d) States and private organizations whose submissions under this 
subpart are acceptable shall be granted provisional acceptance. Final 
acceptance shall be conditioned upon adequate performance, which will be 
determined through monitoring of the actions of the primary inspection 
agencies. Monitoring of all primary inspection agencies shall be carried 
out as set out in subpart J. HUD accepted agencies can perform DAPIA 
functions for any manufacturer in any State and IPIA functions in any 
State except those in which the State has been approved to act as the 
exclusive IPIA under Sec. 3282.352.
    (e) Primary inspection agencies approved under this subpart may 
contract with manufactured home manufacturers (see Sec. 3282.202) to 
provide the services set out in this subpart. Any PIA which charges fees 
which are excessive in relation to the services rendered shall be 
subject to disqualification under Sec. 3282.356.



Sec. 3282.352  State exclusive IPIA functions.

    (a) Any State which has an approved State Administrative Agency may, 
if accepted as an IPIA, act as the exclusive IPIA within the State. A 
State which acts as an IPIA but is not approved as an SAA may not act as 
the exclusive IPIA in the State. A State which acts as an exclusive IPIA 
shall be staffed to provide IPIA services to all manufacturers within 
the state and may not charge unreasonable fees for those services.
    (b) States which wish to act as exclusive IPIAs shall apply for 
approval to do so in their State plan applications. They shall specify 
the fees they will charge for IPIA services and shall submit proposed 
fee revisions to the Secretary prior to instituting any change in fees. 
If at any time the Secretary finds that those fees are not commensurate 
with the fees generally being charged for similar services, the 
Secretary will withhold or revoke approval to act as an exclusive IPIA. 
States acting as DAPIAs and also as exclusive IPIAs shall establish 
separate fees for the two functions and shall specify what additional 
services (such as approval of design changes and full time inspections) 
these fees cover. As provided in Sec. 3282.302(b)(11), each State shall 
submit fee schedules for its activities and, where appropriate, the fees 
presently charged for DAPIA and IPIA services, and any fees charged for 
DAPIA and IPIA services during the preceding two calendar years.
    (c) A State's status as an exclusive IPIA shall commence upon 
approval of the State Plan Application and acceptance of the State's 
submission under Sec. 3282.355. Where a private organization accepted 
or provisionally accepted as an IPIA under this subpart H is operating 
in a manufacturing plant within the State on the date the State's status 
as an exclusive IPIA commences, the private organization may provide 
IPIA services in that plant for 90 days after that date.

[61 FR 10861, Mar. 15, 1996]



Sec. 3282.353  Submission format.

    States and private organizations which wish to act as primary 
inspection agencies shall submit to the Director, Manufactured Housing 
Standards Division, Department of Housing and Urban Development, 451 
Seventh St. SW., Washington, DC 20410, an application which includes the 
following:
    (a) A cover sheet which shall show the following:
    (1) Name and address of the party making the application;
    (2) The capacity (DAPIA, IPIA) in which the party wishes to be 
approved to act;
    (3) A list of the key personnel who will perform the various 
functions required under these regulations;
    (4) The number of manufactured home manufacturers and manufacturing 
plants for which the submitting party proposes to act in each of the 
capacities for which it wishes to be approved to act;
    (5) The estimated total number of manufactured homes produced by 
those

[[Page 246]]

manufacturers and in those plants per year;
    (6) The number of years the proposed primary inspection agency has 
been actively engaged in the enforcement of manufactured home standards; 
and
    (7) A certification by the party applying that it will follow the 
Federal manufactured home construction and safety standards set out at 
24 CFR part 3280 and any interpretations of those standards which may be 
made by the Secretary.
    (b) A detailed schedule of fees to be charged broken down by the 
services for which they will be charged.
    (c) A detailed description of how the submitting party intends to 
carry out all of the functions for which it wishes to be approved under 
this subpart, with appropriate cross-references to sections of this 
subpart, including examples and complete descriptions of all reports, 
tests, and evaluations which the party would be required to make. Where 
appropriate, later sections of this subpart identify particular items 
which must be included in the submission. The Secretary may request 
further detailed information, when appropriate.
    (d) A party wishing to be approved as a DAPIA shall submit a copy of 
a manufactured home design that it has approved (or if it has not 
approved a design, one that it has evaluated and a deviation report 
showing where the design is not in conformance with the standards) and a 
copy of a quality assurance manual that it has approved (or if it was 
not approved a manual, one that it has evaluated and a deviation report 
showing where the manual is inadequate).
    (e) A party wishing to be approved as an IPIA shall submit a copy of 
a certification report which it has prepared for a manufactured home 
plant or, if it has not prepared such a report, an evaluation of a 
manufacturing plant which it has inspected with a description of what 
changes shall be made before a certification report can be issued. A 
party that has not previously inspected manufactured homes may 
nevertheless be accepted on the basis of the qualifications of its 
personnel and its commitment to perform the required functions.

[41 FR 19852, May 13, 1976, as amended at 61 FR 10861, Mar. 15, 1996]



Sec. 3282.354  Submittal of false information or refusal to submit
information.

    The submittal of false information or the refusal to submit 
information required under this subpart may be sufficient cause for the 
Secretary to revoke or withhold acceptance.



Sec. 3282.355  Submission acceptance.

    (a) A party whose submission is determined by the Department to be 
adequate shall be granted provisional acceptance until December 15, 
1976, or for a six month period from the date of such determination, 
whichever is later.
    (b) Final acceptance of a party to act as a primary inspection 
agency will be contingent upon adequate performance during the period of 
provisional acceptance as determined through monitoring carried out 
under subpart J and upon satisfactory acceptance under Sec. 3282.361(e) 
or Sec. 3282.362(e). Final acceptance shall be withheld if performance 
is inadequate.
    (c) Continued acceptance as a primary inspection agency shall be 
contingent upon continued adequacy of performance as determined through 
monitoring carried out under subpart J. If the Secretary determines that 
a primary inspection agency that has been granted final acceptance is 
performing inadequately, the Secretary shall suspend the acceptance, and 
the primary inspection agency shall be entitled to a Formal or Informal 
Presentation of Views as set out in subpart D of this part.

[41 FR 19852, May 13, 1976, as amended at 51 FR 34468, Sept. 29, 1986; 
61 FR 10861, Mar. 15, 1996]



Sec. 3282.356  Disqualification and requalification of primary 
inspection agencies.

    (a) The Secretary, based on monitoring reports or on other reliable 
information, may determine that a primary inspection agency which has 
been accepted under this subpart is not adequately carrying out one or 
more of its required functions. In so determining,

[[Page 247]]

the Secretary shall consider the impact of disqualification on 
manufacturers and other affected parties and shall seek to assure that 
the manufacturing process is not disrupted unnecessarily. Whenever the 
Secretary disqualifies a primary inspection agency under this section, 
the primary inspection agency shall have a right to a Formal or Informal 
Presentation of Views under subpart D of this part.
    (b) Interested persons may petition the Secretary to disqualify a 
primary inspection agency under the provisions of Sec. 3282.156(b).
    (c) A primary inspection agency which has been disqualified under 
paragraph (a) may resubmit an application under Sec. 3282.353. The 
submission shall include a full explanation of how problems or 
inadequacies which resulted in disqualifications have been rectified and 
how the primary inspection agency shall assure that such problems shall 
not recur.
    (d) When appropriate, the Secretary shall publish in the Federal 
Register or otherwise make available to the public for comment a 
disqualified PIA's application for requalification, subject to the 
provisions of Sec. 3282.54.
    (e) Both provisional and final acceptance of any IPIA (or DAPIA) 
automatically expires at the end of any period of one year during which 
it has not acted as an IPIA (or DAPIA). An IPIA (or DAPIA) has not acted 
as such unless it has actively performed its services as an IPIA (or 
DAPIA) for at least one manufacturer by which it has been selected. An 
IPIA (or DAPIA) whose acceptance has expired pursuant to this section 
may resubmit an application under Sec. 3282.353 in order to again be 
qualified as an IPIA (or DAPIA), when it can show a bona fide prospect 
of performing IPIA (or DAPIA) services.

[41 FR 19852, May 13, 1976, as amended at 45 FR 59311, Sept. 9, 1980; 51 
FR 34468, Sept. 29, 1986]



Sec. 3282.357  Background and experience.

    All private organizations shall submit statements of the 
organizations' experience in the housing industry, including a list of 
housing products, equipment, and structures for which evaluation, 
testing and follow-up inspection services have been furnished. They 
shall also submit statements regarding the length of time these services 
have been provided by them. In addition, all such submissions shall 
include a list of other products for which the submitting party provides 
evaluation, inspection, and listing or labeling services and the 
standard applied to each product, as well as the length of time it has 
provided these additional services.



Sec. 3282.358  Personnel.

    (a) Each primary inspection agency shall have qualified personnel 
capable of carrying out all of the functions for which the primary 
inspection agency is seeking to be approved or disapproved. Where a 
State intends to act as the exclusive IPIA in the State, it shall show 
that it has adequate personnel to so act in all plants in the State.
    (b) Each submission shall indicate the total number of personnel 
employed by the submitting party, the number of personnel available for 
this program, and the locations of the activities of the personnel to be 
used in the program.
    (c) Each submission shall include the names and qualifications of 
the administrator and the supervisor who will be directly responsible 
for the program, and r[eacute]sum[eacute]s of their experience.
    (d) Each submission shall contain the information set out in 
paragraphs (d)(1) through (d)(9) of this section. Depending upon the 
functions (DAPIA or IPIA) to be undertaken by a particular primary 
inspection agency, some of the categories of personnel listed may not be 
required. In such cases, the submission should indicate which of the 
categories of information are not required and explain why they are not 
needed. The submission should identify which personnel will carry out 
each of the functions the party plans to perform. The qualifications of 
the personnel to perform one or more of the functions will be judged in 
accordance with the requirements of ASTM Standard E-541 except that the 
requirement for registration as a professional engineer or architect may 
be waived for personnel whose qualifications by experience or education 
equal those of a registered engineer or architect. The categories of

[[Page 248]]

personnel to be included in the submission are as follows:
    (1) The names of engineers practicing structural engineering who 
will be involved in the evaluation, testing, or followup inspection 
services, and r[eacute]sum[eacute]s of their experience.
    (2) The names of engineers practicing mechanical engineering who 
will be involved in the evaluation, testing, or followup, inspection 
services and r[eacute]sum[eacute]s of their experience.
    (3) The names of engineers practicing electrical engineering who 
will be involved in the evaluation, testing, or followup inspection 
services and r[eacute]sum[eacute]s of their experience.
    (4) The names of engineers practicing fire protection engineering 
who will be involved in the evaluation, testing, or followup inspection 
services, and r[eacute]sum[eacute]s of their experience.
    (5) The names of all other engineers assigned to this program, the 
capacity in which they will be employed, and r[eacute]sum[eacute]s of 
their experience.
    (6) The names of all full-time and part-time consulting architects 
and engineers, their registration, and r[eacute]sum[eacute]s of their 
experience.
    (7) The names of inspectors and other technicians along with 
r[eacute]sum[eacute]s of experience and a description of the type of 
work each will perform.
    (8) A general outline of the applicant agency's training program for 
assuring that all inspectors and other technicians are properly trained 
to do each specific job assigned.
    (9) The names and qualifications of individuals serving on advisory 
panels that assist the applicant agency in making its policies conform 
with the public interest in the field of public health and safety.
    (e) All information required by this section shall be kept current. 
The Secretary shall be notified of any change in personnel or management 
or change of ownership or State jurisdiction within 30 days of such 
change.



Sec. 3282.359  Conflict of interest.

    (a) All submissions by private organizations shall include a 
statement that the submitting party is independent in that it does not 
have any actual or potential conflict of interest and is not affiliated 
with or influenced or controlled by any producer, supplier, or vendor of 
products in any manner which might affect its capacity to render reports 
of findings objectively and without bias.
    (b) A private organization shall be judged to be free of conflicting 
affiliation, influence, and control if it demonstrates compliance with 
all of the following criteria:
    (1) It has no managerial affiliation with any producer, supplier, or 
vendor of products for which it performs PIA services, and is not 
engaged in the sale or promotion of any such product or material;
    (2) The results of its work do not accrue financial benefits to the 
organization via stock ownership of any producer, supplier or vendor of 
the products involved;
    (3) Its directors and other management personnel and its engineers 
and inspectors involved in certification activities hold no stock in and 
receive no stock option or other benefits, financial, or otherwise, from 
any producer, supplier, or vendor of the product involved, other than 
compensation under Sec. 3282.202 of this part;
    (4) The employment security status of its personnel is free of 
influence or control of any producer, supplier, or vendor, and
    (5) It does not perform design or quality assurance manual approval 
services for any manufacturer whose design or manual has been created or 
prepared in whole or in part by engineers of its organization or 
engineers of any affiliated organization.
    (c) All submissions by States shall include a statement that 
personnel who will be in any way involved in carrying out the State plan 
or PIA function are free of any conflict of interest except that with 
respect to members of councils, committees or similar bodies providing 
advice to the designated agency are not subject to this requirement.



Sec. 3282.360  PIA acceptance of product certification programs or 
listings.

    In determining whether products to be included in a manufactured 
home are acceptable under the standards set out in part 3280 of 24 CFR, 
all PIAs shall accept all product verification

[[Page 249]]

programs, labelings, and listings unless the PIA has reason to believe 
that a particular certification is not acceptable, in which case, the 
PIA shall so inform the Secretary and provide the Secretary with full 
documentation and information on which it bases its belief. Pending a 
determination by the Secretary, the PIA shall provisionally accept the 
certification. The Secretary's determination shall be binding on all 
PIAs.



Sec. 3282.361  Design Approval Primary Inspection Agency (DAPIA).

    (a) General. (1) The DAPIA selected by a manufacturer under Sec. 
3282.203 shall be responsible for evaluating all manufactured home 
designs submitted to it by the manufacturer and for assuring that they 
conform to the standards. It shall also be responsible for evaluating 
all quality control programs submitted to it by the manufacturer by 
reviewing the quality assurance manuals in which the programs are set 
out to assure that the manuals reflect programs which are compatible 
with the designs to be followed and which commit the manufacturer to 
make adequate inspections and tests of every part of every manufactured 
home produced.
    (2) A design or quality assurance manual approved by a DAPIA shall 
be accepted by all IPIAs acting under Sec. 3282.362 who deal with the 
design, quality assurance manual, or manufactured homes built to them, 
and by all other parties, as, respectively, being in conformance with 
the Federal standards or as providing for adequate quality control to 
assure conformance. However, each design and quality assurance manual is 
subject to review and verification by the Secretary or the Secretary's 
agent at any time.
    (b) Designs. (1) In evaluating designs for compliance with the 
standards, the DAPIA will not allow any deviations from accepted 
engineering practice standards for design calculations or any deviations 
from accepted test standards, except that the DAPIA, for good cause, may 
request the Secretary to accept innovations which are not yet accepted 
practices. Acceptances by the Secretary shall be published in the form 
of interpretative bulletins, where appropriate.
    (2) The DAPIA shall require the manufacturer to submit floor plans 
and specific information for each manufactured home design or variation 
which the DAPIA is to evaluate. It shall also require the submission of 
drawings, specifications, calculations, and test records of the 
structural, electrical and mechanical systems of each such manufactured 
home design or variation. The manufacturer need not supply duplicate 
information where systems are common to several floor plans. Each DAPIA 
shall develop and carry out procedures for evaluating original 
manufactured home designs by requiring manufacturers to submit necessary 
drawings and calculations and carry out such verifications and 
calculations as it deems necessary. Where compliance with the standards 
cannot be determined on the basis of drawings and calculations, the 
DAPIA shall require any necessary tests to be carried out at its own 
facility, at separate testing facilities or at the manufacturer's plant.
    (3) Design deviation report. After evaluating the manufacturer's 
design, the DAPIA shall furnish the manufacturer with a design deviation 
report which specifies in detail, item by item with appropriate 
citations to the standards, the specific deviations in the 
manufacturer's design which must be rectified in order to produce 
manufactured homes which comply with the standards. The design deviation 
report may acknowledge the possibility of alternative designs, tests, 
listings, and certifications and state the conditions under which they 
will be acceptable. The design deviation report shall, to the extent 
practicable, be complete for each design evaluated in order to avoid 
repeated rejections and additional costs to the manufacturer.
    (4) Design approval. The DAPIA shall signify approval of a design by 
placing its stamp of approval or authorized signature on each drawing 
and each sheet of test results. The DAPIA shall clearly cross-reference 
the calculations and test results to applicable drawings. The DAPIA may 
require the manufacturer to do the cross-referencing if it wishes. It 
shall indicate on each sheet how any deviations from the standards have 
been or shall be resolved. Within 5 days after approving a design, the 
DAPIA

[[Page 250]]

shall forward a copy of the design to the manufacturer and the Secretary 
or the Secretary's agent (prior to the effective date of the standards 
the latter copy shall go to the Secretary.)

The DAPIA shall maintain a complete up-to-date set of approved designs 
and design changes approved under paragraph (b)(5) of this section which 
it can duplicate and copies of which it can furnish to interested 
parties as needed when disputes arise.
    (5) Design change approval. The DAPIA shall also be responsible for 
approving all changes which a manufacturer wishes to make in a design 
approved by the DAPIA. In reviewing design changes, the DAPIA shall 
respond as quickly as possible to avoid disruption of the manufacturing 
process. Within 5 days after approving a design change, the DAPIA shall 
forward a copy of this change to the manufacturer and the Secretary or 
the Secretary's agent as set out in paragraph (b)(4) of this section to 
be included in the design to which the change was made.
    (c) Quality assurance manuals. (1) In evaluating a quality assurance 
manual, the DAPIA shall identify any aspects of designs to be 
manufactured under the manual which require special quality control 
procedures. The DAPIA shall determine whether the manual under which a 
particular design is to be manufactured reflects those special 
procedures, and shall also determine whether the manuals which it 
evaluates provide for such inspections and testing of each manufactured 
home so that the manufacturer, by following the manual, can assure that 
each manufactured home it manufactures will conform to the standards. 
The manual shall, at a minimum, include the information set out in Sec. 
3282.203(c).
    (2) Manual deviation report. After evaluating a manufacturer's 
quality assurance manual, the DAPIA shall furnish the manufacturer with 
a manual deviation report which specifies in detail any changes which a 
manufacturer must make in order for the quality assurance manual to be 
acceptable. The manual deviation report shall, to the extent 
practicable, be complete for each design in order to avoid repeated 
rejections and additional costs to the manufacturer.
    (3) Manual approval. The DAPIA shall signify approval of the 
manufacturer's quality assurance manual by placing its stamp of approval 
or authorized signature on the cover page of the manual. Within 5 days 
of approving a quality assurance manual, the DAPIA shall forward a copy 
of the quality assurance manual to the manufacturer and the Secretary or 
the Secretary's agent (prior to the effective date of the standards, the 
latter copy shall go to the Secretary). The DAPIA shall maintain a 
complete up-to-date set of approved manuals and manual changes approved 
under paragraph (c)(4) of this section which it can duplicate and copies 
of which it can furnish to interested parties as needed when disputes 
arise.
    (4) Manual change approval. Each change the manufacturer wishes to 
make in its quality assurance manual shall be approved by the DAPIA. 
Within 5 days after approving a manual change, the DAPIA shall forward a 
copy of the change to the manufacturer and the Secretary or the 
Secretary's agent as set out in paragraph (c)(3) of this section to be 
included in the manual to which the change was made.
    (d) Requirements for full acceptance--DAPIA. (1) Before granting 
full acceptance to a DAPIA, the Secretary or the Secretary's agent shall 
review and evaluate at least one complete design and one quality 
assurance manual which has been approved by the DAPIA. These shall be 
designs and manuals approved to the Federal standards, and they shall be 
chosen at random from those approved by the DAPIA during the period of 
provisional acceptance.
    (2) If the Secretary determines that a design or quality assurance 
manual shows an inadequate level of performance, the Secretary or the 
Secretary's agent shall carry out further evaluations. If the Secretary 
finds the level of performance to be unacceptable, the Secretary shall 
not grant full acceptance. If full acceptance has not been granted by 
the end of the provisional acceptance period, provisional acceptance 
shall lapse unless the Secretary determines that the failure to obtain 
full acceptance resulted from the fact

[[Page 251]]

that the Secretary or her agent has not had adequate time in which to 
complete an evaluation.

[41 FR 19852, May 13, 1976, as amended at 61 FR 10861, Mar. 15, 1996]



Sec. 3282.362  Production Inspection Primary Inspection Agencies (IPIAs).

    (a) General--(1) IPIA responsibilities. An IPIA selected by a 
manufacturer under Sec. 3282.204 to act in a particular manufacturing 
plant shall be responsible for assuring:
    (i) That the plant is capable of following the quality control 
procedures set out in the quality assurance manual to be followed in 
that plant;
    (ii) That the plant continues to follow the quality assurance 
manual;
    (iii) That any part of any manufactured home that it actually 
inspects conforms with the design, or where the design is not specific 
with respect to an aspect of the standards, to the standards;
    (iv) That whenever it finds a manufactured home in production which 
fails to conform to the design or where the design is not specific, to 
the standards, the failure to conform is corrected before the 
manufactured home leaves the manufacturing plant; and
    (v) That if a failure to conform to the design, or where the design 
is not specific, to the standards, is found in one manufactured home, 
all other homes still in the plant which the IPIA's records or the 
records of the manufacturer indicate might not conform to the design or 
to standards are inspected and, if necessary, brought up to the 
standards before they leave the plant.
    (2) No more than one IPIA shall operate in any one manufacturing 
plant, except that where a manufacturer decides to change from one IPIA 
to another, the two may operate in the plant simultaneously for a 
limited period of time to the extent necessary to assure a smooth 
transition.
    (b) Plant approval. (1) Each IPIA shall, with respect to each 
manufacturing plant for which it is responsible, evaluate the quality 
control procedures being followed by the manufacturer in the plant to 
determine whether those procedures are consistent with and fulfill the 
procedures set out in the DAPIA approved quality assurance manual being 
followed in the plant. As part of this evaluation, and prior to the 
issuance of any labels to the manufacturer, the IPIA shall make a 
complete inspection of the manufacture of at least one manufactured home 
through all of the operations in the manufacturer's plant. The purpose 
of this initial factory inspection is to determine whether the 
manufacturer is capable of producing manufactured homes in conformance 
with the approved design and, to the extent the design is not specific 
with respect to an aspect of the standards, with the standards and to 
determine whether the manufacturer's quality control procedures as set 
out in the quality assurance manual, plant equipment, and personnel, 
will assure that such conformance continues. This inspection should be 
made by one or more qualified engineers who have reviewed the approved 
design and by an inspector who has been carefully briefed by the 
engineers on the restrictive aspects of the design. The manufactured 
home shall be inspected to the approved design for the home except that 
where the design is not specific with respect to any aspect of the 
standards, the inspection shall be to the standards as to that aspect of 
the manufactured home. If the first manufactured home inspected fails to 
conform to the design or, with respect to any aspect of the standards 
not specifically covered by the design, to the standards, additional 
units shall be similarly inspected until the IPIA is satisfied that the 
manufacturer is conforming to the approved design, or where the design 
is not specific with respect to any aspect of the standards, to the 
standards and quality assurance manual.
    (2) Certification report. If, on the basis of the initial 
comprehensive factory inspection required by paragraph (b)(1) of this 
section, the IPIA determines that the manufacturer is performing 
adequately, the IPIA shall prepare and forward to the manufacturer, to 
HUD, and to HUD's agent a certification report as described in this 
paragraph (b)(2) of this section. The issuance of the certification 
report is a prerequisite to the commencement of production surveillance 
under paragraph (c) of this

[[Page 252]]

section in the plant for which the report is issued. At the time the 
certification report is issued, the IPIA may provide the manufacturer 
with a two to four week supply of labels to be applied to manufactured 
homes produced in the plant. The IPIA shall maintain a copy of each 
certification report which it issues.
    (3) The certification report shall include:
    (i) The name of the DAPIA which approved the manufacturer's design 
and quality assurance manual and the dates of those approvals,
    (ii) The names and titles of the IPIA engineers and inspectors who 
performed the initial comprehensive inspection,
    (iii) A full report of inspections made, serial numbers inspected, 
any failures to comply which were observed, corrective actions taken, 
and dates of inspections, and
    (iv) A certification that at least one manufactured home has been 
completely inspected in all phases of its production in the plant, that 
the manufacturer is performing in conformance with the approved designs 
and quality assurance manual and, to the extent the design is not 
specific with respect to any aspects of the standards, with the 
standards, and the IPIA is satisfied that the manufacturer can produce 
manufactured homes in conformance with the designs, and where the 
designs are not specific, with the standards on a continuing basis.
    (4) Inadequate manufacturer performance. Where an IPIA determines 
that the performance of a manufacturer is not yet adequate to justify 
the issuance of a certification report and labels to the manufacturer, 
the IPIA may label manufactured homes itself by using such of its 
personnel as it deems necessary to perform complete inspections of all 
phases of production of each manufactured home being produced and 
labeling only those determined after any necessary corrections to be in 
conformance with the design and, as appropriate, with the standards. 
This procedure shall continue until the IPIA determines that the 
manufacturer's performance is adequate to justify the issuance of a 
certification report.
    (c) Production surveillance. (1) After it has issued a certification 
report under paragraph (b) of this section, the IPIA shall carry out 
ongoing surveillance of the manufacturing process in the plant. The IPIA 
shall be responsible for conducting representative inspections to assure 
that the manufacturer is performing its quality control program pursuant 
to and consistent with its approved quality assurance manual and to 
assure that whatever part of a manufactured home is actually inspected 
by the IPIA is fully in conformance with the design and, as appropriate 
under paragraph (a)(1)(iii) of this section, with the standards before a 
label is issued for or placed on that manufactured home. The 
surveillance visits shall commence no later than that date on which the 
IPIA determines they must commence so that the IPIA can assure that 
every manufactured home to be produced after the effective date of the 
standards to which a label provided for in paragraph (c)(2) of this 
section is affixed, is inspected in at least one stage of its 
production. The frequency of subsequent visits to the plant shall 
continue to be such that every manufactured home is inspected at some 
stage in its production. In the course of each visit, the IPIA shall 
make a complete inspection of every phase of production and of every 
visible part of every manufactured home which is at each stage of 
production. The inspection shall be made to the approved design except 
where the design is not specific with respect to an aspect of the 
standards, in which case the inspection of that aspect of the 
manufactured home shall be made to the standards. The IPIA shall assure 
that no label is placed on any manufactured home which it finds fails to 
conform with the approved design or, as appropriate, the standards in 
the course of these inspections and shall assure that no labels are 
placed on other manufactured homes still in the plant which may also not 
conform until those homes are inspected and if necessary corrected to 
the design or the standards. If an IPIA finds a manufactured home that 
fails to conform to the design, or as appropriate under paragraph 
(a)(1)(iii) of this section, to the standards, the IPIA may, in addition 
to

[[Page 253]]

withholding the label for the unit, proceed to red tag the home until 
the failure to conform is corrected. Only the IPIA is authorized to 
remove a red tag. When manufactured homes repeatedly fail to conform to 
the design, or as appropriate under paragraph (a)(1)(iii) of this 
section, to the standards in the same assembly station or when there is 
evidence that the manufacturer is ignoring or not performing under its 
approved quality assurance manual, the IPIA shall increase the frequency 
of these inspections until it is satisfied that the manufacturer is 
performing to its approved quality assurance manual. Failure to perform 
to the approved manual justifies withholding labels until an adequate 
level of performance is attained. As part of its function of assuring 
quality control, the IPIA shall inspect materials in storage and test 
equipment used by the manufacturer at least once a month, and more 
frequently if unacceptable conditions are observed. With the prior 
approval of the Secretary, an IPIA may decrease the frequency of any 
inspections.
    (2) Labeling--(i) Labels required. (A) The IPIA shall continuously 
provide the manufacturer with a two- to four-week supply (at the 
convenience of the IPIA and the manufacturer) of the labels described in 
this subsection, except that no labels shall be issued for use when the 
IPIA is not present if the IPIA is not satisfied that the manufacturer 
can and is producing manufactured homes which conform to the design and, 
as appropriate, to the standards. Where necessary, the IPIA shall 
reclaim labels already given to the manufacturer. In no event shall the 
IPIA allow a label to be affixed to a manufactured home if the IPIA 
believes that the manufactured home fails to conform to the design, or, 
where the design is not specific with respect to an aspect of the 
standards, to the standards. Labels for such manufactured homes shall be 
provided only after the failure to conform has been remedied, or after 
the Secretary has determined that there is no failure to conform.
    (B) A permanent label shall be affixed to each transportable section 
of each manufactured home for sale or lease to a purchaser or lessor in 
the United States in such a manner that removal will damage the label so 
that it cannot be reused. This label is provided by the IPIA and is 
separate and distinct from the data plate that the manufacturer is 
required to provide under Sec. 3280.5.
    (C) The label shall read as follows:

    ``As evidenced by this label No. ABC 000 001, the manufacturer 
certifies to the best of the manufacturer's knowledge and belief that 
this manufactured home has been inspected in accordance with the 
requirements of the Department of Housing and Urban Development and is 
constructed in conformance with the Federal Manufactured Home 
Construction and Safety Standards in effect on the date of manufacture. 
See data plate.''

    (D) The label shall be 2 in. by 4 in. in size and shall be 
permanently attached to the manufactured home by means of 4 blind 
rivets, drive screws, or other means that render it difficult to remove 
without defacing it. It shall be etched on .032 in. thick aluminum 
plate. The label number shall be etched or stamped with a 3 letter IPIA 
designation which the Secretary shall assign and a 6 digit number which 
the label supplier shall stamp sequentially on labels supplied to each 
IPIA.
    (E) The label shall be located at the tail-light end of each 
transportable section of the manufactured home approximately one foot up 
from the floor and one foot in from the road side, or as near that 
location on a permanent part of the exterior of the manufactured home as 
practicable. The roadside is the right side of the manufactured home 
when one views the manufactured home from the tow bar end of the 
manufactured home. It shall be applied to the manufactured home unit in 
the manufacturing plant by the manufacturer or the IPIA, as appropriate.
    (F) The label shall be provided to the manufacturer only by the 
IPIA. The IPIA shall provide the labels in sequentially numbered series. 
The IPIA may obtain labels from the Secretary or the Secretary's agent, 
or where the IPIA obtains the prior approval of the Secretary, from a 
label manufacturer. However, if the IPIA obtains labels directly from a 
label supplier, those labels must be sequentially numbered without any 
duplication of label numbers.

[[Page 254]]

    (G) Whenever the IPIA determines that a manufactured home which has 
been labeled, but which has not yet been released by the manufacturer 
may not conform to the design or, as appropriate under paragraph 
(a)(1)(iii) of this section, to the standards, the IPIA by itself or 
through an agent shall red tag the manufactured home. Where the IPIA 
determines that a manufactured home which has been labeled and released 
by the manufacturer, but not yet sold to a purchaser (as described in 
Sec. 3282.252(b)) may not conform, the IPIA may, in its discretion, 
proceed to red tag the manufactured home. Only the IPIA is authorized to 
remove red tags, though it may do so through agents which it deems 
qualified to determine that the failure to conform has been corrected. 
Red tags may be removed when the IPIA is satisfied, through inspections, 
assurances from the manufacturer, or otherwise, that the affected homes 
conform.
    (H) Labels that are damaged, destroyed, or otherwise made illegible 
or removed shall be replaced by the IPIA, after determination that the 
manufactured home is in compliance with the standards, by a new label of 
a different serial number. The IPIA's labeling record shall be 
permanently marked with the number of the replacement label and a 
corresponding record of the replacement label.
    (ii) Label control. The labels used in each plant shall be under the 
direct control of the IPIA acting in that plant. Only the IPIA shall 
provide the labels to the manufacturer. The IPIA shall assure that the 
manufacturer does not use any other label to indicate conformance to the 
standards.
    (A) The IPIA shall be responsible for obtaining labels. Labels shall 
be obtained from HUD or its agent, or with the approval of the 
Secretary, from a label manufacturer. The labels shall meet the 
requirements of this section. Where the IPIA obtains labels directly 
from a label manufacturer, the IPIA shall be responsible for assuring 
that the label manufacturer does not provide labels directly to the 
manufacturer of manufactured homes. If the label manufacturer fails to 
supply correct labels or allows labels to be released to parties other 
than the IPIA, the IPIA shall cease dealing with the label manufacturer.
    (B) The labels shall be shipped to and stored by the IPIA's at a 
location which permits ready access to manufacturing plants under its 
surveillance. The labels shall be stored under strict security and 
inventory control. They shall be released only by the IPIA to the 
manufacturer under these regulations.
    (C) The IPIA shall be able to account for all labels which it has 
obtained through the date on which the manufactured home leaves the 
manufacturing plant, and it shall be able to identify the serial number 
of the manufactured home to which each particular label is affixed.
    (D) The IPIA shall keep in its central record office a list of the 
serial numbers of labels issued from the label producer to the IPIA and 
by the IPIA to the manufacturing plant.
    (E) Failure to maintain control of labels through the date the 
manufactured home leaves the manufacturing plant and failure to keep 
adequate records of which label is on which manufactured home shall 
render the IPIA subject to disqualification under Sec. 3282.356.
    (3) Data plate. (i) The IPIA shall assure that each manufactured 
home produced in each manufacturing plant under its surveillance is 
supplied with a data plate which meets the requirements of this section 
and of Sec. 3280.5 of chapter XX of 24 CFR. The data plate shall be 
furnished by the manufacturer and affixed inside the manufactured home 
on or near the main electrical distribution panel. The data plate shall 
contain the following information:
    (A) The name and address of the manufacturing plant in which the 
manufactured home was manufactured,
    (B) The serial number and model designation of the unit and the date 
the unit was manufactured,
    (C) The statement ``This manufactured home is designed to comply 
with the Federal Manufactured Home Construction and Safety Standards in 
force at the time of manufacture.'',
    (D) A list of major factory-installed equipment including the 
manufacturer's name and the model designation of each appliance,

[[Page 255]]

    (E) Reference to the roof load zone and wind load zone for which the 
home is designed and duplicates of the maps as set forth in Sec. 
3280.305. This information may be combined with the heating/cooling 
certificate and insulation zone map required by Sec. Sec. 3280.510 and 
3280.511. The Wind Zone Map on the Data Plate shall also contain the 
statement:

    This home has not been designed for the higher wind pressures and 
anchoring provisions required for ocean/coastal areas and should not be 
located within 1500[foot] of the coastline in Wind Zones II and III, 
unless the home and its anchoring and foundation system have been 
designed for the increased requirements specified for Exposure D in 
ANSI/ASCE 7-88.

    (F) The statement:

    This home has ---- has not ---- (appropriate blank to be checked by 
manufacturer) been equipped with storm shutters or other protective 
coverings for windows and exterior door openings. For homes designed to 
be located in Wind Zones II and III, which have not been provided with 
shutters or equivalent covering devices, it is strongly recommended that 
the home be made ready to be equipped with these devices in accordance 
with the method recommended in the manufacturers printed instructions.

    (G) The statement: ``Design Approval by'', followed by the name of 
the agency that approved the design.
    (ii) A copy of the data plate shall be furnished to the IPIA, and 
the IPIA shall keep a permanent record of the data plate as part of its 
labeling record so that the information is available during the life of 
the manufactured home in case the data plate in the manufactured home is 
defaced or destroyed.
    (d) Permanent records. The IPIA shall maintain the following records 
as appropriate:
    (1) Records of all labels issued, applied, removed, and replaced by 
label number, manufactured home serial number, manufactured home type, 
manufacturer's name, dealer destination, and copies of corresponding 
data plates.
    (2) Records of all manufactured homes which are red tagged, and the 
status of each home.
    (3) Records of all inspections made at each manufacturing plant on 
each manufactured home serial number, each failure to conform found, and 
the action taken in each case.
    (4) Records of all inspections made at other locations of 
manufactured homes identified by manufacturer and serial number, all 
manufactured homes believed to contain the same failure to conform, and 
the action taken in each case.

All records shall specify the precise section of the standard which is 
in question and contain a clear and concise explanation of the process 
by which the IPIA reached any conclusions. All records shall be 
traceable to specific manufactured home serial numbers and through the 
manufacturer's records to dealers and purchasers.
    (e) Requirements for full acceptance--IPIA. (1) Before granting full 
acceptance to an IPIA, the Secretary or the Secretary's agent shall 
review and evaluate at least one certification report which has been 
prepared by the IPIA during the period of provisional acceptance. The 
Secretary or the Secretary's agent shall also review in depth the IPIA's 
administrative capabilities and otherwise review the IPIA's performance 
of its responsibilities under these regulations.
    (2) Where the Secretary determines on the basis of these reviews 
that an IPIA is not meeting an adequate level of performance, the 
Secretary or the Secretary's agent shall carry out further evaluations. 
If the Secretary finds the level of performance to be unacceptable, the 
Secretary shall not grant full acceptance. If full acceptance has not 
been granted by the end of the provisional acceptance period, 
provisional acceptance shall lapse unless the Secretary determines that 
the failure to obtain full acceptance resulted from the fact that the 
Secretary or the Secretary's agent has not had adequate time in which to 
complete an evaluation.

[41 FR 19852, May 13, 1976, as amended at 42 FR 2580, Jan. 12, 1977; 42 
FR 35157, July 8, 1977; 59 FR 2474, Jan. 14, 1994; 61 FR 10861, Mar. 15, 
1996]



Sec. 3282.363  Right of entry and inspection.

    Each primary inspection agency shall secure from each manufacturer 
and

[[Page 256]]

manufacturing plant under its surveillance an agreement that the 
Secretary, the State Administrative Agency and the primary inspection 
agency have the right to inspect the plant and its manufactured home 
inspection, labeling, and delivery records, and any of its manufactured 
homes in the hands of dealers or distributors at any reasonable time.



Sec. 3282.364  Inspection responsibilities and coordination.

    All primary inspection agencies shall be responsible for acting as 
necessary under their contractual commitment with the manufacturer to 
determine whether alleged failures to conform to the standards may exist 
in manufactured homes produced under their surveillance and to determine 
the source of the problems. The DAPIA may be required to examine the 
designs in question or the quality assurance manual under which the 
manufactured homes were produced. The IPIA may be required to reexamine 
the quality control procedures which it has approved to determine if 
they conform to the quality assurance manual, and the IPIA shall have 
primary responsibility for inspecting actual units produced and, where 
necessary, for inspecting units released by the manufacturer. All 
primary inspection agencies acting with respect to particular 
manufacturer or plant shall act in close coordination so that all 
necessary functions are performed effectively and efficiently.



Sec. 3282.365  Forwarding monitoring fee.

    The IPIA shall, whenever it provides labels to a manufacturer, 
obtain from the manufacturer the monitoring fee to be forwarded to the 
Secretary or the Secretary's agent as set out in Sec. 3282.210. If a 
manufacturer fails to provide the monitoring fee as required by Sec. 
3282.210 to be forwarded by the IPIA under this section, the IPIA shall 
immediately inform the Secretary; or the Secretary's Agent.



Sec. 3282.366  Notification and correction campaign responsibilities.

    (a) Both IPIAs and DAPIAs are responsible for assisting the 
Secretary or an SAA in identifying the class of manufactured homes that 
may have been affected where the Secretary or an SAA makes or is 
contemplating making a preliminary determination of imminent safety 
hazard, serious defect, defect, or noncompliance under Sec. 3282.407 
with respect to manufactured homes for which the IPIA or DAPIA provided 
either plant inspection or design approval services.
    (b) The IPIA in each manufacturing plant is responsible for 
reviewing manufacturer determinations of the class of manufactured homes 
affected when the manufacturer is acting under Sec. 3282.404. The IPIA 
shall concur in the method used to determine the class of potentially 
affected manufactured homes or shall state why it finds the method to be 
inappropriate, inadequate or incorrect.

[42 FR 2580, Jan. 12, 1977]



       Subpart I_Consumer Complaint Handling and Remedial Actions

    Source: 42 FR 2580, Jan. 12, 1977, unless otherwise noted.



Sec. 3282.401  Purpose and scope.

    (a) The purpose of this subpart is to establish a system under which 
the protections of the Act are provided with a minimum of formality and 
delay, but in which the rights of all parties are protected.
    (b) This subpart sets out the procedures to be followed by 
manufacturers, State Administrative Agencies, primary inspection 
agencies, and the Secretary to assure that manufacturers provide 
notification and correction with respect to their manufactured homes as 
required by the Act. Notification and correction may be required to be 
provided with respect to manufactured homes that have been sold or 
otherwise released by the manufacturer to another party when the 
manufacturer, an SAA or the Secretary determines that an imminent safety 
hazard, serious defect, defect, or noncompliance may exist in those 
manufactured homes as set out herein.
    (c) This subpart sets out the rights of dealers under section 613 of 
the Act, 42 U.S.C. 5412, to obtain remedies from

[[Page 257]]

manufacturers in certain circumstances.



Sec. 3282.402  General principles.

    (a) Nothing in this subpart or in these regulations shall limit the 
rights of the purchaser under any contract or applicable law.
    (b) The liability of manufactured home manufacturers to provide 
remedial actions under this subpart is limited by the principle that 
manufacturers are not responsible for failures that occur in 
manufactured homes or components solely as the result of normal year and 
aging, gross and unforeseeable consumer abuse, or unforeseeable neglect 
of maintenance.
    (c) The extent of a manufacturer's responsibility for providing 
notification or correction depends upon the seriousness of problems for 
which the manufacturer is responsible under this subpart.
    (d) When manufacturers act under Sec. 3282.404 of these 
regulations, they will not be required to classify the problem that 
triggered their action as a noncompliance, defect, serious defect, or 
imminent safety hazard.
    (e) It is the policy of these regulations that all consumer 
complaints or other information indicating the possible existence of an 
imminent safety hazard, serious defect, defect, or noncompliance should 
be referred to the manufacturer of the potentially affected manufactured 
homes as early as possible so that the manufacturer can begin to timely 
respond to the consumer and take any necessary remedial actions.



Sec. 3282.403  Consumer complaint and information referral.

    When a consumer complaint or other information indicating the 
possible existence of a noncompliance, defect, serious defect, or 
imminent safety hazard is received by a State Administrative Agency or 
the Secretary, the SAA or the Secretary shall forward the complaint or 
other information to the manufacturer of the manufactured home in 
question. The SAA or the Secretary shall, when it appears from the 
complaint or other information that more than one manufactured home may 
be involved, simultaneously send a copy of the complaint or other 
information to the SAA of the State where the manufactured home was 
manufactured or to the Secretary if there is no such SAA, and when it 
appears that an imminent safety hazard or serious defect may be 
involved, simultaneously send a copy to the Secretary.



Sec. 3282.404  Notification pursuant to manufacturer's determination.

    (a) The manufacturer shall provide notification as set out in this 
subpart with respect to all manufactured homes produced by the 
manufacturer in which there exists or may exist an imminent safety 
hazard or serious defect. The manufacturer shall provide such 
notification with respect to manufactured homes produced by the 
manufacturer in which a defect exists or may exist if the manufacturer 
has information indicating that the defect may exist in a class of 
manufactured homes that is identifiable because the cause of the defect 
or defects actually known to the manufacturer is such that the same 
defect would probably have been systematically introduced into more than 
one manufactured home during the course of production. This information 
may include, but is not limited to, complaints that can be traced to the 
same cause, defects known to exist in supplies of components or parts, 
information related to the performance of a particular employee and 
information indicating a failure to follow quality control procedures 
with respect to a particular aspect of the manufactured home. A 
manufacturer is required to provide notification with respect to a 
noncompliance only after the issuance of a final determination under 
Sec. 3282.407.
    (b) Whenever the manufacturer receives from any source information 
that may indicate the existence of a problem in a manufactured home for 
which the manufacturer is responsible for providing notification under 
paragraph (a) of this section, the manufacturer shall, as soon as 
possible, but not later than 20 days after receipt of the information, 
carry out any necessary investigations and inspections to determine and 
shall determine whether the manufacturer is responsible for providing 
notification under paragraph (a)

[[Page 258]]

of this section. The manufacturer shall maintain complete records of all 
such information and determinations in a form that will allow the 
Secretary or an SAA readily to discern who made the determination with 
respect to a particular piece of information, what the determination 
was, and the basis for the determination. Such records shall be kept for 
a minimum of five years from the date the manufacturer received the 
information. Consumer complaints or other information indicating the 
possible existence of noncompliances or defects received prior to the 
effective date of this section shall, for purposes of this subpart, be 
deemed to have been received on the date this section became effective.
    (c) If a manufacturer determines under paragraph (b) of this section 
that the manufacturer is responsible for providing notification under 
paragraph (a) of this section, the manufacturer shall prepare a plan for 
notification as set out in Sec. 3282.409. Where the manufacturer is 
required to correct under Sec. 3282.406, the manufacturer shall include 
in the plan provision for correction of affected manufactured homes. The 
manufacturer shall, as soon as possible, but not later than 20 days 
after making the determination, submit the plan to one of the following, 
as appropriate:
    (1) Where the manufactured homes covered by the plan were all 
manufactured in one State, to the SAA of the State of manufacture;
    (2) Where the manufactured homes were manufactured in more than one 
State, to the Secretary; or
    (3) Where there is no appropriate SAA under paragraph (c)(1) of this 
section, to the Secretary.

However, Where only one manufactured home is involved, the manufacturer 
need not submit the plan if the manufacturer corrects the manufactured 
home within the 20 day period. The manufacturer shall maintain, in the 
plant where the manufactured home was manufactured, a complete record of 
the correction. The record shall describe briefly the facts of the case 
and state what corrective actions were taken, and it shall be maintained 
in a separate file in a form that will allow the Secretary or an SAA to 
review all such corrections.
    (d) Upon approval of the plan with any necessary changes, the 
manufacturer shall carry out the approved plan within the time limits 
stated in it.
    (e) In any case, the manufacturer may act prior to obtaining 
approval of the plan. However, such action is subject to review and 
disapproval by the SAA of the State where the manufactured home is 
located, the SAA of the State where the manufactured home was 
manufactured, or the Secretary, except to the extent that agreement to 
the correction is obtained as described in this paragraph. To be assured 
that the corrective action will be accepted, the manufacturer may obtain 
the agreement of either SAA or the Secretary that the corrective action 
is adequate before the correction is made regardless of whether a plan 
has been submitted under paragraph (c) of this section. If such an 
agreement is obtained, the correction shall be accepted as adequate by 
all SAAs and the Secretary if the correction is made as agreed to and 
any imminent safety hazard or serious defect is eliminated.
    (f) If the manufacturer wishes to obtain a waiver of the formal plan 
approval and notification requirements that would result from a 
determination under paragraph (b) of this section, the manufacturer may 
act under this paragraph. The plan approval and notification 
requirements shall be waived by either the SAA or the Secretary that 
would otherwise review the plan under paragraph (c) of this section if:
    (1) The manufacturer, before the expiration of the time period 
determined under paragaraph (c) of this section, shows to the 
satisfaction of the SAA or the Secretary, through such documentation as 
the SAA or the Secretary may require, that:
    (i) The manufacturer has identified the class of possibly affected 
manufactured homes in accordance with Sec. 3282.409.
    (ii) The manufacturer will correct, at the manufacturer's expense, 
all affected manufactured homes in the class within 60 days of being 
informed that the request for waiver has been accepted; and

[[Page 259]]

    (iii) The proposed repairs are adequate to remove the failure to 
conform or imminent safety hazard that gave rise to the determination 
under paragraph (b) of this section; and
    (2) The manufacturer corrects all affected manufactured homes within 
60 days of being informed that the request for waiver has been accepted. 
The formal plan and notification requirements are waived pending final 
resolution of a waiver request under this paragraph (f) as of the date 
of such a request. If a waiver request is not accepted, the plan called 
for by paragraph (c) of this section shall be submitted within 5 days 
after the manufacturer is notified that the request was not accepted.



Sec. 3282.405  SAA responsibilities.

    (a) As set out at Sec. 3282.302(b)(5), each SAA is responsible for 
overseeing the handling of consumer complaints by manufacturers within 
the state. As part of that responsibility, the SAA is required to 
monitor manufacturer compliance with this subpart, and particularly with 
Sec. 3282.404. This monitoring will be done primarily by periodically 
checking the records that manufacturers are required to keep under Sec. 
3282.404(b).
    (b) If the SAA acting under paragraph (a) finds that a manufacturer 
has failed to comply with Sec. 3282.404, or if the SAA finds that the 
manufacturer has decided not to act under Sec. 3282.404(c) where the 
SAA believes the manufacturer is required to act, or if the manufacturer 
failed to fulfill the requirements of Sec. 3282.404(f) after requesting 
a waiver under that paragraph, the SAA shall make such preliminary 
determinations as it deems appropriate under Sec. 3282.407(b), except 
that if the affected manufactured homes were manufactured in more than 
one state or if it appears that the appropriate preliminary 
determination would be an imminent safety hazard or serious defect, the 
SAA shall refer the matter to the Secretary.
    (c) Where an SAA that is reviewing a plan under Sec. 3282.404(c) 
finds that the manufacturer is not acting reasonably in refusing to 
accept changes to a proposed plan, the SAA shall make such preliminary 
determinations as may be appropriate under Sec. 3282.407, except that 
where it appears that it would be appropriate to make a preliminary 
determination of imminent safety hazard or serious defect, the SAA shall 
refer the matter to the Secretary.



Sec. 3282.406  Required manufacturer correction.

    A manufacturer required to furnish notification under Sec. 3282.404 
or Sec. 3282.407 shall correct, at its expense, any imminent safety 
hazard or serious defect that can be related to an error in design or 
assembly of the manufactured home by the manufacturer, including an 
error in design or assembly of any component or system incorporated in 
the manufactured home by the manufacturer.



Sec. 3282.407  Notification and correction pursuant to administrative
determination.

    (a) Preliminary determinations. (1) Whenever the Secretary has 
information indicating the possible existence of an imminent safety 
hazard or serious defect in a manufactured home, the Secretary may issue 
a preliminary determination to that effect to the manufacturer.
    (2) Whenever the information referred to in paragraph (a)(1) of this 
section indicates that the manufacturer is required to correct the 
imminent safety hazard or serious defect under Sec. 3282.406, the 
Secretary may issue a preliminary determination to that effect to the 
manufacturer.
    (3) Whenever an SAA has information indicating that a defect or 
noncompliance may exist in a class of manufactured homes that is 
identifiable because the cause of the defect or noncompliance is such 
that the same defect or noncompliance would probably have been 
systematically introduced into more than one manufactured home during 
the course of production, and all manufactured homes in the class appear 
to have been manufactured in that State, the SAA may issue a preliminary 
determination of defect or noncompliance to the manufacturer. 
Information on which an SAA may base a conclusion that an appropriate 
class of manufactured homes exists may include, but is not limited to, 
complaints that can be traced to the

[[Page 260]]

same cause, defects known to exist in supplies of components or parts, 
information related to the performance of a particular employee, and 
information indicating a failure to follow quality control procedures 
with respect to a particular aspect of the manufactured home. If, during 
the course of these proceedings, evidence arises that indicates that 
manufactured homes in the same identifiable class were manufactured in 
more than one state, the SAA shall refer the matter to the Secretary. 
The Secretary may make a preliminary determination of noncompliance or 
defect where there is evidence that a noncompliance or defect may exist.
    (b) Notice and request for presentation of views and evidence. (1) 
Notice of the preliminary determination shall be sent by certified mail 
and shall include:
    (i) The factual basis for the determination and
    (ii) The identifying criteria of the manufactured homes known to be 
affected and those believed to be in the class of possibly affected 
manufactured homes.
    (2) The notice shall inform the manufacturer that the preliminary 
determination shall become final unless the manufacturer requests a 
hearing or presentation of views under subpart D of this part within 15 
days of receipt of a Notice of Preliminary Determination of serious 
defect, defect, or noncompliance, or within 5 days of receipt of a 
Notice of Preliminary Determination of imminent safety hazard.
    (3) Promptly upon receipt of a manufacturer's request, a Formal or 
an Informal Presentation of Views shall be held in accordance with Sec. 
3282.152.
    (4) Parties may propose in writing, at any time, offers of 
settlement which shall be submitted to and considered by the Secretary 
or the SAA that issued the Notice of Preliminary Determination. If 
determined to be appropriate, the party making the offer may be given an 
opportunity to make an oral presentation in support of such offer. If an 
offer of settlement is rejected, the party making the offer shall be so 
notified and the offer shall be deemed withdrawn and shall not 
constitute a part of the record in the proceeding. Final acceptance by 
the Secretary or an SAA of any offer to settlement shall automatically 
terminate any proceedings related thereto.
    (c) Final determinations. (1) If the manufacturer fails to respond 
to the notice of preliminary determination within the time period 
established in paragraph (b)(2) of this section, or if the SAA or the 
Secretary decides that the views and evidence presented by the 
manufacturer or others are insufficient to rebut the preliminary 
determination, the SAA or the Secretary, as appropriate, shall make a 
final determination that an imminent safety hazard, serious defect, 
defect, or noncompliance exists. In the event of a final determination 
that an imminent safety hazard, serious defect, defect or noncompliance 
exists, the SAA or the Secretary shall issue an order directing the 
manufacturer to furnish notification. If the Secretary makes a final 
determination that the manufacturer is required to correct, the 
Secretary shall issue an order directing the manufacturer to provide 
correction.
    (2) Appeals. When an SAA has made a final determination that a 
defect or noncompliance exists, the manufacturer may, within 10 days 
after receipt of the notice of such final determination, appeal to the 
Secretary under Sec. 3282.309.
    (d) Where a preliminary determination of defect or noncompliance has 
been issued, the manufacturer may, at any time during the proceedings 
called for in this section or after the issuance of a Final 
Determination and Order, request a waiver of the formal notification 
requirements. The manufacturer may request such a waiver from the SAA 
that is handling the proceedings, or if the Secretary is handling the 
proceedings, from the Secretary. When requesting such a waiver, the 
manufacturer shall certify and provide assurances that:
    (1) The manufacturer has identified the class of possibly affected 
manufactured homes in accordance with Sec. 3282.409;
    (2) The manufacturer will correct, at the manufacturer's expense, 
all affected manufactured homes in the class within a time period 
specified by the SAA or the Secretary but not later than 60 days after 
being informed of

[[Page 261]]

the acceptance of the request for waiver or issuance of the Final 
Determination, whichever is later; and
    (3) The proposed repairs are adequate to remove the failure to 
conform or imminent safety hazard that gave rise to the issuance of the 
Preliminary Determination.

The SAA or the Secretary may grant the request for waiver if the 
manufacturer agrees under paragraph (b)(4) of this section to an offer 
of settlement that includes an order that embodies the assurances made 
by the manufacturer.

[42 FR 2580, Jan. 12, 1977, as amended at 51 FR 34468, Sept. 29, 1986; 
51 FR 37568, Oct. 23, 1986]



Sec. 3282.408  Reimbursement for prior correction by owner.

    A manufacturer that is required to correct under Sec. 3282.406 or 
that decides to correct and obtain a waiver under Sec. 3282.404(f) or 
Sec. 3282.407(d) shall provide reimbursement for reasonable cost of 
correction to any owner of an affected manufactured home who chose to 
make the correction before the manufacturer did so.



Sec. 3282.409  Manufacturer's plan for notification and correction.

    (a) This section sets out the requirements that shall be met by 
manufacturers in preparing plans they are required to submit under Sec. 
3282.404(c). The underlying requirement is that the plan show how the 
manufacturer will fulfill its responsibilities with respect to 
notification and correction that arise under this subpart I.
    (b) The plan shall include a copy of the proposed notice that meets 
the requirements of Sec. 3282.410.
    (c) The plan shall identify, by serial number and other appropriate 
identifying criteria, all manufactured homes with respect to which 
notification is to be provided. The class of manufactured homes with 
respect to which notification shall be provided and which shall be 
covered by the plan is that class of homes that was or is suspected of 
having been affected by the cause of an imminent safety hazard or 
failure to conform. The class is identifiable to the extent that the 
cause of the imminent safety hazard or failure to conform is such that 
it would probably have been systematically introduced into the 
manufactured homes in the class during the course of production. In 
determining the extent of such a class, the manufacturer may rely either 
upon information that positively identifies the extent of the class or 
upon information that indicates what manufactured homes were not 
affected by the same cause, thereby identifying the class by excluding 
those manufactured homes. Methods that may be used in determining the 
extent of the class of manufactured homes include, but are not limited 
to:
    (1) Inspection of manufactured homes produced before and after the 
manufactured homes known to be affected;
    (2) Inspection of manufacturer quality control records to determine 
whether quality control procedures were followed;
    (3) Inspection of IPIA records to determine whether the imminent 
safety hazard or failure to conform was either detected or specifically 
found not to exist in some manufactured homes;
    (4) Inspection of the design of the manufactured home in question to 
determine whether the imminent safety hazard or failure to conform 
resulted from the design itself;
    (5) Identification of the cause as relating to a particular employee 
or process that was employed for a known period of time or in producing 
the manufactured homes manufactured during that time;
    (6) Inspection of records relating to components supplied by other 
parties and known to contain or suspected of containing imminent safety 
hazards or failures to conform.

The class of manufactured homes identified by these methods may include 
only manufactured homes actually affected by the imminent safety hazard 
or failure to conform if the manufacturer can identify the precise 
manufactured homes. If it is not possible to identify the precise 
manufactured homes, the class shall include manufactured homes suspected 
of containing the imminent safety hazard or failure to conform because 
the evidence shows that they may have been affected.
    (d) The plan shall include a statement by the IPIA operating in each

[[Page 262]]

plant in which manufactured homes in question were produced. In this 
statement, the IPIA shall concur in the methods used by the manufacturer 
to determine the class of potentially affected manufactured homes or 
state why it believes the methods to have been inappropriate, 
inadequate, or incorrect.
    (e) The plan shall include a deadline for completion of all 
notifications and corrections.
    (f) The plan shall provide for notification to be accomplished:
    (1) By certified mail or other more expeditious means to the dealers 
or distributors of such manufacturer to whom such manufactured home was 
delivered. Where a serious defect or imminent safety hazard is involved, 
notification shall be sent by certified mail if it is mailed; and
    (2) By certified mail to the first purchaser of each manufactured 
home in the class of manufactured homes set out in the plan under 
paragraph (c) of this section, and to any subsequent owner to whom any 
warranty provided by the manufacturer or required by Federal, State or 
local law on such manufactured home has been transferred, to the extent 
feasible, except that notification need not be sent to any person known 
by the manufacturer not to own the manufactured home in question if the 
manufacturer has a record of a subsequent owner of the manufactured 
home; and
    (3) By certified mail to any other person who is a registered owner 
of each manufactured home containing the imminent safety hazard, serious 
defect, defect, or noncompliance and whose name has been ascertained 
pursuant to Sec. 3282.211.



Sec. 3282.410  Contents of notice.

    Except as otherwise agreed by the Secretary or the SAA reviewing the 
plan under Sec. 3282.404(c), the notification to be sent by the 
manufacturer shall include the following:
    (a) An opening statement: ``This notice is sent to you in accordance 
with the requirments of the National Manufactured Housing Construction 
and Safety Standards Act.''
    (b) Except where the manufacturer is acting under Sec. 3282.404, 
the following statement, as appropriate: ``(Manufacturer's name or the 
Secretary, or the appropriate SAA)'' has determined that:
    (1) An imminent safety hazard may exist in (identifying criteria of 
manufactured home).
    (2) A serious defect may exist in (identifying criteria of 
manufactured home).
    (3) A defect may exist in (identifying criteria of manufactured 
home).
    (4) (Identifying criteria of manufactured home) may not comply with 
an applicable ``Federal Home Construction or Safety Standard.''
    (c) A clear description of the imminent safety hazard, serious 
defect, defect, or noncompliance which shall include:
    (1) The location of the imminent safety hazard, serious defect, 
defect, or noncompliance in the manufactured home;
    (2) A description of any hazards, malfunctions, deterioration or 
other consequences which may result from the imminent safety hazard, 
serious defect, defect, or noncompliance;
    (3) A statement of the conditions which may cause such consequences 
to arise; and
    (4) Precautions, if any, that the owner should take to reduce the 
chance that the consequences will arise before the manufactured home is 
repaired.
    (d) An evaluation of the risk to manufactured home occupants' safety 
and the durability of the manufactured home reasonably related to such 
imminent safety hazard, serious defect, defect, or noncompliance, 
including:
    (1) The type of injury which may occur to occupants of the 
manufactured home; and
    (2) Whether there will be any warning that a dangerous occurrence 
may take place and what that warning would be, and any signs which the 
owner might see, hear, smell, or feel which might indicate danger or 
deterioration of the manufactured home as a result of the imminent 
safety hazard, serious defect, defect, or noncompliance.
    (e) If the manufacturer will correct the manufactured home under 
this subpart or otherwise, a statement that the manufacturer will 
correct the manufactured home.

[[Page 263]]

    (f) A statement in accordance with whichever of the following is 
appropriate:
    (1) Where the manufacturer will correct the manufactured home at no 
cost to the owner, the statement shall indicate how and when the 
correction will be done, how long the correction will take, and any 
other information that may be helpful to the owner.
    (2) When the manufacturer does not bear the cost of repair, the 
notification shall include a detailed description of all parts and 
materials needed to make the correction, a description of all steps to 
be followed in making the correction including appropriate 
illustrations, and an estimate of the cost of the purchaser or owner of 
the correction.
    (g) A statement informing the owner that the owner may submit a 
complaint to the Secretary if the owner believes that:
    (1) The notification or the remedy described therein is inadequate; 
or
    (2) The manufacturer has failed or is unable to remedy the problem 
in accordance with his notification; or
    (3) The manufacturer has failed or is unable to remedy within a 
reasonable time after the owner's first attempt to obtain remedy.
    (h) A statement that any actions taken by the manufacturer under the 
Act in no way limit the rights of the owner or any other person under 
any contract or other applicable law and that the owner may have further 
rights under contract or other applicable law.



Sec. 3282.411  Time for implementation.

    (a) The manufacturer shall complete implementation of the plan for 
correction approved under Sec. 3282.404(d) on or before the deadline 
established in the plan as required by Sec. 3282.409(e). The deadline 
shall allow a reasonable amount of time to complete the plan, taking 
into account the seriousness of the problem, the number of manufactured 
homes involved, the immediacy of any risk, and the difficulty of 
completing the action. The seriousness and immediacy of any risk shall 
be given greater weight than other considerations. If a manufacturer is 
required to correct an imminent safety hazard or serious defect under 
Sec. 3282.406, the deadline shall be no later than 60 days after 
approval of the plan.
    (b) The manufacturer shall complete the implementation of any 
notifications and corrections being carried out under an order of an SAA 
or the Secretary under Sec. 3282.407(c) on or before the deadline 
established in the order. In establishing each deadline, an SAA or the 
Secretary shall allow a reasonable time to complete all notifications 
and corrections, taking into account the seriousness of the imminent 
safety hazard, serious defect, defect or noncompliance, the number of 
manufactured homes involved, the location of the homes, and the extent 
of correction required, except that in no case shall the time allowed 
exceed the following limits:
    (1) In the case of a Final Determination of imminent safety hazard, 
30 days after the issuance of the Final Determination.
    (2) In the case of a Final Determination of serious defect, defect 
or noncompliance, 60 days after the issuance of the Final Determination.
    (c) An SAA that approved a plan or is handling a proceeding or the 
Secretary may grant an extension of the deadlines included in a plan or 
order if the manufacturer requests such an extension in writing and 
shows good cause for the extension, and the SAA or the Secretary is 
satisfied that the extension is justified in the public interest. When 
the Secretary grants an extension, the Secretary shall notify the 
manufacturer and shall publish notice of such extension in the Federal 
Register. When an SAA grants an extension, the SAA shall notify the 
manufacturer, and forward to the Secretary a draft notice of the 
extension to be published in the Federal Register.



Sec. 3282.412  Completion of remedial actions and report.

    (a) Where a manufacturer is required to provide notification under 
this subpart, the manufacturer shall maintain in its files for five 
years from the date the notification campaign is completed a copy of the 
notice sent and a complete list of the people and their addresses. The 
files referred to in this section shall be organized such that

[[Page 264]]

each notification and correction campaign can be readily identified and 
reviewed by an SAA or the Secretary.
    (b) Where a manufacturer is required to provide correction under 
Sec. 3282.406 or where the manufacturer otherwise corrects under Sec. 
3282.404(f) or Sec. 3282.407(d), the manufacturer shall maintain in its 
files, for five years from the date the correction campaign is 
completed, one of the following, as appropriate, for each manufactured 
home involved.
    (1) Where the correction is made, a certification by the 
manufacturer that the repair was made to satisfy completely the 
standards in effect at the time the manufactured home was manufactured 
and that any imminent safety hazard has been eliminated, or
    (2) Where the owner refuses to allow the manufacturer to repair the 
home, a certification by the manufacturer that the owner has been 
informed of the problem which may exist in the manufactured home, that 
the owner has been informed of any risk to safety or durability of the 
manufactured home which may result from the problem, and that an attempt 
has been made to repair the problems only to have the owner refuse the 
repair.
    (c) If any actions taken under this subpart are not adequate under 
the approved plan or an order of the Secretary or an SAA, the 
manufacturer may be required to provide additional notifications or 
corrections to satisfy the plan or order.
    (d) If, in the course of making corrections under any of the 
provisions of this subpart, the manufacturer creates an imminent safety 
hazard or serious defect, the manufacturer shall correct the imminent 
safety hazard or serious defect under Sec. 3282.406.
    (e) The manufacturer shall, within 30 days after the deadline for 
completing any notifications and, where required, corrections, under an 
approved plan or under an order of an SAA or the Secretary, or any 
corrections required to obtain a waiver under Sec. 3282.404(f) or Sec. 
3282.407(d), provide a complete report of the action taken to the SAA or 
the Secretary that approved the plan under Sec. 3282.404(d), granted 
the waiver, or issued the order under Sec. 3282.407(c), and to any 
other SAA or the Secretary that forwarded a relevant complaint or 
information to the manufacturer under Sec. 3282.403.



Sec. 3282.413  Replacement or repurchase of manufactured home from
purchaser.

    (a) Whenever an imminent safety hazard or serious defect which must 
be corrected by the manufacturer at his expense under Sec. 3282.407 
cannot be repaired within 60 days in accordance with section 615(i) of 
the Act, the Secretary may require:
    (1) That the manufactured home be replaced by the manufacturer with 
a manufactured home substantially equal in size, equipment, and quality, 
and either new or in the same condition the defective manufactured home 
would have been in at the time of discovery of the imminent safety 
hazard or serious defect had the imminent safety hazard or serious 
defect not existed; or
    (2) That the manufacturer take possession of the manufactured home 
and refund the purchase price in full, less a reasonable allowance for 
depreciation based on actual use if the home has been in the possession 
of the owner for more than one year. Such depreciation shall be based 
upon an appraisal system approved by the Secretary, and shall not take 
into account damage or deterioration resulting from the imminent safety 
hazard or serious defect.
    (b) In determining whether to order replacement or refund by the 
manufacturer, the Secretary shall consider:
    (1) The threat of injury or death to manufactured home occupants;
    (2) Any costs and inconvenience to manufactured home owners which 
will result from the lack of adequate repair within the specified 
period;
    (3) The expense to the manufacturer;
    (4) Any obligations imposed on the manufacturer under contract or 
other applicable law of which the Secretary has knowledge; and
    (5) Any other relevant factors which may be brought to the attention 
of the Secretary.
    (c) In those situations where, under contract or other applicable 
law, the owner has the right of election between replacement and refund, 
the manufacturer shall inform the owner of such right of election and 
shall inform the

[[Page 265]]

Secretary of the election, if any, by the owner.
    (d) This section applies where an attempted correction of an 
imminent safety hazard or serious defect relieves the safety problem but 
does not bring the home in conformity to the standards.
    (e) Where replacement or refund by the manufacturer is ordered under 
this section, it shall be carried out within 30 days of the Secretary's 
order to replace the manufactured home or refund the purchase price 
unless the Secretary, for good cause shown, grants an extension of time 
for implementation of such order and publishes notice of extension in 
the Federal Register.



Sec. 3282.414  Manufactured homes in the hands of dealers and
distributors.

    (a) The manufacturer is responsible for correcting any failures to 
conform and imminent safety hazards which exist in manufactured homes 
which have been sold or otherwise released to a distributor or dealer 
but which have not yet been sold to a purchaser. This responsibility 
generally does not extend to failures to conform or imminent safety 
hazards that result solely from transit damage that occurs after the 
manufactured home leaves the control of the manufacturer, unless such 
transit damage is reasonably foreseeable by the manufacturer when the 
home is released by the manufacturer. This section sets out the 
procedures to be followed by dealers and distributors for handling 
manufactured homes in such cases. Regardless of whether the manufacturer 
is responsible for repairing a manufactured home, no dealer or 
distributor may sell a manufactured home if it contains a failure to 
conform or an imminent safety hazard.
    (b) Whenever a dealer or distributor finds a problem in a 
manufactured home which the manufacturer is responsible for correcting 
under paragraph (a) of this section, the dealer or distributor shall 
contact the manufacturer, provide full information concerning the 
problem, and request appropriate action by the manufacturer in accord 
with paragraph (c) of this section. Where the manufacturer agrees to 
correct, the manufacturer shall maintain a complete record of its 
actions. Where the manufacturer authorizes the dealer to make the 
necessary corrections on a reimbursable basis, the dealer or distributor 
shall maintain a complete record of its actions. Agreement by the 
manufacturer to correct or to authorize corrections on a reimbursable 
basis under this paragraph constitutes a determination of the Secretary 
for purposes of section 613(b) of the Act with respect to judicial 
review of the amount which the manufacturer agrees to reimburse the 
dealer or distributor for corrections.
    (c) Upon a final determination by the Secretary or a State 
Administration Agency under Sec. 3282.407, or upon a determination by a 
court of competent jurisdiction that a manufactured home fails to 
conform to the standard or contains an imminent safety hazard after such 
manufactured home is sold or otherwise released by a manufacturer to a 
distributor or a dealer and prior to the sale of such manufactured home 
by such distributor or dealer to a purchaser, the manufacturer shall 
have the option to either:
    (1) Immediately furnish, at the manufacturer's expense, to the 
purchasing distributor or dealer the required conforming part or parts 
or equipment for installation by the distributor or dealer on or in such 
manufactured home, and the manufacturer shall reimburse such distributor 
or dealer for the reasonable value of such installation plus a 
reasonable reimbursement of not less than one per centum per month of 
the manufacturer's or distributor's selling price prorated from the date 
of receipt by certified mail of notice of noncompliance to the date such 
manufactured home is brought into compliance with the standards, so long 
as the distributor or dealer proceeds with reasonable diligence with the 
installation after the part or component is received; or
    (2) Immediately repurchase, at the manufacturer's expense, such 
manufactured home from such distributor or dealer at the price paid by 
such distributor or dealer, plus all transportation charges involved and 
a reasonable reimbursement of not less than one per centum per month of 
such price paid prorated from the date of receipt

[[Page 266]]

by certified mail of notice of the imminent safety hazard, serious 
defect, defect or noncompliance to the distributor. The value of such 
reasonable reimbursements as specified in this paragraph shall be fixed 
by mutual agreement of the parties or by a court in an action brought 
under section 613(b) of the Act.
    (d) This section shall not apply to any manufactured home purchased 
by a dealer or distributor which has been leased by such dealer or 
distributor to a tenant for purposes other than resale. In that instance 
the dealer or distributor has the remedies available to a purchaser 
under this subpart.



Sec. 3282.415  Notices, bulletins and other communications.

    Each manufacturer shall, at the time of dispatch, furnish to the 
Secretary a true or representative copy of all notices, bulletins, and 
other written communications to the dealers or distributors of such 
manufacturer or purchasers or owners of manufactured homes of such 
manufacturers regarding any serious defect or imminent safety hazard 
which may exist in any such manufactured homes produced by such 
manufacturer. Manufacturers shall keep complete records of all other 
communications with dealers, owners, and purchasers regarding 
noncompliances, and defects.



Sec. 3282.416  Supervision of notification and correction actions.

    (a) The IPIA in each manufacturing plant shall be responsible for 
assuring that notifications are sent to all owners, purchasers, dealers, 
or distributors of whom the manufacturer has knowledge under Sec. 
3282.211 or otherwise as required by these regulations, and the IFIA 
shall be responsible for assuring that the required corrections are 
carried out by auditing the certificates required by Sec. 3282.412.
    (b) The SAA or Secretary to which the report required by Sec. 
3282.412(e) is sent shall be responsible for assuring through oversight 
that remedial actions described in the report have been carried out as 
described in the report.
    (c) The SAA of the state in which an affected manufactured home is 
located may inspect that manufactured home to determine whether any 
required correction is carried out to the approved plan or, if there is 
no plan, to the standards or other approval obtained by the 
manufacturer.



           Subpart J_Monitoring of Primary Inspection Agencies



Sec. 3282.451  General.

    The actions of all primary inspection agencies accepted under 
subpart H shall be monitored by the Secretary or the Secretary's agent 
to determine whether the PIAs are fulfilling their responsibilities 
under these regulations. This monitoring shall be carried out primarily 
through joint monitoring teams made up of personnel supplied by SAAs and 
by the Secretary or the Secretary's agent. Monitoring parties shall make 
recommendations to the Secretary with respect to final acceptance of 
PIAs under Sec. Sec. 3282.361(e) and 3282.362(e), continued acceptance, 
and disqualification or requalification under Sec. 3282.356, and with 
respect to any changes which PIAs should make in their operations in 
order to continue to be approved. Based on this monitoring, the 
Secretary shall determine whether PIAs should continue to be approved 
under these regulations.



Sec. 3282.452  Participation in monitoring.

    (a) Joint monitoring teams. (1) The Secretary or the Secretary's 
agent shall develop and coordinate joint monitoring teams which shall be 
made up of qualified personnel provided by SAAs and by the Secretary or 
the Secretary's agent. The Secretary or the Secretary's agent shall 
determine whether personnel are qualified based on education or 
experience.
    (2) The joint monitoring teams will operate generally on a regional 
basis. To the extent possible, the teams shall be so scheduled that 
personnel provided by an SAA will be monitoring operations in 
manufactured home plants from which manufactured homes are shipped into 
their State.
    (3) Personnel from an SAA shall not participate on joint monitoring 
teams operating within their State.
    (4) States are encouraged but not required to participate on joint 
monitoring teams.

[[Page 267]]

    (b) State monitoring. A State may carry out monitoring of IPIA 
functions at plant facilities within the State if the State is not 
acting as an IPIA. Where a State wishes to carry out monitoring 
activities it shall do so in coordination with the Secretary and the 
Secretary's agent. To the extent that the State is performing adequate 
monitoring, the frequency of the joint team monitoring may be reduced to 
one visit per year consistent with the requirements of Sec. 3282.453.
    (c) Review of staff capability. The monitoring party shall review 
the capability of the PIA's staff to perform the functions it is 
required to perform.
    (d) Review of interpretations. The monitoring party shall review all 
records of interpretations of the standards made by the PIA to determine 
whether they are consistent and to determine whether there are any 
conflicts which should be referred to the Secretary for determination.
    (e) DAPIA. Monitoring parties shall review on a random basis at 
least 10 percent of the design and quality assurance manual approvals 
made by each DAPIA in each year.
    (f) IPIA. The monitoring parties shall assure that the IPIAs are 
carrying out all of the functions for which they have been accepted. In 
particular, they shall assure that the manufacturing process is as 
stated in the certification reports, that the IPIAs are carrying out the 
required number of inspections, that inspections are effective, and that 
the IPIAs are maintaining complete label control as required by Sec. 
3282.362. A monitoring team shall monitor the IPIA's office procedures, 
files, and label control and the monitoring team shall send copies of 
its report to the Secretary or the Secretary's agent, which shall send 
copies to all monitoring teams which monitor the operations of the 
subject IPIA.
    (g) Remedial actions. The monitoring parties shall review the 
remedial action records of the manufacturers and of the primary 
inspection agencies closely to determine whether the primary inspection 
agencies have been carrying out their responsibilities with respect to 
remedial actions.



Sec. 3282.453  Frequency and extent of monitoring.

    (a) The actions of all primary inspection agencies shall be 
monitored at a frequency adequate to assure that they are performing 
consistently and fulfilling their responsibilities under these 
regulations. Every aspect of the primary inspection agencies' 
performance shall be monitored.
    (b) Frequency of monitoring. The performance of each primary 
inspection agency shall be monitored during its period of provisional 
acceptance by a complete review of its records and, in the case of IPAs, 
by a complete inspection of the operations of at least one manufacturing 
plant which it has approved or in which it is operating. After the 
initial inspection, the performance of each primary inspection agency 
shall be monitored four times per year, except that the number of 
monitoring visits may be decreased to a minimum of one per year if the 
performance of the primary inspection agency is deemed by the Secretary 
or the Secretary's agent to be superior, and it may be increased as 
necessary if performance is suspect. There shall be a minimum of one 
review per year of the records of each primary inspection agency, and 
there shall be more reviews as needed.



                    Subpart K_Departmental Oversight



Sec. 3282.501  General.

    The Secretary shall oversee the performance of SAAs, the Secretary's 
agent, and primary inspection agencies as follows:
    (a) The Secretary shall review SAA reports to ensure that States are 
taking appropriate actions with regard to the enforcement of the 
standards and with respect to the functions for which they are approved 
under these regulations.
    (b) The Secretary shall review monitoring reports submitted by the 
Secretary's agent to determine that it is performing in accordance with 
the contract between it and the Secretary.
    (c) The Secretary shall review monitoring reports to determine 
whether

[[Page 268]]

PIAs are fulfilling their responsibilities under these regulations.
    (d) The Secretary shall make random visits for the purpose of 
overseeing the activities of SAAs and the Secretary's agent.
    (e) The Secretary shall take such other actions to oversee the 
system established by these regulations as it deems appropriate.
    (f) All records maintained by all parties acting under these 
regulations with respect to those actions shall be available to the 
Secretary, the Secretary's agent, and where appropriate, SAAs and PIAs 
for review at any reasonable time.



Sec. 3282.502  Departmental implementation.

    To the extent that SAAs or any parties contracting with the 
Secretary do not perform functions called for under these regulations, 
those functions shall be carried out by the Secretary with its own 
personnel or through other appropriate parties.



Sec. 3282.503  Determinations and hearings.

    The Secretary shall make all the determinations and hold such 
hearings as are required by these regulations, and the Secretary shall 
resolve all disputes arising under these regulations.



              Subpart L_Manufacturer, IPIA and SAA Reports



Sec. 3282.551  Scope and purpose.

    This subpart describes the reports which shall be submitted by 
manufacturers, PIAs and SAAs as part of the system of enforcement 
established under these regulations. Additional reports described in 
subpart I are required when corrective actions are taken under that 
subpart.



Sec. 3282.552  Manufacturer reports for joint monitoring fees.

    For each month, the manufacturer shall submit to the IPIA in each of 
its manufacturing plants a report that includes the serial numbers of 
each manufactured home manufactured at that plant during that preceding 
month, and the State of first location, after leaving the manufacturing 
plant, of such manufactured homes. The State of first location for the 
purpose of this report is the State of the premises of the distributor, 
dealer or purchaser to whom the manufactured home is first shipped. The 
report for each month shall be submitted by the tenth day of the 
following month.



Sec. 3282.553  IPIA reports.

    Each IPIA shall submit by the twentieth day of each month to each 
SAA, or if no SAA to the Secretary, in each state where it is engaged in 
the inspection of manufacturing plants, a report of the operations of 
each manufacturer in that State for the preceding month which includes 
the following information:
    (a) The number of single-wide and double-wide manufactured homes 
labeled in the preceding month;
    (b) The number of inspection visits made to each manufacturing plant 
in the preceding month; and
    (c) The number of manufactured homes with a failure to conform to 
the standards or an imminent safety hazard during the preceding month 
found in the manufacturing plant.

The manufacturers report for the preceding month described in Sec. 
3282.552 shall be attached to each such IPIA report as an appendix 
thereto.



Sec. 3282.554  SAA reports.

    Each SAA shall submit, prior to the last day of each month, to the 
Secretary a report covering the preceding month which includes:
    (a) The description and status of all presentations of views, 
hearings and other legal actions during the preceding month; and
    (b) The description of the SAA's oversight activities and findings 
regarding consumer complaints, notification and correction actions 
during the preceding month. The IPIA report for the preceding month 
described in Sec. 3282.553, as well as the reports described in Sec. 
3282.413 and manufacturer reports under Sec. 3282.404(d), which were 
received during the preceding month, shall be attached to each such SAA 
report as an appendix thereto.

[[Page 269]]



PART 3284_MANUFACTURED HOUSING PROGRAM FEE--Table of Contents



Sec.
3284.1 Applicability.
3284.5 Amount of fee.
3284.10 Payments to States.

    Authority: 42 U.S.C. 3535(d), 5419 and 5424.

    Source: 67 FR 52835, Aug. 13, 2002, unless otherwise noted.



Sec. 3284.1  Applicability.

    This part applies to manufacturers that are subject to the 
requirements of the National Manufactured Housing Construction and 
Safety Standards Act of 1974 (the Act), and to States having State plans 
approved in accordance with the Act. The amounts established under this 
part for any fee collected from manufacturers will be used, to the 
extent approved in advance in an annual appropriations Act, to offset 
the expenses incurred by HUD in connection with the manufactured housing 
program authorized by the Act.



Sec. 3284.5  Amount of fee.

    Each manufacturer, as defined in Sec. 3282.7 of this chapter, must 
pay a fee of $39 per transportable section of each manufactured housing 
unit that it manufactures under the requirements of part 3280 of this 
chapter.



Sec. 3284.10  Payments to States.

    Each calendar year HUD will pay each State that, on December 27, 
2000, had a State plan approved pursuant to subpart G of part 3282 of 
this chapter a total amount that is not less than the amount paid to 
that State for the 12 months ending at the close of business on December 
26, 2000.



PART 3285_MODEL MANUFACTURED HOME INSTALLATION STANDARDS--
Table of Contents



                            Subpart A_General

Sec.
3285.1 Administration.
3285.2 Manufacturer installation instructions.
3285.3 Alterations during initial installation.
3285.4 Incorporation by reference (IBR).
3285.5 Definitions.
3285.6 Final leveling of manufactured home.

                Subpart B_Pre-Installation Considerations

3285.101 Fire separation.
3285.102 Installation of manufactured homes in flood hazard areas.
3285.103 Site suitability with design zone maps.
3285.104 Moving manufactured home to location.
3285.105 Permits, other alterations, and on-site structures.

                       Subpart C_Site Preparation

3285.201 Soil conditions.
3285.202 Soil classifications and bearing capacity.
3285.203 Site drainage.
3285.204 Ground moisture control.

                          Subpart D_Foundations

3285.301 General.
3285.302 Flood hazard areas.
3285.303 Piers.
3285.304 Pier configuration.
3285.305 Clearance under homes.
3285.306 Design procedures for concrete block piers.
3285.307 Perimeter support piers.
3285.308 Manufactured piers.
3285.309 [Reserved]
3285.310 Pier location and spacing.
3285.311 Required perimeter supports.
3285.312 Footings.
3285.313 Combination systems.
3285.314 [Reserved]
3285.315 Special snow load conditions.

                    Subpart E_Anchorage Against Wind

3285.401 Anchoring instructions.
3285.402 Ground anchor installations.
3285.403 Sidewall, over-the-roof, mate-line, and shear wall straps.
3285.404 Severe climatic conditions.
3285.405 Severe wind zones.
3285.406 Flood hazard areas.

                       Subpart F_Optional Features

3285.501 Home installation manual supplements.
3285.502 Expanding rooms.
3285.503 Optional appliances.
3285.504 Skirting.
3285.505 Crawlspace ventilation.

         Subpart G_Ductwork and Plumbing and Fuel Supply Systems

3285.601 Field assembly.
3285.602 Utility connections.
3285.603 Water supply.
3285.604 Drainage system.
3285.605 Fuel supply system.

[[Page 270]]

3285.606 Ductwork connections.

               Subpart H_Electrical Systems and Equipment

3285.701 Electrical crossovers.
3285.702 Miscellaneous lights and fixtures.
3285.703 Smoke alarms.
3285.704 Telephone and cable TV.

                Subpart I_Exterior and Interior Close-Up

3285.801 Exterior close-up.
3285.802 Structural interconnection of multi-section homes.
3285.803 Interior close-up.
3285.804 Bottom board repair.

     Subpart J_Optional Information for Manufacturer's Installation 
                              Instructions

3285.901 General.
3285.902 Moving manufactured home to location.
3285.903 Permits, alterations, and on-site structures.
3285.904 Utility systems connection.
3285.905 Heating oil systems.
3285.906 Telephone and cable TV.
3285.907 Manufacturer additions to installation instructions.

    Authority: 42 U.S.C. 3535(d), 5403, 5404, and 5424.

    Source: 72 FR 59362, Oct. 19, 2007, unless otherwise noted.



                            Subpart A_General



Sec. 3285.1  Administration.

    (a) Scope. These Model Installation Standards provide minimum 
requirements for the initial installation of new manufactured homes, in 
accordance with section 605 of the Act (42 U.S.C. 5404). The Model 
Installation Standards are one component of the Manufactured Home 
Installation Program in Part 3286 of this chapter, upon effect, and 
serve as the basis for developing the manufacturers' installation 
instructions required by Sec. 3285.2 of this subpart. The 
manufacturer's installation instructions, including specific methods for 
performing a specific operation or assembly, will be deemed to comply 
with these Model Installation Standards, provided they meet or exceed 
the minimum requirements of these Model Installation Standards and do 
not take the home out of compliance with the Manufactured Home 
Construction and Safety Standards (24 CFR part 3280). Work necessary to 
join all sections of a multi-section home specifically identified in 
Subparts G, H, and I of this part, or work associated with connecting 
exterior lights, chain-hung light fixtures, or ceiling-suspended fans, 
as specifically identified in Subpart I, is not considered assembly or 
construction of the home, although the design of those elements of a 
manufactured home must comply with the Manufactured Home Construction 
and Safety Standards (MHCSS). However, work associated with the 
completion of hinged roofs and eaves in Sec. 3285.801 and other work 
done on-site and not specifically identified in this part as close-up is 
considered construction and assembly and is subject to the requirements 
of the Manufactured Home Construction and Safety Standards (24 CFR part 
3280) and the Manufactured Home Procedural and Enforcement Regulations 
(24 CFR part 3282).
    (1) States that choose to operate an installation program for 
manufactured homes in lieu of the federal program must implement 
installation standards that provide protection to its residents that 
equals or exceeds the protection provided by these Model Installation 
Standards.
    (2) In states that do not choose to operate their own installation 
program for manufactured homes, these Model Installation Standards serve 
as the minimum standards for manufactured home installations.
    (b) Applicability. The standards set forth herein have been 
established to accomplish certain basic objectives and are not to be 
construed as relieving manufacturers, retailers, installers, or other 
parties of responsibility for compliance with other applicable 
ordinances, codes, regulations, and laws. The manufactured homes covered 
by this standard must comply with requirements of the U.S. Department of 
Housing and Urban Development's (HUD) MHCSS Program, as set forth in 24 
CFR part 3280, Manufactured Home Construction and Safety Standards, and 
24 CFR part 3282, Manufactured Home Procedural and Enforcement 
Regulations, as well as with, upon effect, the Manufactured Home 
Installation Program, 24 CFR part 3286, and the Dispute Resolution 
Program, 24 CFR

[[Page 271]]

part 3288. The requirements of this part do not apply to homes installed 
on site-built permanent foundations when the manufacturer certifies the 
home in accordance with Sec. 3282.12 of this chapter.
    (c) Consultation with the Manufactured Housing Consensus Committee. 
The Secretary will seek input from the Manufactured Housing Consensus 
Committee (MHCC) when revising the installation standards in this part 
3285. Before publication of a proposed rule to revise the installation 
standards, the Secretary will provide the MHCC with a 120-day 
opportunity to comment on such revision. The MHCC may send to the 
Secretary any of the MHCC's own recommendations to adopt new 
installation standards or to modify or repeal any of the installation 
standards in this part. Along with each recommendation, the MHCC must 
set forth pertinent data and arguments in support of the action sought. 
The Secretary will either:
    (1) Accept or modify the recommendation and publish it for public 
comment in accordance with section 553 of the Administrative Procedure 
Act (5 U.S.C. 553), along with an explanation of the reasons for any 
such modification; or
    (2) Reject the recommendation entirely, and provide to the MHCC a 
written explanation of the reasons for the rejection.



Sec. 3285.2  Manufacturer installation instructions.

    (a) Instructions required. A manufacturer must provide with each new 
manufactured home, installation designs and instructions that have been 
approved by the Secretary or DAPIA. The approved installation 
instructions must include all topics covered in the Model Installation 
Standards for the installation of manufactured homes. These installation 
instructions and any variations thereto that are prepared to comply with 
paragraph (c) of this section must provide protection to residents of 
the manufactured homes that equals or exceeds the protection provided by 
these Model Installation Standards and must not take the manufactured 
home out of compliance with the MHCSS. These instructions must insure 
that each home will be supported and anchored in a manner that is 
capable of meeting or exceeding the design loads required by the MHCSS.
    (b) Professional engineer or registered architect certification. A 
professional engineer or registered architect must prepare and certify 
that the manufacturer's installation instructions meet or exceed the 
Model Installation Standards for foundation support and anchoring 
whenever:
    (1) The manufacturer's installation instructions do not conform in 
their entirety to the minimum requirements or tables or their conditions 
for foundation support and anchoring of this Standard; or
    (2) An alternative foundation system or anchoring system is 
employed, including designs for basements and perimeter support 
foundation systems, whether or not it is included in the installation 
instructions; or
    (3) Materials such as metal piers or alternatives to concrete 
footing materials are required by the installation instructions; or
    (4) Foundation support and anchoring systems are designed for use in 
areas subject to freezing or for use in areas subject to flood damage or 
high seismic risk; or
    (5) Foundations support and anchoring systems are designed to be 
used in special snow load conditions or in severe wind design areas; or
    (6) Site conditions do not allow the use of the manufacturer's 
installation instructions; or
    (7) There are any other circumstances in which the manufacturer's 
installation instructions would not permit the home to be installed in 
conformance with the Installation Standards or the MHCSS.
    (c) Variations to installation instructions. (1) Before an installer 
provides support or anchorage that are different than those methods 
specified in the manufacturer's installation instructions, or when the 
installer encounters site or other conditions (such as areas that are 
subject to flood damage or high seismic risk) that prevent the use of 
the instructions, the installer must:
    (i) First attempt to obtain DAPIA-approved designs and instructions 
prepared by the manufacturer; or

[[Page 272]]

    (ii) If designs and instructions are not available from the 
manufacturer, obtain an alternate design prepared and certified by a 
registered professional engineer or registered architect for the support 
and anchorage of the manufactured home that is consistent with the 
manufactured home design, conforms to the requirements of the MHCSS, and 
has been approved by the manufacturer and the DAPIA.
    (2) The manufacturer's installation instructions must include an 
explanation of the requirement in paragraph (c)(1) of this section.
    (d) Installer certification. In making the certification of the 
installation required under part 3286 of this chapter, upon effect, an 
installer must certify that it completed the installation in compliance 
with either the manufacturer's instructions or with an alternate 
installation design and instructions that have been prepared by the 
manufacturer or prepared in compliance with paragraph (c) of this 
section.
    (e) Temporary storage. The installation instructions must provide at 
least one method for temporarily supporting each transportable section 
of a manufactured home, to prevent structural and other damage to the 
structure, when those section(s) are temporarily sited at the 
manufacturer's facility, retailer's lot, or the home site.



Sec. 3285.3  Alterations during initial installation.

    Additions, modifications, or replacement or removal of any equipment 
that affects the installation of the home made by the manufacturer, 
retailer, or installer prior to completion of the installation by an 
installer must equal or exceed the protections and requirements of these 
Model Installation Standards, the MHCSS (24 CFR part 3280) and the 
Manufactured Home Procedural and Enforcement Regulations (24 CFR part 
3282). An alteration, as defined in Sec. 3282.7 of this chapter, must 
not affect the ability of the basic manufactured home to comply with the 
MHCSS, and the alteration must not impose additional loads to the 
manufactured home or its foundation, unless the alteration is included 
in the manufacturer's DAPIA-approved designs and installation 
instructions, or is designed by a registered professional engineer or 
architect consistent with the manufacturer's design and that conforms to 
the requirements of the MHCSS.



Sec. 3285.4  Incorporation by reference (IBR).

    (a) The materials listed in this section are incorporated by 
reference in the corresponding sections noted. These incorporations by 
reference were approved by the Director of the Federal Register, in 
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. The materials are 
available for purchase at the corresponding addresses noted below, and 
all are available for inspection at the Office of Manufactured Housing 
Programs, U.S. Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room 9164, Washington, DC 20410; or the National Archives 
and Records Administration (NARA). For information on the availability 
of this material at NARA, call (202) 741-6030, or go to: http://
www.archives.gov/federal-register/cfr/ibr-locations.html.
    (b) The materials listed below are available for purchase from the 
Air Conditioning Contractors of America (ACCA), 2800 Shirlington Road, 
Suite 300, Arlington, Virginia 22206.
    (1) ACCA Manual J, Residential Load Calculation, 8th Edition, IBR 
approved for Sec. 3285.503(a)(1)(i)(A).
    (2) [Reserved]
    (c) The materials listed below are available for purchase from APA--
The Engineered Wood Association, 7011 South 19th Street, Tacoma, 
Washington 98411, telephone number (253) 565-6600, fax number (253) 565-
7265.
    (1) PS1-95, Construction and Industrial Plywood (with typical APA 
trademarks), 1995 edition, IBR approved for Sec. 3285.312(a)(2)(i).
    (2) [Reserved]
    (d) The materials listed below are available for purchase from 
American Society of Heating, Refrigerating and Air Conditioning 
Engineers (ASHRAE), 1791 Tullie Circle, NE., Atlanta, Georgia 30329-
2305.
    (1) ASHRAE Handbook of Fundamentals, 1997 Inch-Pound Edition, IBR 
approved for Sec. 3285.503(a)(1)(i)(A).
    (2) [Reserved]
    (e) The materials listed below are available for purchase from 
American

[[Page 273]]

Society for Testing and Materials (ASTM), 100 Barr Harbor Drive, West 
Conshohocken, Pennsylvania 19428-2959.
    (1) ASTM C 90-02a, Standard Specification for Loadbearing Concrete 
Masonry Units, 2002, IBR approved for Sec. 3285.312(a)(1)(i).
    (2) ASTM D 1586-99, Standard Test Method for Penetration Test and 
Split-Barrel Sampling of Soils, 1999, IBR approved for the table at 
Sec. 3285.202(c).
    (3) ASTM D 2487-00, Standard Practice for Classification of Soils 
for Engineering Purposes (Unified Soil Classification System), 2000, IBR 
approved for the table at Sec. 3285.202(c).
    (4) ASTM D 2488-00, Standard Practice for Description and 
Identification of Soils (Visual-Manual Procedure), 2000, IBR approved 
for the table at Sec. 3285.202(c).
    (5) ASTM D 3953-97, Standard Specification for Strapping, Flat Steel 
and Seals, 1997, IBR approved for Sec. 3285.402(b)(2) and Note 10 to 
Table 1 to Sec. 3285.402.
    (f) The materials listed below are available for purchase from 
American Wood-Preservers' Association (AWPA), P.O. Box 388, Selma, 
Alabama 36702.
    (1) AWPA M4-02, Standard for the Care of Preservative-Treated Wood 
Products, 2002, IBR approved for Sec. 3285.312(a)(2)(iii).
    (2) AWPA U1-04, Use Category System; User Specification for Treated 
Wood, 2004, IBR approved for Sec. Sec. 3285.303(b)(1), 
3285.312(a)(2)(ii), and 3285.504(c).
    (g) The materials listed below are available for purchase from the 
Federal Emergency Management Administration (FEMA), 500 C Street, SW., 
Washington, DC 20472.
    (1) FEMA 85/September 1985, Manufactured Home Installation in Flood 
Hazard Areas, 1985, IBR approved for Sec. 3285.102(d)(3).
    (2) [Reserved]
    (h) The materials listed below are available for purchase from the 
National Fire Protection Association (NFPA), 1 Batterymarch Park, 
Quincy, Massachusetts 02169-7471.
    (1) NFPA 31, Standard for the Installation of Oil Burning Equipment, 
2001 edition, IBR approved for Sec. Sec. 3285.905(a) and 
3285.905(d)(3).
    (2) NFPA 70, National Electrical Code, 2005 edition, IBR approved 
for Sec. Sec. 3285.702(e)(1) and 3285.906.
    (3) NFPA 501A, Standard for Fire Safety Criteria for Manufactured 
Home Installations, Sites, and Communities, 2003 edition, IBR approved 
for Sec. 3285.101.
    (i) The materials listed below are available for purchase from the 
Structural Engineering Institute/American Society of Civil Engineers 
(SEI/ASCE), 1801 Alexander Bell Drive, Reston, Virginia 20191.
    (1) SEI/ASCE 32-01, Design and Construction of Frost-Protected 
Shallow Foundations, 2001, IBR approved for Sec. Sec. 
3285.312(b)(2)(ii) and 3285.312(b)(3)(ii).
    (2) [Reserved]
    (j) The materials listed below are available for purchase from 
Underwriters Laboratories (UL), 333 Pfingsten Road, Northbrook, Illinois 
60062.
    (1) UL 181A, Closure Systems for Use With Rigid Air Ducts and Air 
Connectors, 1994, with 1998 revisions, IBR approved for Sec. 
3285.606(a).
    (2) UL 181B, Closure Systems for Use With Flexible Air Ducts and Air 
Connectors, 1995, with 1998 revisions, IBR approved for Sec. 
3285.606(a).



Sec. 3285.5  Definitions.

    The definitions contained in this section apply to the terms used in 
these Model Installation Standards. Where terms are not included, common 
usage of the terms applies. The definitions are as follows:
    Act. The National Manufactured Housing Construction and Safety 
Standards Act of 1974, 42 U.S.C. 5401-5426.
    Anchor assembly. Any device or other means designed to transfer home 
anchoring loads to the ground.
    Anchoring equipment. Ties, straps, cables, turnbuckles, chains, and 
other approved components, including tensioning devices that are used to 
secure a manufactured home to anchor assemblies.
    Anchoring system. A combination of anchoring equipment and anchor 
assemblies that will, when properly designed and installed, resist the 
uplift, overturning, and lateral forces on the manufactured home and on 
its support and foundation system.

[[Page 274]]

    Approved. When used in connection with any material, appliance or 
construction, means complying with the requirements of the Department of 
Housing and Urban Development.
    Arid region. An area subject to 15 inches or less of annual 
rainfall.
    Base flood. The flood having a one percent chance of being equaled 
or exceeded in any given year.
    Base flood elevation (BFE). The elevation of the base flood, 
including wave height, relative to the datum specified on a LAHJ's flood 
hazard map.
    Comfort cooling certificate. A certificate permanently affixed to an 
interior surface of the home specifying the factory design and 
preparations for air conditioning the manufactured home.
    Crossovers. Utility interconnections in multi-section homes that are 
located where the sections are joined. Crossover connections include 
heating and cooling ducts, electrical circuits, water pipes, drain 
plumbing, and gas lines.
    Design Approval Primary Inspection Agency (DAPIA). A state or 
private organization that has been accepted by the Secretary in 
accordance with the requirements of Part 3282, Subpart H of this 
chapter, which evaluates and approves or disapproves manufactured home 
designs and quality control procedures.
    Diagonal tie. A tie intended to resist horizontal or shear forces, 
but which may resist vertical, uplift, and overturning forces.
    Flood hazard area. The greater of either: The special flood hazard 
area shown on the flood insurance rate map; or the area subject to 
flooding during the design flood and shown on a LAHJ's flood hazard map, 
or otherwise legally designated.
    Flood hazard map. A map delineating the flood hazard area and 
adopted by a LAHJ.
    Footing. That portion of the support system that transmits loads 
directly to the soil.
    Foundation system. A system of support that is capable of 
transferring all design loads to the ground, including elements of the 
support system, as defined in this section, or a site-built permanent 
foundation that meets the requirements of 24 CFR 3282.12.
    Ground anchor. A specific anchoring assembly device designed to 
transfer home anchoring loads to the ground.
    Installation instructions. DAPIA-approved instructions provided by 
the home manufacturer that accompany each new manufactured home and 
detail the home manufacturer requirements for support and anchoring 
systems, and other work completed at the installation site to comply 
with these Model Installation Standards and the Manufactured Home 
Construction and Safety Standards in 24 CFR part 3280.
    Installation standards. Reasonable specifications for the 
installation of a new manufactured home, at the place of occupancy, to 
ensure proper siting; the joining of all sections of the home; and the 
installation of stabilization, support, or anchoring systems.
    Labeled. A label, symbol, or other identifying mark of a nationally 
recognized testing laboratory, inspection agency, or other organization 
concerned with product evaluation that maintains periodic inspection of 
production of labeled equipment or materials, and by whose labeling is 
indicated compliance with nationally recognized standards or tests to 
determine suitable usage in a specified manner.
    Listed or certified. Included in a list published by a nationally 
recognized testing laboratory, inspection agency, or other organization 
concerned with product evaluation that maintains periodic inspection of 
production of listed equipment or materials, and whose listing states 
either that the equipment or material meets nationally recognized 
standards or has been tested and found suitable for use in a specified 
manner.
    Local authority having jurisdiction (LAHJ). The state, city, county, 
city and county, municipality, utility, or organization that has local 
responsibilities and requirements that must be complied with during the 
installation of a manufactured home.
    Lowest floor. The floor of the lowest enclosed area of a 
manufactured home. An unfinished or flood-resistant enclosure, used 
solely for vehicle parking, home access, or limited storage, must not be 
considered the lowest floor, provided the enclosed area is not 
constructed so as to render the home in

[[Page 275]]

violation of the flood-related provisions of this standard.
    Manufactured home. A structure, transportable in one or more 
sections, which in the traveling mode is 8 body feet or more in width or 
40 body feet or more in length, or which when erected on site is 320 or 
more square feet, and which is built on a permanent chassis and designed 
to be used as a dwelling with or without a permanent foundation when 
connected to the required utilities, and includes the plumbing, heating, 
air-conditioning, and electrical systems contained in the structure. 
This term includes all structures that meet the above requirements, 
except the size requirements and with respect to which the manufacturer 
voluntarily files a certification, pursuant to Sec. 3282.13 of this 
chapter, and complies with the MHCSS set forth in part 3280 of this 
chapter. The term does not include any self-propelled recreational 
vehicle. Calculations used to determine the number of square feet in a 
structure will include the total of square feet for each transportable 
section comprising the completed structure and will be based on the 
structure's exterior dimensions measured at the largest horizontal 
projections when erected on-site. These dimensions will include all 
expandable rooms, cabinets, and other projections containing interior 
space, but do not include bay windows. Nothing in this definition should 
be interpreted to mean that a manufactured home necessarily meets the 
requirements of HUD's Minimum Property Standards (HUD Handbook 4900.1) 
or that it is automatically eligible for financing under 12 U.S.C. 
1709(b) certification.
    Manufactured Home Construction and Safety Standards or MHCSS. The 
Manufactured Home Construction and Safety Standards established in part 
3280 of this chapter, pursuant to section 604 of the Act, 42 U.S.C. 
5403.
    Manufactured home gas supply connector. A listed connector designed 
for connecting the manufactured home to the gas supply source.
    Manufactured home site. A designated parcel of land designed for the 
installation of one manufactured home for the exclusive use of the 
occupants of the home.
    Manufactured Housing Consensus Committee or MHCC. The consensus 
committee established pursuant to section 604(a)(3) of the Act, 42 
U.S.C. 5403(a)(3).
    Model Installation Standards. The installation standards established 
in part 3285 of this chapter, pursuant to section 605 of the Act, 42 
U.S.C. 5404.
    Pier. That portion of the support system between the footing and the 
manufactured home, exclusive of shims. Types of piers include, but are 
not limited to: Manufactured steel stands; pressure-treated wood; 
manufactured concrete stands; concrete blocks; and portions of 
foundation walls.
    Ramada. Any freestanding roof or shade structure, installed or 
erected above a manufactured home or any portion thereof.
    Secretary. The Secretary of Housing and Urban Development, or an 
official of HUD delegated the authority of the Secretary with respect to 
the Act.
    Skirting. A weather-resistant material used to enclose the 
perimeter, under the living area of the home, from the bottom of the 
manufactured home to grade.
    Stabilizing devices. All components of the anchoring and support 
systems, such as piers, footings, ties, anchoring equipment, anchoring 
assemblies, or any other equipment, materials, and methods of 
construction, that support and secure the manufactured home to the 
ground.
    State. Each of the several states, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the Virgin Islands, and American 
Samoa.
    Support system. Pilings, columns, footings, piers, foundation walls, 
shims, and any combination thereof that, when properly installed, 
support the manufactured home.
    Tie. Straps, cable, or securing devices used to connect the 
manufactured home to anchoring assemblies.
    Ultimate load. The absolute maximum magnitude of load that a 
component or system can sustain, limited only by failure.
    Utility connection. The connection of the manufactured home to 
utilities that include, but are not limited to, electricity, water, 
sewer, gas, or fuel oil.

[[Page 276]]

    Vertical tie. A tie intended to resist uplifting and overturning 
forces.
    Wind zone. The areas designated on the Basic Wind Zone Map, as 
further defined in Sec. 3280.305(c) of the Manufactured Home 
Construction and Safety Standards in this chapter, which delineate the 
wind design load requirements.
    Working load. The maximum recommended load that may be exerted on a 
component or system determined by dividing the ultimate load of a 
component or system by an appropriate factor of safety.



Sec. 3285.6  Final leveling of manufactured home.

    The manufactured home must be adequately leveled prior to completion 
of the installation, so that the home's performance will not be 
adversely affected. The home will be considered adequately leveled if 
there is no more than \1/4\ inch difference between adjacent pier 
supports (frame or perimeter) and the exterior doors and windows of the 
home do not bind and can be properly operated.



                Subpart B_Pre-Installation Considerations



Sec. 3285.101  Fire separation.

    Fire separation distances must be in accordance with the 
requirements of Chapter 6 of NFPA 501A, 2003 edition (incorporated by 
reference, see Sec. 3285.4) or the requirements of the LAHJ. The 
installation instructions must clearly indicate this requirement in a 
separate section and must caution installers to take into account any 
local requirements on fire separation.



Sec. 3285.102  Installation of manufactured homes in flood hazard areas.

    (a) Definitions. Except to the extent otherwise defined in Subpart 
A, the terms used in this subpart are as defined in 44 CFR 59.1 of the 
National Flood Insurance Program (NFIP) regulations.
    (b) Applicability. The provisions of this section apply to the 
initial installation of new manufactured homes located wholly or partly 
within a flood hazard area.
    (c) Pre-installation considerations. Prior to the initial 
installation of a new manufactured home, the installer is responsible 
for determining whether the manufactured home site lies wholly or partly 
within a special flood hazard area as shown on the LAHJ's Flood 
Insurance Rate Map, Flood Boundary and Floodway Map, or Flood Hazard 
Boundary Map, or if no LAHJ, in accordance with NFIP regulations. If so 
located, and before an installation method is agreed upon, the map and 
supporting studies adopted by the LAHJ must be used to determine the 
flood hazard zone and base flood elevation at the site.
    (d) General elevation and foundation requirements--(1) Methods and 
practices. Manufactured homes located wholly or partly within special 
flood hazard areas must be installed on foundations engineered to 
incorporate methods and practices that minimize flood damage during the 
base flood, in accordance with the requirements of the LAHJ, 44 CFR 
60.3(a) through (e), and other provisions of 44 CFR referenced by those 
paragraphs.
    (2) Outside appliances. (i) Appliances installed on the manufactured 
home site in flood hazard areas must be anchored and elevated to or 
above the same elevation as the lowest elevation of the lowest floor of 
the home.
    (ii) Appliance air inlets and exhausts in flood hazard areas must be 
located at or above the same elevation as the lowest elevation of the 
lowest floor of the home.
    (3) Related guidance. Refer to FEMA 85/September 1985, Manufactured 
Home Installation in Flood Hazard Areas, 1985 (incorporated by 
reference, see Sec. 3285.4).



Sec. 3285.103  Site suitability with design zone maps.

    Prior to the initial installation of a new manufactured home and as 
part of making the certification of the installation required under part 
3286, upon effect, the installer is to verify that the design and 
construction of the manufactured home, as indicated on the design zone 
maps provided with the home, are suitable for the site location where 
the home is to be installed. The

[[Page 277]]

design zone maps are those identified in part 3280 of this chapter.
    (a) Wind zone. Manufactured homes must not be installed in a wind 
zone that exceeds the design wind loads for which the home has been 
designed, as evidenced by the wind zone indicated on the home's data 
plate and as further defined by counties or local governments within 
affected states, as applicable, in Sec. 3280.305(c)(2) of the 
Manufactured Home Construction and Safety Standards in this chapter.
    (b) Roof load zone. Manufactured homes must not be located in a roof 
load zone that exceeds the design roof load for which the home has been 
designed, as evidenced by the roof load zone indicated on the home's 
data plate and as further defined by counties or local governments 
within affected states, as applicable, in Sec. 3280.305(c)(3) of the 
Manufactured Home Construction and Safety Standards in this chapter. 
Refer to Sec. 3285.315 for Special Snow Load Conditions.
    (c) Thermal zone. Manufactured homes must not be installed in a 
thermal zone that exceeds the thermal zone for which the home has been 
designed, as evidenced by the thermal zone indicated on the heating/
cooling certificate and insulation zone map and as further defined by 
counties or local governments within affected states, as applicable, in 
Sec. 3280.504(b)(5) of the Manufactured Home Construction and Safety 
Standards in this chapter. The manufacturer may provide the heating/
cooling information and insulation zone map on the home's data plate.



Sec. 3285.104  Moving manufactured home to location.

    Refer to Sec. 3285.902 for considerations related to moving the 
manufactured home to the site of installation.



Sec. 3285.105  Permits, other alterations, and on-site structures.

    Refer to Sec. 3285.903 for considerations related to permitting, 
other alterations, and on-site structures.



                       Subpart C_Site Preparation



Sec. 3285.201  Soil conditions.

    To help prevent settling or sagging, the foundation must be 
constructed on firm, undisturbed soil or fill compacted to at least 90 
percent of its maximum relative density. All organic material such as 
grass, roots, twigs, and wood scraps must be removed in areas where 
footings are to be placed. After removal of organic material, the home 
site must be graded or otherwise prepared to ensure adequate drainage, 
in accordance with Sec. 3285.203.



Sec. 3285.202  Soil classifications and bearing capacity.

    The soil classification and bearing capacity of the soil must be 
determined before the foundation is constructed and anchored. The soil 
classification and bearing capacity must be determined by one or more of 
the following methods, unless the soil bearing capacity is established 
as permitted in paragraph (f) of this section:
    (a) Soil tests. Soil tests that are in accordance with generally 
accepted engineering practice; or
    (b) Soil records. Soil records of the applicable LAHJ; or
    (c) Soil classifications and bearing capacities. If the soil class 
or bearing capacity cannot be determined by test or soil records, but 
its type can be identified, the soil classification, allowable 
pressures, and torque values shown in Table to Sec. 3285.202 may be 
used.
    (d) A pocket penetrometer; or
    (e) In lieu of determining the soil bearing capacity by use of the 
methods shown in the table, an allowable pressure of 1,500 psf may be 
used, unless the site-specific information requires the use of lower 
values based on soil classification and type.
    (f) If the soil appears to be composed of peat, organic clays, or 
uncompacted fill, or appears to have unusual conditions, a registered 
professional geologist, registered professional engineer, or registered 
architect must determine the soil classification and maximum allowable 
soil bearing capacity.

[[Page 278]]



                                            Table to Sec. 3285.202
----------------------------------------------------------------------------------------------------------------
         Soil classification
--------------------------------------
                    ASTM D 2487-00 or                             Allowable soil      Blow     Torque probe \3\
                        D 2488-00          Soil description      bearing pressure     count    value \4\ (inch-
  Classification    (incorporated by                                 (psf) \1\       ASTM D        pounds)-
      number         reference, see                                                  1586-99
                     Sec. 3285.4)
----------------------------------------------------------------------------------------------------------------
1................  ..................  Rock or hard pan.......  4000+.............  ........
2................  GW, GP, SW, SP,     Sandy gravel and         2000..............     40+    More than 550.
                    GM, SM.             gravel; very than
                                        dense and/orcemented
                                        sands;coursegravel/
                                        cobbles;preloaded
                                        silts,clays and coral.
3................  GC, SC, ML, CL....  Sand; silty sand;        1500..............     24-39  351-550.
                                        clayey sand;
                                        siltygravel; medium
                                        dense course sands;
                                        sandygravel; and very
                                        stiff silt, sand clays.
4A...............  CG, MH \2\........  Loose to medium dense    1000..............     18-23  276-350.
                                        sands; firm to stiff
                                        clays and silts;
                                        alluvial fills.
4B...............  CH, MH \2\........  Loose sands; firm        1000..............     12-17  175-275.
                                        clays; alluvial fills.
5................  OL, OH, PT........  Uncompacted fill; peat;  Refer to                0-11  Less than 175.
                                        organic clays.           3285.202(e).
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ The values provided in this table have not been adjusted for overburden pressure, embedment depth, water
  table height, or settlement problems.
\2\ For soils classified as CH or MH, without either torque probe values or blow count test results, selected
  anchors must be rated for a 4B soil.
\3\ The torque test probe is a device for measuring the torque value of soils to assist in evaluating the
  holding capacity of the soil in which the ground anchor is placed. The shaft must be of suitable length for
  the full depth of the ground anchor.
\4\ The torque value is a measure of the load resistance provided by the soil when subject to the turning or
  twisting force of the probe.



Sec. 3285.203  Site Drainage.

    (a) Purpose. Drainage must be provided to direct surface water away 
from the home to protect against erosion of foundation supports and to 
prevent water build-up under the home, as shown in Figure to Sec. 
3285.203.
    (b) The home site must be graded as shown in Figure to Sec. 
3285.203, or other methods, such as a drain tile and automatic sump pump 
system, must be provided to remove any water that may collect under the 
home.
    (c) All drainage must be diverted away from the home and must slope 
a minimum of one-half inch per foot away from the foundation for the 
first ten feet. Where property lines, walls, slopes, or other physical 
conditions prohibit this slope, the site must be provided with drains or 
swales or otherwise graded to drain water away from the structure, as 
shown in Figure to Sec. 3285.203.
    (d) Sloped site considerations. The home, where sited, must be 
protected from surface runoff from the surrounding area.
    (e) Refer to Sec. 3285.902 regarding the use of drainage structures 
to drain surface runoff.
    (f) Gutters and downspouts. Manufacturers must specify in their 
installation instructions whether the home is suitable for the 
installation of gutters and downspouts. If suitable, the installation 
instructions must indicate that when gutters and downspouts are 
installed, the runoff must be directed away from the home.

[[Page 279]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.006


[[Page 280]]





Sec. 3285.204  Ground moisture control.

    (a) Vapor retarder. If the space under the home is to be enclosed 
with skirting or other materials, a vapor retarder must be installed to 
cover the ground under the home, unless the home is installed in an arid 
region with dry soil conditions.
    (b) Vapor retarder material. A minimum of six mil polyethylene 
sheeting or its equivalent must be used.
    (c) Proper installation. (1) The entire area under the home must be 
covered with the vapor retarder, as noted in Sec. 3285.204(a), except 
for areas under open porches, decks, and recessed entries. Joints in the 
vapor retarder must be overlapped at least 12 inches.
    (2) The vapor retarder may be placed directly beneath footings, or 
otherwise installed around or over footings placed at grade, and around 
anchors or other obstructions.
    (3) Any voids or tears in the vapor retarder must be repaired. At 
least one repair method must be provided in the manufacturer's 
installation instructions.



                          Subpart D_Foundations



Sec. 3285.301  General.

    (a) Foundations for manufactured home installations must be designed 
and constructed in accordance with this subpart and must be based on 
site conditions, home design features, and the loads the home was 
designed to withstand, as shown on the home's data plate.
    (b) Foundation systems that are not pier and footing type 
configurations may be used when verified by engineering data and 
designed in accordance with Sec. 3285.301(d), consistent with the 
design loads of the MHCSS. Pier and footing specifications that are 
different than those provided in this subpart, such as block size, metal 
piers, section width, loads, and spacing, may be used when verified by 
engineering data that comply with Sec. Sec. 3285.301(c) and (d) and are 
capable of resisting all design loads of the MHCSS.
    (c) All foundation details, plans, and test data must be designed 
and certified by a registered professional engineer or registered 
architect, and must not take the home out of compliance with the MHCSS. 
(See 3285.2)
    (d) Alternative foundation systems or designs are permitted in 
accordance with either of the following:
    (1) Systems or designs must be manufactured and installed in 
accordance with their listings by a nationally recognized testing 
agency, based on a nationally recognized testing protocol; or
    (2) System designs must be prepared by a professional engineer or a 
registered architect or tested and certified by a professional engineer 
or registered architect in accordance with acceptable engineering 
practice and must be manufactured and installed so as not to take the 
home out of compliance with the Manufactured Home Construction and 
Safety Standards (part 3280 of this chapter).



Sec. 3285.302  Flood hazard areas.

    In flood hazard areas, foundations, anchorings, and support systems 
must be capable of resisting loads associated with design flood and wind 
events or combined wind and flood events, and homes must be installed on 
foundation supports that are designed and anchored to prevent 
floatation, collapse, or lateral movement of the structure. 
Manufacturer's installation instructions must indicate whether:
    (a) The foundation specifications have been designed for flood-
resistant considerations, and, if so, the conditions of applicability 
for velocities, depths, or wave action; or
    (b) The foundation specifications are not designed to address flood 
loads.



Sec. 3285.303  Piers.

    (a) General. The piers used must be capable of transmitting the 
vertical live and dead loads to the footings or foundation.
    (b) Acceptable piers--materials specification. (1) Piers are 
permitted to be concrete blocks; pressure-treated wood with a water 
borne preservative, in accordance with AWPA Standard U1-04 (incorporated 
by reference, see Sec. 3285.4) for Use Category 4B ground contact 
applications; or adjustable metal or concrete piers.
    (2) Manufactured piers must be listed or labeled for the required 
vertical load

[[Page 281]]

capacity, and, where required by design, for the appropriate horizontal 
load capacity.
    (c) Design requirements. (1) Load-bearing capacity. The load bearing 
capacity for each pier must be designed to include consideration for the 
dimensions of the home, the design dead and live loads, the spacing of 
the piers, and the way the piers are used to support the home.
    (2) Center beam/mating wall support must be required for multi-
section homes and designs must be consistent with Tables 2 and 3 to 
Sec. 3285.303 and Figures A, B, and C to Sec. 3285.310.
    (d) Pier loads. (1) Design support configurations for the pier 
loads, pier spacing, and roof live loads must be in accordance with 
Tables 1, 2, and 3 to Sec. 3285.303 and the MHCSS. Other pier designs 
are permitted in accordance with the provisions of this subpart.
    (2) Manufactured piers must be rated at least to the loads required 
to safely support the dead and live loads, as required by Sec. 
3285.301, and the installation instructions for those piers must be 
consistent with Tables 1, 2, and 3 to this section.

  Table 1 to Sec. 3285.303--Frame Blocking Only/Perimeter Support Not
                       Required Except at Openings
------------------------------------------------------------------------
                                Roof live
         Pier spacing           load (psf)      Location     Load (lbs.)
------------------------------------------------------------------------
                                        20  Frame..........        2,900
4 ft. 0 in...................           30  Frame..........        3,300
                                        40  Frame..........        3,600
------------------------------------------------------------------------
                                        20  Frame..........        4,200
6 ft. 0 in...................           30  Frame..........        4,700
                                        40  Frame..........        5,200
------------------------------------------------------------------------
                                        20  Frame..........        5,500
8 ft. 0 in...................           30  Frame..........        6,200
                                        40  Frame..........        6,900
------------------------------------------------------------------------
                                        20  Frame..........        6,800
10 ft. 0 in..................           30  Frame..........        7,600
                                        40  Frame..........        8,500
------------------------------------------------------------------------

    Notes: 
    1. See Table to Sec. 3285.312 for cast-in-place footing design by 
using the noted loads.
    2. Table 1 is based on the following design assumptions: maximum 16 
ft. nominal section width (15 ft. actual width), 12'' eave, 10'' I-beam 
size, 300 lbs. pier dead load, 10 psf roof dead load, 6 psf floor dead 
load, 35 plf wall dead load, and 10 plf chassis dead load.
    3. Interpolation for other pier spacing is permitted.
    4. The pier spacing and loads shown in the above table do not 
consider flood or seismic loads and are not intended for use in flood or 
seismic hazard areas. In those areas, the foundation support system is 
to be designed by a professional engineer or architect.
    5. See Table to Sec. 3285.312 for sizing of footings.

   Table 2 to Sec. 3285.303--Frame Plus Perimeter Blocking/Perimeter
                            Blocking Required
------------------------------------------------------------------------
                                Roof live
     Maximum pier spacing       load(psf)       Location     Load (lbs.)
------------------------------------------------------------------------
                               ...........  Frame..........        1,400
4 ft. 0 in...................           20  Perimeter......        1,900
                               ...........  Mating.........        3,200
------------------------------------------------------------------------
                               ...........  Frame..........        1,400
4 ft. 0 in...................           30  Perimeter......        2,300
                               ...........  Mating.........        3,800
------------------------------------------------------------------------
                               ...........  Frame..........        1,400
4 ft. 0 in...................           40  Perimeter......        2,600
                               ...........  Mating.........        4,400
------------------------------------------------------------------------
                               ...........  Frame..........        1,900
6 ft. 0 in...................           20  Perimeter......        2,700
                               ...........  Mating.........        4,700
------------------------------------------------------------------------
                               ...........  Frame..........        1,900
6 ft. 0 in...................           30  Perimeter......        3,200
                               ...........  Mating.........        5,600
------------------------------------------------------------------------
                               ...........  Frame..........        1,900
6 ft. 0 in...................           40  Perimeter......        3,700
                               ...........  Mating.........        6,500
------------------------------------------------------------------------
                               ...........  Frame..........        2,400
8 ft. 0 in...................           20  Perimeter......        3,500
                               ...........  Mating.........        6,100
------------------------------------------------------------------------
                               ...........  Frame..........        2,400
8 ft. 0 in...................           30  Perimeter......        4,200
                               ...........  Mating.........        7,300
------------------------------------------------------------------------
                               ...........  Frame..........        2,400
8 ft. 0 in...................           40  Perimeter......        4,800
                               ...........  Mating.........        8,500
------------------------------------------------------------------------
                               ...........  Frame..........        2,900
10 ft. 0 in..................           20  Perimeter......        4,300
                               ...........  Mating.........        7,600
------------------------------------------------------------------------
                               ...........  Frame..........        2,900
10 ft. 0 in..................           30  Perimeter......        5,100
                               ...........  Mating.........        9,100
------------------------------------------------------------------------
                               ...........  Frame..........        2,900
10 ft. 0 in..................           40  Perimeter......        6,000
                               ...........  Mating.........       10,600
------------------------------------------------------------------------

    Notes: 
    1. See Table to Sec. 3285.312 for cast-in-place footing design by 
using the noted loads.
    2. Mating wall perimeter piers and footings only required under full 
height mating walls supporting roof loads. Refer to Figures A and B to 
Sec. 3285.310.
    3. Table 2 is based on the following design assumptions: maximum 16 
ft. nominal section width (15 ft. actual width), 12'' eave, 10''

[[Page 282]]

I-beam size, 300 lbs. pier dead load, 10 psf roof dead load, 6 psf floor 
dead load, 35 plf wall dead load, and 10 plf chassis dead load.
    4. Interpolation for other pier spacing is permitted.
    5. The pier spacing and loads shown in the above table do not 
consider flood or seismic loads and are not intended for use in flood or 
seismic hazard areas. In those areas, the foundation support system is 
to be designed by a professional engineer or architect.
    6. See Table to Sec. 3285.312 for sizing of footings.

      Table 3 to Sec. 3285.303--Ridge Beam Span Footing Capacity
------------------------------------------------------------------------
                                                             Pier and
        Mating wall opening (ft)          Roof live load   footing load
                                               (psf)          (lbs.)
------------------------------------------------------------------------
                                                      20           1,200
5.......................................              30           1,600
                                                      40           1,900
------------------------------------------------------------------------
                                                      20           2,300
10......................................              30           3,100
                                                      40           3,800
------------------------------------------------------------------------
                                                      20           3,500
15......................................              30           4,700
                                                      40           5,800
------------------------------------------------------------------------
                                                      20           4,700
20......................................              30           6,200
                                                      40           7,500
------------------------------------------------------------------------
                                                      20           5,800
25......................................              30           7,800
                                                      40           9,700
------------------------------------------------------------------------
                                                      20           7,000
30......................................              30           9,300
                                                      40          11,600
------------------------------------------------------------------------
                                                      20           8,100
35......................................              30          10,900
                                                      40          13,600
------------------------------------------------------------------------

    Notes: 
    1. See Table to Sec. 3285.312 for cast-in-place footing design by 
using the noted loads.
    2. Table 3 is based on the following design assumptions: maximum 16 
ft. nominal section width (15 ft. actual width), 10 I-beam 
size, 300 lbs. pier dead load, 10 psf roof dead load, 6 psf floor dead 
load, 35 plf wall dead load, and 10 plf chassis dead load.
    3. Loads listed are maximum column loads for each section of the 
manufactured home.
    4. Interpolation for maximum allowable pier and column loads is 
permitted for mate-line openings between those shown in the table.
    5. The pier spacing and loads shown in the above table do not 
consider flood or seismic loads and are not intended for use in flood or 
seismic hazard areas. In those areas, the foundation support system must 
be designed by a professional engineer or registered architect.
    6. See Table to Sec. 3285.312 for sizing of footings.



Sec. 3285.304  Pier configuration.

    (a) Concrete blocks. Installation instructions for concrete block 
piers must be developed in accordance with the following provisions and 
must be consistent with Figures A and B to Sec. 3285.306.
    (1) Load-bearing (not decorative) concrete blocks must have nominal 
dimensions of at least 8 inches x 8 inches x 16 inches;
    (2) The concrete blocks must be stacked with their hollow cells 
aligned vertically; and
    (3) When piers are constructed of blocks stacked side-by-side, each 
layer must be at right angles to the preceding one, as shown in Figure B 
to Sec. 3285.306.
    (b) Caps. (1) Structural loads must be evenly distributed across 
capped-hollow block piers, as shown in Figures A and B to Sec. 
3285.306.
    (2) Caps must be solid concrete or masonry at least 4 inches in 
nominal thickness, or hardboard lumber at least 2 inches nominal in 
thickness; or be corrosion-protected minimum one-half inch thick steel; 
or be of other listed materials.
    (3) All caps must be of the same length and width as the piers on 
which they rest.
    (4) When split caps are used on double-stacked blocks, the caps must 
be installed with the long dimension across the joint in the blocks 
below.
    (c) Gaps. Any gaps that occur during installation between the bottom 
of the main chassis beam and foundation support system must be filled 
by:
    (1) Nominal 4 inch x 6 inch x 1 inch shims to level the home and 
fill any gaps between the base of the main chassis beam and the top of 
the pier cap;
    (2) Shims must be used in pairs, as shown in Figures A and B to 
Sec. 3285.306, and must be driven in tightly so that they do not occupy 
more than one inch of vertical height; and
    (3) Hardwood plates no thicker than 2 inches nominal in thickness or 
2 inch or 4 inch nominal concrete block must be used to fill in any 
remaining vertical gaps.

[[Page 283]]

    (d) Manufactured pier heights. Manufactured pier heights must be 
selected so that the adjustable risers do not extend more than 2 inches 
when finally positioned.



Sec. 3285.305  Clearance under homes.

    A minimum clearance of 12 inches must be maintained between the 
lowest member of the main frame (I-beam or channel beam) and the grade 
under all areas of the home.



Sec. 3285.306  Design procedures for concrete block piers.

    (a) Frame piers less than 36 inches high. (1) Frame piers less than 
36 inches high are permitted to be constructed of single, open, or 
closed-cell concrete blocks, 8 inches `` 8 inches `` 16 inches, when the 
design capacity of the block is not exceeded.
    (2) The frame piers must be installed so that the long sides are at 
right angles to the supported I-beam, as shown in Figure A to this 
section.
    (3) The concrete blocks must be stacked with their hollow cells 
aligned vertically and must be positioned at right angles to the 
footings.
    (4) Horizontal offsets from the top to the bottom of the pier must 
not exceed one-half inch.
    (5) Mortar is not required, unless specified in the installation 
instructions or required by a registered professional engineer or 
registered architect.
    (b) Frame piers 36 inches to 67 inches high and corner piers. (1) 
All frame piers between 36 inches and 67 inches high and all corner 
piers over three blocks high must be constructed out of double, 
interlocked concrete blocks, as shown in Figure B to this section, when 
the design capacity of the block is not exceeded. Mortar is not required 
for concrete block piers, unless otherwise specified in the installation 
instructions or required by a professional engineer or registered 
architect.
    (2) Horizontal offsets from the top to the bottom of the pier must 
not exceed one inch.
    (c) All piers over 67 inches high. Piers over 67 inches high must be 
designed by a registered professional engineer or registered architect, 
in accordance with acceptable engineering practice. Mortar is not 
required for concrete block piers, unless otherwise specified in the 
manufacturer installation instructions or by the design.

[[Page 284]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.007


[[Page 285]]


[GRAPHIC] [TIFF OMITTED] TR19OC07.008



Sec. 3285.307  Perimeter support piers.

    (a) Piers required at mate-line supports, perimeter piers, and piers 
at exterior wall openings are permitted to be constructed of single 
open-cell or closed-cell concrete blocks, with nominal dimensions of 8 
inches x 8 inches x 16 inches, to a maximum height of 54 inches, as 
shown in Figure A to this section, when the design capacity of the block 
is not exceeded.
    (b) Piers used for perimeter support must be installed with the long 
dimension parallel to the perimeter rail.



Sec. 3285.308  Manufactured piers.

    (a) Manufactured piers must be listed and labeled and installed to 
the pier manufacturer's installation instructions. See Sec. 
3285.303(d)(2) for additional requirements.
    (b) Metal or other manufactured piers must be provided with 
protection against weather deterioration and corrosion at least 
equivalent to that provided by a coating of zinc on steel of .30 oz./
ft.\2\ of surface coated.



Sec. 3285.309  [Reserved]



Sec. 3285.310  Pier location and spacing.

    (a) The location and spacing of piers depends upon the dimensions of 
the home, the live and dead loads, the type of construction (single-or 
multi-section), I-beam size, soil bearing capacity, footing size, and 
such other factors as the location of doors or other openings.

[[Page 286]]

    (b) Mate-line and column pier supports must be in accordance with 
this subpart and consistent with Figures A through C to this section, 
unless the pier support and footing configuration is designed by a 
registered professional engineer or registered architect.
    (c) Piers supporting the frame must be no more than 24 inches from 
both ends and not more than 120 inches center to center under the main 
rails.
    (d) Pier support locations. Pier support locations and spacing must 
be presented to be consistent with Figures A and B to Sec. 3285.312, as 
applicable, unless alternative designs are provided by a professional 
engineer or registered architect in accordance with acceptable 
engineering practice.
[GRAPHIC] [TIFF OMITTED] TR19OC07.009

    Notes: 
    1. Bottom of footings must extend below frost line depth, unless 
designed for placement above the frost line. (See Sec. 3285.312(b)).
    2. Piers may be offset up to 6 in. in either direction along the 
supported members to allow for plumbing, electrical, mechanical, 
equipment, crawlspaces, or other devices.
    3. Single-stack concrete block pier loads must not exceed 8,000 lbs.
    4. Prefabricated piers must not exceed their approved or listed 
maximum vertical or horizontal design loads.
    5. When a full-height mating wall does not support the ridge beam, 
this area is considered an unsupported span--Span B.
    6. Piers are not required at openings in the mating wall that are 
less than 48 inches in width. Place piers on both sides of mating wall 
openings that are 48 inches or greater in width. For roof loads of 40 
psf or greater, a professional engineer or registered architect must 
determine the maximum mating wall opening permitted without pier or 
other supports.

[[Page 287]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.010

    Notes: 
    1. Bottom of footings must be below the frost line depth, unless 
designed for placement above the frost line. (See Sec. 3285.312(b)).
    2. Piers may be offset 6 in. in either direction along supported 
members to allow for plumbing electrical, mechanical equipment, 
crawlspaces, or other devices.
    3. Single stack concrete block pier loads must not exceed 8,000 lbs.
    4. Piers are not required at openings in the mating wall that are 
less than 48 inches in width. Place piers on both sides of mating wall 
openings that are 48 inches or greater in width. For roof loads of 40 
psf or greater, a professional engineer or registered architect must 
determine the maximum mating wall opening permitted without pier or 
other supports.
    5. When a full-height mating wall does not support the ridge beam, 
this area is considered an unsupported span--Span B.
    6. In areas where the open span is greater than 10 ft., intermediate 
piers and footings must be placed at maximum 10 ft. on center.
    7. Prefabricated piers must not exceed their approved or listed 
maximum horizontal or vertical design loads.
    8. Column piers are in addition to piers required under full-height 
mating walls.

[[Page 288]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.011

    Notes: 
    1. Mate-line column support piers are installed with the long 
dimension of the concrete block perpendicular to the rim joists.
    2. Pier and footing designed to support both floor sections. Loads 
as listed in Table 3 to Sec. 3285.303 are total column loads for both 
sections.



Sec. 3285.311  Required perimeter supports.

    (a) Perimeter pier or other supports must be located as follows:
    (1) On both sides of side wall exterior doors (such as entry, patio, 
and sliding glass doors) and any other side wall openings of 48 inches 
or greater in width, and under load-bearing porch posts, factory 
installed fireplaces, and fireplace stoves).
    (2) Other perimeter supports must be:
    (i) Located in accordance with Table 2 to Sec. 3285.303; or
    (ii) Provided by other means such as additional outriggers or floor 
joists. When this alternative is used, the designs required by Sec. 
3285.301 must consider the additional loads in sizing the pier and 
footing supports under the main chassis beam.

[[Page 289]]

    (b) For roof live loads of 40 psf or greater, a professional 
engineer or architect must determine the maximum sidewall opening 
permitted without perimeter pier or other supports.
    (c) The location and installation of any perimeter pier support must 
not take the home out of compliance with the Manufactured Home 
Construction and Safety Standards (part 3280 of this chapter).



Sec. 3285.312  Footings.

    (a) Materials approved for footings must provide equal load-bearing 
capacity and resistance to decay, as required by this section. Footings 
must be placed on undisturbed soil or fill compacted to 90 percent of 
maximum relative density. A footing must support every pier. Footings 
are to be either:
    (1) Concrete.
    (i) Four inch nominal precast concrete pads meeting or exceeding 
ASTM C 90-02a, Standard Specification for Loadbearing Concrete Masonry 
Units (incorporated by reference, see Sec. 3285.4), without 
reinforcement, with at least a 28-day compressive strength of 1,200 
pounds per square inch (psi); or
    (ii) Six inch minimum poured-in-place concrete pads, slabs, or 
ribbons with at least a 28-day compressive strength of 3,000 pounds per 
square inch (psi). Site-specific soil conditions or design load 
requirements may also require the use of reinforcing steel in cast-in-
place concrete footings.
    (2) Pressure-treated wood.
    (i) Pressure-treated wood footings must consist of a minimum of two 
layers of nominal 2-inch thick pressure-treated wood, a single layer of 
nominal \3/4\-inch thick, pressure-treated plywood with a maximum size 
of 16 inches by 16 inches, or at least two layers of \3/4\-inch thick, 
pressure-treated plywood for sizes greater than 16 inches by 16 inches. 
Plywood used for this purpose is to be rated exposure 1 or exterior 
sheathing, in accordance with PS1-95, Construction and Industrial 
Plywood (incorporated by reference, see Sec. 3285.4).
    (ii) Pressure treated lumber is to be treated with a water-borne 
adhesive, in accordance with AWPA Standard U1-04 (incorporated by 
reference, see Sec. 3285.4) for Use Category 4B ground contact 
applications.
    (iii) Cut ends of pressure treated lumber must be field-treated, in 
accordance with AWPA Standard M4-02 (incorporated by reference, see 
Sec. 3285.4).
    (3) ABS footing pads.
    (i) ABS footing pads are permitted, provided they are installed in 
accordance with the pad manufacturer installation instructions and 
certified for use in the soil classification at the site.
    (ii) ABS footing pads must be listed or labeled for the required 
load capacity.
    (4) Other Materials. Footings may be of other materials than those 
identified in this section, provided they are listed for such use and 
meet all other applicable requirements of this subpart.
    (b) Placement in freezing climates. Footings placed in freezing 
climates must be designed using methods and practices that prevent the 
effects of frost heave by one of the following methods:
    (1) Conventional footings. Conventional footings must be placed 
below the frost line depth for the site unless an insulated foundation 
or monolithic slab is used (refer to Sec. Sec. 3285.312(b)(2) and 
3285.312(b)(3)). When the frost line depth is not available from the 
LAHJ, a registered professional engineer, registered architect, or 
registered geologist must be consulted to determine the required frost 
line depth for the manufactured home site. This is not subject to the 
provisions in Sec. 3285.2(c) that also require review by the 
manufacturer and approval by its DAPIA for any variations to the 
manufacturer's installation instructions for support and anchoring.
    (2) Monolithic slab systems. A monolithic slab is permitted above 
the frost line when all relevant site-specific conditions, including 
soil characteristics, site preparation, ventilation, and insulative 
properties of the under floor enclosure, are considered and anchorage 
requirements are accommodated as set out in Sec. 3285.401. The 
monolithic slab system must be designed by a registered professional 
engineer or registered architect:
    (i) In accordance with acceptable engineering practice to prevent 
the effects of frost heave; or

[[Page 290]]

    (ii) In accordance with SEI/ASCE 32-01 (incorporated by reference, 
see Sec. 3285.4).
    (3) Insulated foundations. An insulated foundation is permitted 
above the frost line, when all relevant site-specific conditions, 
including soil characteristics, site preparation, ventilation, and 
insulative properties of the under floor enclosure, are considered, and 
the foundation is designed by a registered professional engineer or 
registered architect:
    (i) In accordance with acceptable engineering practice to prevent 
the effects of frost heave; or
    (ii) In accordance with SEI/ASCE 32-01 (incorporated by reference, 
see Sec. 3285.4).
    (c) Sizing of footings. The sizing and layout of footings depends on 
the load-bearing capacity of the soil, footings, and the piers. See 
Sec. Sec. 3285.202 and 3285.303, and Table to 3285.312.
[GRAPHIC] [TIFF OMITTED] TR19OC07.012

    Notes: 
    1. Refer to Table 1 of Sec. 3285.303 for pier and footing 
requirements when frame blocking only is used.
    2. In addition to blocking required by Sec. 3285.311, see Table 2 
to Sec. 3285.303 for maximum perimeter blocking loads.
    3. End piers under main I-beams may be set back a maximum of 24 
inches, as measured from the outside edge of the floor to the center of 
the pier.
    4. Place piers on both sides of sidewall exterior doors, patio 
doors, and sliding glass doors; under porch posts, factory-installed 
fireplaces, and fireplace stoves; under jamb studs at multiple window 
openings; and at any other sidewall openings 48 inches or greater in 
width. For roof loads of 40 psf or greater, a professional engineer or 
registered architect must determine the maximum sidewall opening 
permitted without perimeter supports. See Sec. Sec. 3285.307 and 
3285.311 for additional requirements and for locating perimeter 
supports.

[[Page 291]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.013

    Notes: 
    1. Refer to Table 1 to Sec. 3285.303 for pier and footing 
requirements when frame blocking only is used.
    2. In addition to blocking required by Sec. 3285.311, see Tables 2 
and 3 to Sec. 3285.303 for maximum perimeter blocking loads.
    3. End piers under main I-beams may be set back a maximum of 24 
inches, as measured from the outside edge of the floor to the center of 
the pier.
    4. Place piers on both sides of sidewall exterior doors, patio 
doors, and sliding glass doors; under porch posts, factory-installed 
fireplaces, and fireplace stoves; under jamb studs at multiple window 
openings; and at any other sidewall openings of 48 inches or greater in 
width. For roof loads of 40 psf or greater, a professional engineer or 
registered architect must determine the maximum side wall opening 
permitted without perimeter supports or mating wall opening permitted 
without pier or other supports. See Sec. Sec. 3285.307 and 3285.311 for 
additional information on requirements and for locating perimeter 
supports.
    5. When an end pier under the mate-line also serves as a column 
pier, it may be set back a maximum of 6 in., as measured from the inside 
edge of the exterior wall to the center of the pier.

                                 Table to Sec. 3285.312--The Size and Capacity for Unreinforced Cast-in-Place Footings
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       8 in. x 16 in. pier                  16 in. x 16 in. pier
                                                                             ---------------------------------------------------------------------------
                   Soil capacity (psf)                      Minimum footing                      Unreinforced cast-                    Unreinforced cast-
                                                               size (in.)      Maximum footing    in-place minimum   Maximum footing    in-place minimum
                                                                               capacity (lbs.)    thickness (in.)    capacity (lbs.)    thickness (in.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1,000....................................................            16 x 16              1,600                  6              1,600                  6
                                                                     20 x 20              2,600                  6              2,600                  6
                                                                     24 x 24              3,700                  6              3,700                  6
                                                                     30 x 30              5,600                  8              5,800                  6
                                                                     36 x 36              7,900                 10              8,100                  8
                                                                     42 x 42         \4\ 10,700                 10             10,700                 10
                                                                     48 x 48         \4\ 13,100                 12             13,600                 10
1,500....................................................            16 x 16              2,500                  6              2,500                  6
                                                                     20 x 20              4,000                  6              4,000                  6
                                                                     24 x 24              5,600                  8              5,700                  6
                                                                     30 x 30          \4\ 8,500                 10              8,900                  8
                                                                     36 x 36         \4\ 12,400                 10             12,600                  8
                                                                     42 x 42         \4\ 16,500                 12          \4\16,800                 10
                                                                     48 x 48         \4\ 21,200                 14          \4\21,600                 12
2,000....................................................            16 x 16              3,400                  6              3,400                  6
                                                                     20 x 20              5,300                  6              5,300                  6
                                                                     24 x 24              7,600                  8              7,700                  6
                                                                     30 x 30         \4\ 11,700                 10             11,900                  8
                                                                     36 x 36         \4\ 16,700                 15         \4\ 16,900                 10

[[Page 292]]

 
                                                                     42 x 42         \4\ 21,700                 18         \4\ 22,700                 12
2,500....................................................            16 x 16              4,300                  6              4,300                  6
                                                                     20 x 20              6,700                  6              6,700                  6
                                                                     24 x 24          \4\ 9,600                  8              9,700                  6
                                                                     30 x 30         \4\ 14,800                 10             15,000                  8
                                                                     36 x 36         \4\ 20,700                 12         \4\ 21,400                 10
3,000....................................................            16 x 16              5,200                  6              5,200                  6
                                                                     20 x 20              8,100                  8              8,100                  6
                                                                     24 x 24         \4\ 11,500                 10             11,700                  6
                                                                     30 x 30         \4\ 17,800                 12         \4\ 18,100                  8
                                                                     36 x 36         \4\ 25,400                 14         \4\ 25,900                 10
4,000....................................................            16 x 16              7,000                  6              7,000                  6
                                                                     20 x 20         \4\ 10,800                  8             10,900                  6
                                                                     24 x 24         \4\ 15,500                 10             15,600                  8
                                                                     30 x 30         \4\ 23,300                 12         \4\ 24,200                 10
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Notes: 
    1. The footing sizes shown are for square pads and are based on the 
area (in.\2\), shear and bending required for the loads shown. Other 
configurations, such as rectangular or circular configurations, can be 
used, provided the area and depth is equal to or greater than the area 
and depth of the square footing shown in the table, and the distance 
from the edge of the pier to the edge of the footing is not less than 
the thickness of the footing.
    2. The 6 in. cast-in-place values can be used for 4 in. unreinforced 
precast concrete footings.
    3. The capacity values listed have been reduced by the dead load of 
the concrete footing.
    4. Concrete block piers must not exceed their design capacity of 
8,000 lbs. for 8 x 16 single stack block and 
16,000 lbs. for 16 x 16 double stack block.
    5. A registered professional engineer or registered architect must 
prepare the design, if the design loads exceed the capacity for single 
or double stack concrete block piers shown in footnote 4.



Sec. 3285.313  Combination systems.

    Support systems that combine both load-bearing capacity and uplift 
resistance must also be sized and designed for all applicable design 
loads.



Sec. 3285.314  [Reserved]



Sec. 3285.315  Special snow load conditions.

    (a) General. Foundations for homes designed for and located in areas 
with roof live loads greater than 40 psf must be designed by the 
manufacturer for the special snow load conditions, in accordance with 
acceptable engineering practice. Where site or other conditions prohibit 
the use of the manufacturer's instructions, a registered professional 
engineer or registered architect must design the foundation for the 
special snow load conditions.
    (b) Ramadas. Ramadas may be used in areas with roof live loads 
greater than 40 psf. Ramadas are to be self-supporting, except that any 
connection to the home must be for weatherproofing only.



                    Subpart E_Anchorage Against Wind



Sec. 3285.401  Anchoring instructions.

    (a) After blocking and leveling, the manufactured home must be 
secured against the wind by use of anchor assembly type installations or 
by connecting the home to an alternative foundation system. See Sec. 
3285.301.
    (b) For anchor assembly type installations, the installation 
instructions must require the home to be secured against the wind, as 
described in this section. The installation instructions and design for 
anchor type assemblies

[[Page 293]]

must be prepared by a registered professional engineer or registered 
architect, in accordance with acceptable engineering practice, the 
design loads of the MHCSS, and Sec. 3285.301(d).
    (c) All anchoring and foundation systems must be capable of meeting 
the loads that the home was designed to withstand required by part 3280, 
subpart D of this chapter, as shown on the home's data plate. Exception: 
Manufactured homes that are installed in less restrictive roof load zone 
and wind zone areas may have foundation or anchorage systems that are 
capable of meeting the lower design load provisions of the Standards, if 
the design for the lower requirements is either provided in the 
installation instructions or the foundation and anchorage system is 
designed by a professional engineer or registered architect.
    (d) The installation instructions are to include at least the 
following information and details for anchor assembly-type 
installations:
    (1) The maximum spacing for installing diagonal ties and any 
required vertical ties or straps to ground anchors;
    (2) The minimum and maximum angles or dimensions for installing 
diagonal ties or straps to ground anchors and the main chassis members 
of the manufactured home;
    (3) Requirements for connecting the diagonal ties to the main 
chassis members of the manufactured home. If the diagonal ties are 
attached to the bottom flange of the main chassis beam, the frame must 
be designed to prevent rotation of the beam;
    (4) Requirements for longitudinal and mating wall tie-downs and 
anchorage;
    (5) The method of strap attachment to the main chassis member and 
ground anchor, including provisions for swivel-type connections;
    (6) The methods for protecting vertical and diagonal strapping at 
sharp corners by use of radius clips or other means; and
    (7) As applicable, the requirements for sizing and installation of 
stabilizer plates.



Sec. 3285.402  Ground anchor installations.

    (a) Ground anchor certification and testing. Each ground anchor must 
be manufactured and provided with installation instructions, in 
accordance with its listing or certification. A nationally recognized 
testing agency must list, or a registered professional engineer or 
registered architect must certify, the ground anchor for use in a 
classified soil (refer to Sec. 3285.202), based on a nationally 
recognized testing protocol, or a professional engineer or registered 
architect must certify that the ground anchor is capable of resisting 
all loads in paragraph (b) of this section for the soil type or 
classification.
    (b) Specifications for tie-down straps and ground anchors--(1) 
Ground anchors. Ground anchors must be installed in accordance with 
their listing or certification, be installed to their full depth, be 
provided with protection against weather deterioration and corrosion at 
least equivalent to that provided by a coating of zinc on steel of not 
less than 0.30 oz./ft.\2\ of surface coated, and be capable of resisting 
a minimum ultimate load of 4,725 lbs. and a working load of 3,150 lbs., 
as installed, unless reduced capacities are noted in accordance with 
note 11 of Table 1 to this section or note 12 of Tables 2 and 3 to this 
section. The ultimate load and working load of ground anchors and 
anchoring equipment must be determined by a registered professional 
engineer, registered architect, or tested by a nationally recognized 
third-party testing agency in accordance with a nationally recognized 
testing protocol.
    (2) Tie-down straps. A 1\1/4\ inch x 0.035 inch or larger steel 
strapping conforming to ASTM D 3953--97, Standard Specification for 
Strapping, Flat Steel and Seals (incorporated by reference, see Sec. 
3285.4), Type 1, Grade 1, Finish B, with a minimum total capacity of 
4,725 pounds (lbs.) and a working capacity of 3,150 pounds (lbs.) must 
be used. The tie-down straps must be provided with protection against 
weather deterioration and corrosion at least equivalent to that provided 
by a coating of zinc on steel of not less than 0.30 oz./ft.\2\ of 
surface coated. Slit or cut edges of coated strapping need not be zinc 
coated.

[[Page 294]]

    (c) Number and location of ground anchors. (1) Ground anchor and 
anchor strap spacing must be:
    (i) No greater than the spacing shown in Tables 1 through 3 to this 
section and Figures A and B to this section; or
    (ii) Designed by a registered engineer or architect, in accordance 
with acceptable engineering practice and the requirements of the MHCSS 
for any conditions that are outside the parameters and applicability of 
the Tables 1 through 3 to this section.
    (2) The requirements in paragraph (c) of this section must be used 
to determine the maximum spacing of ground anchors and their 
accompanying anchor straps, based on the soil classification determined 
in accordance with Sec. 3285.202:
    (i) The installed ground anchor type and size (length) must be 
listed for use in the soil class at the site and for the minimum and 
maximum angle permitted between the diagonal strap and the ground; and
    (ii) All ground anchors must be installed in accordance with their 
listing or certification and the ground anchor manufacturer installation 
instructions; and
    (iii) If required by the ground anchor listing or certification, the 
correct size and type of stabilizer plate is installed. If metal 
stabilizer plates are used, they must be provided with protection 
against weather deterioration and corrosion at least equivalent to that 
provided by a coating of zinc on steel of not less than 0.30 oz./ft.2 of 
surface coated. Alternatively, ABS stabilizer plates may be used when 
listed and certified for such use.
    (3) Longitudinal anchoring. Manufactured homes must also be 
stabilized against wind in the longitudinal direction in all Wind Zones. 
Manufactured homes located in Wind Zones II and III must have 
longitudinal ground anchors installed on the ends of the manufactured 
home transportable section(s) or be provided with alternative systems 
that are capable of resisting wind forces in the longitudinal direction. 
See Figure C to Sec. 3285.402 for an example of one method that may be 
used to provide longitudinal anchoring. A professional engineer or 
registered architect must certify the longitudinal anchoring method or 
any alternative system used as adequate to provide the required 
stabilization, in accordance with acceptable engineering practice.
[GRAPHIC] [TIFF OMITTED] TR19OC07.014


[[Page 295]]


    Notes: 
    1. Refer to Tables 1, 2, and 3 to this section for maximum ground 
anchor spacing.
    2. Longitudinal anchors not shown for clarity; refer to 
3285.402(b)(2) for longitudinal anchoring requirements.
[GRAPHIC] [TIFF OMITTED] TR19OC07.015

    Notes: 
    1. Vertical Straps are not required in Wind Zone I.
    2. The frame must be designed to prevent rotation of the main 
chassis beam, when the

[[Page 296]]

diagonal ties are not attached to the top flange of the beam. See Sec. 
3285.401(d)(3).
[GRAPHIC] [TIFF OMITTED] TR19OC07.016


[[Page 297]]



                Table 1 to Sec. 3285.402--Maximum Diagonal Tie-Down Strap Spacing, Wind Zone I
----------------------------------------------------------------------------------------------------------------
                                        Max. heightfrom ground
 Nominal floor width, single section/     to diagonal strap     I-beam spacing 82.5 in.   I-beamspacing 99.5 in.
            multi-section                     attachment
----------------------------------------------------------------------------------------------------------------
12/24 ft. 144 in. nominal section(s).  25 in..................  14 ft. 2 in............  N/A.
                                       33 in..................  11 ft. 9in.............  N/A.
                                       46 in..................  9 ft. 1in..............  N/A.
                                       67 in..................  N/A....................  N/A.
----------------------------------------------------------------------------------------------------------------
14/28 ft. 168 in. nominal section(s).  25 in..................  18 ft. 2in.............  15 ft. 11 in.
                                       33 in..................  16 ft. 1 in............  13 ft. 6 in.
                                       46 in..................  13 ft. 3 in............  10 ft. 8in.
                                       67 in..................  10 ft. 0 in............  N/A.
----------------------------------------------------------------------------------------------------------------
16/32 ft. 180 in. to 192 in. nominal   25 in..................  N/A....................  19 ft. 5in.
 section(s).
                                       33 in..................  19 ft. 0 in............  17 ft. 5 in.
                                       46 in..................  16 ft. 5 in............  14 ft. 7 in.
                                       67 in..................  13 ft. 1 in............  11 ft. 3 in.
----------------------------------------------------------------------------------------------------------------

    Notes: 
    1. Table is based on maximum 90 in. sidewall height.
    2. Table is based on maximum 4 in. inset for ground anchor head from 
edge of floor or wall.
    3. Table is based on main rail (I-beam) spacing per given column.
    4. Table is based on maximum 4 in. eave width for single-section 
homes and maximum 12 in. for multi-section homes.
    5. Table is based on maximum 20-degree roof pitch (4.\3/12\).
    6. Table is based upon the minimum height between the ground and the 
bottom of the floor joist being 18 inches. Interpolation may be required 
for other heights from ground to strap attachment.
    7. Additional tie-downs may be required per the home manufacturer 
instructions.
    8. Ground anchors must be certified for these conditions by a 
professional engineer, architect, or listed by a nationally recognized 
testing laboratory.
    9. Ground anchors must be installed to their full depth, and 
stabilizer plates, if required by the ground anchor listing or 
certification, must also be installed in accordance with the listing or 
certification and in accordance with the ground anchor and home 
manufacturer instructions.
    10. Strapping and anchoring equipment must be certified by a 
registered professional engineer or registered architect, or listed by a 
nationally recognized testing agency to resist these specified forces, 
in accordance with testing procedures in ASTM D 3953-97, Standard 
Specification for Strapping, Flat Steel and Seals (incorporated by 
reference, see Sec. 3285.4).
    11. A reduced ground anchor or strap working load capacity will 
require reduced tie-down strap and anchor spacing.
    12. Ground anchors must not be spaced closer than the minimum 
spacing permitted by the listing or certification.
    13. Table is based on a 3,150 lbs. working load capacity, and straps 
must be placed within 2 ft. of the ends of the home.
    14. Table is based on a minimum angle of 30 degrees and a maximum 
angle of 60 degrees between the diagonal strap and the ground.
    15. Table does not consider flood or seismic loads and is not 
intended for use in flood or seismic hazard areas. In those areas, the 
anchorage system is to be designed by a professional engineer or 
architect.

                                   Table 2 to Sec. 3285.402--Maximum Diagonal Tie-Down Strap Spacing, Wind Zone II.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Max. height from            Near beam method I-beam spacing               Second beam method I-beam spacing
Nominal floor width, single section/   ground to diagonal   --------------------------------------------------------------------------------------------
           multi-section                strap attachment            82.5 in.                99.5 in.               82.5 in.               99.5 in.
--------------------------------------------------------------------------------------------------------------------------------------------------------
12 ft/24 ft. 144 in. nominal         25 in.................  6 ft. 2 in............  4 ft. 3 in...........  N/A..................  N/A
 section(s).
                                     33 in.................  5 ft. 2 in............  N/A..................  N/A..................  N/A
                                     46 in.................  4 ft. 0 in............  N/A..................  N/A..................  N/A
                                     67 in.................  N/A...................  N/A..................  6 ft 1 in............  6 ft 3 in
--------------------------------------------------------------------------------------------------------------------------------------------------------
14 ft/28 ft. 168 in. nominal         25 in.................  7 ft. 7 in............  6 ft. 9 in...........  N/A..................  N/A
 section(s).
                                     33 in.................  6 ft. 10 in...........  5 ft. 9 in...........  N/A..................  N/A
                                     46 in.................  5 ft. 7 in............  4 ft. 6 in...........  N/A..................  N/A
                                     67 in.................  4 ft. 3 in............  N/A..................  N/A..................  N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 298]]

 
16 ft/32 ft. 180 in. to 192 in.      25 in.................  N/A...................  7 ft. 10 in..........  N/A..................  N/A
 nominal section(s).
                                     33 in.................  7 ft. 6 in............  7 ft. 2 in...........  N/A..................  N/A
                                     46 in.................  6 ft. 9 in............  6 ft. 0 in...........  N/A..................  N/A
                                     67 in.................  5 ft. 4 in............  4 ft. 7 in...........  N/A..................  N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Notes: 
    1. Table is based on maximum 90 in. sidewall height.
    2. Table is based on maximum 4 in. inset for ground anchor head from 
edge of floor or wall.
    3. Tables are based on main rail (I-beam) spacing per given column.
    4. Table is based on maximum 4 in. eave width for single-section 
homes and maximum 12 in. for multi-section homes.
    5. Table is based on maximum 20-degree roof pitch (4.3/12).
    6. All manufactured homes designed to be located in Wind Zone II 
must have a vertical tie installed at each diagonal tie location.
    7. Table is based upon the minimum height between the ground and the 
bottom of the floor joist being 18 inches. Interpolation may be required 
for other heights from ground to strap attachment.
    8. Additional tie downs may be required per the home manufacturer 
instructions.
    9. Ground anchors must be certified by a professional engineer, or 
registered architect, or listed by a nationally recognized testing 
laboratory.
    10. Ground anchors must be installed to their full depth, and 
stabilizer plates, if required by the ground anchor listing or 
certification, must also be installed in accordance with the listing or 
certification and in accordance with the ground anchor and home 
manufacturer instructions.
    11. Strapping and anchoring equipment must be certified by a 
registered professional engineer or registered architect or must be 
listed by a nationally recognized testing agency to resist these 
specified forces, in accordance with testing procedures in ASTM D 3953--
97, Standard Specification for Strapping, Flat Steel and Seals 
(incorporated by reference, see Sec. 3285.4).
    12. A reduced ground anchor or strap working load capacity will 
require reduced tie-down strap and anchor spacing.
    13. Ground anchors must not be spaced closer than the minimum 
spacing permitted by the listing or certification.
    14. Table is based on a 3,150 lbs. working load capacity, and straps 
must be placed within 2 ft. of the ends of the home.
    15. Table is based on a minimum angle of 30 degrees and a maximum of 
60 degrees between the diagonal strap and the ground.
    16. Table does not consider flood or seismic loads and is not 
intended for use in flood or seismic hazard areas. In those areas, the 
anchorage system is to be designed by a professional engineer or 
architect.

               Table 3 to Sec. 3285.402--Maximum Diagonal Tie-down Strap Spacing, Wind Zone III.
----------------------------------------------------------------------------------------------------------------
                                 Max. height from    Near beam method I-beam spacing      Second beam method I-
  Nominal floor width, single       ground to     -------------------------------------       beam spacing
     section/multi-section        diagonal strap                                       -------------------------
                                    attachment          82.5 in.          99.5 in.        82.5 in.     99.5 in.
----------------------------------------------------------------------------------------------------------------
12 ft./24 ft. 144 in. nominal   25 in............  5 ft. 1 in.......  N/A.............  N/A........  N/A
 section(s).
                                33 in............  4 ft. 3 in.......  N/A.............  N/A........  N/A
                                46 in............  N/A..............  N/A.............  N/A........  N/A
                                67 in............  N/A..............  N/A.............  N/A........  N/A
14 ft./28 ft. 168 in. nominal   25 in............  6 ft. 2 in.......  5 ft. 7 in......  N/A........  N/A
 section(s).
                                33 in............  5 ft. 8 in.......  4 ft. 9 in......  N/A........  N/A
                                46 in............  4 ft. 8 in.......  N/A.............  N/A........  N/A
                                67 in............  N/A..............  N/A.............  N/A........  N/A
16 ft./32 ft. 180 in. to 192    25 in............  N/A..............  6 ft. 3 in......  N/A........  N/A
 in. nominal sections.
                                33 in............  6 ft. 1 in.......  5 ft. 11 in.....  N/A........  N/A
                                46 in............  5 ft. 7 in.......  5 ft. 0 in......  N/A........  N/A
                                67 in............  4 ft. 5 in.......  N/A.............  N/A........  N/A
----------------------------------------------------------------------------------------------------------------


[[Page 299]]

    Notes: 1. Table is based on maximum 90 in. sidewall height.
    2. Table is based on maximum 4 in. inset for ground anchor head from 
edge of floor or wall.
    3. Table is based on main rail (I-beam) spacing per given column.
    4. Table is based on maximum 4 in. eave width for single-section 
homes and maximum 12 in. for multi-section homes.
    5. Table is based on maximum 20-degree roof pitch (4.3/12).
    6. All manufactured homes designed to be located in Wind Zone III 
must have a vertical tie installed at each diagonal tie location.
    7. Table is based upon the minimum height between the ground and the 
bottom of the floor joist being 18 inches. Interpolation may be required 
for other heights from ground to strap attachment.
    8. Additional tie downs may be required per the home manufacturer 
instructions.
    9. Ground anchors must be certified by a professional engineer, or 
registered architect, or listed by a nationally recognized testing 
laboratory.
    10. Ground anchors must be installed to their full depth, and 
stabilizer plates, if required by the ground anchor listing or 
certification, must also be installed in accordance with the listing or 
certification and per the ground anchor and home manufacturer 
instructions.
    11. Strapping and anchoring equipment must be certified by a 
registered professional engineer or registered architect or must be 
listed by a nationally recognized testing agency to resist these 
specified forces, in accordance with testing procedures in ASTM D 3953-
97, Standard Specification for Strapping, Flat Steel and Seals 
(incorporated by reference, see Sec. 3285.4).
    12. A reduced ground anchor or strap working load capacity will 
require reduced tie-down strap and anchor spacing.
    13. Ground anchors must not be spaced closer than the minimum 
spacing permitted by the listing or certification.
    14. Table is based on a 3,150 lbs. working load capacity, and straps 
must be placed within 2 ft. of the ends of the home.
    15. Table is based on a minimum angle of 30 degrees and a maximum 
angle of 60 degrees between the diagonal strap and the ground.
    16. Table does not consider flood or seismic loads and is not 
intended for use in flood or seismic hazard areas. In those areas, the 
anchorage system is to be designed by a professional engineer or 
architect.



Sec. 3285.403  Sidewall, over-the-roof, mate-line, and shear wall straps.

    If sidewall, over-the-roof, mate-line, or shear wall straps are 
installed on the home, they must be connected to an anchoring assembly.



Sec. 3285.404  Severe climatic conditions.

    In frost-susceptible soil locations, ground anchor augers must be 
installed below the frost line, unless the foundation system is frost-
protected to prevent the effects of frost heave, in accordance with 
acceptable engineering practice and Sec. 3280.306 of this chapter and 
Sec. 3285.312.



Sec. 3285.405  Severe wind zones.

    When any part of a home is installed within 1,500 feet of a 
coastline in Wind Zones II or III, the manufactured home must be 
designed for the increased requirements, as specified on the home's data 
plate (refer to Sec. 3280.5(f) of this chapter) in accordance with 
acceptable engineering practice. Where site or other conditions prohibit 
the use of the manufacturer's instructions, a registered professional 
engineer or registered architect, in accordance with acceptable 
engineering practice, must design anchorage for the special wind 
conditions.



Sec. 3285.406  Flood hazard areas.

    Refer to Sec. 3285.302 for anchoring requirements in flood hazard 
areas.



                       Subpart F_Optional Features



Sec. 3285.501  Home installation manual supplements.

    Supplemental instructions for optional equipment or features must be 
approved by the DAPIA as not taking the home out of conformance with the 
requirements of this part, or part 3280 of this chapter, and included 
with the manufacturer installation instructions.



Sec. 3285.502  Expanding rooms.

    The support and anchoring systems for expanding rooms must be 
installed in accordance with designs provided by the home manufacturer 
or prepared by a registered professional engineer or registered 
architect, in accordance with acceptable engineering practice.



Sec. 3285.503  Optional appliances.

    (a) Comfort cooling systems. When not provided and installed by the 
home

[[Page 300]]

manufacturer, any comfort cooling systems that are installed must be 
installed according to the appliance manufacturer's installation 
instructions.
    (1) Air conditioners. Air conditioning equipment must be listed or 
certified by a nationally recognized testing agency for the application 
for which the unit is intended and installed in accordance with the 
terms of its listing or certification (see Sec. 3280.714 of this 
chapter).
    (i) Energy efficiency. (A) Site-installed central air conditioning 
equipment must be sized to meet the home's heat gain requirement, in 
accordance with Chapter 28 of the 1997 ASHRAE Handbook of Fundamentals 
(incorporated by reference, see Sec. 3285.4) or ACCA Manual J, 
Residential Cooling Load, 8th Edition (incorporated by reference, see 
Sec. 3285.4). Information necessary to calculate the home's heat gain 
can be found on the home's comfort cooling certificate.
    (B) The BTU/hr. rated capacity of the site-installed air 
conditioning equipment must not exceed the air distribution system's 
rated BTU/hr. capacity as shown on the home's compliance certificate.
    (ii) Circuit rating. If a manufactured home is factory-provided with 
an exterior outlet to energize heating and/or air conditioning 
equipment, the branch circuit rating on the tag adjacent to this outlet 
must be equal to or greater than the minimum circuit amperage identified 
on the equipment rating plate.
    (iii) A-coil units. (A) A-coil air conditioning units must be 
compatible and listed for use with the furnace in the home and installed 
in accordance with the appliance manufacturer's instructions.
    (B) The air conditioner manufacturer instructions must be followed.
    (C) All condensation must be directed beyond the perimeter of the 
home by means specified by the equipment manufacturer.
    (2) Heat pumps. Heat pumps must be listed or certified by a 
nationally recognized testing agency for the application for which the 
unit is intended and installed in accordance with the terms of its 
listing or certification. (See Sec. 3280.714 of this chapter).
    (3) Evaporative coolers. (i) A roof-mounted cooler must be listed or 
certified by a nationally recognized testing agency for the application 
for which the unit is intended and installed in accordance with the 
terms of its listing (see Sec. 3280.714 of this chapter).
    (A) Any discharge grill must not be closer than three feet from a 
smoke alarm.
    (B) Before installing a roof-mounted evaporative cooler on-site, the 
installer must ensure that the roof will support the weight of the 
cooler.
    (C) A rigid base must be provided to distribute the cooler weight 
over multiple roof trusses to adequately support the weight of the 
evaporative cooler.
    (ii) An evaporative cooler that is not roof-mounted is to be 
installed in accordance with the requirements of its listing or the 
equipment manufacturer's instructions, whichever is the more 
restrictive.
    (b) Fireplaces and wood-stoves. When not provided by the home 
manufacturer, fireplaces and wood-stoves including chimneys and air 
inlets for fireplaces and wood stoves must be listed for use with 
manufactured homes and must be installed in accordance with their 
listings.
    (c) Appliance venting. (1) All fuel burning heat producing 
appliances of the vented type except ranges and ovens must be vented to 
the exterior of the home.
    (2) Upon completion, the venting system must comply with all 
requirements of Sec. Sec. 3280.707(b) and 3280.710 of the Manufactured 
Home Construction and Safety Standards in this chapter.
    (3) When the vent exhausts through the floor, the vent must not 
terminate under the home and must extend to the home's exterior and 
through any skirting that may be installed.
    (d) Clothes dryer exhaust duct system. A clothes dryer exhaust duct 
system must conform with and be completed in accordance with the 
appliance manufacturer instructions and Sec. 3280.708 of this chapter. 
The vents must exhaust to the exterior of the home, beyond any perimeter 
skirting installed around it, as shown in Figure to Sec. 3285.503.

[[Page 301]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.017

    Notes: 
    1. Installation of the exhaust system must be in accordance with the 
dryer manufacturer instructions.
    2. Dryer exhaust system must not contain reverse slope or terminate 
under the home.



Sec. 3285.504  Skirting.

    (a) Skirting, if used, must be of weather-resistant materials or 
provided with protection against weather deterioration at least 
equivalent to that provided by a coating of zinc on steel of not less 
than 0.30 oz./ft.\2\ of surface coated.
    (b) Skirting must not be attached in a manner that can cause water 
to be trapped between the siding and trim or forced up into the wall 
cavities trim to which it is attached.
    (c) All wood skirting within 6 inches of the ground must be 
pressure-treated in accordance with AWPA Standard U1 (incorporated by 
reference, see Sec. 3285.4) for Use Category 4A, Ground Anchor Contact 
Applications, or be naturally resistant to decay and termite 
infestations.
    (d) Skirting must not be attached in a manner that impedes the 
contraction and expansion characteristics of the home's exterior 
covering.



Sec. 3285.505  Crawlspace ventilation.

    (a) A crawlspace with skirting must be provided with ventilation 
openings. The minimum net area of ventilation openings must not be less 
than one square foot (ft.\2\) for every 150 square feet (ft.\2\) of the 
home's floor area. The total area of ventilation openings may be reduced 
to one square foot (ft.\2\) for every 1,500 square feet (ft.\2\) of the 
home's floor area, where a uniform 6-mil polyethylene sheet material or 
other acceptable vapor retarder is installed, according to Sec. 
3285.204, on the ground surface beneath the entire floor area of the 
home.
    (b) Ventilation openings must be placed as high as practicable above 
the ground.
    (c) Ventilation openings must be located on at least two opposite 
sides to provide cross-ventilation.
    (d) Ventilation openings must be covered for their full height and 
width with a perforated corrosion and weather-resistant covering that is 
designed to prevent the entry of rodents. In areas subject to freezing, 
the coverings for the ventilation openings must also be of the 
adjustable type, permitting them to be in the open or closed position, 
depending on the climatic conditions.
    (e) Access opening(s) not less than 18 inches in width and 24 inches 
in height and not less than three square feet (ft.\2\) in area must be 
provided and must be located so that any utility connections located 
under the home are accessible.

[[Page 302]]

    (f) Dryer vents and combustion air inlets must pass through the 
skirting to the outside. Any surface water runoff from the furnace, air 
conditioning, or water heater drains must be directed away from under 
the home or collected by other methods identified in Sec. 3285.203.



         Subpart G_Ductwork and Plumbing and Fuel Supply Systems



Sec. 3285.601  Field assembly.

    Home manufacturers must provide specific installation instructions 
for the proper field assembly of manufacturer-supplied and shipped loose 
ducts, plumbing, and fuel supply system parts that are necessary to join 
all sections of the home and are designed to be located underneath the 
home. The installation instructions must be designed in accordance with 
applicable requirements of part 3280, subparts G and H, of this chapter, 
as specified in this subpart.



Sec. 3285.602  Utility connections.

    Refer to Sec. 3285.904 for considerations for utility system 
connections.



Sec. 3285.603  Water supply.

    (a) Crossover. Multi-section homes with plumbing in both sections 
require water-line crossover connections to join all sections of the 
home. The crossover design requirements are located in, and must be 
designed in accordance with, Sec. 3280.609 of this chapter.
    (b) Maximum supply pressure and reduction. When the local water 
supply pressure exceeds 80 psi to the manufactured home, a pressure-
reducing valve must be installed.
    (c) Mandatory shutoff valve. (1) An identified and accessible 
shutoff valve must be installed between the water supply and the inlet.
    (2) The water riser for the shutoff valve connection must be located 
underneath or adjacent to the home.
    (3) The shutoff valve must be a full-flow gate or ball valve, or 
equivalent valve.
    (d) Freezing protection. Water line crossovers completed during 
installation must be protected from freezing. The freeze protection 
design requirements are located in, and must be designed in accordance 
with, Sec. 3280.603 of this chapter.
    (1) If subject to freezing temperatures, the water connection must 
be wrapped with insulation or otherwise protected to prevent freezing.
    (2) In areas subject to freezing or subfreezing temperatures, 
exposed sections of water supply piping, shutoff valves, pressure 
reducers, and pipes in water heater compartments must be insulated or 
otherwise protected from freezing.
    (3) Use of pipe heating cable. Only pipe heating cable listed for 
manufactured home use is permitted to be used, and it must be installed 
in accordance with the cable manufacturer installation instructions.
    (e) Testing procedures. (1) The water system must be inspected and 
tested for leaks after completion at the site. The installation 
instructions must provide testing requirements that are consistent with 
Sec. 3280.612 of this chapter.
    (2) The water heater must be disconnected when using an air-only 
test.



Sec. 3285.604  Drainage system.

    (a) Crossovers. Multi-section homes with plumbing in more than one 
section require drainage system crossover connections to join all 
sections of the home. The crossover design requirements are located in, 
and must be designed in accordance with, Sec. 3280.610 of this chapter.
    (b) Assembly and support. If portions of the drainage system were 
shipped loose because they were necessary to join all sections of the 
home and designed to be located underneath the home, they must be 
installed and supported in accordance with Sec. 3280.608 of this 
chapter.
    (c) Proper slopes. Drains must be completed in accordance with Sec. 
3280.610 of this chapter.
    (1) Drain lines must not slope less than one-quarter inch per foot, 
unless otherwise noted on the schematic diagram, as shown in Figure to 
Sec. 3285.604.
    (2) A slope of one-eight inch per foot may be permitted when a 
clean-out is installed at the upper end of the run.
    (d) Testing procedures. The drainage system must be inspected and 
tested for leaks after completion at the site.

[[Page 303]]

The installation instructions must provide testing requirements that are 
consistent with Sec. 3280.612 of this chapter.
[GRAPHIC] [TIFF OMITTED] TR19OC07.018



Sec. 3285.605  Fuel supply system.

    (a) Proper supply pressure. The gas piping system in the home is 
designed for a pressure that is at least 7 inches of water column [4oz./
in.\2\ or 0.25 psi] and not more than 14 inches of water column [8 oz./
in.\2\ or 0.5 psi]. If gas from any supply source exceeds, or could 
exceed this pressure, a regulator must be installed if required by the 
LAHJ.
    (b) Crossovers. (1) Multi-section homes with fuel supply piping in 
both sections require crossover connections to join all sections of the 
home. The crossover design requirements are located in, and must be 
designed in accordance with, Sec. 3280.705 of this chapter.
    (2) Tools must not be required to connect or remove the flexible 
connector quick-disconnect.
    (c) Testing procedures. The gas system must be inspected and tested 
for leaks after completion at the site. The installation instructions 
must provide testing requirements that are consistent with Sec. 
3280.705 of this chapter.



Sec. 3285.606  Ductwork connections.

    (a) Multi-section homes with ductwork in more than one section 
require crossover connections to complete the duct system of the home. 
All ductwork connections, including duct collars, must be sealed to 
prevent air leakage. Galvanized metal straps or tape and mastics listed 
to UL 181A (incorporated by reference, see Sec. 3285.4), for closure 
systems with rigid air ducts and connectors, or UL 181B (incorporated by 
reference, see Sec. 3285.4), for closure systems with flexible air 
ducts and connectors, must be used around the duct collar and secured 
tightly to make all connections.
    (b) If metal straps are used, they must be secured with galvanized 
sheet metal screws.

[[Page 304]]

    (c) Metal ducts must be fastened to the collar with a minimum of 
three galvanized sheet metal screws equally spaced around the collar.
    (d) Air conditioning or heating ducts must be installed in 
accordance with applicable requirements of the duct manufacturer 
installation instructions.
    (e) The duct must be suspended or supported above the ground by 
straps or other means that are spaced at a maximum distance not to 
exceed 4[min]-0[sec] or as otherwise permitted by the installation 
instructions. When straps are used to support a flexible type duct, the 
straps must be at least \1/2\[sec] wider than the spacing of the metal 
spirals encasing the duct. The ducts must be installed such that the 
straps cannot slip between any two spirals and arranged under the floor 
to prevent compression or kinking in any location, as shown in Figures A 
and B to this section. In-floor crossover ducts are permitted, in 
accordance with Sec. 3285.606(g).
    (f) Crossover ducts outside the thermal envelope must be insulated 
with materials that conform to designs consistent with part 3280, 
subpart F of this chapter.
    (g) In-floor or ceiling crossover duct connections must be installed 
and sealed to prevent air leakage.
[GRAPHIC] [TIFF OMITTED] TR19OC07.019

    Notes: 1. This system is typically used when a crossover duct has 
not been built into the floor and the furnace is outside the I-Beam. 
With this type of installation, it is necessary for two flexible ducts 
to be installed.
    2. The crossover duct must be listed for exterior use.
    [GRAPHIC] [TIFF OMITTED] TR19OC07.020
    
    Notes: 1. This system is typically used when a crossover duct has 
not been built into the floor and the furnace is situated directly over 
the main duct in one section of the home. A single flexible duct is then 
used to connect the two sections to each other.

[[Page 305]]

    2. The crossover duct must be listed for exterior use.



               Subpart H_Electrical Systems and Equipment



Sec. 3285.701  Electrical crossovers.

    Multi-section homes with electrical wiring in more than one section 
require crossover connections to join all sections of the home. The 
crossover must be designed in accordance with part 3280, subpart I of 
this chapter, and completed in accordance with the directions provided 
in the installation instructions.



Sec. 3285.702  Miscellaneous lights and fixtures.

    (a) When the home is installed, exterior lighting fixtures, ceiling-
suspended (paddle) fans, and chain-hung lighting fixtures are permitted 
to be installed in accordance with their listings and part 3280, subpart 
I of this chapter.
    (b) Grounding. (1) All the exterior lighting fixtures and ceiling 
fans installed per Sec. 3285.702(a) must be grounded by a fixture-
grounding device or by a fixture-grounding wire.
    (2) For chain-hung lighting fixtures, as shown in Figure A to this 
section, both a fixture-grounding device and a fixture-grounding wire 
must be used. The identified conductor must be the neutral conductor.
    (c) Where lighting fixtures are mounted on combustible surfaces such 
as hardboard, a limited combustible or noncombustible ring, as shown in 
Figures A and B to this section, must be installed to completely cover 
the combustible surface exposed between the fixture canopy and the 
wiring outlet box.
    (d) Exterior lights. (1) The junction box covers must be removed and 
wire-to-wire connections must be made using listed wire connectors.
    (2) Wires must be connected black-to-black, white-to-white, and 
equipment ground-to-equipment ground.
    (3) The wires must be pushed into the box, and the lighting fixture 
must be secured to the junction box.
    (4) The lighting fixture must be caulked around its base to ensure a 
watertight seal to the sidewall.
    (5) The light bulb must be installed and the globe must be attached.
    (e) Ceiling fans. (1) Ceiling-suspended (paddle) fans must be 
connected to junction box listed and marked for ceiling fan application, 
in accordance with Article 314.27(b) of the National Electrical Code, 
NFPA No. 70-2005 (incorporated by reference, see Sec. 3285.4); and
    (2) The ceiling fan must be installed with the trailing edges of the 
blades at least 6 feet 4 inches above the finished floor; and
    (3) The wiring must be connected in accordance with the product 
manufacturer installation instructions.
    (f) Testing. (1) After completion of all electrical wiring and 
connections, including crossovers, electrical lights, and ceiling fans, 
the electrical system must be inspected and tested at the site, in 
accordance with the testing requirements of Sec. 3280.810(b) of this 
chapter.
    (2) The installation instructions must indicate that each 
manufactured home must be subjected to the following tests:
    (i) An electrical continuity test to ensure that metallic parts are 
effectively bonded;
    (ii) Operational tests of all devices and utilization equipment, 
except water heaters, electric ranges, electric furnaces, dishwashers, 
clothes washers/dryers, and portable appliances, to demonstrate that 
they are connected and in working order; and
    (iii) For electrical equipment installed or completed during 
installation, electrical polarity checks must be completed to determine 
that connections have been made properly. Visual verification is an 
acceptable electrical polarity check.

[[Page 306]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.021

[GRAPHIC] [TIFF OMITTED] TR19OC07.022


[[Page 307]]



[72 FR 59362, Oct. 19, 2007; 72 FR 62308, Nov. 2, 2007]



Sec. 3285.703  Smoke alarms.

    Smoke alarms must be functionally tested in accordance with 
applicable requirements of the smoke alarm manufacturer instructions and 
must be consistent with Sec. 3280.208 of this chapter.



Sec. 3285.704  Telephone and cable TV.

    Refer to Sec. 3285.906 for considerations pertinent to installation 
of telephone and cable TV.



                Subpart I_Exterior and Interior Close-Up



Sec. 3285.801  Exterior close-up.

    (a) Exterior siding and roofing necessary to join all sections of 
the home must be installed according to the product manufacturer 
installation instructions and must be fastened in accordance with 
designs and manufacturer instructions, consistent with Sec. Sec. 
3280.305 and 3280.307 of this chapter. Exterior close-up strips/trim 
must be fastened securely and sealed with exterior sealant (see figure A 
to this section).
    (b) Joints and seams. All joints and seams in exterior wall 
coverings that were disturbed during location of the home must be made 
weatherproof.
    (c) Prior to installing the siding, the polyethylene sheeting 
covering exterior walls for transit must be completely removed.
    (d) Prior to completing the exterior close-up, any holes in the 
roofing must be made weatherproof and sealed with a sealant or other 
material that is suitable for use with the roofing in which the hole is 
made.
    (e) Mate-line gasket. The home manufacturer must provide materials 
and designs for mate-line gaskets or other methods designed to resist 
the entry of air, water, water vapor, insects, and rodents at all mate-
line locations exposed to the exterior (see Figure B to this section).
    (f) Hinged roofs and eaves. Hinged roofs and eaves must be completed 
during installation in compliance with all requirements of the 
Manufactured Home Construction and Safety Standards (24 CFR part 3280) 
and the Manufactured Home Procedural and Enforcement Regulations (24 CFR 
part 3282). Unless exempted by the following provisions, hinged roofs 
are also subject to a final inspection for compliance with the 
Manufactured Home Construction and Safety Standards (24 CFR part 3280) 
by the IPIA or a qualified independent inspector acceptable to the IPIA. 
Homes with hinged roofs that are exempted from IPIA inspection are 
instead to be completed and inspected in accordance with the 
Manufactured Home Installation Program (24 CFR part 3286). This includes 
homes:
    (1) That are designed to be located in Wind Zone I;
    (2) In which the pitch of the hinged roof is less than 7:12; and
    (3) In which fuel burning appliance flue penetrations are not above 
the hinge.

[[Page 308]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.023

    Notes: 
    1. Multi-section homes with horizontal-lap siding can be shipped 
with no siding on the front and rear end walls.
    2. The manufacturer must install doors/windows trimmed with J-rail 
or the equivalent and protect all exposed materials not designed for 
exposure to the weather with plastic sheeting for transport. Siding, 
starter trim, and vents may be shipped loose in the home for 
installation on set-up.
    3. All home installers must ensure that all field installed trim, 
windows, doors, and other openings are properly sealed according to the 
siding manufacturer installation instructions.
[GRAPHIC] [TIFF OMITTED] TR19OC07.024


[[Page 309]]


    Note: On multi-section manufactured homes, install the sealer gasket 
on the ceiling, end walls, and floor mate-line prior to joining the 
sections together.



Sec. 3285.802  Structural interconnection of multi-section homes.

    (a) For multi-section homes, structural interconnections along the 
interior and exterior at the mate-line are necessary to join all 
sections of the home.
    (b) Structural interconnection must be designed in accordance with 
the requirements located in Sec. 3280.305 of this chapter to ensure a 
completely integrated structure.
    (c) Upon completion of the exterior close-up, no gaps are permitted 
between the structural elements being interconnected along the mate-line 
of multi-section homes. However, prior to completion of the exterior 
close-up, gaps that do not exceed one inch are permitted between 
structural elements provided:
    (1) The gaps are closed before completion of close-up;
    (2) The home sections are in contact with each other; and
    (3) The mating gasket is providing a proper seal. All such gaps must 
be shimmed with dimensional lumber, and fastener lengths used to make 
connections between the structural elements must be increased to provide 
adequate penetration into the receiving member.



Sec. 3285.803  Interior close-up.

    (a) All shipping blocking, strapping, or bracing must be removed 
from appliances, windows, and doors.
    (b) Interior close up items necessary to join all sections of the 
home or items subject to transportation damage may be packaged or 
shipped with the home for site installation.
    (c) Shipped-loose wall paneling necessary for the joining of all 
sections of the home must be installed by using polyvinyl acetate (PVA) 
adhesive on all framing members and fastened with minimum 1\1/2\ inch 
long staples or nails at 6 inches on center panel edges and 12 inches on 
center in the field, unless alternative fastening methods are permitted 
in the installation instructions (see Figure A to Sec. 3285.803).

[[Page 310]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.025

    Note: Specific designs must be approved by a DAPIA and included in 
the home manufacturer installation instructions.



Sec. 3285.804  Bottom board repair.

    (a) The bottom board covering must be inspected for any loosening or 
areas that might have been damaged or torn during installation or 
transportation. Any missing insulation is to be replaced prior to 
closure and repair of the bottom board.
    (b) Any splits or tears in the bottom board must be resealed with 
tape or patches in accordance with methods provided in the manufacturers 
installation instructions.
    (c) Plumbing P-traps must be checked to be sure they are well-
insulated and covered.
    (d) All edges of repaired areas must be taped or otherwise sealed.



     Subpart J_Optional Information for Manufacturer's Installation 
                              Instructions



Sec. 3285.901  General.

    The planning and permitting processes, as well as utility 
connection, access, and other requirements, are outside of HUD's 
authority and may be governed by LAHJs. These Model Installation 
Standards do not attempt to comprehensively address such requirements. 
However, HUD recommends that the manufacturer's installation 
instructions include the information and advisories in this Subpart J, 
in order to protect the manufactured home, as constructed in accordance 
with the MHCSS.



Sec. 3285.902  Moving manufactured home to location.

    It is recommended that the installation instructions indicate that 
the LAHJ be informed before moving the manufactured home to the site. It 
is

[[Page 311]]

also recommended that the installation instructions indicate that the 
manufactured home is not to be moved to the site until the site is 
prepared in accordance with subpart C of this part and when the 
utilities are available as required by the LAHJ. Examples of related 
areas that might be addressed in the installation instructions for 
meeting this recommendation include:
    (a) Access for the transporter. Before attempting to move a home, 
ensure that the transportation equipment and home can be routed to the 
installation site and that all special transportation permits required 
by the LAHJ have been obtained.
    (b) Drainage structures. Ditches and culverts used to drain surface 
runoff meet the requirements of the LAHJ and are considered in the 
overall site preparation.



Sec. 3285.903  Permits, alterations, and on-site structures.

    It is recommended that the installation instructions include the 
following information related to permits, alterations, and on-site 
structures:
    (a) Issuance of permits. All necessary LAHJ fees should be paid and 
permits should be obtained, which may include verification that LAHJ 
requirements regarding encroachments in streets, yards, and courts are 
obeyed and that permissible setback and fire separation distances from 
property lines and public roads are met.
    (b) Alterations. Prior to making any alteration to a home or its 
installation, contact the LAHJ to determine if plan approval and permits 
are required.
    (c) Installation of on-site structures. Each accessory building and 
structure is designed to support all of its own live and dead loads, 
unless the structure, including any attached garage, carport, deck, and 
porch, is to be attached to the manufactured home and is otherwise 
included in the installation instructions or designed by a registered 
professional engineer or registered architect.



Sec. 3285.904  Utility system connections.

    (a) It is recommended that the manufacturer's installation 
instructions indicate the following procedures be used prior to making 
any utility system connection:
    (1) Where an LAHJ and utility services are available, that the LAHJ 
and all utility services each be consulted before connecting the 
manufactured home to any utilities, or
    (2) Where no LAHJ exists and utility services are available, that 
the utilities be consulted before connecting the manufactured home to 
any utility service; or
    (3) In rural areas where no LAHJ or utility services are available, 
that a professional be consulted prior to making any system connections.
    (b) Qualified personnel. Only qualified personnel familiar with 
local requirements are permitted to make utility site connections and 
conduct tests.
    (c) Drainage system. The main drain line must be connected to the 
site's sewer hookup, using an elastomeric coupler or by other methods 
acceptable to the LAHJ, as shown in Figure A to this section.
    (d) Fuel supply system.
    (1) Conversion of gas appliances. A service person acceptable to the 
LAHJ must convert the appliance from one type of gas to another, 
following instructions by the manufacturer of each appliance.
    (2) Orifices and regulators. Before making any connections to the 
site supply, the inlet orifices of all gas-burning appliances must be 
checked to ensure they are correctly set up for the type of gas to be 
supplied.
    (3) Connection procedures. Gas-burning appliance vents must be 
inspected to ensure that they are connected to the appliance and that 
roof jacks are properly installed and have not come loose during 
transit.
    (4) Gas appliance start-up procedures. The LAHJ should be consulted 
concerning the following gas appliance startup procedures:
    (i) One at a time, opening equipment shutoff valves, lighting pilot 
lights when provided, and adjusting burners and spark igniters for 
automatic ignition systems, in accordance with each appliance 
manufacturer instructions.
    (ii) Checking the operation of the furnace and water heater 
thermostats.

[[Page 312]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.026

    Note: Fittings in the drainage system that are subject to freezing, 
such as P-traps in the floor, are protected with insulation by the 
manufacturer. Insulation must be replaced if it is removed for access to 
the P-trap.



Sec. 3285.905  Heating oil systems.

    It is recommended that the installation instructions include the 
following information related to heating oil systems, when applicable:
    (a) Homes equipped with oil burning furnaces should have their oil 
supply tank and piping installed and tested on-site, in accordance with 
NFPA 31, Standard for the Installation of Oil Burning Equipment, 2001 
(incorporated by reference, see Sec. 3285.4) or the LAHJ, whichever is 
more stringent.
    (b) The oil burning furnace manufacturer's instructions should be 
consulted for pipe size and installation procedures.
    (c) Oil storage tanks and pipe installations should meet all 
applicable local regulations.
    (d) Tank installation requirements. (1) The tank should be located 
where it is accessible to service and supply and where it is safe from 
fire and other hazards.
    (2) In flood hazard areas, the oil storage tank should be anchored 
and elevated to or above the design flood elevation, or anchored and 
designed to prevent flotation, collapse, or permanent lateral movement 
during the design flood.
    (3) Leak test procedure. Before the system is operated, it should be 
checked for leaks in the tank and supply piping, in accordance with NFPA 
31, Standard for the Installation of Oil Burning Equipment, 2001 
(incorporated by reference, see Sec. 3285.4) or the requirements of the 
LAHJ, whichever is more stringent.



Sec. 3285.906  Telephone and cable TV.

    It is recommended that the installation instructions explain that 
telephone and cable TV wiring should be installed in accordance with 
requirements of the LAHJ and the National Electrical Code, NFPA No. 70-
2005 (incorporated by reference, see Sec. 3285.4).



Sec. 3285.907  Manufacturer additions to installation instructions.

    A manufacturer may include in its installation instructions items 
that are not required by this chapter as long as the items included by 
the manufacturer are consistent with the Model Installation Standards in 
this part and do not take the manufactured home out of compliance with 
the MHCSS.



PART 3286_MANUFACTURED HOME INSTALLATION PROGRAM--Table of Contents



       Subpart A_Generally Applicable Provisions and Requirements

Sec.
3286.1 Purpose.
3286.2 Applicability.
3286.3 Definitions.
3286.5 Overview of installation program.
3286.7 Consumer information.
3286.9 Manufacturer shipment responsibilities.
3286.11 Temporary storage of units.
3286.13 Waiver of rights invalid.

[[Page 313]]

3286.15 Consultation with the Manufactured Housing Consensus Committee 
          (MHCC).

   Subpart B_Certification of Installation in HUD-Administered States

3286.101 Purpose.
3286.102 Information provided by manufacturer.
3286.103 DAPIA-approved installation instructions.
3286.105 Requirement for installer licensing.
3286.107 Installation in accordance with standards.
3286.109 Inspection requirements--generally.
3286.111 Installer certification of installation.
3286.113 Information provided by retailer.
3286.115 Date of installation.
3286.117 Completion of sale date.

        Subpart C_Installer Licensing in HUD-Administered States

3286.201 Purpose.
3286.203 Installation license required.
3286.205 Prerequisites for installation license.
3286.207 Process for obtaining installation license.
3286.209 Denial, suspension, or revocation of installation license.
3286.211 Expiration and renewal of installation licenses.

       Subpart D_Training of Installers in HUD-Administered States

3286.301 Purpose.
3286.303 Responsibilities of qualified trainers.
3286.305 Installation trainer criteria.
3286.307 Process for obtaining trainer's qualification.
3286.308 Training curriculum.
3286.309 Continuing education--trainers and curriculum.
3286.311 Suspension or revocation of trainer's qualification.
3286.313 Expiration and renewal of trainer qualification.

Subpart E_Installer Responsibilities of Installation in HUD-Administered 
                                 States

3286.401 Purpose.
3286.403 Licensing requirements.
3286.405 Installation suitability.
3286.407 Supervising work of crew.
3286.409 Obtaining inspection.
3286.411 Certifying installation.
3286.413 Recordkeeping.

    Subpart F_Inspection of Installations in HUD-Administered States

3286.501 Purpose.
3286.503 Inspection required.
3286.505 Minimum elements to be inspected.
3286.507 Verifying installation.
3286.509 Reinspection upon failure to pass.
3286.511 Inspector qualifications.

     Subpart G_Retailer Responsibilities in HUD-Administered States

3286.601 Purpose.
3286.603 At or before sale.
3286.605 After sale.
3286.607 Recordkeeping.

     Subpart H_Oversight and Enforcement in HUD-Administered States

3286.701 Purpose.
3286.703 Failure to comply.
3286.705 Applicability of dispute resolution program.

                        Subpart I_State Programs

3286.801 Purpose.
3286.803 State qualifying installation programs.
3286.805 Procedures for identification as qualified installation 
          program.
3286.807 Recertification required.
3286.809 Withdrawal of qualifying installation program status.
3286.811 Effect on other manufactured housing program requirements.
3286.813 Inclusion in state plan.

    Authority: 42 U.S.C. 3535(d), 5404, and 5424.

    Source: 73 FR 35292, June 20, 2008, unless otherwise noted.



       Subpart A_Generally Applicable Provisions and Requirements



Sec. 3286.1  Purpose.

    (a) Purpose. The purpose of this part is to establish the 
regulations that are applicable to HUD's administration of an 
installation program that meets the requirements of sections 602 (42 
U.S.C. 5401) and 605 (42 U.S.C. 5404) of the National Manufactured 
Housing Construction and Safety Standards Act of 1974. The purpose of 
this subpart A is to establish the regulations that are applicable with 
respect to all manufactured homes before they are sold to a purchaser. 
The requirements in subpart A apply regardless of whether the actual 
installation of a manufactured home is regulated by HUD or a state with 
a qualifying installation program.
    (b) Implementation. This part is effective on October 20, 2008. 
Implementation will be undertaken in accordance

[[Page 314]]

with the phased-in schedule provided by notice published in the Federal 
Register.



Sec. 3286.2  Applicability.

    (a) All states. The requirements in subpart A are applicable in all 
states.
    (b) States without installation programs. The requirements in 
subparts B through H of this part are applicable only in those states 
where HUD is administering an installation program in accordance with 
this part.
    (c) States with installation programs. The requirements in subpart I 
of this part are applicable to only those states that want to administer 
their own installation programs in lieu of the installation program 
administered by HUD in accordance with this part.
    (d) Exclusion. None of the requirements of this part apply to:
    (1) Any structure that a manufacturer certifies as being excluded 
from the coverage of the Act in accordance with Sec. 3282.12 of this 
chapter; or
    (2) Temporary housing units provided under the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) to 
victims of Presidentially declared disasters, when the manufactured home 
is installed by persons holding an emergency contractor license issued 
by the state in which the home is sited or installed by the Federal 
Emergency Management Agency; or
    (3) Any manufactured home after the initial installation of the home 
following the first purchase of the home in good faith for purposes 
other than resale. State installation programs may regulate subsequent 
installations of manufactured homes.
    (4) Any manufactured home installed on Indian reservations.



Sec. 3286.3  Definitions.

    The following definitions apply in this part, except as otherwise 
noted in the regulations in this part:
    Act means the National Manufactured Housing Construction and Safety 
Standards Act of 1974, 42 U.S.C. 5401-5425.
    Certification of installation means the certification, provided by 
an installer under the HUD-administered installation program in 
accordance with Sec. 3286.111, that indicates that the manufactured 
home has been installed in compliance with the appropriate design and 
instructions and has been inspected as required by this part.
    Defect means any defect in the performance, construction, 
components, or material of a manufactured home that renders the home or 
any part thereof not fit for the ordinary use for which it was intended.
    Design Approval Primary Inspection Agency (DAPIA) means a state 
agency or private organization that has been accepted by the Secretary, 
in accordance with the requirement of subpart H of part 3282, to 
evaluate and either approve or disapprove manufactured home designs and 
quality control procedures.
    Distributor means any person engaged in the sale and distribution of 
manufactured homes for resale.
    HUD means the United States Department of Housing and Urban 
Development.
    HUD-administered installation program means the installation program 
to be administered by HUD, in accordance with this part, in those states 
that do not have a qualifying installation program.
    Installation means completion of work done specified in Sec. 
3286.505 to stabilize, support, anchor, and close up a manufactured home 
and to join sections of a multi-section manufactured home, when any such 
work is governed by the federal installation standards in part 3285 of 
this chapter or by state installation standards that are certified as 
part of a qualifying installation program.
    Installation defect means any defect in the performance, 
installation, installation components, installation material, or close-
up of a manufactured home that renders the home or any part thereof not 
fit for the ordinary use for which it was intended or otherwise takes 
the home out of compliance with the Manufactured Home Construction and 
Safety Standards in 24 CFR part 3280.
    Installation design means drawings, specifications, sketches, and 
the related engineering calculations, tests, and data in support of the 
installation

[[Page 315]]

configurations and systems to be incorporated in the installation of 
manufactured homes.
    Installation instructions means DAPIA-approved instructions provided 
by the home manufacturer that accompany each new manufactured home and 
detail the home manufacturer requirements for support and anchoring 
systems and other work completed at the installation site to comply with 
the Model Manufactured Home Installation Standards in 24 CFR part 3285 
and the Manufactured Home Construction and Safety Standards in 24 CFR 
part 3280.
    Installation standards means the standards established by HUD in 24 
CFR part 3285, or any set of state standards that the Secretary has 
determined provide protection to the residents of manufactured homes 
that equals or exceeds the protection provided by the standards in 24 
CFR part 3285.
    Installer means the person or entity who is retained to engage in, 
or who engages in, the business of directing, supervising, controlling, 
or correcting the initial installation of a manufactured home, as 
governed by part 3285 of this chapter.
    Installer's license or installation license means the evidence that 
an installer has met the requirements for installing manufactured homes 
under the HUD-administered installation program. The term does not 
incorporate a state-issued installation license or certification, except 
to the extent provided in this part. The term does not imply that HUD 
approves or recommends an installer or warrants the work of an 
installer, and should not be used in any way that indicates HUD approval 
in violation of 18 U.S.C. 709.
    Lessee means the first person who leases a manufactured home from a 
retailer after the initial installation.
    Manufactured home means a structure, transportable in one or more 
sections, which, in the traveling mode, is 8 body feet or more in width 
or 40 body feet or more in length, or, when erected on-site, is 320 or 
more square feet, and which is built on a permanent chassis and designed 
to be used as a dwelling with or without a permanent foundation when 
connected to the required utilities, and includes the plumbing, heating, 
air-conditioning, and electrical systems contained therein. The term 
also includes any structure that meets all the requirements of this 
paragraph except the size requirements and with respect to which the 
manufacturer voluntarily files a certification pursuant to Sec. 3282.13 
of this chapter and complies with the installation standards established 
under part 3285 and the construction and safety standards in part 3280 
of this chapter, but such term does not include any self-propelled 
recreational vehicle. Calculations used to determine the number of 
square feet in a structure will include the total of square feet for 
each transportable section comprising the completed structure and will 
be based on the structure's exterior dimensions measured at the largest 
horizontal projections when erected on-site. These dimensions will 
include all expandable rooms, cabinets, and other projections containing 
interior space, but do not include bay windows. Nothing in this 
definition should be interpreted to mean that a manufactured home 
necessarily meets the requirements of HUD's Minimum Property Standards 
(HUD Handbook 4900.1) or that it is automatically eligible for financing 
under 12 U.S.C. 1709(b).
    Manufactured Housing Consensus Committee, or MHCC, means the 
consensus committee established pursuant to section 604(a)(3) of the 
Act, 42 U.S.C. 5403(a)(3).
    Manufacturer means any person engaged in manufacturing or assembling 
manufactured homes, including any person engaged in importing 
manufactured homes for resale.
    Manufacturer's certification label means the permanent label that is 
required by Sec. 3280.11 of this chapter to be affixed to each 
transportable section of each manufactured home.
    Person includes, unless the context indicates otherwise, 
corporations, companies, associations, firms, partnerships, societies, 
and joint stock companies, as well as individuals, but does not include 
any agency of government or tribal government entity.
    Professional engineer or registered architect means an individual or 
entity: licensed to practice engineering or architecture in a state; and 
subject to all

[[Page 316]]

laws and limitations imposed by the state agency that regulates the 
applicable profession, and who is engaged in the professional practice 
of rendering service or creative work requiring education, training, and 
experience in architecture or engineering sciences and the application 
of special knowledge of the mathematical, physical, and engineering 
sciences in such professional or creative work as consultation, 
investigation, evaluation, planning or design, and supervision of 
construction for the purpose of securing compliance with specifications 
and design for any such work.
    Purchaser means the first person purchasing a manufactured home in 
good faith for purposes other than resale.
    Qualified trainer means a person who has met the requirements 
established in subpart D of this part to be recognized as qualified to 
provide training to installers for purposes of the HUD-administered 
installation program.
    Qualifying installation program means an installation program that a 
state certifies, in accordance with the requirements set out in subpart 
I of this part, as meeting the requirements of 42 U.S.C. 5404(c)(3).
    Resident means any person residing in the manufactured home.
    Retailer means any person engaged in the sale, leasing, or 
distribution of new manufactured homes primarily to persons who in good 
faith purchase or lease a manufactured home for purposes other than 
resale, and, for purposes of this part, the term includes any 
manufacturer or distributor that sells a manufactured home directly to a 
purchaser.
    Secretary means the Secretary of Housing and Urban Development.
    Set up means any assembly or installation of a manufactured home on-
site that includes aspects of work that are governed by parts 3280 or 
3285 of this chapter.
    State includes each of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the Virgin Islands, and American 
Samoa.



Sec. 3286.5  Overview of installation program.

    (a) HUD-administered installation program. HUD will administer the 
installation program, as established and set out in subparts A through H 
of this part, in a state unless that state administers its own 
qualifying installation program. The states in which HUD administers an 
installation program can be identified under this part by referring to a 
list on a Web site maintained by HUD or by calling HUD. For convenience 
only, the current URL of the Web site is http://www.hud.gov/offices/hsg/
sfh/mhs/mhshome.cfm and the current toll-free telephone number to 
contact the HUD Office of Manufactured Housing Programs is 1-800-927-
2891, extension 57.
    (b) State-administered installation programs. States that have 
qualifying installation programs, as established through the procedures 
set out in subpart I of this part, will administer their own programs, 
except for generally applicable requirements in this subpart A.
    (c) Manufacturer and retailer requirements. (1) Manufacturers and 
retailers are responsible for compliance of the home with the 
construction and safety standards in part 3280 of this chapter, in 
accordance with the Act and applicable regulations. Manufacturers and 
retailers must also comply with applicable requirements in this part 
relating to the installation of the manufactured home.
    (2) In the installation instructions required pursuant to part 3285 
of this chapter, the manufacturer must include instructions for 
supporting the manufactured home or sections of homes temporarily and 
protecting the interior of the manufactured home or sections of homes 
from damage, pending the first siting of the home for occupancy. The 
instructions must be adequate to assure that the temporary supports and 
weatherization used will be sufficient to prevent the home and its 
transportable sections from being brought out of conformance with the 
construction and safety standards in part 3280 of this chapter if the 
home or its sections is either:
    (i) Stored at any location for more than 30 days; or
    (ii) In the possession of any entity for more than 30 days.
    (d) HUD oversight. The Secretary may take such actions as are 
authorized by

[[Page 317]]

the Act to oversee the system established by the regulations in this 
part, as the Secretary deems appropriate.



Sec. 3286.7  Consumer information.

    (a) Manufacturer's consumer manual. In each consumer manual provided 
by a manufacturer as required in Sec. 3282.207 of this chapter, the 
manufacturer must include a recommendation that any home that has been 
reinstalled after its original installation should be inspected after it 
is set up, in order to assure that it has not been damaged and is 
properly installed.
    (b) Retailer disclosures before sale or lease. Prior to execution of 
the sales contract to purchase or agreement to lease a manufactured 
home, the retailer must provide the purchaser or lessee with a consumer 
disclosure. This disclosure must be in a document separate from the 
sales or lease agreement. The disclosure must include the following 
information, as applicable:
    (1) When the installation of the home is in a state that administers 
its own qualifying installation program, the consumer disclosure must 
clearly state that the home will be required to comply with all state 
requirements for the installation of the home;
    (2) When the installation of the home is in a state that does not 
administer its own qualifying installation program, the consumer 
disclosure must clearly state that the home will be required to comply 
with federal requirements, including installation in accordance with 
federal installation standards set forth in 24 CFR part 3285 and 
certification by a licensed installer of installation work, regardless 
of whether the work is performed by the homeowner or anyone else, and 
when certification includes inspection by an appropriate person;
    (3) For all homes, the home may also be required to comply with 
additional state and local requirements for its installation;
    (4) For all homes, additional information about the requirements 
disclosed under paragraphs (b)(1) through (b)(4) of this section is 
available from the retailer and, in the case of the federal 
requirements, is available in part 3286 of Title 24 of the Code of 
Federal Regulations and from the U.S. Department of Housing and Urban 
Development;
    (5) For all homes, compliance with any additional federal, state, 
and local requirements, including a requirement for inspection of the 
installation of the home, may involve additional costs to the purchaser 
or lessee; and
    (6) For all homes, a recommendation that any home that has been 
reinstalled after its original installation should be professionally 
inspected after it is set up, in order to assure that it has not been 
damaged in transit and is properly installed.



Sec. 3286.9  Manufacturer shipment responsibilities.

    (a) Providing information to HUD. At or before the time that each 
manufactured home is shipped by a manufacturer, the manufacturer must 
provide HUD, through the Production Inspection Primary Inspection Agency 
(IPIA), in accordance with Sec. 3282.552 of this chapter, with 
information, as applicable, about:
    (1) The serial number and manufacturer's certification label number 
of the home;
    (2) The manufacturer of the home; and
    (3) The name and address of the retailer or distributor that has 
arranged for the home to be shipped.
    (b) Manufacturer's installation instructions. The manufacturer is 
required to provide with each manufactured home, installation designs 
and instructions for the installation of the manufactured home that have 
been approved by a DAPIA. A DAPIA must give approval only if the 
installation designs and instructions provide equal or greater 
protection than the protection provided under the installation 
standards.



Sec. 3286.11  Temporary storage of units.

    Pursuant to Sec. 3286.5(c), the manufacturer is required to provide 
instructions for the temporary support and protection of the interior 
from damage of its manufactured homes or sections of homes. Every 
manufacturer, distributor, retailer, or installer that has possession of 
a home is required to support each transportable section of a 
manufactured home that is temporarily located on a site used by that

[[Page 318]]

manufacturer, distributor, retailer, or installer in accordance with the 
manufacturer's instructions.



Sec. 3286.13  Waiver of rights invalid.

    Any provision of a contract or agreement entered into by a 
manufactured home purchaser that seeks to waive any recourse to either 
the HUD installation program or a state-qualifying installation program 
is void.



Sec. 3286.15  Consultation with the Manufactured Housing Consensus
Committee (MHCC).

    The Secretary will seek input from the MHCC when revising the 
installation program regulations in this part 3286. Before publication 
of a proposed rule to revise these regulations, the Secretary will 
provide the MHCC with a 120-day opportunity to comment on such revision. 
The MHCC may send to the Secretary any of the MHCC's own recommendations 
to adopt new installation program regulations or to modify or repeal any 
of the regulations in this part. Along with each recommendation, the 
MHCC must set forth pertinent data and arguments in support of the 
action sought. The Secretary will either: Accept or modify the 
recommendation and publish it for public comment in accordance with 
section 553 of the Administrative Procedure Act (5 U.S.C. 553), along 
with an explanation of the reasons for any such modification; or reject 
the recommendation entirely, and provide to the MHCC a written 
explanation of the reasons for the rejection. This section does not 
supersede section 605 of the National Manufactured Housing Construction 
and Safety Standards Act.



   Subpart B_Certification of Installation in HUD-Administered States



Sec. 3286.101  Purpose.

    The purpose of this subpart B is to establish the systems for 
tracking and certifying a manufactured home installation that is to be 
completed in accordance with the HUD-administered installation program.



Sec. 3286.102  Information provided by manufacturer.

    (a) Shipment of home to retailer or distributor. At the time the 
manufactured home is shipped to a retailer or distributor, the 
manufacturer must provide notice to the retailer or distributor that 
tracking information for the home is being provided to HUD, and the 
information must be updated by the retailer or distributor in accordance 
with the requirements in Sec. 3286.113. Such notice must include all of 
the information required in Sec. 3286.9(a). The manufacturer is also 
encouraged to provide notice to the retailer that reminds the retailer 
of its other responsibilities under this part.
    (b) Manufacturer's installation instructions. The manufacturer is 
required to include in its installation instructions for the home a 
notice that the home is required to be installed in accordance with:
    (1) An installation design and instructions that have been provided 
by the manufacturer and approved by the Secretary directly or through 
review by the DAPIA; or
    (2) An installation design and instructions that have been prepared 
and certified by a professional engineer or registered architect, that 
have been approved by the manufacturer and the DAPIA as providing a 
level of protection for residents of the home that equals or exceeds the 
protection provided by the federal installation standards in part 3285 
of this chapter.



Sec. 3286.103  DAPIA-approved installation instructions.

    (a) Providing instructions to purchaser or lessee. (1) For each 
manufactured home sold or leased to a purchaser or lessee, the retailer 
must provide the purchaser or lessee with a copy of the manufacturer's 
DAPIA-approved installation instructions for the home.
    (2) If the installation requires a design that is different from 
that provided by the manufacturer in paragraph (a)(1) of this section, 
the installation design and instructions must be prepared and certified 
by a professional engineer or registered architect, that have been 
approved by the manufacturer and the DAPIA as providing a level of 
protection for residents of the

[[Page 319]]

home that equals or exceeds the protection provided by the federal 
installation standards in part 3285 of this chapter.
    (b) Providing instructions to installer. When the retailer or 
manufacturer agrees to provide any set up in connection with the sale of 
the home, the retailer or manufacturer must provide a copy of the 
approved installation instructions required in paragraph (a)(1) of this 
section or, as applicable, installation design and instructions required 
in paragraph (a)(2) of this section to each company or, in the case of 
sole proprietor, to each individual who performs set up or installation 
work on the home.



Sec. 3286.105  Requirement for installer licensing.

    (a) Installer Licensing. The installer that installs a manufactured 
home in a state that does not have a qualifying installation program 
must be certified or licensed in accordance with the requirements in 
subpart C of this part.
    (b) Use of licensed installer. When the retailer or manufacturer 
agrees to provide any set up in connection with the sale or lease of the 
home, the retailer or manufacturer must ensure that the installer is 
licensed in accordance with these regulations.



Sec. 3286.107  Installation in accordance with standards.

    (a) Compliance with installation requirements. (1) For purposes of 
determining installer compliance, a manufactured home that is subject to 
the requirements of this subpart B must be installed in accordance with:
    (i) An installation design and instructions that have been provided 
by the manufacturer and approved by the Secretary directly or through 
review by the DAPIA; or
    (ii) An installation design and instructions that have been prepared 
and certified by a professional engineer or registered architect, that 
have been approved by the manufacturer and the DAPIA as providing a 
level of protection for residents of the home that equals or exceeds the 
protection provided by the federal installation standards in part 3285 
of this chapter.
    (2) If the installation instructions do not comply with the 
installation standards, the manufacturer is responsible for any aspect 
of installation that is completed in accordance with the installation 
instructions and that does not comply with the installation standards.
    (3) All installation work must be in conformance with accepted 
practices to ensure durable, livable, and safe housing, and must 
demonstrate acceptable workmanship reflecting, at a minimum, journeyman 
quality of work of the various trades.
    (4) Except as set out in paragraph (a)(2) of this section, all 
installation defects due to the work of the installer are the 
responsibility of the installer or retailer or manufacturer that 
retained the installer and must be corrected.
    (5) If the manufacturer or retailer retains the installer, they are 
jointly and severally responsible with the installer for correcting 
installation defects.
    (6) Installation defects must be corrected within 60 days after the 
date of discovery of the installation defect.
    (b) Secretarial approval of manufacturer's designs. A manufacturer 
that seeks a Secretarial determination under paragraph (a) of this 
section that its installation designs and instructions provide 
protection to residents of manufactured homes that equals or exceeds the 
protection provided by the HUD federal installation standards in part 
3285 of this chapter must send the request for such determination and a 
copy of the applicable designs and instructions to: Administrator, 
Office of Manufactured Housing Programs, HUD, 451 Seventh Street, SW., 
Room 9164, Washington, DC 20410-8000, or to a fax number or e-mail 
address obtained by calling the Office of Manufactured Housing Programs 
at the toll-free telephone number 1-800-927-2891, extension 57.
    (c) Compliance with construction and safety standards. The installer 
must not take the home out of compliance with the construction and 
safety standards applicable under part 3280 of this chapter.
    (d) Homeowner installations. The purchaser of a home sited in a 
state in

[[Page 320]]

which HUD administers the installation program may perform installation 
work on the home that is in accordance with paragraph (a) of this 
section, provided that the work is certified in accordance with Sec. 
3286.111.
    (e) Compliance with construction and safety standards. This rule 
does not alter or affect the requirements of the Act concerning 
compliance with the construction and safety standards, and the 
implementing regulations in parts 3280 and 3282 of this chapter, which 
apply regardless of where the work is completed.



Sec. 3286.109  Inspection requirements--generally.

    The installer or the retailer must arrange for the inspection of the 
installation work on any manufactured home that is sited in a state 
without a qualifying installation program. Before the home can be 
occupied, the installer must certify, and the inspector must verify, the 
home as having been installed in conformance with the requirements of 
Sec. 3286.107(a). The requirements for installer certification are set 
out in subpart E of this part.



Sec. 3286.111  Installer certification of installation.

    (a) Certification required. When the installation work is complete, 
a licensed installer must visit the jobsite and certify that:
    (1) The manufactured home has been installed in accordance with:
    (i) An installation design and instructions that have been provided 
by the manufacturer and approved by the Secretary directly or through 
review by the DAPIA; or
    (ii) An installation design and instructions that have been prepared 
and certified by a professional engineer or registered architect, that 
have been approved by the manufacturer and the DAPIA as providing a 
level of protection for residents of the home that equals or exceeds the 
protection provided by the federal installation standards in part 3285 
of this chapter.
    (2) The installation of the home has been inspected as required by 
Sec. 3286.503 and an inspector has verified the installation as meeting 
the requirements of this part.
    (3) All installation defects brought to the installer's attention 
have been corrected.
    (b) Recipients of certification. The installer must provide a signed 
copy of its certification to the retailer that contracted with the 
purchaser or lessee for the sale or lease of the home, and to the 
purchaser or other person with whom the installer contracted for the 
installation work.



Sec. 3286.113  Information provided by retailer.

    (a) Tracking information. Within 30 days from the time a purchaser 
or lessee enters into a contract to purchase or lease a manufactured 
home, the retailer or distributor of the home must provide HUD with the 
following information:
    (1) The home's serial number and manufacturer's certification label 
number;
    (2) The name and address of the retailer or distributor that is 
selling or leasing the home;
    (3) The state and address where the home is to be sited, and, if 
known, the name of the local jurisdiction; and
    (4) The name of the purchaser or lessee.
    (b) Installation information. Within 30 days from the date of 
installation, the retailer or distributor of the home must provide HUD 
with the following information:
    (1) The name, address, telephone number, and license number of the 
licensed installer;
    (2) The date of installer certification of completion of the 
installation;
    (3) The date a qualified inspector verified the installation as 
being in compliance with the requirements of this part; and
    (4) The name, address, and telephone number of the qualified 
inspector who performed the inspection of the installation as required 
by Sec. 3286.109.
    (c) Method of providing information. (1) The retailer or distributor 
must provide a copy of the information set forth in paragraphs (a) and 
(b) of this section to HUD by providing a copy of the information to HUD 
by facsimile, e-mail, or first-class or overnight delivery.
    (2) The information must be sent to: Administrator, Office of 
Manufactured

[[Page 321]]

Housing Programs, HUD, 451 Seventh Street, SW., Room 9164, Washington, 
DC 20410-8000, or to a fax number or e-mail address obtained by calling 
the Office of Manufactured Housing Programs. For convenience only, the 
URL of the Web site is http://www.hud.gov/offices/hsg/sfh/mhs/
mhshome.cfm and the toll-free telephone number to contact the Office of 
Manufactured Housing Programs is 1-800-927-2891, extension 57.
    (d) Correcting information. If the information provided by the 
retailer changes after it has been provided to HUD, the retailer must 
correct the information within 10 business days after the retailer 
learns of the change.
    (e) Record retention requirements. The retailer or distributor must 
maintain a copy of the records required in paragraphs (a) and (b) of 
this section for 3 years from the date of installation, as under Sec. 
3286.115.



Sec. 3286.115  Date of installation.

    The date of installation will be the date the installer has 
certified that all required inspections have been completed, all 
utilities are connected, and the manufactured home is ready for 
occupancy as established, if applicable, by a certificate of occupancy, 
except as follows: If the manufactured home has not been sold to the 
first person purchasing the home in good faith for purposes other than 
resale by the date the home is ready for occupancy, the date of 
installation is the date of the purchase agreement or sales contract for 
the manufactured home.



Sec. 3286.117  Completion of sale date.

    (a) Date of sale defined. For purposes of determining the 
responsibilities of a manufacturer, retailer, or distributor under 
subpart I of part 3282 of this chapter, the sale of a manufactured home 
will not be considered complete until all the goods and services that 
the manufacturer, retailer, or distributor agreed to provide at the time 
the contract was entered into have been provided.
    (b) Compliance with construction and safety standards. When a 
retailer or manufacturer is providing the installation and an installer 
installs a home in such a way as to create an imminent safety hazard or 
cause the home to not comply with the construction and safety standards 
in part 3280 of this chapter, and those issues are discovered during the 
installation of the home, the sale or lease of the home is not complete 
until the home is corrected.



        Subpart C_Installer Licensing in HUD-Administered States



Sec. 3286.201  Purpose.

    The purpose of this subpart C is to establish the requirements for a 
person to qualify to install a manufactured home in accordance with the 
HUD-administered installation program. Installers will be required to 
meet licensing, training, and insurance requirements established in this 
part. Licensed installers will self-certify their installations of 
manufactured homes to be in compliance with the Model Manufactured Home 
Installation Standards in part 3285 of this chapter. In order for such 
an installer to self-certify compliance with the installation standards, 
the installer will have to assure that acceptable inspections, as 
required in subpart F of this part, are performed.



Sec. 3286.203  Installation license required.

    (a) Installation license required. (1) Any individual or entity that 
engages in the business of directing, supervising, or controlling 
initial installations of new manufactured homes in a state without a 
qualifying installation program must itself have, or must employ someone 
who has, a valid manufactured home installation license issued in 
accordance with the requirements of this subpart C. For each 
installation covered under these requirements, the licensed installer, 
and any company that employs the licensed installer, will be responsible 
for the proper and competent performance of all employees working under 
the licensed installer's supervision and for assuring that the 
installation work complies with this part.
    (2) A business that employs a licensed installer to represent the 
business and hold the installer's license retains primary responsibility 
for performance of the installation work in

[[Page 322]]

compliance with the requirements of this part.
    (3) A license is not required for individuals working as direct 
employees of a licensed installer or for the company that employs a 
licensed installer, provided that those individuals are supervised by a 
licensed installer.
    (4) The installer must display an original or a copy of a valid 
installation license at the site of the installation while performing 
work related to the installation of the home.
    (5) The installer is responsible for understanding and following, as 
applicable, the approved manufacturer installation instructions and any 
alternative installation design and instructions that have been 
certified by a professional engineer or registered architect, that have 
been approved by the manufacturer and DAPIA as providing a level of 
protection for residents of the home that equals or exceeds the 
protection provided by the federal installation standards in part 3285 
of this chapter.
    (b) Installation license not required. An installation license is 
not required for:
    (1) Site preparation that is not subject to the requirements of part 
3285 of this chapter;
    (2) Connection of utilities to the manufactured home;
    (3) Add-ons subject to the requirements of Sec. 3282.8(j) of this 
chapter;
    (4) Temporary installations on dealer, distributor, manufacturer, or 
other sales or storage lots, when the manufactured home is not serving 
as an occupied residence;
    (5) Home maintenance, repairs, or corrections, or other 
noninstallation-related work performed by the home manufacturer under 
warranty or other obligations or service agreements;
    (6) Installations performed by authorized representatives of the 
Federal Emergency Management Agency in order to provide emergency 
housing after a natural disaster; or
    (7) Work performed at the home site that is not covered by the 
federal installation standards in part 3285 of this chapter or the 
requirements of this part.



Sec. 3286.205  Prerequisites for installation license.

    (a) Required experience. (1) In order to obtain an installation 
license to perform manufactured home installations under the HUD-
administered installation program, an individual must meet at least one 
of the following minimum experience requirements:
    (i) 1,800 hours of experience installing manufactured homes;
    (ii) 3,600 hours of experience in the construction of manufactured 
homes;
    (iii) 3,600 hours of experience as a building construction 
supervisor;
    (iv) 1,800 hours as an active manufactured home installation 
inspector;
    (v) Completion of one year of a college program in a construction-
related field; or
    (vi) Any combination of experience or education from paragraphs 
(a)(1)(i) through (a)(1)(v) of this section that totals 3,600 hours.
    (2) An installer who is certified or licensed to perform 
manufactured home installations in a state with a qualifying 
installation program may be exempted by the Secretary from complying 
with these experience requirements, if the Secretary determines that the 
state requirements are substantially equal to the HUD experience 
requirements.
    (b) Required training--(1) Initial applicant. An applicant for an 
installation license must complete 12 hours of training, at least 4 
hours of which must consist of training on the federal installation 
standards in part 3285 of this chapter and the installation program 
regulations in this part. An installer who is licensed to perform 
installations in a state with a qualified installation program may 
postpone the training requirements of this section until October 20, 
2009.
    (2) Renewal applicant. In order to qualify for renewal of an 
installation license, the licensed installer must complete 8 hours of 
continuing education during the 3-year license period, including in any 
particular subject area that may be required by HUD to be covered in 
order to assure adequate understanding of installation requirements.
    (3) The training required under this paragraph (b) must be conducted 
by

[[Page 323]]

trainers who meet the requirements of subpart D of this part and must 
meet the curriculum requirements established in Sec. 3286.308 or Sec. 
3286.309, as applicable.
    (c) Testing. An applicant for an installation license must have 
successfully received a passing grade of 70 percent on a HUD-
administered or HUD-approved examination covering the Manufactured Home 
Installation Program and the federal installation standards in part 
3285.
    (d) Surety bond or insurance. An applicant for an installation 
license must provide evidence of and must maintain, when available in 
the state of installation, a surety bond or insurance that will cover 
the cost of repairing all damage to the home and its supports caused by 
the installer during the installation up to and including replacement of 
the home. HUD may require the licensed installer to provide proof of the 
surety bond or insurance at any time. The licensed installer must notify 
HUD of any changes or cancellations with the surety bond or insurance 
coverage.



Sec. 3286.207  Process for obtaining installation license.

    (a) Where to apply. An applicant for an initial or renewed 
installation license must provide the applicant's legal name, address, 
and telephone number to HUD. The application, with all required 
information, must be sent to: Administrator, Office of Manufactured 
Housing Programs, HUD, 451 Seventh Street, SW., Room 9164, Washington, 
DC 20410-8000, or to a fax number or e-mail address obtained by calling 
the Office of Manufactured Housing Programs. For convenience only, the 
current URL of the Web site is http://www.hud.gov/offices/hsg/sfh/mhs/
mhshome.cfm, and the current toll-free telephone number to contact the 
Office of Manufactured Housing Programs is 1-800-927-2891, extension 57.
    (b) Proof of experience. Every applicant for an initial installation 
license must submit verification of the experience required in Sec. 
3286.205(a). This verification may be in the form of statements by past 
or present employers or a self-certification that the applicant meets 
those experience requirements, but HUD may contact the applicant for 
additional verification at any time. The applicant must also provide to 
HUD employment information relevant to the applicant's experience as an 
installer, including the dates and type of such employment. An installer 
who is certified or licensed to perform manufactured home installations 
in a state with a qualifying installation program may seek an exemption 
from the experience requirement by submitting proof of such 
certification or license.
    (c) Proof of training. Every applicant for an initial installation 
license, or the renewal of an installation license, must submit 
verification of successful completion of the training required in Sec. 
3286.205(b). This verification must be in the form of a certificate of 
completion from a qualified trainer that the applicant has completed the 
requisite number of hours of a qualifying curriculum, as set out in 
Sec. 3286.308 or Sec. 3286.309.
    (d) Proof of surety bond or insurance. Every applicant for an 
installation license must submit the name of the applicant's surety bond 
or insurance carrier and the number of the policy required in Sec. 
3286.205(d).
    (e) Other application submissions. (1) Every applicant for an 
installation license must submit a list of all states in which the 
applicant holds a similar installation certification or license, and a 
list of all states in which the applicant has had such a certification 
or license revoked, suspended, or denied.
    (2) When the examination is not administered by HUD, every applicant 
for an initial installation license must submit certification of a 
passing grade on the examination required by Sec. 3286.205(c).
    (f) Issuance or denial of an installation license. (1) When HUD 
confirms that an applicant has met the requirements in this subpart C, 
HUD will either:
    (i) Provide an installation license to the applicant that, as long 
as the installation license remains in effect, establishes the 
applicant's qualification to install manufactured homes in a state 
subject to the HUD-administered installation program; or
    (ii) Provide a written explanation of why HUD deems the applicant to 
not

[[Page 324]]

qualify for an installation license, including on grounds applicable 
under Sec. 3286.209 for suspension or revocation of an installation 
license and any other specified evidence of inability to adequately meet 
the requirements of this part.
    (2) An applicant who is denied an installation license under this 
subpart C, other than for failure to pass the installation license test, 
may request from HUD an opportunity for a presentation of views, in 
accordance with subpart D of part 3282 of this chapter, for the purpose 
of establishing the applicant's qualifications to obtain an installation 
license.
    (g) Assignment of license prohibited. An installation license issued 
under this part may not be transferred, assigned, or pledged to another 
entity or individual.



Sec. 3286.209  Denial, suspension, or revocation of installation license.

    (a) Oversight. The Secretary may make a continuing evaluation of the 
manner in which each licensed installer is carrying out his or her 
responsibilities under this subpart C.
    (b) Denial, suspension, or revocation. After notice and an 
opportunity for a presentation of views in accordance with subpart D of 
part 3282 of this chapter, the Secretary may deny, suspend, or revoke an 
installation license under this part. An installation license may be 
denied, suspended, or revoked for, among other things:
    (1) Providing false records or information to any party;
    (2) Refusing to submit information that the Secretary requires to be 
submitted;
    (3) Failure to comply with applicable requirements of parts 3285, 
3286, or 3288 of this chapter;
    (4) Failure to take appropriate actions upon a failed inspection, as 
provided in Sec. 3286.509;
    (5) Fraudulently obtaining or attempting to obtain an installation 
license, or fraudulently or deceptively using an installation license;
    (6) Using or attempting to use an expired, suspended, or revoked 
installation license;
    (7) Violating state or federal laws that relate to the fitness and 
qualification or ability of the applicant to install homes; or
    (8) Engaging in poor conduct or workmanship as evidenced by one or 
more of the following:
    (i) Installing one or more homes that fail to meet the requirements 
of Sec. 3286.107;
    (ii) An unsatisfied judgment in favor of a consumer;
    (iii) Repeatedly engaging in fraud, deception, misrepresentation, or 
knowing omissions of material facts relating to installation contracts;
    (iv) Having a similar state installation license or certification 
denied, suspended, or revoked;
    (v) Having the renewal of a similar state installation license or 
certification denied for any cause other than failure to pay a renewal 
fee; or
    (vi) Failure to maintain the surety bond or insurance required by 
Sec. 3286.205(d).
    (c) Other criteria. In deciding whether to suspend or revoke an 
installation license, the Secretary will consider the impact of the 
suspension or revocation on other affected parties and will seek to 
assure that the sales and siting of manufactured homes are not unduly 
disrupted.
    (d) Reinstating an installation license. An installer whose 
installation license has been denied, suspended, or revoked may submit a 
new application in accordance with this subpart C. Installers whose 
installation licenses have been suspended may also reinstate their 
installation licenses in any manner provided under the terms of their 
suspensions.



Sec. 3286. 211  Expiration and renewal of installation licenses.

    (a) Expiration. Each installation license issued or renewed under 
this subpart C will expire 3 years after the date of its issuance or 
renewal.
    (b) Renewal. An application for the renewal of an installation 
license must include the information required by, and must be submitted 
to, HUD in accordance with Sec. 3286.207, and must be submitted at 
least 60 days before the date the license expires. Any person applying 
for a license renewal after the date the license expires must apply for 
a new installation license following the

[[Page 325]]

requirements established under this subpart C for application for an 
initial installation license.



       Subpart D_Training of Installers in HUD-Administered States



Sec. 3286.301  Purpose.

    The purpose of this subpart D is to establish the requirements for a 
person to qualify to provide the training required under subpart C of 
this part. This training is required for manufactured home installers 
who want to be licensed in accordance with the HUD-administered 
installation program.



Sec. 3286.303  Responsibilities of qualified trainers.

    (a) Curriculum and hours. In providing training to installers for 
the purpose of qualifying installers under the HUD-administered 
installation program, qualified trainers must adequately address the 
curriculum and instruction-time requirements established in subparts C 
and D of this part.
    (b) Attendance records. Qualified trainers must maintain records of 
the times, locations, names of attendees at each session, and content of 
all courses offered. When an attendee misses a significant portion of 
any training session, the trainer must assure that the attendee makes up 
the missed portion of the instruction.
    (c) Certificates of completion of training. Qualified trainers must 
provide certificates of completion to course attendees that indicate the 
level of compliance with the applicable curriculum and time requirements 
under subparts C and D of this part.
    (d) Record retention. All records maintained by trainers and 
continuing education providers must be retained for 3 years, and must be 
made available to HUD upon request.
    (e) Testing of installers. Qualified trainers may be authorized to 
administer the installation license testing required for initial 
licensing of installers, as set forth in Sec. 3286.205(c).



Sec. 3286.305  Installation trainer criteria.

    (a) Trainer qualification required. (1) All classes that provide 
manufactured home installation education classes used to satisfy the 
requirements for the initial issuance and renewal of installation 
licenses under subpart C of this part must be taught by trainers who are 
registered with HUD as qualified trainers. In order to register with HUD 
as a qualified trainer, a person must meet the experience requirements 
of this section.
    (2) Any entity other than a natural person may also provide initial 
training and continuing education, as long as such entity establishes 
its qualification as a trainer by providing evidence and assurance that 
the entity's individual trainers meet the requirements of this section.
    (b) Experience prerequisites. In order to qualify as a trainer, an 
individual or other training entity must provide to HUD evidence that 
each individual who will be responsible for providing training:
    (1) Has a minimum of 3,600 hours of experience in one or more of the 
following:
    (i) As a supervisor of manufactured home installations;
    (ii) As a supervisor in the building construction industry;
    (iii) In design work related to the building construction industry; 
or
    (2) Has completed a 2-year educational program in a construction-
related field.
    (c) Certification of curriculum. In order to register as a qualified 
trainer, an individual or other training entity must submit to HUD 
certification that training provided in accordance with this subpart D 
will meet the curriculum requirements established in Sec. 3286.308 or 
Sec. 3286.309, as applicable.



Sec. 3286.307  Process for obtaining trainer's qualification.

    (a) Where to apply. An applicant for qualification as a trainer must 
provide the applicant's legal name, address, and telephone number to 
HUD. The application, with all required information, must be sent to: 
Administrator, Office of Manufactured Housing Programs, HUD, 451 Seventh 
Street, SW., Room 9164, Washington DC 20410-8000, or to a fax number or 
e-mail address obtained by calling the Office of Manufactured Housing 
Programs. For convenience only, the URL of the Web site is http://
www.hud.gov/offices/hsg/sfh/mhs/

[[Page 326]]

mhshome.cfm, and the toll-free telephone number to contact the Office of 
Manufactured Housing Programs is 1-800-927-2891, extension 57.
    (b) Proof of experience. (1) Every individual applicant for initial 
qualification as a trainer must submit verification of the experience 
required in Sec. 3286.305. This verification may be in the form of 
statements by past or present employers or a self-certification that the 
applicant meets those experience requirements, but HUD may contact the 
applicant for additional verification at any time. The applicant must 
also provide to HUD employment information relevant to the applicant's 
experience as a trainer, including the dates and type of such 
employment. A trainer who is licensed, or otherwise certified, to 
provide manufactured home installation training in a state with a 
qualifying installation program may seek an exemption from the 
experience requirement by submitting proof of such license or other 
certification. An individual who applies for renewal qualification as a 
trainer is not required to submit additional proof of experience.
    (2) An entity that seeks to be designated as a qualified trainer 
must provide evidence and assurance that the entity's individual 
trainers meet the experience requirements in Sec. 3286.305.
    (c) Other qualification information. (1) An applicant for initial or 
renewal qualification as a trainer must submit to HUD a list of all 
states in which the applicant has had a similar training qualification 
revoked, suspended, or denied.
    (2) An applicant also must submit to HUD a certification that 
training provided in accordance with this subpart D will meet the 
curriculum requirements established in Sec. 3286.308 or Sec. 3286.309, 
as applicable.
    (d) Confirmation or denial of qualification. (1) When HUD confirms 
that an applicant has met the experience and curriculum requirements in 
this section, HUD will either:
    (i) Provide to the applicant a written confirmation that the 
applicant is a qualified trainer under this part, and will add the 
applicant's name to a list maintained by HUD of qualified trainers; or
    (ii) Provide a written explanation of why HUD deems the applicant to 
not qualify as a trainer, including on grounds applicable under Sec. 
3286.311 for suspension or revocation of a qualification and any other 
specified evidence of inability to meet the requirements of this part.
    (2) An applicant whose qualification is denied by HUD may request an 
opportunity for a presentation of views, in accordance with subpart D of 
part 3282 of this chapter, for the purpose of establishing the 
applicant's qualifications to be a qualified trainer or the adequacy of 
any training curriculum that is challenged by HUD.
    (e) Assignment of qualification prohibited. A qualification issued 
under this subpart D may not be transferred, assigned, or pledged to 
another entity or individual.



Sec. 3286.308  Training curriculum.

    (a) Curriculum for initial installer licensing. The training 
provided by qualified trainers to installers to meet the initial 
requirements of the HUD-administered installation program must include 
at least 12 hours of training, at least 4 hours of which must consist of 
training on the federal installation standards in part 3285 of this 
chapter and the installation program regulations in this part. The 
curriculum must include, at a minimum, training in the following areas:
    (1) An overview of the Act and the general regulatory structure of 
the HUD manufactured housing program;
    (2) An overview of the manufactured home installation standards and 
regulations established in parts 3285 and 3286 of this chapter, and 
specific instruction including:
    (i) Preinstallation considerations;
    (ii) Site preparation;
    (iii) Foundations;
    (iv) Anchorage against wind;
    (v) Optional features, including comfort cooling systems;
    (vi) Ductwork and plumbing and fuel supply systems;
    (vii) Electrical systems; and
    (viii) Exterior and interior close-up work;
    (3) An overview of the construction and safety standards and 
regulations

[[Page 327]]

found in parts 3280 and 3282 of this chapter;
    (4) Licensing requirements applicable to installers;
    (5) Installer responsibilities for correction of improper 
installation, including installer obligations under applicable state and 
HUD manufactured housing dispute resolution programs;
    (6) Inspection requirements and procedures;
    (7) Problem-reporting mechanisms;
    (8) Operational checks and adjustments; and
    (9) Penalties for any person's failure to comply with the 
requirements of this part 3286 and parts 3285 and 3288 of this chapter.
    (b) Updating curriculum. Qualified trainers must revise and modify 
course curriculum as needed to include, at a minimum, any relevant 
modifications to the Act or the implementing standards and regulations 
in this chapter, as well as to provide any training further mandated by 
HUD.



Sec. 3286.309  Continuing education-trainers and curriculum.

    (a) HUD-mandated elements. Only qualified trainers are permitted to 
provide any training on particular subject areas that are required by 
HUD to be an element of the continuing education requirement set out in 
Sec. 3286.205(b)(2) for the renewal of an installer's license. In 
implementing this requirement, HUD will:
    (1) Establish the minimum number of hours and the required 
curriculum for such subject areas, according to experience with the 
program and changes in program requirements; and
    (2) Provide information about the hours and curriculum directly to 
qualified trainers and licensed installers, or through general 
publication of the information.
    (b) Other training. (1) The remainder of the 8 hours required to 
meet the continuing education requirement may be met through training 
provided either by qualified trainers or by any combination of the 
following:
    (i) Accredited educational institutions, including community 
colleges and universities;
    (ii) A provider of continuing education units who is certified by 
the International Association for Continuing Education and Training;
    (iii) Agencies at any level of government; and
    (iv) State or national professional associations.
    (2) The curriculum for the remainder of the 8 hours of continuing 
education training must relate to any aspect of manufactured home 
installation or construction, or to the general fields of building 
construction or contracting.



Sec. 3286.311  Suspension or revocation of trainer's qualification.

    (a) Oversight. The Secretary may make a continuing evaluation of the 
manner in which each qualified trainer is carrying out the trainer's 
responsibilities under this subpart D.
    (b) Suspension or revocation of qualification. After notice and an 
opportunity for a presentation of views in accordance with subpart D of 
part 3282 of this chapter, the Secretary may suspend or revoke a 
trainer's qualification under this part. A trainer's qualification may 
be suspended or revoked for cause, which may include:
    (1) Providing false records or information to HUD;
    (2) Refusing to submit information required to be submitted by the 
Secretary in accordance with the Act;
    (3) Certifying, or improperly assisting certification of, a person 
as having met the training requirements established in this part when 
that person has not completed the required training;
    (4) Failing to appropriately supervise installation training that is 
used to meet the requirements of this part and that is provided by other 
persons; and
    (5) Any other failures to comply with the requirements of this part.
    (c) Other criteria. In deciding whether to suspend or revoke a 
trainer's qualification, the Secretary will consider the impact of the 
suspension or revocation on other affected parties and will seek to 
assure that the sales and siting of manufactured homes are not unduly 
disrupted.
    (d) Reinstating qualification. A trainer whose qualification has 
been suspended or revoked may submit a new application to be qualified 
in accordance with this subpart D no sooner than 6 months

[[Page 328]]

after the date of suspension or revocation. A trainer whose 
qualification has been suspended may also reinstate the qualification in 
any manner provided under the terms of the suspension.



Sec. 3286.313  Expiration and renewal of trainer qualification.

    (a) Expiration. Each notice of qualification issued or renewed under 
this subpart D will expire 5 years after the date of its issuance or 
renewal.
    (b) Renewal. An application for the renewal of a trainer 
qualification must be submitted to HUD in accordance with Sec. 
3286.307, and must be submitted at least 60 days before the date the 
trainer's term of qualification expires. Any person applying for a 
qualification renewal after the date the qualification expires must 
apply for a new qualification, following the requirements established 
under this subpart D for application for initial qualification as an 
installation trainer.



Subpart E_Installer Responsibilities of Installation in HUD-Administered 
                                 States



Sec. 3286.401  Purpose.

    The purpose of this subpart E is to set out the responsibilities of 
the installer who is accountable for the installation of a manufactured 
home in compliance with the requirements of the HUD-administered 
installation program.



Sec. 3286.403  Licensing requirements.

    An installer of manufactured homes must comply with the licensing 
requirements set forth in subpart C of this part.



Sec. 3286.405  Installation suitability.

    (a) Site appropriateness. Before installing a manufactured home at 
any site, the installer must assure that the site is suitable for 
installing the home by verifying that:
    (1) The site is accessible;
    (2) The site is appropriate for the foundation or support and 
stabilization system that is to be used to install the home in 
accordance with the federal installation standards or alternative 
requirements in part 3285 of this chapter;
    (3) The data plate required by Sec. 3280.5 of this chapter is 
affixed to the home, that the home is designed for the roof load, wind 
load, and thermal zones that are applicable to the intended site; and
    (4) The installation site is protected from surface run-off and can 
be graded in accordance with part 3285.
    (b) Installer notification of unsuitable site. If the installer 
determines that the home cannot be installed properly at the site, the 
installer must:
    (1) Notify the purchaser or other person with whom the installer 
contracted for the installation work, identifying the reasons why the 
site is unsuitable;
    (2) Notify the retailer that contracted with the purchaser for the 
sale of the home, identifying the reasons why the site is unsuitable;
    (3) Notify HUD, identifying the reasons why the site is unsuitable;
    (4) Decline to install the home until the site and the home are both 
verified by the installer as suitable for the site under this section; 
and
    (5) Ensure that all unique characteristics of the site have been 
fully addressed.
    (c) Installer notification of failures to comply with the 
construction and safety standards. If the installer notices and 
recognizes failures to comply with the construction and safety standards 
in part 3280 of this chapter prior to beginning any installation work, 
during the course of the installation work, or after the installation 
work is complete, the installer must notify the manufacturer and 
retailer of each failure to comply.
    (d) Retailer notification. The retailer must provide a copy of the 
notification received in paragraphs (b) and (c) of this section to any 
subsequent installer.



Sec. 3286.407  Supervising work of crew.

    The installer will be responsible for the work performed by each 
person engaged to perform installation tasks on a manufactured home, in 
accordance with the HUD-administered installation program.

[[Page 329]]



Sec. 3286.409  Obtaining inspection.

    (a) Inspection obligations. Ten business days prior to the 
completion of installation, the installer must arrange for a third-party 
inspection of the work performed, in accordance with subpart F of this 
part, unless the installer and retailer who contracted with the 
purchaser for the sale of the home agree, in writing, that during the 
same time period the retailer will arrange for the inspection. Such 
inspection must be performed as soon as practicable by an inspector who 
meets the qualifications set forth in Sec. 3286.511. The scope of the 
inspections that are required to be performed is addressed in Sec. 
3286.505.
    (b) Contract rights not affected. Failure to arrange for an 
inspection of a home within 5 business days will not affect the validity 
or enforceability of any sale or contract for the sale of any 
manufactured home.
    (c) State or local permits. The licensed installer should obtain all 
necessary permits required under state or local laws.



Sec. 3286.411  Certifying installation.

    (a) Certification required. When the installation work is complete, 
a licensed installer must visit the jobsite and certify that:
    (1) The manufactured home has been installed in accordance with:
    (i) An installation design and instructions that have been provided 
by the manufacturer and approved by the Secretary directly or through 
review by the DAPIA; or
    (ii) An installation design and instructions that have been prepared 
and certified by a professional engineer or registered architect, that 
have been approved by the manufacturer and the DAPIA as providing a 
level of protection for residents of the home that equals or exceeds the 
protection provided by the federal installation standards in part 3285 
of this chapter.
    (2) The installation of the home has been inspected as required by 
Sec. 3286.503, and an inspector has verified the installation as 
meeting the requirements of this part.
    (3) All installation defects brought to the installer's attention 
have been corrected.
    (b) Recipients of certification. The installer must provide a signed 
copy of its certification to the retailer that contracted with the 
purchaser or lessee for the sale or lease of the home, and to the 
purchaser or other person with whom the installer contracted for the 
installation work.



Sec. 3286.413  Recordkeeping.

    (a) Records to be retained. The installer must retain:
    (1) A record of the name and address of the purchaser or other 
person with whom the installer contracted for the installation work and 
the address of the home installed;
    (2) A copy of the contract pursuant to which the installer performed 
the installation work;
    (3) A copy of any notice from an inspector disapproving the 
installation work;
    (4) A copy of the qualified inspector's verification of the 
installation work;
    (5) A copy of the installer's certification of completion of 
installation in accordance with the requirements of this part; and
    (6) A copy of foundation designs used to install the home, if 
different from the designs provided by the manufacturer, including 
evidence that the foundation designs and instructions were certified by 
a professional engineer or registered architect, including the name, 
address, and telephone number of the professional engineer or architect 
certifying the designs.
    (b) Retention requirement. The records listed in paragraph (a) of 
this section must be maintained for a period of 3 years after the 
installer certifies completion of installation.



    Subpart F_Inspection of Installations in HUD-Administered States



Sec. 3286.501  Purpose.

    The purpose of this subpart F is to provide additional detail about 
the inspection that must be performed by a qualified third-party 
inspector before the installation of a manufactured home may be verified 
by the inspector and certified by the installer under the HUD-
administered installation program.

[[Page 330]]



Sec. 3286.503  Inspection required.

    (a) Timing of requirements. Ten business days prior to the 
completion of the installation of each manufactured home, the installer 
must arrange for a third-party inspection of the work performed, unless 
the installer and retailer who contracted with the purchaser for the 
sale of the home agree, in writing, that during the same time period the 
retailer will arrange for the inspection. Such inspection must be 
performed as soon as practicable by an inspector that meets the 
qualifications set out in Sec. 3286.511. The scope of the inspections 
that are required to be performed is addressed in Sec. 3286.505.
    (b) Disclosure of requirement. At the time of sale, the retailer 
must disclose to the purchaser, in a manner provided in Sec. 3286.7, 
that the manufactured home must be installed in accordance with 
applicable federal and state law, including requirements for a third-
party inspection of the installation. If the cost of inspection of the 
home's installation is not included in the sales price of the home, the 
sales contract must include a clear disclosure about whether the 
purchaser will be charged separately for the inspection of the home's 
installation and the amount of such charge.
    (c) Providing instructions to inspectors. Installation instructions 
must be made available to the inspector at the installation site by the 
installer.



Sec. 3286.505  Minimum elements to be inspected.

    The installation of every manufactured home that is subject to the 
HUD-administered installation program is required to be inspected for 
each of the installation elements included in a checklist. The checklist 
must include assurance that each of the following elements complies with 
the requirements of part 3285 of this chapter:
    (a) Site location with respect to home design and construction;
    (b) Consideration of site-specific conditions;
    (c) Site preparation and grading for drainage;
    (d) Foundation construction;
    (e) Anchorage;
    (f) Installation of optional features;
    (g) Completion of ductwork, plumbing, and fuel supply systems;
    (h) Electrical systems;
    (i) Exterior and interior close-up;
    (j) Skirting, if installed; and
    (k) Completion of operational checks and adjustments.



Sec. 3286.507  Verifying installation.

    (a) Verification by inspector. When an inspector is satisfied that 
the manufactured home has been installed in accordance with the 
requirements of this part, the inspector must provide verification of 
the installation in writing and return the evidence of such verification 
to the installer.
    (b) Certification by installer. (1) Once an installation has been 
inspected and verified, the installer is permitted to certify the 
installation as provided in Sec. 3286.111. The installer must provide a 
signed copy of the certification to:
    (i) The retailer that contracted with the purchaser for the sale of 
the home;
    (ii) The purchaser; and
    (iii) Any other person that contracted to obtain the services of the 
installer for the installation work on the home.
    (2) The installer must retain records in accordance with Sec. 
3286.413.



Sec. 3286.509  Reinspection upon failure to pass.

    (a) Procedures for failed inspection. If the inspector cannot verify 
the installation of the manufactured home, the inspector must 
immediately notify the installer of any failures to comply with the 
installation standards and explain the reasons why the inspector cannot 
issue verification that the installation complies with the requirements 
of this part. After the installation is corrected, it must be 
reinspected before verification can be issued.
    (b) Cost of reinspection. If there is any cost for the reinspection 
of an installation that an inspector has refused to verify, that cost 
must be paid by the installer or the retailer and, absent a written 
agreement with the purchaser that specifically states otherwise, that 
cost cannot be charged to the purchaser of the manufactured home.

[[Page 331]]



Sec. 3286.511  Inspector qualifications.

    (a) Qualifications. Any individual or entity who meets at least one 
of the following qualifications is permitted to review the work and 
verify the installation of a manufactured home that is subject to the 
requirements of the HUD-administered installation program:
    (1) A manufactured home or residential building inspector employed 
by the local authority having jurisdiction over the site of the home, 
provided that the jurisdiction has a residential code enforcement 
program;
    (2) A professional engineer;
    (3) A registered architect;
    (4) A HUD-accepted Production Inspection Primary Inspection Agency 
(IPIA) or a Design Approval Primary Inspection Agency (DAPIA); or
    (5) An International Code Council certified inspector.
    (b) Independence required. The inspector must be independent of the 
manufacturer, the retailer, the installer, and any other person that has 
a monetary interest, other than collection of an inspection fee, in the 
completion of the sale of the home to the purchaser.
    (c) Suspension or revocation of inspection authority. After notice 
and an opportunity for a presentation of views in accordance with 
subpart D of part 3282 of this chapter, the Secretary may suspend or 
revoke an inspector's authority to inspect manufactured home 
installations under this part in HUD-administered states. An inspector's 
authority may be suspended or revoked for cause. In deciding whether to 
suspend or revoke an inspector's authority to conduct such installation 
inspections, the Secretary will consider the impact of the suspension or 
revocation on other affected parties and will seek to assure that the 
sales and siting of manufactured homes are not unduly disrupted.
    (d) Reinstating inspection authority. An inspector whose authority 
to inspect manufactured home installations in HUD-administered states 
has been suspended or revoked under this section may apply for 
reauthorization by contacting: Administrator, Office of Manufactured 
Housing Programs, HUD, 451 Seventh Street, SW., Room 9164, Washington, 
DC 20410-8000, or to a fax number or e-mail address obtained by calling 
the Office of Manufactured Housing Programs at the toll-free telephone 
number 1-800-927-2891, extension 57.



     Subpart G_Retailer Responsibilities in HUD-Administered States



Sec. 3286.601  Purpose.

    The purpose of this subpart G is to set out the requirements that 
apply to a retailer with respect to the federal installation 
requirements applicable to new manufactured homes that the retailer 
sells or leases and that will be installed in states that do not have 
qualifying installation programs. These requirements are in addition to 
other requirements that apply to retailers of manufactured homes 
pursuant to other parts of this chapter.



Sec. 3286.603  At or before sale.

    (a) Before contract. (1) The retailer is required to support each 
transportable section of a manufactured home that is temporarily or 
permanently located on a site used by a retailer in accordance with the 
manufacturer's instructions.
    (2) Before a purchaser or lessee signs a contract of sale or lease 
for a manufactured home, the retailer must:
    (i) Provide the purchaser or lessee with a copy of the consumer 
disclosure statement required in Sec. 3286.7(b); and
    (ii) Verify that the wind, thermal, and roof load zones of the home 
being purchased or leased are appropriate for the site where the 
purchaser or lessee plans to install the home for occupancy; and
    (iii) If the cost of inspection of the home's installation is not 
included in the sales price of the home, provide the disclosure required 
in Sec. 3286.7(b).
    (b) Occupancy site not known. When at the time of purchase the 
purchaser does not know the locale for the initial siting of the home 
for occupancy, the retailer must advise the purchaser that:
    (1) The home was designed and constructed for specific wind, 
thermal, and roof load zones; and
    (2) If the home is sited in a different zone, the home may not pass 
the required installation inspection because the home will have been 
installed in a

[[Page 332]]

manner that would take it out of compliance with the construction and 
safety standards in part 3280 of this chapter.
    (c) Verification of installer license.When the retailer or 
manufacturer agrees to provide any set up in connection with the sale or 
lease of the home, the retailer or manufacturer must verify that the 
installer is licensed in accordance with these regulations.



Sec. 3286.605  After sale.

    (a) Tracking installation information. The retailer is responsible 
for providing to HUD the information required pursuant to Sec. 
3286.113.
    (b) Other tracking and compliance requirements. The retailer 
continues to be responsible for compliance with the tracking and 
compliance requirements set out in subpart F of part 3282 of this 
chapter, which are related to HUD construction and safety standards.



Sec. 3286.607  Recordkeeping.

    The retailer is responsible for the reporting and recordkeeping 
requirements under Sec. 3286.113.



     Subpart H_Oversight and Enforcement in HUD-Administered States



Sec. 3286.701  Purpose.

    The purpose of this subpart H is to set out the mechanisms by which 
manufacturers, retailers, distributors, installers, and installation 
inspectors will be held accountable for assuring the appropriate 
installation of manufactured homes. The requirements in subpart A of 
this part are applicable in all states, the requirements in subparts B 
through H are applicable in states where the HUD-administered 
installation program operates, and the requirements in subpart I are 
applicable in states with qualifying installation programs. It is the 
policy of the Secretary, regarding manufactured home installation 
program enforcement matters, to cooperate with state or local agencies 
having authority to regulate the installation of manufactured homes. In 
addition to actions expressly recognized under this subpart H and other 
provisions in this part, however, HUD may take any actions authorized by 
the Act in order to oversee the system established by the regulations in 
this part.



Sec. 3286.703  Failure to comply.

    (a) Penalties and injunctive relief. Failure to comply with the 
requirements of this part is a prohibited act under section 610(a)(7) of 
the Act, 42 U.S.C. 5409(a). Any person who fails to comply with the 
requirements of this part is subject to civil and criminal penalties, 
and to actions for injunctive relief, in accordance with sections 611 
and 612 of the Act, 42 U.S.C. 5410 and 5411.
    (b) Presentation of views. When practicable, the Secretary will 
provide notice to any person against whom an action for injunctive 
relief is contemplated and will afford such person an opportunity to 
request a presentation of views. The procedures set forth in Sec. Sec. 
3282.152 through 3282.154 of this chapter shall apply to each request to 
present views and to each presentation of views authorized in accordance 
with this section.
    (c) Investigations. The procedures for investigations and 
investigational proceedings are set forth in part 3800 of this chapter.



Sec. 3286.705  Applicability of dispute resolution program.

    (a) Generally. Regardless of any action taken under Sec. 3286.703, 
for any defect in a manufactured home that is reported during the one-
year period beginning on the date of installation, as specified in Sec. 
3286.115, any rights and remedies available under the HUD dispute 
resolution program, as implemented in part 3288 of this chapter, 
continue to apply as provided in that part.
    (b) Waiver of rights invalid. Any provision of a contract or 
agreement entered into by a manufactured home purchaser that seeks to 
waive any recourse to either HUD or a state dispute resolution program 
is void.



                        Subpart I_State Programs



Sec. 3286.801  Purpose.

    The purpose of this subpart I is to establish the requirements that 
must be

[[Page 333]]

met by a state to implement and administer its own installation program, 
either as part of its approved state plan or under this subpart, in such 
a way that the state would not be covered by the HUD-administered 
installation program. This subpart I also establishes the procedure for 
determining whether a state installation program meets the requirements 
of the Act for a qualifying installation program that will operate in 
lieu of the HUD-administered installation program.



Sec. 3286.803  State qualifying installation programs.

    (a) Qualifying installation program supersedes. The HUD-administered 
installation program will not be implemented in any state that is 
identified as fully or conditionally accepted under the requirements and 
procedures of this subpart I or in accordance with part 3282 of this 
chapter.
    (b) Minimum elements. To be accepted as a fully qualifying 
installation program, a state installation program must include the 
following elements:
    (1) Installation standards that meet or exceed the requirements of 
Sec. 3286.107(a) and that apply to every initial installation of a new 
manufactured home within the state;
    (2) The training of manufactured home installers;
    (3) The licensing of, or other method of certifying or approving, 
manufactured home installers to perform the initial installations of new 
manufactured homes in the state;
    (4) A method for inspecting the initial installations of new 
manufactured homes in the state that is implemented and used to hold 
installers responsible for the work they perform; and
    (5) Provision of adequate funding and personnel to administer the 
state installation program.
    (c) Conditional acceptance. (1) A state installation program that 
meets the minimum requirements set forth under paragraphs (b)(1), (4), 
and (5) of this section may be conditionally accepted by the Secretary 
if the state provides assurances deemed adequate by the Secretary that 
the state is moving to meet all of the requirements for full acceptance. 
If the Secretary conditionally accepts a state's installation program, 
the Secretary will provide to the state an explanation of what is 
necessary to obtain full acceptance.
    (2) A conditionally accepted state will be permitted to implement 
its own installation program in lieu of the HUD-administered program for 
a period of not more than 3 years. The Secretary may for good cause 
grant an extension of conditional approval upon petition by the state.
    (d) Limited exemptions from requirements. A state installation 
program may be accepted by the Secretary as a qualifying installation 
program if the state can demonstrate that it lacks legal authority, as a 
matter of federal law, to impose the minimum requirements set forth 
under paragraph (b) of this section in certain geographic areas of the 
state, but that the minimum requirements do apply in all other 
geographic areas of the state.



Sec. 3286.805  Procedures for identification as qualified installation
program.

    (a) Submission of certification. (1) A state seeking identification 
as having a qualified installation program must submit a completed State 
Installation Program Certification form to the Secretary for review and 
acceptance and indicate if the installation program will be part of its 
approved state plan in accordance with part 3282 of this chapter.
    (2) A state must include a qualified installation program as part of 
any state plan application submitted for approval under Sec. 3282.302 
of this chapter, if the state does not have a fully or conditionally 
approved state plan in effect at the time of submission of the state 
plan application. In all other cases, a qualified installation program 
is permitted, but is not required, to be submitted as a part of a state 
plan approved in accordance with Sec. 3282.305 of this chapter.
    (b) HUD review and action. (1) The Secretary will review the State 
Installation Program Certification form submitted by a state and may 
request that the state submit additional information as necessary. 
Unless the Secretary has contacted the state for additional

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information or has conditionally accepted or rejected the state 
installation program, the state installation program will be considered 
to have been accepted by the Secretary as a fully qualifying 
installation program as of the earlier of:
    (i) Ninety days after the Secretary receives the state's completed 
State Installation Program Certification form; or
    (ii) The date that the Secretary issues notification to the state of 
its full acceptance.
    (2) A notice of full or conditional acceptance will include the 
effective date of acceptance.
    (c) Rejection of state installation program. (1) If the Secretary 
intends to reject a state's installation program, the Secretary will 
provide to the state an explanation of what is necessary to obtain full 
or conditional acceptance. The state will be given 90 days from the date 
the Secretary provides such explanation to submit a revised State 
Installation Program Certification form.
    (2) If the Secretary decides that any revised State Installation 
Program Certification form is inadequate, or if the state fails to 
submit a revised form within the 90-day period or otherwise indicates 
that it does not intend to change its form, the Secretary will notify 
the state that its installation program is not accepted.
    (3) A state whose State Installation Program Certification form is 
rejected has a right to a presentation of views on the rejection using 
the procedures set forth under subpart D of part 3282 of this chapter. 
The state's request for a presentation of views must be submitted to the 
Secretary within 60 days after the Secretary has provided notification 
that the state's installation program has been rejected.



Sec. 3286.807  Recertification required.

    (a) Recertification. To maintain its status as a qualified 
installation program when the installation program is not part of the 
approved state plan in accordance with part 3282 of this chapter, a 
state must submit a new State Installation Program Certification form to 
the Secretary for review and action as follows:
    (1) Every 5 years after the state's most recent certification as a 
qualified installation program; and
    (2) Whenever there is a change to the state's installation program 
or a change in the HUD requirements applicable to qualifying 
installation programs such that the state's installation program no 
longer complies with the minimum requirements set forth in Sec. 
3286.803(b), regardless of when the state's next regular recertification 
of its installation program would be due.
    (b) Due date of recertification. (1) A state's recertification 
required in paragraph (a) of this section must be filed within 90 days 
of, as applicable:
    (i) The 5-year anniversary of the effective date of the Secretary's 
acceptance of the state's most recent certification as a qualified 
installation program; and
    (ii) The effective date of the state or HUD action that makes a 
significant change to the state's installation program.
    (2) Upon petition by the state, the Secretary may for good cause 
grant an extension of the deadline for recertification.
    (c) Failure to Recertify. (1) A state whose certification of its 
installation program, when the installation program is not part of the 
approved state plan in accordance with part 3282 of this chapter, has 
been accepted by the Secretary is permitted to administer its 
installation program in lieu of the HUD-administered installation 
program until the effective date of a notification by the Secretary that 
the state's certification of its installation program is no longer 
approved.
    (2) A state whose recertification of its installation program is 
rejected by the Secretary has a right to a presentation of views on the 
rejection using the procedures set forth under subpart D of part 3282 of 
this chapter. The state's request for a presentation of views must be 
submitted to the Secretary within 60 days after the Secretary has 
provided notification that the state's recertification of its 
installation program has been rejected.

[[Page 335]]



Sec. 3286.809  Withdrawal of qualifying installation program status.

    (a) Voluntary withdrawal. Any state that intends to withdraw from 
its responsibilities to administer a qualifying installation program 
should provide the Secretary with a minimum of 90 days notice.
    (b) Involuntary withdrawal. Whenever the Secretary finds, after 
affording notice and an opportunity for a hearing in accordance with 
subpart D of part 3282 of this chapter, that a state installation 
program fails to comply substantially with any provision of the 
installation program requirements or that the state program has become 
inadequate, the Secretary will notify the state of withdrawal of 
acceptance or conditional acceptance of the state installation program. 
The HUD-administered installation program will begin to operate in such 
state at such time as the Secretary establishes in issuing the finding.



Sec. 3286.811  Effect on other manufactured housing program 
requirements.

    A state with a qualifying installation program will operate in lieu 
of HUD with respect to only the installation program established under 
subparts B through H of this part. No state may permit its installation 
program, even if it is a qualified installation program under this part, 
to supersede the requirements applicable to HUD's Manufactured Housing 
Construction and Safety Standards and enforcement programs. Regardless 
of whether a state has a qualified installation program:
    (a) Construction and safety standards. Any responsibilities, rights, 
and remedies applicable under the Manufactured Home Construction and 
Safety Standards Act in part 3280 of this chapter and the Manufactured 
Home Procedural and Enforcement Regulations in part 3282 of this chapter 
continue to apply as provided in those parts; and
    (b) Dispute resolution. For any defect in a manufactured home that 
is reported during the one-year period beginning on the date of 
installation defined in Sec. 3286.115, any responsibilities, rights, 
and remedies applicable under the HUD dispute resolution program as 
implemented in part 3288 of this chapter continue to apply as provided 
in that part.



Sec. 3286.813  Inclusion in state plan.

    If a state installation program is included in a state plan approved 
in accordance with Sec. 3282.302 of this chapter, the state 
installation program is subject to all of the requirements for such a 
state plan, including annual review by HUD.



PART 3288_MANUFACTURED HOME DISPUTE RESOLUTION PROGRAM--
Table of Contents



                            Subpart A_General

Sec.
3288.1 Purpose and scope.
3288.3 Definitions.
3288.5 Retailer notification at sale.

   Subpart B_HUD Manufactured Home Dispute Resolution Program in HUD-
                           Administered States

3288.10 Applicability.
3288.15 Eligibility for dispute resolution.
3288.20 Reporting a defect.
3288.25 Initiation of dispute resolution.
3288.30 Screening of dispute resolution request.
3288.33 Notice of dispute resolution.
3288.35 Mediation.
3288.40 Nonbinding arbitration.
3288.45 HUD review and order.

        Subpart C_Alternative Process in HUD-Administered States

3288.100 Scope and applicability.
3288.105 Time when Alternative Process is available.
3288.110 Alternative Process agreements.

  Subpart D_State Dispute Resolution Programs in Non-HUD-Administered 
                                 States

3288.200 Applicability.
3288.205 Minimum requirements.
3288.210 Acceptance and recertification process.
3288.215 Effect on other manufactured home program requirements.

       Subpart E_Dispute Resolution Program Rulemaking Procedures

3288.300 Applicability.
3288.305 Consultation with the Manufactured Housing Consensus Committee.

    Authority: 42 U.S.C. 3535(d), 5422 and 5424.

[[Page 336]]


    Source: 72 FR 27229, May 14, 2007, unless otherwise noted.



                            Subpart A_General



Sec. 3288.1  Purpose and scope.

    (a) Purpose. The Act is intended, in part, to protect the quality, 
safety, durability, and affordability of manufactured homes. Section 
623(c)(12) of the Act (42 U.S.C. 5422 (c)(12)) requires the 
implementation of ``a dispute resolution program for the timely 
resolution of disputes between manufacturers, retailers, and installers 
of manufactured homes regarding responsibility, and for the issuance of 
appropriate orders, for the correction or repair of defects in 
manufactured homes that are reported during the 1-year period beginning 
on the date of installation.'' The purpose of this part is to provide a 
dispute resolution program for the timely resolution of disputes among 
manufacturers, retailers, and installers regarding the responsibility 
for correction or repair of defects reported by the homeowner or others 
and reported in the 1-year period after the first installation of the 
manufactured home.
    (b) Scope--(1) Applicability. In carrying out this purpose, it is 
presumed that if a manufactured home contains an alleged defect that is 
reported in the first year after installation and was not caused by the 
homeowner, then the manufacturer, retailer, or installer is responsible 
for the alleged defect and the dispute resolution process recognized in 
this part is an appropriate means for resolving disputes about 
responsibility for correction and repair of the alleged defect. For 
purposes of the dispute resolution process recognized in this part, only 
alleged defects reported in the first year after the first installation 
are covered by the process. The state where the home is sited determines 
whether the HUD Manufactured Home Dispute Resolution Program or a state 
program applies. Subpart A of this part establishes general provisions 
applicable to HUD's implementation of a dispute resolution program as 
required by the Act. Subpart B of this part establishes the HUD 
Manufactured Home Dispute Resolution Program that HUD will administer in 
any state that does not establish a program that complies with the Act 
and been accepted by HUD as provided in subpart D of this part. Subpart 
C of this part provides an Alternative Process for manufacturers, 
retailers, and installers who agree that a homeowner is not responsible 
for the alleged defect to resolve their disputes about responsibility 
for correction or repair outside of the HUD Mediation and Arbitration 
Process under subpart B. Subpart D of this part establishes the minimum 
requirements that must be met by a state applying to implement its own 
dispute resolution program that complies with the Act, and the procedure 
for determining whether the requirements for complying have been met. 
Subpart E of this part establishes special rulemaking procedures that 
apply to the issuance of new regulations that implement the dispute 
resolution requirements set forth in section 623 of the Act (42 U.S.C. 
5422).
    (2) Warranties not affected. This part is not a warranty program and 
the requirements established in this part do not replace the 
manufacturer's or any other warranty program. Such warranty program may 
have its own requirements.



Sec. 3288.3  Definitions.

    The following definitions apply in this part:
    Act means the National Manufactured Housing Construction and Safety 
Standards Act of 1974, 42 U.S.C. 5401-5426.
    Appropriate order means an order issued by HUD or an order that is 
enforceable under state law.
    Date of installation means the date all utilities are connected and 
the manufactured home is ready for occupancy as established, if 
applicable, by a certificate of occupancy, except as follows: if the 
manufactured home has not been sold to the first person purchasing the 
home in good faith for purposes other than resale by the date the home 
is ready for occupancy, the date of installation is the date of closing 
under the purchase agreement or sales contract for the manufactured 
home.
    Day means a calendar day.
    Defect means any defect in the performance, construction, 
components, or material of a manufactured home

[[Page 337]]

that renders the home or any part of the home not fit for the ordinary 
use for which it was intended, including, but not limited to, a defect 
in the construction, safety, or installation of the home. For purposes 
of state certification under Sec. 3288.205, HUD will find it acceptable 
if the threshold for the state's program is functionally equivalent to 
this definition.
    Dispute resolution provider means a person or entity providing 
dispute resolution services for HUD.
    Homeowner means a person who purchased or leased the manufactured 
home in good faith for purposes other than resale.
    HUD means the U.S. Department of Housing and Urban Development.
    Installer means the person who is retained to engage in, or who 
engages in, the business of directing, supervising, controlling, or 
correcting the initial installation of a manufactured home.
    Manufactured home has the same meaning as the term ``manufactured 
home'' as defined in 24 CFR 3280.2.
    Manufactured Housing Consensus Committee or MHCC means the consensus 
committee established pursuant to section 604(a)(3) of the Act, 42 
U.S.C. 5403(a)(3).
    Party or parties means, individually or collectively, the 
manufacturer, retailer, or installer of a manufactured home in which a 
defect has been reported in accordance with Sec. 3288.20.
    State Administrative Agency means an agency of a state that has been 
approved or conditionally approved to carry out the state plan for 
enforcement of the standards pursuant to section 623 of the Act, 42 
U.S.C. 5422.
    Timely reporting means the reporting of an alleged defect within 1 
year after the date of installation of a manufactured home in accordance 
with Sec. 3288.20.
    Timely resolution means the resolution of disputes among 
manufacturers, retailers, and installers within 120 days of the time a 
request for dispute resolution is made, except that if the defect 
presents an unreasonable risk of injury, death, or significant loss or 
damage to valuable personal property, the resolution must be within 60 
days of the time a request for dispute resolution is made.



Sec. 3288.5  Retailer notification at sale.

    Retailer notice at the time of signing. At the time of signing a 
contract for sale or lease for a manufactured home, the retailer must 
provide the purchaser with a retailer notice. This notice may be in a 
separate document from the sales contract or may be incorporated clearly 
in a separate section on consumer dispute resolution information at the 
top of the sales contract. The notice must include the following 
language:

    The U.S. Department of Housing and Urban Development (HUD) 
Manufactured Home Dispute Resolution Program is available to resolve 
disputes among manufacturers, retailers, or installers concerning 
defects in manufactured homes. Many states also have a consumer 
assistance or dispute resolution program. For additional information 
about these programs, see sections titled ``Dispute Resolution Process'' 
and ``Additional Information--HUD Manufactured Home Dispute Resolution 
Program'' in the Consumer Manual required to be provided to the 
purchaser. These programs are not warranty programs and do not replace 
the manufacturer's, or any other person's, warranty program.



   Subpart B_HUD Manufactured Home Dispute Resolution Program in HUD-
                           Administered States



Sec. 3288.10  Applicability.

    The requirements of the HUD Manufactured Home Dispute Resolution 
Program established in this subpart B apply in each state that does not 
establish a state dispute resolution program that complies with the Act 
and has been accepted by HUD as provided in subpart D of this part.



Sec. 3288.15  Eligibility for dispute resolution.

    (a) Initiation of actions. Manufacturers, retailers, and installers 
of manufactured homes are eligible to initiate and participate in the 
HUD Manufactured Home Dispute Resolution Program. Homeowners may 
initiate action under, and be observers to, the HUD Manufactured Home 
Dispute Resolution Program.
    (b) Eligible disputes. Only disputes concerning alleged defects that 
have

[[Page 338]]

been reported to the manufacturer, retailer, installer, HUD, or a State 
Administrative Agency within 1 year after the date of the first 
installation of the manufactured home are eligible for resolution 
through the HUD Manufactured Home Dispute Resolution Program. The 
eligible dispute includes the defect alleged in a timely report and any 
related issues.



Sec. 3288.20  Reporting a defect.

    (a) Making a report. To preserve the right to request dispute 
resolution through HUD, alleged defects must be reported to the 
manufacturer, retailer, installer, HUD, or a State Administrative 
Agency. An alleged defect may be reported by a homeowner, manufacturer, 
retailer, or installer.
    (b) Form of report. It is recommended that alleged defects be 
reported in writing, including, but not limited to, e-mail, written 
letter, certified mail, or fax. The existence of an alleged defect may 
also be reported by telephone.
    (c) Content of report. No particular form or format is required to 
report an alleged defect, but any such report must, at a minimum, 
include a description of the alleged defect, the name of homeowner, and 
the address of the home.
    (d) Record of report--(1) To evidence timeliness. To establish 
timely reporting, the report of an alleged defect that is made to the 
manufacturer, retailer, installer, or a State Administrative Agency of 
the manufactured home should be done in a manner that will create a 
dated record of the report that demonstrates that the report was made 
within 1 year after the date of installation; for example, by certified 
mail, fax, or email. Persons who report an alleged defect by telephone 
should make a contemporaneous note of the telephone call, including 
date, time, the name of the person who received the report, the name of 
the business contacted, and the telephone number called. If the matter 
goes to arbitration, the arbitrator and HUD will review whether there is 
sufficient evidence to believe the report was made on a timely basis.
    (2) Obligation to retain. Each report of a defect, including logs of 
telephonic complaints, received by a manufacturer, retailer, a State 
Administrative Agency or installer, must be maintained for 3 years from 
the date of receipt.
    (e) Reports made to a State Administrative Agency. Reports of 
defects in the manufactured home that are made in the first year after 
its installation can be sent to the appropriate State Administrative 
Agency. Contact information about a State Administrative Agency is 
available at http://www.hud.gov. Contact the appropriate State 
Administrative Agency to determine the method for making the report.
    (f) Reports made to HUD. Reports of alleged defects in the 
manufactured home that are made in the first year after its installation 
can be sent to HUD. The report to HUD may be made using any of the 
following methods:
    (1) In writing at: HUD, Office of Regulatory Affairs and 
Manufactured Housing, Attn: Dispute Resolution, 451 Seventh Street, SW., 
Washington, DC 20410-8000;
    (2) By telephone at: (202) 708-6423 or (800) 927-2891;
    (3) By fax at: (202) 708-4213; or
    (4) By e-mail at [email protected].
    (g) Effect of report. The reporting of an alleged defect does not 
initiate the HUD Manufactured Home Dispute Resolution Program, but only 
establishes whether the requirement of timely reporting in accordance 
with Sec. 3288.15(b) has been met. The HUD Manufactured Home Dispute 
Resolution Process is initiated when a request for dispute resolution is 
submitted to HUD in accordance with Sec. 3288.25.



Sec. 3288.25  Initiation of dispute resolution.

    (a) Preliminary effort. HUD strongly encourages the homeowner or 
party reporting an alleged defect to seek to resolve the dispute 
directly with any manufacturer, retailer, or installer that the person 
reporting the defect believes to be responsible before initiating the 
HUD dispute resolution process.
    (b) Request for dispute resolution. Any of the parties or the 
homeowner may initiate the HUD Manufactured Home Dispute Resolution 
Program at any time after an alleged defect has been

[[Page 339]]

reported, by requesting dispute resolution, as follows:
    (1) By mailing, e-mailing, or otherwise delivering a written request 
for dispute resolution to the dispute resolution provider at the address 
or e-mail address provided either at http://www.hud.gov, or by 
contacting HUD's Office of Regulatory Affairs and Manufactured Housing 
at (202) 708-6423 or (800) 927-2891;
    (2) By faxing a request for dispute resolution to the fax number 
provided either at http://www.hud.gov, or by contacting HUD's Office of 
Regulatory Affairs and Manufactured Housing at (202) 708-6423 or (800) 
927-2891; or
    (3) By telephoning a request for dispute resolution to the number 
provided either at http://www.hud.gov, or by contacting HUD's Office of 
Regulatory Affairs and Manufactured Housing at (202) 708-6423 or (800) 
927-2891.
    (c) Requested information. The dispute resolution provider will 
request at least the following information when a person seeks to 
initiate dispute resolution under the HUD Manufactured Home Dispute 
Resolution Program:
    (1) The name, address, and contact information of the homeowner;
    (2) The name and contact information of the manufacturer, retailer, 
and installer of the manufactured home, to the extent available;
    (3) The date the report of the alleged defect was made;
    (4) The name and contact information of the recipient or recipients 
of the report of the alleged defect;
    (5) The date of installation of the manufactured home affected by 
the alleged defect; and
    (6) A description of the alleged defect.



Sec. 3288.30  Screening of dispute resolution request.

    (a) Review for sufficiency. When the request for dispute resolution 
has been received by the dispute resolution provider, a screening 
neutral will review the sufficiency of the information provided in the 
request for dispute resolution and determine if the dispute resolution 
process should proceed. If the screening neutral determines that a 
defect is properly alleged and timely reported, notice of the request 
will be forwarded, as provided in Sec. 3288.33, to the manufacturer, 
retailer, and installer, as appropriate and to the extent the 
appropriate parties can be identified based on the information in the 
request.
    (b) Insufficient information. If a request for dispute resolution is 
lacking any information necessary to determine if the dispute resolution 
process should proceed, the screening neutral will contact the requester 
or the parties about supplementing the initial request. If information 
necessary to qualify the matter for the HUD Manufactured Home Dispute 
Resolution Program is not received within a reasonable time established 
by the screening neutral, the request for dispute resolution will be 
considered withdrawn.
    (c) Denial of a dispute. Denial by all of the parties that there is 
a dispute does not preclude the dispute resolution process from going 
forward to mediation. A screening neutral's determination that a defect 
is properly alleged is prima facie evidence of a dispute. If the defect 
has not been corrected or repaired, the matter will be referred to 
mediation.
    (d) Determination of unreasonable risk. If the screening neutral 
determines there is sufficient documentation of an alleged defect 
presenting an unreasonable risk of injury or death, he or she will send 
a copy of the request to HUD.



Sec. 3288.33  Notice of dispute resolution.

    (a) Once the screening neutral determines that a defect is properly 
alleged and timely reported, notice about the request will be forwarded 
to the parties by overnight delivery, commercial carrier, or fax.
    (b) If the parties have not initiated the Alternative Process in 
accordance with Sec. 3288.105 of this part within 7 days of the 
screening neutral's notification, the screening neutral will refer the 
matter to mediation.



Sec. 3288.35  Mediation.

    (a) Mediator. The dispute resolution provider will provide for the 
selection of a mediator. The selected mediator will not be the person 
who screened the

[[Page 340]]

dispute resolution request. The selected mediator will mediate the 
dispute and attempt to facilitate a settlement. If a party identifies 
any other party that should be included in the mediation, the mediator 
will contact the other party and provide information about the scheduled 
mediation meetings.
    (b) Time--(1) For reaching settlement. Except as provided in 
paragraph (b)(2) of this section, the parties are allowed 30 days from 
the commencement of the mediation to reach a mediated settlement. In 
every case, the dispute resolution provider will notify the parties and 
the homeowner, in writing, of the date of the commencement of the 
mediation.
    (2) Alleged defects presenting an unreasonable risk of injury, 
death, or significant loss or damage to valuable personal property. For 
mediations involving alleged defects that appear to present an 
unreasonable risk of injury, death, or significant loss or damage to 
valuable personal property as determined by the screening neutral, the 
parties have a maximum 10 days from the commencement of the mediation to 
reach a settlement.
    (3) For corrective repairs. Unless a longer period is agreed to in 
writing by the parties to the mediated settlement and the homeowner, 
corrective repairs must be completed no later than 30 days after the 
date the settlement agreement is signed by the applicable parties.
    (c) Denial of dispute. During mediation, denial of a dispute by all 
parties without acceptance of responsibility will result in the mediator 
referring the matter to arbitration for determination of the defect and 
responsibility for the defect.
    (d) Written settlement agreement.
    (1) Upon reaching an agreement, the parties will sign a written 
settlement agreement. The dispute resolution provider will forward 
copies of the agreements with the original signatures of the parties to 
the parties, the homeowner, and to HUD.
    (2) Sample agreements will be made available to the parties as 
drafting guidance by the dispute resolution provider.
    (e) Failure of mediation. If mediation is not successful, parties or 
the homeowner may proceed to nonbinding arbitration, as provided in 
Sec. 3288.40 of this part.
    (f) Confidentiality. Except for the report of an alleged defect, any 
request for dispute resolution, and any written settlement agreement, 
all other documents and communications provided in confidence and used 
in the mediation will be confidential, in accordance with the 
Administrative Dispute Resolution Act of 1996 (5 U.S.C. 571 et seq.).



Sec. 3288.40  Nonbinding arbitration.

    (a) When initiated. (1) If, following mediation under Sec. 3288.35, 
the parties fail to reach a settlement, any party or the homeowner may, 
within 15 days of the expiration of the deadline applicable under Sec. 
3288.35(b), initiate nonbinding arbitration.
    (2) In addition, arbitration may be initiated upon referral by the 
mediator pursuant to Sec. 3288.35(c).
    (b) Written request--(1) Submission to HUD. A written request for 
arbitration must be submitted to the dispute resolution provider. 
Information about the dispute resolution provider and how to make a 
request for dispute resolution will be available at http://www.hud.gov 
or by contacting HUD's Office of Manufactured Housing Programs at (202) 
708-6423 or (800) 927-2891.
    (2) Contents of request. The written request for arbitration must 
include:
    (i) The name and address of the party making the request;
    (ii) A brief description of the alleged defect or a copy of the 
report of the alleged defect; and
    (iii) A copy of the request for dispute resolution.
    (c) Appointment and authority of arbitrator. Upon receipt of the 
request, the dispute resolution provider will select an arbitrator. The 
arbitrator will have the authority to:
    (1) Set hearing dates and deadlines;
    (2) Conduct on-site inspections;
    (3) Issue requests for documentation and information necessary to 
complete the record;
    (4) Dismiss frivolous allegations;
    (5) Make proposed findings, including findings of defect and 
culpability and a

[[Page 341]]

disposition recommendation to HUD; and
    (6) Recommend apportionment of the responsibility of paying for or 
providing any correction or repair of the home when recommending that 
culpability be assessed to more than one party.
    (d) Denial of dispute. If the parties deny a dispute exists and the 
arbitrator determines there is a defect, the arbitrator will make a 
determination of responsibility for the defect.
    (e) Notice to parties. The dispute resolution provider will provide 
the parties and the homeowner with a notice setting forth the date, 
place, and time an arbitration is to be held.
    (f) Proceedings. (1) If all parties do not request an in-person 
hearing under paragraph (f)(2) of this section within 5 days of the 
dispute resolution provider's receipt of the request for arbitration, or 
if the arbitrator rejects the request for an in-person hearing, the 
arbitrator may conduct either a record review or a telephonic hearing.
    (2) If any party wants to request an in-person hearing, in which the 
parties or their representatives may personally appear before the 
arbitrator, the arbitrator will consider such a request if it is made by 
all of the parties that are participating in the arbitration. Such an 
in-person hearing will be held at the discretion of the arbitrator, 
after considering appropriate factors, such as cost.
    (g) Effect on nonparticipating parties. If a party chooses not to 
participate in the arbitration, the process will continue without 
further input from that party. In such a case, the arbitrator may rely 
on the record developed through the arbitration to find a 
nonparticipating party responsible for correction or repair of a defect.
    (h) Completion of arbitration. (1) Unless an extension is granted 
for good cause by HUD, the arbitrator, within 21 days of the dispute 
resolution provider's receipt of the request for arbitration, the 
arbitrator will complete the arbitration process and provide HUD with 
all background information used during the arbitration and with a 
written, nonbinding recommendation as to which party or parties are 
responsible for the defect, and what corrective actions should be taken.
    (2) Unless an extension is granted for good cause by HUD, the 
arbitrator, within 21 days of the dispute resolution provider's receipt 
of the request for arbitration, will provide the parties with a copy of 
the nonbinding recommendation that was delivered to HUD, in accordance 
with Sec. 3288.40(h)(1).
    (i) Settlement offers. At any time before HUD issues a final order, 
the parties may submit to HUD a proposal to resolve the dispute.



Sec. 3288.45  HUD review and order.

    (a) Appropriate order. HUD will review the arbitrator's 
recommendation provided in accordance with Sec. 3288.40(h), any 
settlement offers presented by the parties in accordance with Sec. 
3288.40(i), and the information gathered during the arbitration, and 
will issue an appropriate order in which HUD may accept, modify, or 
reject the recommendations. HUD will forward a copy of the order to the 
arbitrator and to each of the parties and the homeowner, whether or not 
a party chose to participate in the arbitration.
    (b) Contents of order. If HUD finds that a defect exists, the order 
will include the following:
    (1) Assignment of responsibility for the correction and repair of 
all defects and associated costs; and
    (2) If the manufacturer, retailer, or installer is responsible for 
corrective action, a date by which the correction and repair of each 
defect must be completed, taking into consideration the seriousness of 
the defect.
    (c) Failure to comply. Failure to comply with an order issued by HUD 
is a violation of section 610(a)(5) of the Act (42 U.S.C. 5409(a)(5)).



        Subpart C_Alternative Process in HUD-Administered States



Sec. 3288.100  Scope and applicability.

    The requirements of this subpart C may be followed in lieu of the 
requirements of subpart B of this part to resolve disputes among 
manufacturers, retailers, and installers of manufactured homes in any 
state where subpart B of this part would otherwise apply. In limited 
circumstances, this

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subpart C permits manufacturers, retailers, and installers of 
manufactured homes to use neutrals of their choosing to resolve disputes 
concerning alleged defects in manufactured homes.



Sec. 3288.105  Time when Alternative Process is available.

    (a) The Alternative Process may be invoked after an alleged defect 
has been reported, pursuant to Sec. 3288.15(b). However, the 
Alternative Process may not be invoked more than 7 days after 
notification of a request for dispute resolution has been received by 
all of the parties. The notification must be delivered by overnight 
delivery, commercial carrier, or fax by the screening neutral, in 
accordance with Sec. 3288.30. If within 7 days of the receipt of 
notification, the Alternative Process is not initiated, the screening 
neutral will refer the matter to the mediator. Once the Alternative 
Process is invoked, neither the parties nor the homeowner may invoke the 
Mediation and Arbitration Process in the HUD Manufactured Home Dispute 
Resolution Program for 30 days.
    (b) No particular form or format is required to provide notification 
for the Alternative Process, but the party or parties submitting the 
notification must include a statement from the parties participating in 
the Alternative Process stating that the homeowner is not responsible 
for the alleged defect and that one or more of the parties will correct 
or repair the defect. All required agreements are set forth in Sec. 
3288.110 of this part. The parties must also make reasonable efforts to 
include the following information in the notification:
    (1) Identification of the case; and
    (2) Identification of the parties participating in the Alternative 
Process.
    (c) The screening neutral will notify the parties if the case is 
referred to the Alternative Process for resolution.



Sec. 3288.110  Alternative Process agreements.

    (a) Required agreement. To use the Alternative Process, the 
manufacturer, retailer, and installer of the manufactured home at issue, 
as appropriate, must agree:
    (1) That there is a defect in the manufactured home;
    (2) That the manufacturer, retailer, or installer is responsible for 
the defect;
    (3) That the homeowner is not responsible for the defect;
    (4) To engage a neutral to evaluate the dispute and make an 
assignment of responsibility for correction and repair; and
    (5) To notify the homeowner of, and allow the homeowner to be 
present at, any meetings and to inform the homeowner of the outcome.
    (b) Additional element of agreement. In addition, the parties should 
agree to act upon the neutral's assignment of responsibility for 
correction and repair.



  Subpart D_State Dispute Resolution Programs in Non-HUD Administered 
                                 States



Sec. 3288.200  Applicability.

    This subpart D establishes the minimum requirements that must be met 
by a state to implement its own dispute resolution program and therefore 
not be covered by the HUD Manufactured Home Dispute Resolution Program 
established in accordance with subpart B. The subpart also establishes 
the procedure for determining whether the state dispute resolution 
program meets the requirements of the Act for operating in lieu of the 
HUD Manufactured Home Dispute Resolution Program.



Sec. 3288.205  Minimum requirements.

    (a) List of requirements. The HUD Manufactured Home Dispute 
Resolution Program will not be implemented in any state that complies 
with the procedures of this subpart D and that has a dispute resolution 
program that provides for the following minimum requirements:
    (1) The timely resolution of disputes among manufacturers, 
retailers, or installers regarding responsibility for correction and 
repair of defects in manufactured homes;
    (2) The issuance of appropriate orders for correction and repair of 
defects in such homes;

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    (3) A coverage period for disputes that includes at least defects 
that are reported within 1 year after the date of first installation; 
and
    (4) Adequate funding and personnel.
    (b) Applicability to programs in state plans. (1) In order to 
include a dispute resolution program in a state plan that on February 8, 
2008 is fully or conditionally approved under Sec. 3282.302 of this 
chapter, a state must amend its state plan to provide for the 
requirements of paragraphs (a)(1) through (3) of this section.
    (2) After February 8, 2008, a state that submits a state plan for 
approval in accordance with Sec. 3282.302 of this chapter must provide 
for the requirements of paragraphs (a)(1) through (3) of this section in 
its state plan.



Sec. 3288.210  Acceptance and recertification process.

    (a) Submission of certification. A state seeking HUD acceptance of 
its state dispute resolution program under this subpart must submit to 
HUD a completed Dispute Resolution Certification Form, which is 
available by contacting HUD by telephone at (202) 708-6423 or by e-mail 
at [email protected]. The certification may be submitted as a part of, or 
independent of, a state plan under Sec. 3282.302 of this chapter. If 
included as part of a state plan, the state does not have to separately 
certify that it meets the requirements of Sec. 3288.205(a)(4).
    (b) HUD review and action. (1) HUD will review the Dispute 
Resolution Certification Form submitted by a state and may contact the 
state to request additional clarification or information as necessary. 
Upon completing its review, HUD will provide the state with notice of 
acceptance, conditional acceptance, or rejection of its dispute 
resolution program.
    (2) A notice of acceptance will include the date of acceptance.
    (3) If HUD rejects a state's dispute resolution program, HUD will 
provide an explanation of what is necessary to obtain full acceptance. A 
revised Dispute Resolution Certification Form may be submitted within 30 
days of receipt of such notification. If the revised Dispute Resolution 
Certification Form is inadequate or if the state fails to resubmit 
within the 30-day period or otherwise indicates that it does not intend 
to change its Dispute Resolution Certification Form, HUD will notify the 
state that its dispute resolution program is not accepted and that it 
has a right to a hearing on the rejection using the procedures set forth 
under subpart D of part 3282 of this chapter.
    (c) Conditional acceptance. A state meeting three of the four 
minimum requirements set forth under Sec. 3288.205(a)(1) through (4) 
will be conditionally accepted by HUD. If HUD conditionally accepts a 
state's dispute resolution program, HUD will provide an explanation of 
what is necessary to obtain full acceptance. A revised Dispute 
Resolution Certification Form may be submitted within 30 days of receipt 
of such notification. Any state conditionally accepted will be permitted 
to implement its own dispute resolution program for a period of not more 
than 3 years, absent extension of this period by HUD.
    (d) Revocation. If HUD becomes aware at any time that a state no 
longer meets the minimum requirements set forth under Sec. 3288.205, 
HUD may revoke acceptance of the state's certification after an 
opportunity for a hearing, using the procedures set forth under subpart 
D of part 3282.
    (e) Recertification of a program not included in state plan. Except 
as provided in paragraph (f), to maintain its accepted status, a state 
whose program is not included in an approved or conditionally approved 
state plan must submit a current Dispute Resolution Certification Form 
to HUD for review and acceptance as follows:
    (1) Every 3 years within 90 days of the day and month of the most 
recent date of HUD's acceptance of the state's program or
    (2) Whenever there is a significant change to the program.
    (f) Inclusion in state plan. If a state dispute resolution program 
is part of a state plan, it will be reviewed annually as part of the 
state plan and separate recertification of the state's dispute 
resolution program is not required.



Sec. 3288.215  Effect on other manufactured home program requirements.

    A state with an accepted dispute resolution program will operate in 
lieu of

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HUD's Manufactured Home Dispute Resolution Program established under 
subpart B of this part 3288. A state dispute resolution program, even if 
it is an accepted dispute resolution program under this part, does not 
supersede the requirements applicable to any other aspect of HUD's 
manufactured home program. Any responsibilities, rights, and remedies 
applicable under the Manufactured Home Construction and Safety Standards 
in part 3280 of this chapter and the Manufactured Home Procedural and 
Enforcement Regulations in part 3282 of this chapter continue to apply 
as provided in those parts in all states.



       Subpart E_Dispute Resolution Program Rulemaking Procedures



Sec. 3288.300  Applicability.

    This subpart establishes special regulatory procedures for issuing 
or revising dispute resolution program regulations as codified in this 
part.



Sec. 3288.305  Consultation with the Manufactured Housing Consensus
Committee.

    HUD will seek input from the MHCC when revising the HUD Manufactured 
Home Dispute Resolution Program regulations in this part 3288. Before 
publication of a proposed rule to revise these regulations, HUD will 
provide the MHCC with an opportunity to comment on such revision. The 
MHCC may send to HUD any of the MHCC's own recommendations to adopt new 
dispute resolution program regulations or to modify or repeal any of the 
regulations in this part. Along with each recommendation, the MHCC must 
set forth pertinent data and arguments in support of the action sought. 
HUD will either: accept or modify the recommendation and publish it for 
public comment in accordance with section 553 of the Administrative 
Procedure Act (5 U.S.C. 553), along with an explanation of the reasons 
for any such modification; or reject the recommendation entirely, and 
provide to the MHCC a written explanation of the reasons for the 
rejection. This section does not supersede section 605 of the National 
Manufactured Housing Construction and Safety Standards Act of 1974 (42 
U.S.C. 5404).



PART 3400_SAFE MORTGAGE LICENSING ACT--Table of Contents



Sec.
3400.1 Purpose.
3400.3 Confidentiality of information.

                            Subpart A_General

3400.20 Scope of this subpart.
3400.23 Definitions.

      Subpart B_Determination of State Compliance With the SAFE Act

3400.101 Scope of this subpart.
3400.103 Individuals required to be licensed by states.
3400.105 Minimum loan originator license requirements.
3400.107 Minimum annual license renewal requirements.
3400.109 Effective date of state requirements imposed on individuals.
3400.111 Other minimum requirements for state licensing systems.
3400.113 Performance standards.
3400.115 Determination of noncompliance.

 Subpart C_HUD's Loan Originator Licensing System and HUD's Nationwide 
                 Mortgage Licensing and Registry System

3400.201 Scope of this subpart.
3400.203 HUD's establishment of loan originator licensing system.
3400.205 HUD's establishment of nationwide mortgage licensing system and 
          registry.

     Subpart D_Minimum Requirements for Administration of the NMLSR

3400.301 Scope of this subpart.
3400.303 Financial reporting.
3400.305 Data security.
3400.307 Fees.
3400.309 Absence of liability for good-faith administration.

              Subpart E_Enforcement of HUD Licensing System

3400.401 HUD's authority to examine loan originator records.
3400.403 Enforcement proceedings.
3400.405 Civil money penalties.

Appendix A to Part 3400--Examples of Mortgage Loan Originator Activities
Appendix B to Part 3400--Engaging in the Business of a Loan Originator: 
          Commercial Context and Habitualness

[[Page 345]]

Appendix C to Part 3400--Independent Contractors and Loan Processor and 
          Underwriter Activities That Require a State Mortgage Loan 
          Originator License
Appendix D to Part 3400--Attorneys: Circumstances That Require a State 
          Mortgage Loan Originator License

    Authority: 12 U.S.C. 5101-5116; 42 U.S.C. 3535(d).

    Source: 76 FR 38492, June 30, 2011, unless otherwise noted.



Sec. 3400.1  Purpose.

    (a) This part implements HUD's responsibilities under the Secure and 
Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) (12 
U.S.C. 5101-5116). The SAFE Act strives to enhance consumer protection 
and reduce fraud by directing states to adopt minimum uniform standards 
for the licensing and registration of residential mortgage loan 
originators and to participate in a nationwide mortgage licensing system 
and registry database of residential mortgage loan originators. Under 
the SAFE Act, if HUD determines that a state's loan origination 
licensing system does not meet the minimum requirements of the SAFE Act, 
HUD is charged with establishing and implementing a system for all loan 
originators in that state. Additionally, if at any time HUD determines 
that the nationwide mortgage licensing system and registry is failing to 
meet the SAFE Act's requirements, HUD is charged with establishing and 
maintaining a licensing and registry database for loan originators.
    (b) Subpart A establishes the definitions applicable to this part. 
Subpart B provides the minimum standards that a state must meet in 
licensing loan originators, including standards for whom a state must 
require to be licensed, and sets forth HUD's procedure for determining a 
state's compliance with the minimum standards. Subpart C provides the 
requirements that HUD will apply in any state that HUD determines has 
not established a licensing and registration system in compliance with 
the minimum standards of the SAFE Act. Subpart D provides minimum 
requirements for the administration of the Nationwide Mortgage Licensing 
System and Registry. Subpart E clarifies HUD's enforcement authority in 
states in which it operates a state licensing system.



Sec. 3400.3  Confidentiality of information.

    (a) Except as otherwise provided in this part, any requirement under 
Federal or state law regarding the privacy or confidentiality of any 
information or material provided to the Nationwide Mortgage Licensing 
System and Registry or a system established by the Secretary under this 
part, and any privilege arising under Federal or state law (including 
the rules of any Federal or state court) with respect to such 
information or material, shall continue to apply to such information or 
material after the information or material has been disclosed to the 
system. Such information and material may be shared with all state and 
Federal regulatory officials with mortgage industry oversight authority 
without the loss of privilege or the loss of confidentiality protections 
provided by Federal and state laws.
    (b) Information or material that is subject to a privilege or 
confidentiality under paragraph (a) of this section shall not be subject 
to:
    (1) Disclosure under any Federal or state law governing the 
disclosure to the public of information held by an officer or an agency 
of the Federal Government or the respective state; or
    (2) Subpoena or discovery, or admission into evidence, in any 
private civil action or administrative process, unless with respect to 
any privilege held by the Nationwide Mortgage Licensing System and 
Registry or by the Secretary with respect to such information or 
material, the person to whom such information or material pertains, 
waives, in whole or in part, in the discretion of such person, that 
privilege.
    (c) Any state law, including any state open record law, relating to 
the disclosure of confidential supervisory information or any 
information or material described in paragraph (a) of this section that 
is inconsistent with paragraph (a), shall be superseded by the 
requirements of such provision to the extent that state law provides 
less confidentiality or a weaker privilege.
    (d) This section shall not apply with respect to the information or 
material relating to the employment history of,

[[Page 346]]

and publicly adjudicated disciplinary and enforcement actions against, 
loan originators that is included in the Nationwide Mortgage Licensing 
System and Registry for access by the public.



                            Subpart A_General



Sec. 3400.20  Scope of this subpart.

    This subpart provides the definitions applicable to this part, and 
other general requirements applicable to this part.



Sec. 3400.23  Definitions.

    Terms that are defined in the SAFE Act and used in this part have 
the same meaning as in the SAFE Act, unless otherwise provided in this 
section.
    Administrative or clerical tasks means the receipt, collection, and 
distribution of information common for the processing or underwriting of 
a loan in the mortgage industry and communication with a consumer to 
obtain information necessary for the processing or underwriting of a 
residential mortgage loan.
    American Association of Residential Mortgage Regulators is the 
national association of executives and employees of the various states 
who are charged with the responsibility for administration and 
regulation of residential mortgage lending, servicing, and brokering, 
and dedicated to the goals described at http://www.aarmr.org.
    Application means a request, in any form, for an offer (or a 
response to a solicitation of an offer) of residential mortgage loan 
terms, and the information about the borrower or prospective borrower 
that is customary or necessary in a decision on whether to make such an 
offer.
    Clerical or support duties:
    (1) Include:
    (i) The receipt, collection, distribution, and analysis of 
information common for the processing or underwriting of a residential 
mortgage loan; and
    (ii) Communicating with a consumer to obtain the information 
necessary for the processing or underwriting of a loan, to the extent 
that such communication does not include offering or negotiating loan 
rates or terms, or counseling consumers about residential mortgage loan 
rates or terms; and
    (2) Does not include:
    (i) Taking a residential mortgage loan application; or
    (ii) Offering or negotiating terms of a residential mortgage loan.
    Conference of State Bank Supervisors (CSBS) is the national 
organization composed of state bank supervisors dedicated to maintaining 
the state banking system and state regulation of financial services in 
accordance with the CSBS statement of principles described at http://
www.csbs.org.
    Employee:
    (1) Subject to paragraph (2) of this definition, means:
    (i) An individual:
    (A) Whose manner and means of performance of work are subject to the 
right of control of, or are controlled by, a person, and
    (B) Whose compensation for Federal income tax purposes is reported, 
or required to be reported, on a W-2 form issued by the controlling 
person.
    (2) Has such binding definition as may be issued by the Federal 
banking agencies in connection with their implementation of their 
responsibilities under the SAFE Act.
    Farm Credit Administration means the independent Federal agency, 
authorized by the Farm Credit Act of 1971, to examine and regulate the 
Farm Credit System.
    Federal banking agencies means the Board of Governors of the Federal 
Reserve System, the Comptroller of the Currency, the Director of the 
Office of Thrift Supervision, the National Credit Union Administration, 
and the Federal Deposit Insurance Corporation.
    For compensation or gain. See Sec. 3400.103(c)(2)(ii).
    Independent contractor means an individual who performs his or her 
duties other than at the direction of and subject to the supervision and 
instruction of an individual who is licensed and registered in 
accordance with Sec. 3400.103(a), or is not required to be licensed, in 
accordance with Sec. 3400.103(e)(5), (e)(6), or (e)(7).
    Loan originator. See Sec. 3400.103.
    Loan processor or underwriter, for purposes of this part, means an 
individual who, with respect to the origination of a residential 
mortgage loan, performs

[[Page 347]]

clerical or support duties at the direction of and subject to the 
supervision and instruction of:
    (1) A state-licensed loan originator; or
    (2) A registered loan originator.
    Nationwide Mortgage Licensing System and Registry or NMLSR means the 
mortgage licensing system developed and maintained by the Conference of 
State Bank Supervisors and the American Association of Residential 
Mortgage Regulators for the licensing and registration of loan 
originators and the registration of registered loan originators or any 
system established by the Secretary of HUD, as provided in subpart D of 
this part.
    Nontraditional mortgage product means any mortgage product other 
than a 30-year fixed-rate mortgage.
    Origination of a residential mortgage loan, for purposes of the 
definition of loan processor or underwriter, means all residential 
mortgage loan-related activities from the taking of a residential 
mortgage loan application through the completion of all required loan 
closing documents and funding of the residential mortgage loan.
    Real estate brokerage activities mean any activity that involves 
offering or providing real estate brokerage services to the public 
including--
    (1) Acting as a real estate agent or real estate broker for a buyer, 
seller, lessor, or lessee of real property;
    (2) Bringing together parties interested in the sale, purchase, 
lease, rental, or exchange of real property;
    (3) Negotiating, on behalf of any party, any portion of a contract 
relating to the sale, purchase, lease, rental, or exchange of real 
property (other than in connection with providing financing with respect 
to any such transaction);
    (4) Engaging in any activity for which a person engaged in the 
activity is required to be registered as a real estate agent or real 
estate broker under any applicable law; and
    (5) Offering to engage in any activity, or act in any capacity, 
described in paragraphs (1), (2), (3), or (4) of this definition.
    Residential mortgage loan means any loan primarily for personal, 
family, or household use that is secured by a mortgage, deed of trust, 
or other equivalent consensual security interest on a dwelling (as 
defined in section 103(v) of the Truth in Lending Act) or residential 
real estate upon which is constructed or intended to be constructed a 
dwelling (as so defined).
    Secretary means the Secretary of Housing and Urban Development.
    State means any State of the United States, the District of 
Columbia, any territory of the United States, Puerto Rico, Guam, 
American Samoa, the Virgin Islands, and the Commonwealth of the Northern 
Mariana Islands.
    Unique identifier means a number or other identifier that:
    (1) Permanently identifies a loan originator;
    (2) Is assigned by protocols established by the Nationwide Mortgage 
Licensing System and Registry and the Federal banking agencies to 
facilitate electronic tracking of loan originators and uniform 
identification of, and public access to, the employment history of and 
the publicly adjudicated disciplinary and enforcement actions against 
loan originators; and
    (3) Shall not be used for purposes other than those set forth under 
the SAFE Act.



      Subpart B_Determination of State Compliance with the SAFE Act



Sec. 3400.101  Scope of this subpart.

    This subpart describes the minimum standards of the SAFE Act that 
apply to a state's licensing and registering of loan originators. This 
subpart also provides the procedures that HUD follows to determine that 
a state does not have in place a system for licensing and registering 
mortgage loan originators that complies with the minimum standards. Upon 
making such a determination, HUD will impose the requirements and 
exercise the enforcement authorities described in subparts C and E of 
this part.



Sec. 3400.103  Individuals required to be licensed by states.

    (a) Except as provided in paragraph (e) of this section, in order to 
operate a SAFE-compliant program, a state must prohibit an individual 
from engaging in the business of a loan originator with

[[Page 348]]

respect to any dwelling or residential real estate in the state, unless 
the individual first:
    (1) Registers as a loan originator through and obtains a unique 
identifier from the NMLSR, and
    (2) Obtains and maintains a valid loan originator license from the 
state.
    (b) An individual engages in the business of a loan originator if 
the individual, in a commercial context and habitually or repeatedly:
    (1)(i) Takes a residential mortgage loan application; and
    (ii) Offers or negotiates terms of a residential mortgage loan for 
compensation or gain; or
    (2) Represents to the public, through advertising or other means of 
communicating or providing information (including the use of business 
cards, stationery, brochures, signs, rate lists, or other promotional 
items), that such individual can or will perform the activities 
described in paragraph (b)(1) of this section.
    (c)(1) An individual ``takes a residential mortgage loan 
application'' if the individual receives a residential mortgage loan 
application for the purpose of facilitating a decision whether to extend 
an offer of residential mortgage loan terms to a borrower or prospective 
borrower (or to accept the terms offered by a borrower or prospective 
borrower in response to a solicitation), whether the application is 
received directly or indirectly from the borrower or prospective 
borrower.
    (2) An individual ``offers or negotiates terms of a residential 
mortgage loan for compensation or gain'' if the individual:
    (i)(A) Presents for consideration by a borrower or prospective 
borrower particular residential mortgage loan terms;
    (B) Communicates directly or indirectly with a borrower, or 
prospective borrower for the purpose of reaching a mutual understanding 
about prospective residential mortgage loan terms; or
    (C) Recommends, refers, or steers a borrower or prospective borrower 
to a particular lender or set of residential mortgage loan terms, in 
accordance with a duty to or incentive from any person other than the 
borrower or prospective borrower; and
    (ii) Receives or expects to receive payment of money or anything of 
value in connection with the activities described in paragraph (c)(2)(i) 
of this section or as a result of any residential mortgage loan terms 
entered into as a result of such activities.
    (d)(1) Except as provided in paragraph (e) of this section, a state 
must prohibit an individual who is an independent contractor from 
engaging in residential mortgage loan origination activities as a loan 
processor or underwriter with respect to any dwelling or residential 
real estate in the state, unless the individual first:
    (i) Registers as a loan originator through and obtains a unique 
identifier from the NMLSR, and
    (ii) Obtains and maintains a valid loan originator license from the 
state.
    (2) An individual ``engages in residential mortgage loan origination 
activities as a loan processor or underwriter'' if, with respect to a 
residential mortgage loan application, the individual performs clerical 
or support duties.
    (e) A state is not required to impose the prohibitions required 
under paragraphs (a) and (d) of this section on the following 
individuals:
    (1) An individual who performs only real estate brokerage activities 
and is licensed or registered in accordance with applicable state law, 
unless the individual is compensated directly or indirectly by a lender, 
mortgage broker, or other loan originator or by an agent of such lender, 
mortgage broker, or other loan originator;
    (2) An individual who is involved only in extensions of credit 
relating to timeshare plans, as that term is defined in 11 U.S.C. 
101(53D);
    (3) An individual who performs only clerical or support duties and:
    (i) Who does so at the direction of and subject to the supervision 
and instruction of an individual who:
    (A) Is licensed and registered in accordance with paragraph (a) of 
this section, or
    (B) Is not required to be licensed in accordance with paragraph 
(e)(5); or
    (ii) Who performs such duties solely with respect to transactions 
for which

[[Page 349]]

the individual who acts as a loan originator is not required to be 
licensed, in accordance with paragraph (e)(2), (e)(6), or (e)(7) of this 
section;
    (4) An individual who performs only purely administrative or 
clerical tasks on behalf of a loan originator;
    (5) An individual who is lawfully registered with, and maintains a 
unique identifier through, the Nationwide Mortgage Licensing System and 
Registry, and who is an employee of
    (i) A depository institution;
    (ii) A subsidiary that is:
    (A) Owned and controlled by a depository institution; and
    (B) Regulated by a Federal banking agency; or
    (iii) An institution regulated by the Farm Credit Administration;
    (6)(i) An individual who is an employee of a Federal, state, or 
local government agency or housing finance agency and who acts as a loan 
originator only pursuant to his or her official duties as an employee of 
the Federal, state, or local government agency or housing finance 
agency.
    (ii) For purposes of this paragraph (e)(6), the term ``employee'' 
has the meaning provided in paragraph (1) of the definition of employee 
in Sec. 3400.23 and excludes the meaning provided in paragraph (2) of 
the definition.
    (iii) For purposes of this paragraph (e)(6), the term ``housing 
finance agency'' means any authority:
    (A) That is chartered by a state to help meet the affordable housing 
needs of the residents of the state;
    (B) That is supervised directly or indirectly by the state 
government;
    (C) That is subject to audit and review by the state in which it 
operates; and
    (D) Whose activities make it eligible to be a member of the National 
Council of State Housing Agencies.
    (7)(i) An employee of a bona fide nonprofit organization who acts as 
a loan originator only with respect to his or her work duties to the 
bona fide nonprofit organization, and who acts as a loan originator only 
with respect to residential mortgage loans with terms that are favorable 
to the borrower.
    (ii) For an organization to be considered a bona fide nonprofit 
organization under this paragraph, a state supervisory authority that 
opts not to require licensing of the employee must determine, under 
criteria and pursuant to processes established by the state, that the 
organization:
    (A) Has the status of a tax-exempt organization under section 
501(c)(3) of the Internal Revenue Code of 1986;
    (B) Promotes affordable housing or provides homeownership education, 
or similar services;
    (C) Conducts its activities in a manner that serves public or 
charitable purposes, rather than commercial purposes;
    (D) Receives funding and revenue and charges fees in a manner that 
does not incentivize it or its employees to act other than in the best 
interests of its clients;
    (E) Compensates its employees in a manner that does not incentivize 
employees to act other than in the best interests of its clients;
    (F) Provides or identifies for the borrower residential mortgage 
loans with terms favorable to the borrower and comparable to mortgage 
loans and housing assistance provided under government housing 
assistance programs; and
    (G) Meets other standards that the state determines are appropriate.
    (iii) A state must periodically examine the books and activities of 
an organization it determines is a bona fide nonprofit organization and 
revoke its status as a bona fide nonprofit organization if it does not 
continue to meet the criteria under paragraph (e)(ii) of this section;
    (iv) For residential mortgage loans to have terms that are favorable 
to the borrower, a state must determine that the terms are consistent 
with loan origination in a public or charitable context, rather than a 
commercial context.
    (f) A state must require an individual licensed in accordance with 
paragraphs (a) or (d) of this section to renew the loan originator 
license no less often than annually.



Sec. 3400.105  Minimum loan originator license requirements.

    For an individual to be eligible for a loan originator license 
required under

[[Page 350]]

Sec. 3400.103(a) and (d), a state must require and find, at a minimum, 
that an individual:
    (a) Has never had a loan originator license revoked in any 
governmental jurisdiction, except that a formally vacated revocation 
shall not be deemed a revocation;
    (b)(1) Has never been convicted of, or pled guilty or nolo 
contendere to, a felony in a domestic, foreign, or military court:
    (i) During the 7-year period preceding the date of the application 
for licensing; or
    (ii) At any time preceding such date of application, if such felony 
involved an act of fraud, dishonesty, a breach of trust, or money 
laundering.
    (2) For purposes of this paragraph (b):
    (i) Expunged convictions and pardoned convictions do not, in 
themselves affect the eligibility of the individual; and
    (ii) Whether a particular crime is classified as a felony is 
determined by the law of the jurisdiction in which an individual is 
convicted.
    (c) Has demonstrated financial responsibility, character, and 
general fitness, such as to command the confidence of the community and 
to warrant a determination that the loan originator will operate 
honestly, fairly, and efficiently, under reasonable standards 
established by the individual state.
    (d) Completed at least 20 hours of pre-licensing education that has 
been reviewed and approved by the Nationwide Mortgage Licensing System 
and Registry. The pre-licensing education completed by the individual 
must include at least:
    (1) 3 hours of Federal law and regulations;
    (2) 3 hours of ethics, which must include instruction on fraud, 
consumer protection, and fair lending issues; and
    (3) 2 hours of training on lending standards for the nontraditional 
mortgage product marketplace.
    (e)(1) Achieved a test score of not less than 75 percent correct 
answers on a written test developed by the NMLSR in accordance with 12 
U.S.C. 5105(d).
    (2) To satisfy the requirement under paragraph (e)(1) of this 
section, an individual may take a test three consecutive times, with 
each retest occurring at least 30 days after the preceding test. If an 
individual fails three consecutive tests, the individual must wait at 
least 6 months before taking the test again.
    (3) If a formerly state-licensed loan originator fails to maintain a 
valid license for 5 years or longer, not taking into account any time 
during which such individual is a registered loan originator, the 
individual must retake the test and achieve a test score of not less 
than 75 percent correct answers.
    (f) Be covered by either a net worth or surety bond requirement, or 
pays into a state fund, as required by the state loan originator 
supervisory authority.
    (g) Has submitted to the NMLSR fingerprints for submission to the 
Federal Bureau of Investigation and to any government agency for a state 
and national criminal history background check; and
    (h) Has submitted to the NMLSR personal history and experience, 
which must include authorization for the NMLSR to obtain:
    (1) Information related to any administrative, civil, or criminal 
findings by any governmental jurisdiction; and
    (2) An independent credit report.



Sec. 3400.107  Minimum annual license renewal requirements.

    For an individual to be eligible to renew a loan originator license 
as required under Sec. 3400.103(f), a state must require the 
individual:
    (a)(1) To continue to meet the minimum standards for license 
issuance provided in Sec. 3400.105; and
    (2) To satisfy annual continuing education requirements, which must 
include at least 8 hours of education approved by the NMLSR. The 8 hours 
of annual continuing education must include at least:
    (i) 3 hours of Federal law and regulations;
    (ii) 2 hours of ethics (including instruction on fraud, consumer 
protection, and fair lending issues); and
    (iii) 2 hours of training related to lending standards for the 
nontraditional mortgage product marketplace.

[[Page 351]]

    (b) A state must provide that a state-licensed loan originator may 
only receive credit for a continuing education course in the year in 
which the course is taken, and that a state-licensed loan originator may 
not apply credits for education courses taken in one year to meet the 
continuing education requirements of subsequent years. A state must 
provide that an individual may not meet the annual requirements for 
continuing education by taking an approved course more than one time in 
the same year or in successive years.
    (c) An individual who is an instructor of an approved continuing 
education course may receive credit for the individual's own annual 
continuing education requirement at the rate of 2 hours credit for every 
one hour taught.



Sec. 3400.109  Effective date of state requirements imposed on individuals.

    (a) Except as provided in paragraphs (b) and (c) of this section, a 
state must provide that the effective date for requirements it imposes 
in accordance with Sec. Sec. 3400.103, 3400.105, and 3400.107 is no 
later than August 29, 2011.
    (b) For an individual who was permitted to perform residential 
mortgage loan originations under state legislation or regulations 
enacted or promulgated prior to the state's enactment or promulgation of 
a licensing system that complies with this subpart, a state may delay 
the effective date for requirements it imposes in accordance with 
Sec. Sec. 3400.103, 3400.105, and 3400.107 to no later than August 29, 
2011. For purposes of this paragraph (b), an individual was permitted to 
perform residential mortgage loan originations only if prior state law 
required the individual to be licensed, authorized, registered, or 
otherwise granted a form of affirmative and revocable government 
permission for individuals as a condition of performing residential 
mortgage loan originations.
    (c) HUD may approve a later effective date only upon a state's 
demonstration that substantial numbers of loan originators (or of a 
class of loan originators) who require a state license face unusual 
hardship, through no fault of their own or of the state government, in 
complying with the standards required by the SAFE Act and in obtaining 
state licenses within one year.



Sec. 3400.111  Other minimum requirements for state licensing systems.

    (a) General. A state must maintain a loan originator licensing, 
supervisory, and oversight authority (supervisory authority) that 
provides effective supervision and enforcement, in accordance with the 
minimum standards provided in this section and in Sec. 3400.113.
    (b) Authorities. A supervisory authority must have the legal 
authority and mechanisms:
    (1) To examine any books, papers, records, or other data of any loan 
originator operating in the state;
    (2) To summon any loan originator operating in the state, or any 
person having possession, custody, or care of the reports and records 
relating to such a loan originator, to appear before the supervisory 
authority at a time and place named in the summons and to produce such 
books, papers, records, or other data, and to give testimony, under 
oath, as may be relevant or material to an investigation of such loan 
originator for compliance with the requirements of the SAFE Act;
    (3) To administer oaths and affirmations and examine and take and 
preserve testimony under oath as to any matter in respect to the affairs 
of any such loan originator;
    (4) To enter an order requiring any individual or person that is, 
was, or would be a cause of a violation of the SAFE Act as implemented 
by the state, due to an act or omission the person knew or should have 
known would contribute to such violation, to cease and desist from 
committing or causing such violation and any future violation of the 
same requirement;
    (5) To suspend, terminate, and refuse renewal of a loan originator 
license for violation of state or Federal law; and
    (6) To impose civil money penalties for individuals acting as loan 
originators, or representing themselves to the public as loan 
originators, in the state without a valid license or registration.
    (c) A supervisory authority must have established processes in place 
to verify that individuals subject to the requirement described in Sec. 
3400.103(a)(1)

[[Page 352]]

and (d)(1) are registered with the NMLSR.
    (d) The supervisory authority must be required under state law to 
regularly report violations of such law, as well as enforcement actions 
and other relevant information, to the NMLSR.
    (e) The supervisory authority must have a process in place for 
challenging information contained in the NMLSR.
    (f) The supervisory authority must require a loan originator to 
ensure that all residential mortgage loans that close as a result of the 
loan originator engaging in activities described in Sec. 3400.103(b)(1) 
are included in reports of condition submitted to the NMLSR. Such 
reports of condition shall be in such form, shall contain such 
information, and shall be submitted with such frequency and by such 
dates as the NMLSR may reasonably require.



Sec. 3400.113  Performance standards.

    (a) For HUD to determine that a state is providing effective 
supervision and enforcement, a supervisory authority must meet the 
following performance standards:
    (1) The supervisory authority must participate in the NMLSR;
    (2) The supervisory authority must approve or deny loan originator 
license applications and must renew or refuse to renew existing loan 
originator licenses for violations of state or Federal law;
    (3) The supervisory authority must discipline loan originator 
licensees with appropriate enforcement actions, such as license 
suspensions or revocations, cease-and-desist orders, civil money 
penalties, and consumer refunds for violations of state or Federal law;
    (4) The supervisory authority must examine or investigate loan 
originator licensees in a systematic manner based on identified risk 
factors or on a periodic schedule.
    (b) A supervisory authority that is accredited under the Conference 
of State Bank Supervisors-American Association of Residential Mortgage 
Regulators Mortgage Accreditation Program will be presumed by HUD to be 
compliant with the requirements of this section.



Sec. 3400.115  Determination of noncompliance.

    (a) Evidence of compliance. Any time a state enacts legislation that 
affects its compliance with the SAFE Act, it must notify HUD. Upon 
request from HUD, a state must provide evidence that it is in compliance 
with the requirements of the SAFE Act and this part, including citations 
to applicable state law, and regulations; descriptions of processes 
followed by the state's supervisory authority; and data concerning 
examination, investigation, and enforcement actions.
    (b) Initial determination of noncompliance. If HUD makes an initial 
determination that a state is not in compliance with the SAFE Act, HUD 
will notify the state and will publish, in the Federal Register, a 
notice providing HUD's initial determination and presenting the 
opportunity for public comment for a period of no less than 30 days. 
This public comment period will allow the residents of the state and 
other interested members of the public to comment on HUD's initial 
determination.
    (c) Final determination of noncompliance. In making a final 
determination of noncompliance, HUD will review additional information 
that may be offered by a state and the comments submitted during the 
public comment period described in paragraph (b) of this section. If HUD 
makes a final determination that a state does not have in place by law 
or regulation a system that complies with the minimum requirements of 
the SAFE Act, as described in this part, HUD will publish that final 
determination in the Federal Register.
    (d) Good-faith effort to comply. If HUD makes the final 
determination described in paragraph (c) of this section, but HUD finds 
that the state is making a good-faith effort to meet the requirements of 
12 U.S.C. 5104, 5105, 5107(d), and this subpart, HUD may grant the state 
a period of not more than 24 months to comply with these requirements. 
If an extension is granted to the state in accordance with this 
paragraph (d), then HUD will provide an additional initial and final 
determination process before it determines that the

[[Page 353]]

state is not in compliance and is subject to subparts C and E of this 
part.
    (e) Effective date of subparts C and E. The provisions of subparts C 
and E of this part will become effective with respect to a state for 
which a final determination of noncompliance has been made upon:
    (1) The effective date of HUD's final determination with respect to 
the state, pursuant to paragraph (c) of this section, unless an 
extension had been granted to the state in accordance with paragraph (d) 
of this section; or
    (2) If an extension had been granted to the state in accordance with 
paragraph (d) of this section, the effective date of HUD's subsequent 
final determination with respect to the state following the expiration 
of the period of time granted pursuant to paragraph (d) of this section.



Subpart C_HUD's Loan Originator Licensing System and Nationwide Mortgage 
                      Licensing and Registry System



Sec. 3400.201  Scope of this subpart.

    The SAFE Act provides HUD with ``backup authority'' to establish a 
loan originator licensing system for any state that is determined by HUD 
not to be in compliance with the minimum standards of the SAFE Act. The 
provisions of this subpart become applicable to individuals in a state 
as provided in Sec. 3400.115(e). The SAFE Act also authorizes HUD to 
establish and maintain a nationwide mortgage licensing system and 
registry if HUD determines that the NMLSR is failing to meet the 
purposes and requirements of the SAFE Act for a comprehensive licensing, 
supervisory, and tracking system for loan originators.



Sec. 3400.203  HUD's establishment of loan originator licensing system.

    If HUD determines, in accordance with Sec. 3400.115(e), that a 
state has not established a licensing and registration system in 
compliance with the minimum standards of the SAFE Act, HUD shall apply 
to individuals in that state the minimum standards of the SAFE Act, as 
specified in subpart B, which provides the minimum requirements that a 
state must meet to be in compliance with the SAFE Act, and as may be 
further specified in this part.



Sec. 3400.205  HUD's establishment of nationwide mortgage licensing 
system and registry.

    If HUD determines that the NMLSR established by CSBS and AARMR does 
not meet the minimum requirements of subpart D of this part, HUD will 
establish and maintain a nationwide mortgage licensing system and 
registry.



     Subpart D_Minimum Requirements for Administration of the NMLSR



Sec. 3400.301  Scope of this subpart.

    This subpart establishes minimum requirements that apply to 
administration of the NMLSR by the Conference of State Bank Supervisors 
or by HUD. The NMLSR must accomplish the following objectives:
    (a) Provides uniform license applications and reporting requirements 
for state-licensed loan originators.
    (b) Provides a comprehensive licensing and supervisory database.
    (c) Aggregates and improves the flow of information to and between 
regulators.
    (d) Provides increased accountability and tracking of loan 
originators.
    (e) Streamlines the licensing process and reduces the regulatory 
burden.
    (f) Enhances consumer protections and supports anti-fraud measures.
    (g) Provides consumers with easily accessible information, offered 
at no charge, utilizing electronic media, including the Internet, 
regarding the employment history of, and publicly adjudicated 
disciplinary and enforcement actions against, loan originators.
    (h) Establishes a means by which residential mortgage loan 
originators would, to the greatest extent possible, be required to act 
in the best interests of the consumer.
    (i) Facilitates responsible behavior in the mortgage marketplace and 
provides comprehensive training and examination requirements related to 
mortgage lending.
    (j) Facilitates the collection and disbursement of consumer 
complaints on

[[Page 354]]

behalf of state and Federal mortgage regulators.



Sec. 3400.303  Financial reporting.

    To the extent that CSBS maintains the NMLSR, CSBS must annually 
provide to HUD, and HUD will annually collect and make available to the 
public, NMLSR financial statements, audited in accordance with Generally 
Accepted Accounting Principles (GAAP) promulgated by the Federal 
Accounting Standards Advisory Board, and other data. These financial 
statements and other data shall include, but not be limited to, the 
level and categories of funds received in relation to the NMLSR and how 
such funds are spent, including the aggregate total of funds paid for 
system development and improvements, the aggregate total of salaries and 
bonuses paid, the aggregate total of other administrative costs, and 
detail on other money spent, including money and interest paid to 
reimburse system investors or lenders, and a report of each state's 
activity with respect to the NMLSR, including the number of licensees, 
the state's financial commitment to the system, and the fees collected 
by the state through the NMLSR.



Sec. 3400.305  Data security.

    (a) To the extent that CSBS, AARMR, or their successors, maintain 
the NMLSR, CSBS, AARMR, and their successors, as applicable, must 
complete a background check on their employees, contractors, or other 
persons who have access to loan originators' Social Security Numbers, 
fingerprints, or any credit reports collected by the system.
    (b) To the extent that CSBS, AARMR, or theirs successors, maintains 
the NMLSR, CSBS, AARMR, and their successors as applicable, must keep 
and adhere to an appropriate information security and privacy policy. If 
the NMLSR forms a reasonable belief that a security breach has occurred, 
it shall notify affected parties, as soon as practicable, including HUD, 
any loan originators or registrants whose data may have been 
compromised, and the employer of the loan originator or registrant, if 
such employer is also licensed through the system.



Sec. 3400.307  Fees.

    CSBS, AARMR, or HUD, as applicable, may charge reasonable fees to 
cover the costs of maintaining and providing access to information from 
the Nationwide Mortgage Licensing System and Registry. Fees shall not be 
charged to consumers for access to such system and registry. If HUD 
determines to charge fees, the fees to be charged shall be issued by 
notice with the opportunity for comment prior to any fees being charged.



Sec. 3400.309  Absence of liability for good-faith administration.

    HUD or any organization serving as the administrator of the 
Nationwide Mortgage Licensing System and Registry or a system 
established by HUD under 12 U.S.C. 5108 and in accordance with subpart 
C, or any officer or employee of HUD or HUD's designee, shall not be 
subject to any civil action or proceeding for monetary damages by reason 
of the good-faith action or omission of any officer or employee of any 
such entity, while acting within the scope of office or employment, 
relating to the collection, furnishing, or dissemination of information 
concerning persons who are loan originators or are applying for 
licensing or registration as loan originators.



              Subpart E_Enforcement of HUD Licensing System



Sec. 3400.401  HUD's authority to examine loan originator records.

    (a) Summons authority. HUD may:
    (1) Examine any books, papers, records, or other data of any loan 
originator operating in any state which is subject to a licensing system 
established by HUD under subpart C of this part; and
    (2) Summon any loan originator referred to in paragraph (a)(1) of 
this section or any person having possession, custody, or care of the 
reports and records relating to such loan originator, to appear before a 
HUD representative at a time and place named in the summons and to 
produce such books, papers, records, or other data, and to give 
testimony, under oath, as

[[Page 355]]

may be relevant or material to an investigation of such loan originator 
for compliance with the requirements of the SAFE Act.
    (b) Examination authority--(1) In general. If HUD establishes a 
licensing system under 12 U.S.C. 5107 and in accordance with subpart C 
of this part for any state, HUD shall appoint examiners for the purposes 
of ensuring the appropriate administration of the HUD licensing system.
    (2) Power to examine. Any examiner appointed under paragraph (b)(1) 
of this section shall have power, on behalf of HUD, to make any 
examination of any loan originator operating in any state which is 
subject to a licensing system established by HUD under 12 U.S.C. 5107 
and in accordance with subpart C of this part, whenever HUD determines 
that an examination of any loan originator is necessary to determine the 
compliance by the originator with minimum requirements of the SAFE Act.
    (3) Report of examination. Each HUD examiner appointed under 
paragraph (b)(1) of this section shall make a full and detailed report 
to HUD of examination of any loan originator examined under this 
section.
    (4) Administration of oaths and affirmations; evidence. In 
connection with examinations of loan originators operating in any state 
which is subject to a licensing system established by HUD under 12 
U.S.C. 5107, and in accordance with subpart C of this part, or with 
other types of investigations to determine compliance with applicable 
law and regulations, HUD and the examiners appointed by HUD may 
administer oaths and affirmations and examine and take and preserve 
testimony under oath as to any matter in respect to the affairs of any 
such loan originator.
    (5) Assessments. The cost of conducting any examination of any loan 
originator operating in any state which is subject to a licensing system 
established by HUD under 12 U.S.C. 5107 and in accordance with subpart C 
of this part shall be assessed by HUD against the loan originator to 
meet the Secretary's expenses in carrying out such examination.



Sec. 3400.403  Enforcement proceedings.

    (a) Cease and desist proceeding. (1) If HUD finds, after notice and 
opportunity for hearing in accordance with subpart A of part 26, that 
any person is violating, has violated, or is about to violate any 
provision of the SAFE Act, the provisions of this part, or a provision 
of state law enacted or promulgated under the SAFE Act, to which the 
person is subject and with respect to a state that is subject to a 
licensing system established by HUD under 12 U.S.C. 5107 and in 
accordance with subpart C of this part, HUD may publish such findings 
and enter an order requiring such person, and any other person that is, 
was, or would be a cause of the violation, due to an act or omission the 
person knew or should have known would contribute to such violation, to 
cease and desist from committing or causing such violation and any 
future violation of the same provision, rule, or regulation.
    (2) The order authorized by paragraph (a)(1) of this section may, in 
addition to requiring a person to cease and desist from committing or 
causing a violation, require such person to comply, or to take steps to 
effect compliance, with such provision or regulation, upon such terms 
and conditions and within such time as HUD may specify in such order.
    (3) Any order issued under paragraph (a)(1) of this section may, as 
HUD determines appropriate, require future compliance or steps to effect 
future compliance, either permanently or for such period of time as HUD 
may specify, with such provision or regulation with respect to any loan 
originator.
    (b) Hearing. The notice instituting proceedings in accordance with 
paragraph (a) of this section shall establish a hearing date not earlier 
than 30 days nor later than 60 days after the date of service of the 
notice unless an earlier or a later date is set by HUD with the consent 
of any respondent so served.
    (c) Temporary order--(1) Issuance of a temporary order. Whenever HUD 
determines that the alleged violation or threatened violation specified 
in the notice instituting proceedings in accordance with paragraph (a) 
of this section, or the continuation thereof, is

[[Page 356]]

likely to result in significant dissipation or conversion of assets, 
significant harm to consumers, or substantial harm to the public 
interest prior to the completion of the proceedings, HUD may enter a 
temporary order requiring the respondent to cease and desist from the 
violation or threatened violation and to take such action to prevent the 
violation or threatened violation and to prevent dissipation or 
conversion of assets, significant harm to consumers, or substantial harm 
to the public interest as HUD determines appropriate pending completion 
of such proceedings.
    (i) The order authorized by paragraph (c)(1) of this section shall 
be entered only after notice and opportunity for a hearing, unless HUD 
determines that notice and hearing prior to entry would be impracticable 
or contrary to the public interest.
    (ii) The temporary order authorized by paragraph (c)(1) of this 
section shall become effective upon the date of service upon the 
respondent and, unless set aside, limited, or suspended by HUD or a 
court of competent jurisdiction, shall remain effective and enforceable 
pending the completion of the proceedings.
    (2) Review of temporary orders--(i) Review by HUD. At any time after 
the respondent has been served with a temporary cease-and-desist order 
pursuant to paragraph (c)(1) of this section, the respondent may apply 
to HUD to have the order set aside, limited, or suspended. If the 
respondent has been served with a temporary cease-and-desist order 
entered without a prior hearing before HUD, the respondent may, within 
10 days after the date on which the order was served, request a hearing 
on such application, and HUD shall hold a hearing and render a decision 
on such application at the earliest possible time.
    (ii) Judicial review. (A) Within 10 days after the date the 
respondent was served with a temporary cease-and-desist order entered 
with a prior hearing before HUD or within 10 days after HUD renders a 
decision on an application and hearing under paragraph (b) of this 
section, with respect to any temporary cease-and-desist order entered 
without a prior hearing before HUD, the respondent may apply to the 
United States district court for the district in which the respondent 
resides or has its principal place of business, or for the District of 
Columbia, for an order setting aside, limiting, or suspending the 
effectiveness or enforcement of the order, and the court shall have 
jurisdiction to enter such an order.
    (B) A respondent served with a temporary cease-and-desist order 
entered without a prior hearing before the Secretary may not apply to 
the court, except after a hearing and decision by HUD on the 
respondent's application under paragraph (c)(2)(i) of this section.
    (C) The commencement of proceedings under paragraph (b) of this 
section shall not, unless specifically ordered by the court, operate as 
a stay of HUD's order.
    (d) Authority of the secretary to prohibit persons from serving as 
loan originators. In any cease-and-desist proceeding under this section, 
HUD may issue an order to prohibit, conditionally or unconditionally, 
and permanently or for such period of time as HUD shall determine, any 
person who has violated this title or regulations thereunder, from 
acting as a loan originator if the conduct of that person demonstrates 
unfitness to serve as a loan originator.



Sec. 3400.405  Civil money penalties.

    HUD may impose civil money penalties on a loan originator operating 
in any state which is subject to a licensing system established by HUD 
under 12 U.S.C. 5107 and in accordance with subpart C of this part, as 
provided in 24 CFR 30.69.



                   Sec. Appendix A to 24 CFR Part 3400

             Examples of Mortgage Loan Originator Activities

    This Appendix provides examples to aid in the understanding of 
activities that would cause an individual to fall within or outside the 
definition of a mortgage loan originator under this part 3400. The 
examples in this Appendix are not all inclusive. They illustrate only 
the issue described and do not illustrate any other issues that may 
arise. For purposes of the examples below, the term ``loan'' refers to a 
residential mortgage loan as defined in Sec. 3400.23 of this part.
    Taking a Loan Application. Taking a residential mortgage loan 
application within the

[[Page 357]]

meaning of Sec. 3400.103(c)(1) means receipt by an individual, for the 
purpose of facilitating a decision whether to extend an offer of loan 
terms to a borrower or prospective borrower, of an application as 
defined in Sec. 3400.23 (a request in any form for an offer, or a 
response to a solicitation of an offer, of residential mortgage loan 
terms, and the information about the borrower or prospective borrower 
that is customary or necessary in a decision whether to make such an 
offer).
    (a) The following are examples to illustrate when an individual 
takes, or does not take, a loan application:
    (1) An individual ``takes a residential mortgage loan application'' 
even if the individual:
    (i) Has received the borrower or prospective borrower's request or 
information indirectly. Section 3400.103(c)(1) provides that an 
individual takes an application, whether he or she receives it 
``directly or indirectly'' from the borrower or prospective borrower. 
This means that an individual who offers or negotiates residential 
mortgage loan terms for compensation or gain cannot avoid licensing 
requirements simply by having another person physically receive the 
application from the prospective borrower and then pass the application 
to the individual;
    (ii) Is not responsible for verifying information. The fact that an 
individual who takes application information from a borrower or 
prospective borrower is not responsible for verifying that information--
for example, the individual is a mortgage broker who collects and sends 
that information to a lender--does not mean that the individual is not 
taking an application;
    (iii) Only inputs the information into an online application or 
other automated system; or
    (iv) Is not involved in approval of the loan, including determining 
whether the consumer qualifies for the loan. Similar to an individual 
who is not responsible for verification, an individual can still ``take 
a residential mortgage loan application'' even if he or she is not 
ultimately responsible for approving the loan. A mortgage broker, for 
example, can take a residential mortgage loan application even though it 
is passed on to a lender for a decision on whether the borrower 
qualifies for the loan and for the ultimate loan approval.
    (2) An individual does not take a loan application merely because 
the individual performs any of the following actions:
    (i) Receives a loan application through the mail and forwards it, 
without review, to loan approval personnel. HUD interprets the term 
``takes a residential mortgage loan application'' to exclude an 
individual whose only role with respect to the application is physically 
handling a completed application form or transmitting a completed form 
to a lender on behalf of a borrower or prospective borrower. This 
interpretation is consistent with the definition of ``loan originator'' 
in section 1503(3) of the SAFE Act.
    (ii) Assists a borrower or prospective borrower who is filling out 
an application by explaining the contents of the application and where 
particular borrower information is to be provided on the application;
    (iii) Generally describes for a borrower or prospective borrower the 
loan application process without a discussion of particular loan 
products; or
    (iv) In response to an inquiry regarding a prequalified offer that a 
borrower or prospective borrower has received from a lender, collects 
only basic identifying information about the borrower or prospective 
borrower on behalf of that lender.
    Offering or Negotiating Terms of a Loan. The following examples are 
designed to illustrate when an individual offers or negotiates terms of 
a loan within the meaning of Sec. 3400.103(c)(2) and, conversely, what 
does not constitute offering or negotiating terms of a loan:
    (a) Offering or negotiating the terms of a loan includes:
    (1) Presenting for consideration by a borrower or prospective 
borrower particular loan terms, whether verbally, in writing, or 
otherwise, even if:
    (i) Further verification of information is necessary;
    (ii) The offer is conditional;
    (iii) Other individuals must complete the loan process;
    (iv) The individual lacks authority to negotiate the interest rate 
or other loan terms; or
    (v) The individual lacks authority to bind the person that is the 
source of the prospective financing.
    (2) Communicating directly or indirectly with a borrower or 
prospective borrower for the purpose of reaching a mutual understanding 
about prospective residential mortgage loan terms, including responding 
to a borrower or prospective borrower's request for a different rate or 
different fees on a pending loan application by presenting to the 
borrower or prospective borrower a revised loan offer, even if a mutual 
understanding is not subsequently achieved.
    (b) Offering or negotiating terms of a loan does not include any of 
the following activities:
    (1) Providing general explanations or descriptions in response to 
consumer queries, such as explaining loan terminology (e.g., debt-to-
income ratio) or lending policies (e.g., the loan-to-value ratio policy 
of the lender), or describing product-related services;
    (2) Arranging the loan closing or other aspects of the loan process, 
including by communicating with a borrower or prospective

[[Page 358]]

borrower about those arrangements, provided that any communication that 
includes a discussion about loan terms only verifies terms already 
agreed to by the borrower or prospective borrower;
    (3) Providing a borrower or prospective borrower with information 
unrelated to loan terms, such as the best days of the month for 
scheduling loan closings at the bank;
    (4) Making an underwriting decision about whether the borrower or 
prospective borrower qualifies for a loan;
    (5) Explaining or describing the steps that a borrower or 
prospective borrower would need to take in order to obtain a loan offer, 
including providing general guidance about qualifications or criteria 
that would need to be met that is not specific to that borrower or 
prospective borrower's circumstances;
    (6) Communicating on behalf of a mortgage loan originator that a 
written offer has been sent to a borrower or prospective borrower 
without providing any details of that offer; or
    (7) Offering or negotiating loan terms solely through a third-party 
licensed loan originator, so long as the nonlicensed individual does not 
represent to the public that he or she can or will perform covered 
activities and does not communicate with the borrower or potential 
borrower. For example:
    (i) A seller who provides financing to a purchaser of a dwelling 
owned by that seller in which the offer and negotiation of loan terms 
with the borrower or prospective borrower is conducted exclusively by a 
third-party licensed loan originator;
    (ii) An individual who works solely for a lender, when the 
individual offers loan terms exclusively to third-party licensed loan 
originators and not to borrowers or potential borrowers.
    For Compensation or Gain.
    (a) An individual acts ``for compensation or gain'' within the 
meaning of Sec. 3400.103(c)(2)(ii) if the individual receives or 
expects to receive in connection with the individual's activities 
anything of value, including, but not limited to, payment of a salary, 
bonus, or commission. The concept ``anything of value'' is interpreted 
broadly and is not limited only to payments that are contingent upon the 
closing of a loan.
    (b) An individual does not act ``for compensation or gain'' if the 
individual acts as a volunteer without receiving or expecting to receive 
anything of value in connection with the individual's activities.



                   Sec. Appendix B to 24 CFR Part 3400

 Engaging in the Business of a Loan Originator: Commercial Context and 
                              Habitualness

    An individual who acts (or holds himself or herself out as acting) 
as a loan originator in a commercial context and with some degree of 
habitualness or repetition is considered to be ``engaged in the business 
of a loan originator.'' An individual who acts as a loan originator does 
so in a commercial context if the individual acts for the purpose of 
obtaining anything of value for himself or herself, or for an entity or 
individual for which the individual acts, rather than exclusively for 
public, charitable, or family purposes. The habitualness or repetition 
of the origination activities that is needed to ``engage[e] in the 
business of a loan originator'' may be met either if the individual who 
acts as a loan originator does so with a degree of habitualness or 
repetition, or if the source of the prospective financing provides 
mortgage financing or performs other origination activities with a 
degree of habitualness or repetition. This Appendix provides examples to 
aid in the understanding of activities that would not constitute 
engaging in the business of a loan originator, such that an individual 
is not required to obtain and maintain a state mortgage loan originator 
license. The examples in this Appendix are not all inclusive. They 
illustrate only the issue described and do not illustrate any other 
issues that may arise under part 3400. For purposes of the examples 
below, the term ``loan'' refers to a ``residential mortgage loan'' as 
defined in Sec. 3400.23 of this part.
    Not Engaged in the Business of a Mortgage Loan Originator. The 
following examples illustrate when an individual generally does not 
``engage in the business of a loan originator'':
    (a) An individual who acts as a loan originator in providing 
financing for the sale of that individual's own residence, provided that 
the individual does not act as a loan originator or provide financing 
for such sales so frequently and under such circumstances that it 
constitutes a habitual and commercial activity.
    (b) An individual who acts as a loan originator in providing 
financing for the sale of a property owned by that individual, provided 
that such individual does not engage in such activity with habitualness.
    (c) A parent who acts as a loan originator in providing loan 
financing to his or her child.
    (d) An employee of a government entity who acts as a loan originator 
only pursuant to his or her official duties as an employee of that 
government entity, if all applicable conditions in Sec. 3400.103(e)(6) 
of this part are met.
    (e) If all applicable conditions in Sec. 3400.103(e)(7) of this 
part are met, an employee of a nonprofit organization that has been 
determined to be a bona fide nonprofit organization by the state 
supervisory authority, when the employee acts as a loan originator 
pursuant to his or her duties as an employee of that organization.

[[Page 359]]

    (f) An individual who does not act as a loan originator habitually 
or repeatedly, provided that the source of prospective financing does 
not provide mortgage financing or perform other loan origination 
activities habitually or repeatedly.



                   Sec. Appendix C to 24 CFR Part 3400

 Independent Contractors and Loan Processor and Underwriter Activities 
          That Require a State Mortgage Loan Originator License

    The examples below are designed to aid in the understanding of loan 
processing or underwriting activities for which an individual is 
required to obtain a SAFE Act-compliant mortgage loan originator 
license. The examples in this Appendix are not all inclusive. They 
illustrate only the issue described and do not illustrate any other 
issues that may arise under this part 3400. For purposes of the examples 
below, the term ``loan'' refers to a residential mortgage loan as 
defined in Sec. 3400.23 of this part.
    (a) An individual who is a loan processor or underwriter who must 
obtain and maintain a state loan originator license includes:
    (1) Any individual who engages in the business of a loan originator, 
as defined in Sec. 3400.103 of this part;
    (2) Any individual who performs clerical or support duties and who 
is an independent contractor, as those terms are defined in Sec. 
3400.23;
    (3) Any individual who collects, receives, distributes, or analyzes 
information in connection with the making of a credit decision and who 
is an independent contractor, as that term is defined in Sec. 3400.23; 
and
    (4) Any individual who communicates with a consumer to obtain 
information necessary for making a credit decision and who is an 
independent contractor, as that term is defined in Sec. 3400.23.
    (b) A state is not required to impose SAFE Act licensing 
requirements on any individual loan processor or underwriter who, for 
example:
    (1) Performs only clerical or support duties (i.e., the loan 
processor's or underwriter's activities do not include, e.g., offering 
or negotiating loan rates or terms, or counseling borrowers or 
prospective borrowers about loan rates or terms), and who performs those 
clerical or support duties at the direction of and subject to the 
supervision and instruction of an individual who either: Is licensed and 
registered in accordance with Sec. 3400.103(a) (State licensing of loan 
originators); or is not required to be licensed because he or she is 
excluded from the licensing requirement pursuant to Sec. Sec. 
3400.103(e)(2) (time-share exclusion), (e)(5) (federally registered loan 
originator), (e)(6) (government employees exclusion), or (e)(7) 
(nonprofit exclusion).
    (2) Performs only clerical or support duties as an employee of a 
mortgage lender or mortgage brokerage firm, and who performs those 
duties at the direction of and subject to the supervision and 
instruction of an individual who is employed by the same employer and 
who is licensed in accordance with Sec. 3400.103(a) (State licensing of 
loan originators).
    (3) Is an employee of a loan processing or underwriting company that 
provides loan processing or underwriting services to one or more 
mortgage lenders or mortgage brokerage firms under a contract between 
the loan processing or underwriting company and the mortgage lenders or 
mortgage brokerage firms, provided the employee performs only clerical 
or support duties and performs those duties only at the direction of and 
subject to the supervision and instruction of a licensed loan originator 
employee of the same loan processing and underwriting company.
    (4) Is an individual who does not otherwise perform the activities 
of a loan originator and is not involved in the receipt, collection, 
distribution, or analysis of information common for the processing or 
underwriting of a residential mortgage loan, nor is in communication 
with the consumer to obtain such information.
    (c) In order to conclude that an individual who performs clerical or 
support duties is doing so at the direction of and subject to the 
supervision and instruction of a loan originator who is licensed or 
registered in accordance with Sec. 3400.103 (or, as applicable, an 
individual who is excluded from the licensing and registration 
requirements under Sec. 3400.103(e)(2), (e)(6), or (e)(7)), there must 
be an actual nexus between the licensed or registered loan originator's 
(or excluded individual's) direction, supervision, and instruction and 
the loan processor or underwriter's activities. This actual nexus must 
be more than a nominal relationship on an organizational chart. For 
example, there is an actual nexus when:
    (1) The supervisory licensed or registered loan originator assigns, 
authorizes, and monitors the loan processor or underwriter employee's 
performance of clerical and support duties.
    (2) The supervisory licensed or registered loan originator exercises 
traditional supervisory responsibilities, including, but not limited to, 
the training, mentoring, and evaluation of the loan processor or 
underwriter employee.



                   Sec. Appendix D to 24 CFR Part 3400

 Attorneys: Circumstances that Require a State Mortgage Loan Originator 
                                 License

    This Appendix D clarifies the circumstances in which the SAFE Act 
requires a licensed attorney who engages in loan origination activities 
to obtain a state loan

[[Page 360]]

originator license and registration. This special category recognizes 
limited, heavily regulated activities that meet strict criteria that are 
different from the criteria for specific exemptions from the SAFE Act 
requirements and the exclusions set forth in the regulations and 
illustrated in other appendices of part 3400.
    SAFE Act-Compliant Licensing Required: An individual who is engaged 
in the business of a loan originator as defined in Sec. 3400.103 of 
this part and who happens to be a licensed attorney, but whose loan 
origination activities are not all of the following: (1) Considered by 
the state's court of last resort (or other state governing body 
responsible for regulating the practice of law) to be part of the 
authorized practice of law within the state; (2) carried out within an 
attorney-client relationship; and (3) accomplished by the attorney in 
compliance with all applicable laws, rules, ethics, and standards.
    SAFE Act-Compliant Licensing Not Required: A licensed attorney 
performing activities that come within the definition of a loan 
originator, provided that such activities are: (1) Considered by the 
state's court of last resort (or other state governing body responsible 
for regulating the practice of law) to be part of the authorized 
practice of law within the state; (2) carried out within an attorney-
client relationship; and (3) accomplished by the attorney in compliance 
with all applicable laws, rules, ethics, and standards.



PART 3500_REAL ESTATE SETTLEMENT PROCEDURES ACT--Table of Contents



Sec.
3500.1 Designation and applicability.
3500.2 Definitions.
3500.3 Questions or suggestions from public and copies of public 
          guidance documents.
3500.4 Reliance upon rule, regulation or interpretation by HUD.
3500.5 Coverage of RESPA.
3500.6 Special information booklet at time of loan application.
3500.7 Good faith estimate.
3500.8 Use of HUD-1 or HUD-1A settlement statements.
3500.9 Reproduction of settlement statements.
3500.10 One-day advance inspection of HUD-1 or HUD-1A settlement 
          statement; delivery; recordkeeping.
3500.11 Mailing.
3500.12 No fee.
3500.13 Relation to State laws.
3500.14 Prohibition against kickbacks and unearned fees.
3500.15 Affiliated business arrangements.
3500.16 Title companies.
3500.17 Escrow accounts.
3500.18 Validity of contracts and liens.
3500.19 Enforcement.
3500.20 [Reserved]
3500.21 Mortgage servicing transfers.
3500.22 Severability.
3500.23 ESIGN ability.

Appendix A to Part 3500--Instructions for Completing HUD-1 and HUD-1a 
          Settlement Statements; Sample HUD-1 and HUD-1a Statements
Appendix B to Part 3500--Illustrations of Requirements of RESPA
Appendix C to Part 3500--Instructions for Completing Good Faith Estimate 
          (GFE) Form
Appendix D to Part 3500--Affiliated Business Arrangement Disclosure 
          Statement Format
Appendix E to Part 3500--Arithmetic Steps
Appendix MS-1 to Part 3500--Servicing Disclosure Statement
Appendix MS-2 to Part 3500--Notice of Assignment, Sale, or Transfer of 
          Servicing Rights

    Authority: 12 U.S.C. 2601 et seq.; 42 U.S.C. 3535(d).

    Source: 57 FR 49607, Nov. 2, 1992, unless otherwise noted. Sections 
3500.1 through 3500.19 and 3500.21 revised at 61 FR 13233, Mar. 26, 
1996.



Sec. 3500.1  Designation and applicability.

    (a) Designation. This part may be referred to as Regulation X.
    (b) Applicability. The following sections, as revised by the final 
rule published on November 17, 2008, are applicable as follows:
    (1) Sections 3500.8(b), 3500.17, 3500.21, 3500.22 and 3500.23, and 
Appendices E and MS-1 are applicable commencing January 16, 2009.
    (2) Section 203.27, the definitions other than Required use in Sec. 
3500.2, Sec. 3500.7, Sec. Sec. 3500.8(a) and(c), Sec. 3500.9, and 
Appendices A and C, are applicable commencing January 1, 2010.

[73 FR 68239, Nov. 17, 2008; 74 FR 2370, Jan. 15, 2009, as amended at 74 
FR 10174, Mar. 10, 2009; 74 FR 22826, May 15, 2009]



Sec. 3500.2  Definitions.

    (a) Statutory terms. All terms defined in RESPA (12 U.S.C. 2602) are 
used in accordance with their statutory meaning unless otherwise defined 
in paragraph (b) of this section or elsewhere in this part.
    (b) Other terms. As used in this part:
    Application means the submission of a borrower's financial 
information in anticipation of a credit decision relating to a federally 
related mortgage loan,

[[Page 361]]

which shall include the borrower's name, the borrower's monthly income, 
the borrower's social security number to obtain a credit report, the 
property address, an estimate of the value of the property, the mortgage 
loan amount sought, and any other information deemed necessary by the 
loan originator. An application may either be in writing or 
electronically submitted, including a written record of an oral 
application.
    Balloon payment has the same meaning as ``balloon payment'' under 
Regulation Z (12 CFR part 226).
    Business day means a day on which the offices of the business entity 
are open to the public for carrying on substantially all of the entity's 
business functions.
    Changed circumstances means: (1)(i) Acts of God, war, disaster, or 
other emergency;
    (ii) Information particular to the borrower or transaction that was 
relied on in providing the GFE and that changes or is found to be 
inaccurate after the GFE has been provided. This may include information 
about the credit quality of the borrower, the amount of the loan, the 
estimated value of the property, or any other information that was used 
in providing the GFE;
    (iii) New information particular to the borrower or transaction that 
was not relied on in providing the GFE; or
    (iv) Other circumstances that are particular to the borrower or 
transaction, including boundary disputes, the need for flood insurance, 
or environmental problems.
    (2) Changed circumstances do not include:
    (i) The borrower's name, the borrower's monthly income, the property 
address, an estimate of the value of the property, the mortgage loan 
amount sought, and any information contained in any credit report 
obtained by the loan originator prior to providing the GFE, unless the 
information changes or is found to be inaccurate after the GFE has been 
provided; or
    (ii) Market price fluctuations by themselves.
    Dealer means, in the case of property improvement loans, a seller, 
contractor, or supplier of goods or services. In the case of 
manufactured home loans, ``dealer'' means one who engages in the 
business of manufactured home retail sales.
    Dealer loan or dealer consumer credit contract means, generally, any 
arrangement in which a dealer assists the borrower in obtaining a 
federally related mortgage loan from the funding lender and then assigns 
the dealer's legal interests to the funding lender and receives the net 
proceeds of the loan. The funding lender is the lender for the purposes 
of the disclosure requirements of this part. If a dealer is a 
``creditor'' as defined under the definition of ``federally related 
mortgage loan'' in this part, the dealer is the lender for purposes of 
this part.
    Effective date of transfer is defined in section 6(i)(1) of RESPA 
(12 U.S.C. 2605(i)(1)). In the case of a home equity conversion mortgage 
or reverse mortgage as referenced in this section, the effective date of 
transfer is the transfer date agreed upon by the transferee servicer and 
the transferor servicer.
    Federally related mortgage loan or mortgage loan means as follows:
    (1) Any loan (other than temporary financing, such as a construction 
loan):
    (i) That is secured by a first or subordinate lien on residential 
real property, including a refinancing of any secured loan on 
residential real property upon which there is either:
    (A) Located or, following settlement, will be constructed using 
proceeds of the loan, a structure or structures designed principally for 
occupancy of from one to four families (including individual units of 
condominiums and cooperatives and including any related interests, such 
as a share in the cooperative or right to occupancy of the unit); or
    (B) Located or, following settlement, will be placed using proceeds 
of the loan, a manufactured home; and
    (ii) For which one of the following paragraphs applies. The loan:
    (A) Is made in whole or in part by any lender that is either 
regulated by or whose deposits or accounts are insured by any agency of 
the Federal Government;
    (B) Is made in whole or in part, or is insured, guaranteed, 
supplemented, or assisted in any way:

[[Page 362]]

    (1) By the Secretary or any other officer or agency of the Federal 
Government; or
    (2) Under or in connection with a housing or urban development 
program administered by the Secretary or a housing or related program 
administered by any other officer or agency of the Federal Government;
    (C) Is intended to be sold by the originating lender to the Federal 
National Mortgage Association, the Government National Mortgage 
Association, the Federal Home Loan Mortgage Corporation (or its 
successors), or a financial institution from which the loan is to be 
purchased by the Federal Home Loan Mortgage Corporation (or its 
successors);
    (D) Is made in whole or in part by a ``creditor'', as defined in 
section 103(g) of the Consumer Credit Protection Act (15 U.S.C. 
1602(g)), that makes or invests in residential real estate loans 
aggregating more than $1,000,000 per year. For purposes of this 
definition, the term ``creditor'' does not include any agency or 
instrumentality of any State, and the term ``residential real estate 
loan'' means any loan secured by residential real property, including 
single-family and multifamily residential property;
    (E) Is originated either by a dealer or, if the obligation is to be 
assigned to any maker of mortgage loans specified in paragraphs (1)(ii) 
(A) through (D) of this definition, by a mortgage broker; or
    (F) Is the subject of a home equity conversion mortgage, also 
frequently called a ``reverse mortgage,'' issued by any maker of 
mortgage loans specified in paragraphs (1)(ii) (A) through (D) of this 
definition.
    (2) Any installment sales contract, land contract, or contract for 
deed on otherwise qualifying residential property is a federally related 
mortgage loan if the contract is funded in whole or in part by proceeds 
of a loan made by any maker of mortgage loans specified in paragraphs 
(1)(ii) (A) through (D) of this definition.
    (3) If the residential real property securing a mortgage loan is not 
located in a State, the loan is not a federally related mortgage loan.
    Good faith estimate or GFE means an estimate of settlement charges a 
borrower is likely to incur, as a dollar amount, and related loan 
information, based upon common practice and experience in the locality 
of the mortgaged property, as provided on the form prescribed in Sec. 
3500.7 and prepared in accordance with the Instructions in Appendix C to 
this part.
    HUD-1 or HUD-1A settlement statement (also HUD-1 or HUD-1A) means 
the statement that is prescribed by the Secretary in this part for 
setting forth settlement charges in connection with either the purchase 
or the refinancing (or other subordinate lien transaction) of 1- to 4-
family residential property.
    Lender means, generally, the secured creditor or creditors named in 
the debt obligation and document creating the lien. For loans originated 
by a mortgage broker that closes a federally related mortgage loan in 
its own name in a table funding transaction, the lender is the person to 
whom the obligation is initially assigned at or after settlement. A 
lender, in connection with dealer loans, is the lender to whom the loan 
is assigned, unless the dealer meets the definition of creditor as 
defined under ``federally related mortgage loan'' in this section. See 
also Sec. 3500.5(b)(7), secondary market transactions.
    Loan originator means a lender or mortgage broker.
    Managerial employee means an employee of a settlement service 
provider who does not routinely deal directly with consumers, and who 
either hires, directs, assigns, promotes, or rewards other employees or 
independent contractors, or is in a position to formulate, determine, or 
influence the policies of the employer. Neither the term ``managerial 
employee'' nor the term ``employee'' includes independent contractors, 
but a managerial employee may hold a real estate brokerage or agency 
license.
    Manufactured home is defined in Sec. 3280.2 of this title.
    Mortgage broker means a person (not an employee of a lender) or 
entity that renders origination services and serves as an intermediary 
between a borrower and a lender in a transaction involving

[[Page 363]]

a federally related mortgage loan, including such a person or entity 
that closes the loan in its own name in a table funded transaction. A 
loan correspondent approved under 24 CFR 202.8 for Federal Housing 
Administration programs is a mortgage broker for purposes of this part.
    Mortgaged property means the real property that is security for the 
federally related mortgage loan.
    Origination service means any service involved in the creation of a 
mortgage loan, including but not limited to the taking of the loan 
application, loan processing, and the underwriting and funding of the 
loan, and the processing and administrative services required to perform 
these functions.
    Person is defined in section 3(5) of RESPA (12 U.S.C. 2602(5)).
    Prepayment penalty has the same meaning as ``prepayment penalty'' 
under Regulation Z (12 CFR part 226).
    Public Guidance Documents means documents that HUD has published in 
the Federal Register, and that it may amend from time-to-time by 
publication in the Federal Register. These documents are also available 
from HUD at the address indicated in 24 CFR 3500.3.
    Refinancing means a transaction in which an existing obligation that 
was subject to a secured lien on residential real property is satisfied 
and replaced by a new obligation undertaken by the same borrower and 
with the same or a new lender. The following shall not be treated as a 
refinancing, even when the existing obligation is satisfied and replaced 
by a new obligation with the same lender (this definition of 
``refinancing'' as to transactions with the same lender is similar to 
Regulation Z, 12 CFR 226.20(a)):
    (1) A renewal of a single payment obligation with no change in the 
original terms;
    (2) A reduction in the annual percentage rate as computed under the 
Truth in Lending Act with a corresponding change in the payment 
schedule;
    (3) An agreement involving a court proceeding;
    (4) A workout agreement, in which a change in the payment schedule 
or change in collateral requirements is agreed to as a result of the 
consumer's default or delinquency, unless the rate is increased or the 
new amount financed exceeds the unpaid balance plus earned finance 
charges and premiums for continuation of allowable insurance; and
    (5) The renewal of optional insurance purchased by the consumer that 
is added to an existing transaction, if disclosures relating to the 
initial purchase were provided.
    Regulation Z means the regulations issued by the Board of Governors 
of the Federal Reserve System (12 CFR part 226) to implement the Federal 
Truth in Lending Act (15 U.S.C. 1601 et seq.), and includes the 
Commentary on Regulation Z.
    Required use means a situation in which a person must use a 
particular provider of a settlement service in order to have access to 
some distinct service or property, and the person will pay for the 
settlement service of the particular provider or will pay a charge 
attributable, in whole or in part, to the settlement service. However, 
the offering of a package (or combination of settlement services) or the 
offering of discounts or rebates to consumers for the purchase of 
multiple settlement services does not constitute a required use. Any 
package or discount must be optional to the purchaser. The discount must 
be a true discount below the prices that are otherwise generally 
available, and must not be made up by higher costs elsewhere in the 
settlement process.
    RESPA means the Real Estate Settlement Procedures Act of 1974, 12 
U.S.C. 2601 et seq.
    Servicer means the person responsible for the servicing of a 
mortgage loan (including the person who makes or holds a mortgage loan 
if such person also services the mortgage loan). The term does not 
include:
    (1) The Federal Deposit Insurance Corporation (FDIC) or the 
Resolution Trust Corporation (RTC), in connection with assets acquired, 
assigned, sold, or transferred pursuant to section 13(c) of the Federal 
Deposit Insurance Act or as receiver or conservator of an insured 
depository institution; and
    (2) The Federal National Mortgage Corporation (FNMA); the Federal 
Home Loan Mortgage Corporation

[[Page 364]]

(Freddie Mac); the RTC; the FDIC; HUD, including the Government National 
Mortgage Association (GNMA) and the Federal Housing Administration (FHA) 
(including cases in which a mortgage insured under the National Housing 
Act (12 U.S.C. 1701 et seq.) is assigned to HUD); the National Credit 
Union Administration (NCUA); the Farmers Home Administration or its 
successor agency under Public Law 103-354 (FmHA); and the Department of 
Veterans Affairs (VA), in any case in which the assignment, sale, or 
transfer of the servicing of the mortgage loan is preceded by 
termination of the contract for servicing the loan for cause, 
commencement of proceedings for bankruptcy of the servicer, or 
commencement of proceedings by the FDIC or RTC for conservatorship or 
receivership of the servicer (or an entity by which the servicer is 
owned or controlled).
    Servicing means receiving any scheduled periodic payments from a 
borrower pursuant to the terms of any mortgage loan, including amounts 
for escrow accounts under section 10 of RESPA (12 U.S.C. 2609), and 
making the payments to the owner of the loan or other third parties of 
principal and interest and such other payments with respect to the 
amounts received from the borrower as may be required pursuant to the 
terms of the mortgage servicing loan documents or servicing contract. In 
the case of a home equity conversion mortgage or reverse mortgage as 
referenced in this section, servicing includes making payments to the 
borrower.
    Settlement means the process of executing legally binding documents 
regarding a lien on property that is subject to a federally related 
mortgage loan. This process may also be called ``closing'' or ``escrow'' 
in different jurisdictions.
    Settlement service means any service provided in connection with a 
prospective or actual settlement, including, but not limited to, any one 
or more of the following:
    (1) Origination of a federally related mortgage loan (including, but 
not limited to, the taking of loan applications, loan processing, and 
the underwriting and funding of such loans);
    (2) Rendering of services by a mortgage broker (including 
counseling, taking of applications, obtaining verifications and 
appraisals, and other loan processing and origination services, and 
communicating with the borrower and lender);
    (3) Provision of any services related to the origination, processing 
or funding of a federally related mortgage loan;
    (4) Provision of title services, including title searches, title 
examinations, abstract preparation, insurability determinations, and the 
issuance of title commitments and title insurance policies;
    (5) Rendering of services by an attorney;
    (6) Preparation of documents, including notarization, delivery, and 
recordation;
    (7) Rendering of credit reports and appraisals;
    (8) Rendering of inspections, including inspections required by 
applicable law or any inspections required by the sales contract or 
mortgage documents prior to transfer of title;
    (9) Conducting of settlement by a settlement agent and any related 
services;
    (10) Provision of services involving mortgage insurance;
    (11) Provision of services involving hazard, flood, or other 
casualty insurance or homeowner's warranties;
    (12) Provision of services involving mortgage life, disability, or 
similar insurance designed to pay a mortgage loan upon disability or 
death of a borrower, but only if such insurance is required by the 
lender as a condition of the loan;
    (13) Provision of services involving real property taxes or any 
other assessments or charges on the real property;
    (14) Rendering of services by a real estate agent or real estate 
broker; and
    (15) Provision of any other services for which a settlement service 
provider requires a borrower or seller to pay.
    Special information booklet means the booklet prepared by the 
Secretary pursuant to section 5 of RESPA (12 U.S.C. 2604) to help 
persons understand the nature and costs of settlement services. The 
Secretary publishes the form of the special information booklet in the 
Federal Register. The Secretary may

[[Page 365]]

issue or approve additional booklets or alternative booklets by 
publication of a Notice in the Federal Register.
    State means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, and any territory or 
possession of the United States.
    Table funding means a settlement at which a loan is funded by a 
contemporaneous advance of loan funds and an assignment of the loan to 
the person advancing the funds. A table-funded transaction is not a 
secondary market transaction (see Sec. 3500.5(b)(7)).
    Third party means a settlement service provider other than a loan 
originator.
    Title company means any institution, or its duly authorized agent, 
that is qualified to issue title insurance.
    Title service means any service involved in the provision of title 
insurance (lender's or owner's policy), including but not limited to: 
title examination and evaluation; preparation and issuance of title 
commitment; clearance of underwriting objections; preparation and 
issuance of a title insurance policy or policies; and the processing and 
administrative services required to perform these functions. The term 
also includes the service of conducting a settlement.
    Tolerance means the maximum amount by which the charge for a 
category or categories of settlement costs may exceed the amount of the 
estimate for such category or categories on a GFE.

[61 FR 13233, Mar. 26, 1996, as amended at 61 FR 29252, June 7, 1996; 61 
FR 58475, Nov. 15, 1996; 62 FR 20088, Apr. 24, 1997; 73 FR 68239, Nov. 
17, 2008; 74 FR 22826, May 15, 2009; 76 FR 40615, July 11, 2011]

    Effective Date Note: At 61 FR 29252, June 7, 1996, Sec. 3500.2(b) 
was amended by adding a definition of ``managerial employee'', effective 
Oct. 7, 1996. At 61 FR 51782, Oct. 4, 1996, the effective date was 
delayed until further notice.



Sec. 3500.3  Questions or suggestions from public and copies of public
guidance documents.

    Any questions or suggestions from the public regarding RESPA, or 
requests for copies of HUD Public Guidance Documents, should be directed 
to the Director, Office of Consumer and Regulatory Affairs, Department 
of Housing and Urban Development, 451 Seventh Street SW., Washington, DC 
20410-8000, rather than to HUD field offices. Legal questions may be 
directed to the Assistant General Counsel, GSE/RESPA Division, at this 
address.



Sec. 3500.4  Reliance upon rule, regulation or interpretation by HUD.

    (a) Rule, regulation or interpretation. (1) For purposes of sections 
19 (a) and (b) of RESPA (12 U.S.C. 2617 (a) and (b)) only the following 
constitute a rule, regulation or interpretation of the Secretary:
    (i) All provisions, including appendices, of this part. Any other 
document referred to in this part is not incorporated in this part 
unless it is specifically set out in this part;
    (ii) Any other document that is published in the Federal Register by 
the Secretary and states that it is an ``interpretation,'' 
``interpretive rule,'' ``commentary,'' or a ``statement of policy'' for 
purposes of section 19(a) of RESPA. Such documents will be prepared by 
HUD staff and counsel. Such documents may be revoked or amended by a 
subsequent document published in the Federal Register by the Secretary.
    (2) A ``rule, regulation, or interpretation thereof by the 
Secretary'' for purposes of section 19(b) of RESPA (12 U.S.C. 2617(b)) 
shall not include the special information booklet prescribed by the 
Secretary or any other statement or issuance, whether oral or written, 
by an officer or representative of the Department of Housing and Urban 
Development (HUD), letter or memorandum by the Secretary, General 
Counsel, any Assistant Secretary or other officer or employee of HUD, 
preamble to a regulation or other issuance of HUD, Public Guidance 
Document, report to Congress, pleading, affidavit or other document in 
litigation, pamphlet, handbook, guide, telegraphic communication, 
explanation, instructions to forms, speech or other material of any 
nature which is not specifically included in paragraph (a)(1) of this 
section.
    (b) Unofficial interpretations; staff discretion. In response to 
requests for interpretation of matters not adequately

[[Page 366]]

covered by this part or by an official interpretation issued under 
paragraph (a)(1)(ii) of this section, unofficial staff interpretations 
may be provided at the discretion of HUD staff or counsel. Written 
requests for such interpretations should be directed to the address 
indicated in Sec. 3500.3. Such interpretations provide no protection 
under section 19(b) of RESPA (12 U.S.C. 2617(b)). Ordinarily, staff or 
counsel will not issue unofficial interpretations on matters adequately 
covered by this part or by official interpretations or commentaries 
issued under paragraph (a)(1)(ii) of this section.
    (c) All informal counsel's opinions and staff interpretations issued 
before November 2, 1992, were withdrawn as of that date. Courts and 
administrative agencies, however, may use previous opinions to determine 
the validity of conduct under the previous Regulation X.



Sec. 3500.5  Coverage of RESPA.

    (a) Applicability. RESPA and this part apply to all federally 
related mortgage loans, except for the exemptions provided in paragraph 
(b) of this section.
    (b) Exemptions. (1) A loan on property of 25 acres or more.
    (2) Business purpose loans. An extension of credit primarily for a 
business, commercial, or agricultural purpose, as defined by Regulation 
Z, 12 CFR 226.3(a)(1). Persons may rely on Regulation Z in determining 
whether the exemption applies.
    (3) Temporary financing. Temporary financing, such as a construction 
loan. The exemption for temporary financing does not apply to a loan 
made to finance construction of 1- to 4-family residential property if 
the loan is used as, or may be converted to, permanent financing by the 
same lender or is used to finance transfer of title to the first user. 
If a lender issues a commitment for permanent financing, with or without 
conditions, the loan is covered by this part. Any construction loan for 
new or rehabilitated 1- to 4-family residential property, other than a 
loan to a bona fide builder (a person who regularly constructs 1- to 4-
family residential structures for sale or lease), is subject to this 
part if its term is for two years or more. A ``bridge loan'' or ``swing 
loan'' in which a lender takes a security interest in otherwise covered 
1- to 4-family residential property is not covered by RESPA and this 
part.
    (4) Vacant land. Any loan secured by vacant or unimproved property, 
unless within two years from the date of the settlement of the loan, a 
structure or a manufactured home will be constructed or placed on the 
real property using the loan proceeds. If a loan for a structure or 
manufactured home to be placed on vacant or unimproved property will be 
secured by a lien on that property, the transaction is covered by this 
part.
    (5) Assumption without lender approval. Any assumption in which the 
lender does not have the right expressly to approve a subsequent person 
as the borrower on an existing federally related mortgage loan. Any 
assumption in which the lender's permission is both required and 
obtained is covered by RESPA and this part, whether or not the lender 
charges a fee for the assumption.
    (6) Loan conversions. Any conversion of a federally related mortgage 
loan to different terms that are consistent with provisions of the 
original mortgage instrument, as long as a new note is not required, 
even if the lender charges an additional fee for the conversion.
    (7) Secondary market transactions. A bona fide transfer of a loan 
obligation in the secondary market is not covered by RESPA and this 
part, except as set forth in section 6 of RESPA (12 U.S.C. 2605) and 
Sec. 3500.21. In determining what constitutes a bona fide transfer, HUD 
will consider the real source of funding and the real interest of the 
funding lender. Mortgage broker transactions that are table-funded are 
not secondary market transactions. Neither the creation of a dealer loan 
or dealer consumer credit contract, nor the first assignment of such 
loan or contract to a lender, is a secondary market transaction (see 
Sec. 3500.2.)

[61 FR 13233, Mar. 26, 1996, as amended at 61 FR 58475, Nov. 15, 1996]



Sec. 3500.6  Special information booklet at time of loan application.

    (a) Lender to provide special information booklet. Subject to the 
exceptions

[[Page 367]]

set forth in this paragraph, the lender shall provide a copy of the 
special information booklet to a person from whom the lender receives, 
or for whom the lender prepares, a written application for a federally 
related mortgage loan. When two or more persons apply together for a 
loan, the lender is in compliance if the lender provides a copy of the 
booklet to one of the persons applying.
    (1) The lender shall provide the special information booklet by 
delivering it or placing it in the mail to the applicant not later than 
three business days (as that term is defined in Sec. 3500.2) after the 
application is received or prepared. However, if the lender denies the 
borrower's application for credit before the end of the three-business-
day period, then the lender need not provide the booklet to the 
borrower. If a borrower uses a mortgage broker, the mortgage broker 
shall distribute the special information booklet and the lender need not 
do so. The intent of this provision is that the applicant receive the 
special information booklet at the earliest possible date.
    (2) In the case of a federally related mortgage loan involving an 
open-ended credit plan, as defined in Sec. 226.2(a)(20) of Regulation Z 
(12 CFR), a lender or mortgage broker that provides the borrower with a 
copy of the brochure entitled ``When Your Home is On the Line: What You 
Should Know About Home Equity Lines of Credit'', or any successor 
brochure issued by the Board of Governors of the Federal Reserve System, 
is deemed to be in compliance with this section.
    (3) In the categories of transactions set forth at the end of this 
paragraph, the lender or mortgage broker does not have to provide the 
booklet to the borrower. Under the authority of section 19(a) of RESPA 
(12 U.S.C. 2617(a)), the Secretary may issue a revised or separate 
special information booklet that deals with these transactions, or the 
Secretary may chose to endorse the forms or booklets of other Federal 
agencies. In such an event, the requirements for delivery by lenders and 
the availability of the booklet or alternate materials for these 
transactions will be set forth in a Notice in the Federal Register. This 
paragraph shall apply to the following transactions:
    (i) Refinancing transactions;
    (ii) Closed-end loans, as defined in 12 CFR 226.2(a)(10) of 
Regulation Z, when the lender takes a subordinate lien;
    (iii) Reverse mortgages; and
    (iv) Any other federally related mortgage loan whose purpose is not 
the purchase of a 1- to 4-family residential property.
    (b) Revision. The Secretary may from time to time revise the special 
information booklet by publishing a notice in the Federal Register.
    (c) Reproduction. The special information booklet may be reproduced 
in any form, provided that no change is made other than as provided 
under paragraph (d) of this section. The special information booklet may 
not be made a part of a larger document for purposes of distribution 
under RESPA and this section. Any color, size and quality of paper, type 
of print, and method of reproduction may be used so long as the booklet 
is clearly legible.
    (d) Permissible changes. (1) No changes to, deletions from, or 
additions to the special information booklet currently prescribed by the 
Secretary shall be made other than those specified in this paragraph (d) 
or any others approved in writing by the Secretary. A request to the 
Secretary for approval of any changes shall be submitted in writing to 
the address indicated in Sec. 3500.3, stating the reasons why the 
applicant believes such changes, deletions or additions are necessary.
    (2) The cover of the booklet may be in any form and may contain any 
drawings, pictures or artwork, provided that the words ``settlement 
costs'' are used in the title. Names, addresses and telephone numbers of 
the lender or others and similar information may appear on the cover, 
but no discussion of the matters covered in the booklet shall appear on 
the cover.
    (3) The special information booklet may be translated into languages 
other than English.



Sec. 3500.7  Good faith estimate.

    (a) Lender to provide. (1) Except as otherwise provided in 
paragraphs (a), (b), or (h) of this section, not later than 3 business 
days after a lender receives

[[Page 368]]

an application, or information sufficient to complete an application, 
the lender must provide the applicant with a GFE. In the case of dealer 
loans, the lender must either provide the GFE or ensure that the dealer 
provides the GFE.
    (2) The lender must provide the GFE to the loan applicant by hand 
delivery, by placing it in the mail, or, if the applicant agrees, by 
fax, e-mail, or other electronic means.
    (3) The lender is not required to provide the applicant with a GFE 
if, before the end of the 3-business-day period:
    (i) The lender denies the application; or
    (ii) The applicant withdraws the application.
    (4) The lender is not permitted to charge, as a condition for 
providing a GFE, any fee for an appraisal, inspection, or other similar 
settlement service. The lender may, at its option, charge a fee limited 
to the cost of a credit report. The lender may not charge additional 
fees until after the applicant has received the GFE and indicated an 
intention to proceed with the loan covered by that GFE. If the GFE is 
mailed to the applicant, the applicant is considered to have received 
the GFE 3 calendar days after it is mailed, not including Sundays and 
the legal public holidays specified in 5 U.S.C. 6103(a).
    (5) The lender may at any time collect from the loan applicant any 
information that it requires in addition to the required application 
information. However, the lender is not permitted to require, as a 
condition for providing a GFE, that an applicant submit supplemental 
documentation to verify the information provided on the application.
    (b) Mortgage broker to provide. (1) Except as otherwise provided in 
paragraphs (a), (b), or (h) of this section, either the lender or the 
mortgage broker must provide a GFE not later than 3 business days after 
a mortgage broker receives either an application or information 
sufficient to complete an application. The lender is responsible for 
ascertaining whether the GFE has been provided. If the mortgage broker 
has provided a GFE, the lender is not required to provide an additional 
GFE.
    (2) The mortgage broker must provide the GFE by hand delivery, by 
placing it in the mail, or, if the applicant agrees, by fax, email, or 
other electronic means.
    (3) The mortgage broker is not required to provide the applicant 
with a GFE if, before the end of the 3-business-day period:
    (i) The mortgage broker or lender denies the application; or
    (ii) The applicant withdraws the application.
    (4) The mortgage broker is not permitted to charge, as a condition 
for providing a GFE, any fee for an appraisal, inspection, or other 
similar settlement service. The mortgage broker may, at its option, 
charge a fee limited to the cost of a credit report. The mortgage broker 
may not charge additional fees until after the applicant has received 
the GFE and indicated an intention to proceed with the loan covered by 
that GFE. If the GFE is mailed to the applicant, the applicant is 
considered to have received the GFE 3 calendar days after it is mailed, 
not including Sundays and the legal public holidays specified in 5 
U.S.C. 6103(a).
    (5) The mortgage broker may at any time collect from the loan 
applicant any information that it requires in addition to the required 
application information. However, the mortgage broker is not permitted 
to require, as a condition for providing a GFE, that an applicant submit 
supplemental documentation to verify the information provided on the 
application.
    (c) Availability of GFE terms. Except as provided in this paragraph, 
the estimate of the charges and terms for all settlement services must 
be available for at least 10 business days from when the GFE is 
provided, but it may remain available longer, if the loan originator 
extends the period of availability. The estimate for the following 
charges are excepted from this requirement: the interest rate, charges 
and terms dependent upon the interest rate, which includes the charge or 
credit for the interest rate chosen, the adjusted origination charges, 
and per diem interest.
    (d) Content and form of GFE. The GFE form is set out in Appendix C 
to this part. The loan originator must prepare

[[Page 369]]

the GFE in accordance with the requirements of this section and the 
Instructions in Appendix C to this part. The instructions in Appendix C 
to this part allow for flexibility in the preparation and distribution 
of the GFE in hard copy and electronic format.
    (e) Tolerances for amounts included on GFE. (1) Except as provided 
in paragraph (f) of this section, the actual charges at settlement may 
not exceed the amounts included on the GFE for:
    (i) The origination charge;
    (ii) While the borrower's interest rate is locked, the credit or 
charge for the interest rate chosen;
    (iii) While the borrower's interest rate is locked, the adjusted 
origination charge; and
    (iv) Transfer taxes.
    (2) Except as provided in paragraph (f) below, the sum of the 
charges at settlement for the following services may not be greater than 
10 percent above the sum of the amounts included on the GFE:
    (i) Lender-required settlement services, where the lender selects 
the third party settlement service provider;
    (ii) Lender-required services, title services and required title 
insurance, and owner's title insurance, when the borrower uses a 
settlement service provider identified by the loan originator; and
    (iii) Government recording charges.
    (3) The amounts charged for all other settlement services included 
on the GFE may change at settlement.
    (f) Binding GFE. The loan originator is bound, within the tolerances 
provided in paragraph (e) of this section, to the settlement charges and 
terms listed on the GFE provided to the borrower, unless a revised GFE 
is provided prior to settlement consistent with this paragraph (f) or 
the GFE expires in accordance with paragraph (f)(4) of this section. If 
a loan originator provides a revised GFE consistent with this paragraph, 
the loan originator must document the reason that a revised GFE was 
provided. Loan originators must retain documentation of any reason for 
providing a revised GFE for no less than 3 years after settlement.
    (1) Changed circumstances affecting settlement costs. If changed 
circumstances result in increased costs for any settlement services such 
that the charges at settlement would exceed the tolerances for those 
charges, the loan originator may provide a revised GFE to the borrower. 
If a revised GFE is to be provided, the loan originator must do so 
within 3 business days of receiving information sufficient to establish 
changed circumstances. The revised GFE may increase charges for services 
listed on the GFE only to the extent that the changed circumstances 
actually resulted in higher charges.
    (2) Changed circumstances affecting loan. If changed circumstances 
result in a change in the borrower's eligibility for the specific loan 
terms identified in the GFE, the loan originator may provide a revised 
GFE to the borrower. If a revised GFE is to be provided, the loan 
originator must do so within 3 business days of receiving information 
sufficient to establish changed circumstances. The revised GFE may 
increase charges for services listed on the GFE only to the extent that 
the changed circumstances affecting the loan actually resulted in higher 
charges.
    (3) Borrower-requested changes. If a borrower requests changes to 
the mortgage loan identified in the GFE that change the settlement 
charges or the terms of the loan, the loan originator may provide a 
revised GFE to the borrower. If a revised GFE is to be provided, the 
loan originator must do so within 3 business days of the borrower's 
request. The revised GFE may increase charges for services listed on the 
GFE only to the extent that the borrower-requested changes to the 
mortgage loan identified on the GFE actually resulted in higher charges.
    (4) Expiration of GFE. If a borrower does not express an intent to 
continue with an application within 10 business days after the GFE is 
provided, or such longer time specified by the loan originator pursuant 
to paragraph (c) of this section, the loan originator is no longer bound 
by the GFE.
    (5) Interest rate dependent charges and terms. If the interest rate 
has not been locked, or a locked interest rate has expired, the charge 
or credit for the interest rate chosen, the adjusted origination 
charges, per diem interest, and loan terms related to the interest rate

[[Page 370]]

may change. When the interest rate is later locked, a revised GFE must 
be provided showing the revised interest rate-dependent charges and 
terms. The loan originator must provide the revised GFE within 3 
business days of the interest rate being locked or, for an expired 
interest rate, re-locked. All other charges and terms must remain the 
same as on the original GFE, except as otherwise provided in paragraph 
(f) of this section.
    (6) New construction home purchases. In transactions involving new 
construction home purchases, where settlement is anticipated to occur 
more than 60 calendar days from the time a GFE is provided, the loan 
originator may provide the GFE to the borrower with a clear and 
conspicuous disclosure stating that at any time up until 60 calendar 
days prior to closing, the loan originator may issue a revised GFE. If 
no such separate disclosure is provided, the loan originator cannot 
issue a revised GFE, except as otherwise provided in paragraph (f) of 
this section.
    (g) GFE is not a loan commitment. Nothing in this section shall be 
interpreted to require a loan originator to make a loan to a particular 
borrower. The loan originator is not required to provide a GFE if the 
loan originator does not have available a loan for which the borrower is 
eligible.
    (h) Open-end lines of credit (home-equity plans) under Truth in 
Lending Act. In the case of a federally related mortgage loan involving 
an open-end line of credit (home-equity plan) covered under the Truth in 
Lending Act and Regulation Z, a lender or mortgage broker that provides 
the borrower with the disclosures required by 12 CFR 226.5b of 
Regulation Z at the time the borrower applies for such loan shall be 
deemed to satisfy the requirements of this section.
    (i) Violations of section 5 of RESPA (12 U.S.C. 2604). A loan 
originator that violates the requirements of this section shall be 
deemed to have violated section 5 of RESPA. If any charges at settlement 
exceed the charges listed on the GFE by more than the permitted 
tolerances, the loan originator may cure the tolerance violation by 
reimbursing to the borrower the amount by which the tolerance was 
exceeded, at settlement or within 30 calendar days after settlement. A 
borrower will be deemed to have received timely reimbursement if the 
loan originator delivers or places the payment in the mail within 30 
calendar days after settlement.

(Approved by the Office of Management and Budget under control number 
2502-0265)

[61 FR 13233, Mar. 26, 1996, as amended at 61 FR 58476, Nov. 15, 1996; 
73 FR 68240, Nov. 17, 2008; 76 FR 40615, July 11, 2011]



Sec. 3500.8  Use of HUD-1 or HUD-1A settlement statements.

    (a) Use by settlement agent. The settlement agent shall use the HUD-
1 settlement statement in every settlement involving a federally related 
mortgage loan in which there is a borrower and a seller. For 
transactions in which there is a borrower and no seller, such as 
refinancing loans or subordinate lien loans, the HUD-1 may be utilized 
by using the borrower's side of the HUD-1 statement. Alternatively, the 
form HUD-1A may be used for these transactions. The HUD-1 or HUD-1A may 
be modified as permitted under this part. Either the HUD-1 or the HUD-
1A, as appropriate, shall be used for every RESPA-covered transaction, 
unless its use is specifically exempted. The use of the HUD-1 or HUD-1A 
is exempted for open-end lines of credit (home-equity plans) covered by 
the Truth in Lending Act and Regulation Z.
    (b) Charges to be stated. The settlement agent shall complete the 
HUD-1 or HUD-1A, in accordance with the instructions set forth in 
appendix A to this part. The loan originator must transmit to the 
settlement agent all information necessary to complete the HUD-1 or HUD-
1A.
    (1) In general. The settlement agent shall state the actual charges 
paid by the borrower and seller on the HUD-1, or by the borrower on the 
HUD-1A. The settlement agent must separately itemize each third party 
charge paid by the borrower and seller. All origination services 
performed by or on behalf of the loan originator must be included in the 
loan originator's own charge. Administrative and processing services 
related to title services must be included in the title underwriter's or 
title agent's own charge. The amount

[[Page 371]]

stated on the HUD-1 or HUD-1A for any itemized service cannot exceed the 
amount actually received by the settlement service provider for that 
itemized service, unless the charge is an average charge in accordance 
with paragraph (b)(2) of this section.
    (2) Use of average charge. (i) The average charge for a settlement 
service shall be no more than the average amount paid for a settlement 
service by one settlement service provider to another settlement service 
provider on behalf of borrowers and sellers for a particular class of 
transactions involving federally related mortgage loans. The total 
amounts paid by borrowers and sellers for a settlement service based on 
the use of an average charge may not exceed the total amounts paid to 
the providers of that service for the particular class of transactions.
    (ii) The settlement service provider shall define the particular 
class of transactions for purposes of calculating the average charge as 
all transactions involving federally related mortgage loans for:
    (A) A period of time as determined by the settlement service 
provider, but not less than 30 calendar days and not more than 6 months;
    (B) A geographic area as determined by the settlement service 
provider; and
    (C) A type of loan as determined by the settlement service provider.
    (iii) A settlement service provider may use an average charge in the 
same class of transactions for which the charge was calculated. If the 
settlement service provider uses the average charge for any transaction 
in the class, the settlement service provider must use the same average 
charge in every transaction within that class for which a GFE was 
provided.
    (iv) The use of an average charge is not permitted for any 
settlement service if the charge for the service is based on the loan 
amount or property value. For example, an average charge may not be used 
for transfer taxes, interest charges, reserves or escrow, or any type of 
insurance, including mortgage insurance, title insurance, or hazard 
insurance.
    (v) The settlement service provider must retain all documentation 
used to calculate the average charge for a particular class of 
transactions for at least 3 years after any settlement for which that 
average charge was used.
    (c) Violations of section 4 of RESPA (12 U.S.C. 2603). A violation 
of any of the requirements of this section will be deemed to be a 
violation of section 4 of RESPA. An inadvertent or technical error in 
completing the HUD-1 or HUD-1A shall not be deemed a violation of 
section 4 of RESPA if a revised HUD-1 or HUD-1A is provided in 
accordance with the requirements of this section within 30 calendar days 
after settlement.

[73 FR 68241, Nov. 17, 2008, as amended at 76 FR 40616, July 11, 2011]



Sec. 3500.9  Reproduction of settlement statements.

    (a) Permissible changes--HUD-1. The following changes and insertions 
are permitted when the HUD-1 settlement statement is reproduced:
    (1) The person reproducing the HUD-1 may insert its business name 
and logo in section A and may rearrange, but not delete, the other 
information that appears in section A.
    (2) The name, address, and other information regarding the lender 
and settlement agent may be printed in sections F and H, respectively.
    (3) Reproduction of the HUD-1 must conform to the terminology, 
sequence, and numbering of line items as presented in lines 100-1400. 
However, blank lines or items listed in lines 100-1400 that are not used 
locally or in connection with mortgages by the lender may be deleted, 
except for the following: Lines 100, 120, 200, 220, 300, 301, 302, 303, 
400, 420, 500, 520, 600, 601, 602, 603, 700, 800, 900, 1000, 1100, 1200, 
1300, and 1400. The form may be shortened correspondingly. The number of 
a deleted item shall not be used for a substitute or new item, but the 
number of a blank space on the HUD-1 may be used for a substitute or new 
item.
    (4) Charges not listed on the HUD-1, but that are customary locally 
or pursuant to the lender's practice, may be inserted in blank spaces. 
Where existing blank spaces on the HUD-1 are insufficient, additional 
lines and spaces may be added and numbered in sequence with spaces on 
the HUD-1.

[[Page 372]]

    (5) The following variations in layout and format are within the 
discretion of persons reproducing the HUD-1 and do not require prior HUD 
approval: size of pages; tint or color of pages; size and style of type 
or print; vertical spacing between lines or provision for additional 
horizontal space on lines (for example, to provide sufficient space for 
recording time periods used in prorations); printing of the HUD-1 
contents on separate pages, on the front and back of a single page, or 
on one continuous page; use of multicopy tear-out sets; printing on 
rolls for computer purposes; reorganization of sections B through I, 
when necessary to accommodate computer printing; and manner of placement 
of the HUD number, but not the OMB approval number, neither of which may 
be deleted. The designation of the expiration date of the OMB number may 
be deleted. Any changes in the HUD number or OMB approval number may be 
announced by notice in the Federal Register, rather than by amendment of 
this part.
    (6) The borrower's information and the seller's information may be 
provided on separate pages.
    (7) Signature lines may be added.
    (8) The HUD-1 may be translated into languages other than English.
    (9) An additional page may be attached to the HUD-1 for the purpose 
of including customary recitals and information used locally in real 
estate settlements; for example, breakdown of payoff figures, a 
breakdown of the borrower's total monthly mortgage payments, check 
disbursements, a statement indicating receipt of funds, applicable 
special stipulations between buyer and seller, and the date funds are 
transferred. If space permits, such information may be added at the end 
of the HUD-1.
    (10) As required by HUD/FHA in FHA-insured loans.
    (11) As allowed by Sec. 3500.17, relating to an initial escrow 
account statement.
    (b) Permissible changes--HUD-1A. The changes and insertions on the 
HUD-1 permitted under paragraph (a) of this section are also permitted 
when the HUD-1A settlement statement is reproduced, except the changes 
described in paragraphs (a)(3) and (6) of this section.
    (c) Written approval. Any other deviation in the HUD-1 or HUD-1A 
forms is permissible only upon receipt of written approval of the 
Secretary. A request to the Secretary for approval shall be submitted in 
writing to the address indicated in Sec. 3500.3 and shall state the 
reasons why the applicant believes such deviation is needed. The 
prescribed form(s) must be used until approval is received.

(Approved by the Office of Management and Budget under control numbers 
2502-0265 and 2502-0491)

[61 FR 13233, Mar. 26, 1996, as amended at 73 FR 68242, Nov. 17, 2008]



Sec. 3500.10  One-day advance inspection of HUD-1 or HUD-1A settlement
statement; delivery; recordkeeping.

    (a) Inspection one day prior to settlement upon request by the 
borrower. The settlement agent shall permit the borrower to inspect the 
HUD-1 or HUD-1A settlement statement, completed to set forth those items 
that are known to the settlement agent at the time of inspection, during 
the business day immediately preceding settlement. Items related only to 
the seller's transaction may be omitted from the HUD-1.
    (b) Delivery. The settlement agent shall provide a completed HUD-1 
or HUD-1A to the borrower, the seller (if there is one), the lender (if 
the lender is not the settlement agent), and/or their agents. When the 
borrower's and seller's copies of the HUD-1 or HUD-1A differ as 
permitted by the instructions in appendix A to this part, both copies 
shall be provided to the lender (if the lender is not the settlement 
agent). The settlement agent shall deliver the completed HUD-1 or HUD-1A 
at or before the settlement, except as provided in paragraphs (c) and 
(d) of this section.
    (c) Waiver. The borrower may waive the right to delivery of the 
completed HUD-1 or HUD-1A no later than at settlement by executing a 
written waiver at or before settlement. In such case, the completed HUD-
1 or HUD-1A shall be mailed or delivered to the borrower, seller, and 
lender (if the lender is not the settlement agent) as soon as 
practicable after settlement.
    (d) Exempt transactions. When the borrower or the borrower's agent 
does not

[[Page 373]]

attend the settlement, or when the settlement agent does not conduct a 
meeting of the parties for that purpose, the transaction shall be exempt 
from the requirements of paragraphs (a) and (b) of this section, except 
that the HUD-1 or HUD-1A shall be mailed or delivered as soon as 
practicable after settlement.
    (e) Recordkeeping. The lender shall retain each completed HUD-1 or 
HUD-1A and related documents for five years after settlement, unless the 
lender disposes of its interest in the mortgage and does not service the 
mortgage. In that case, the lender shall provide its copy of the HUD-1 
or HUD-1A to the owner or servicer of the mortgage as a part of the 
transfer of the loan file. Such owner or servicer shall retain the HUD-1 
or HUD-1A for the remainder of the five-year period. The Secretary shall 
have the right to inspect or require copies of records covered by this 
paragraph (e).

(Approved by the Office of Management and Budget under control number 
2502-0265)



Sec. 3500.11  Mailing.

    The provisions of this part requiring or permitting mailing of 
documents shall be deemed to be satisfied by placing the document in the 
mail (whether or not received by the addressee) addressed to the 
addresses stated in the loan application or in other information 
submitted to or obtained by the lender at the time of loan application 
or submitted or obtained by the lender or settlement agent, except that 
a revised address shall be used where the lender or settlement agent has 
been expressly informed in writing of a change in address.



Sec. 3500.12  No fee.

    No fee shall be imposed or charge made upon any other person, as a 
part of settlement costs or otherwise, by a lender in connection with a 
federally related mortgage loan made by it (or a loan for the purchase 
of a manufactured home), or by a servicer (as that term is defined under 
12 U.S.C. 2605(i)(2)) for or on account of the preparation and 
distribution of the HUD-1 or HUD-1A settlement statement, escrow account 
statements required pursuant to section 10 of RESPA (12 U.S.C. 2609), or 
statements required by the Truth in Lending Act, 15 U.S.C. 1601 et seq.



Sec. 3500.13  Relation to State laws.

    (a) State laws that are inconsistent with RESPA or this part are 
preempted to the extent of the inconsistency. However, RESPA and these 
regulations do not annul, alter, affect, or exempt any person subject to 
their provisions from complying with the laws of any State with respect 
to settlement practices, except to the extent of the inconsistency.
    (b) Upon request by any person, the Secretary is authorized to 
determine if inconsistencies with State law exist; in doing so, the 
Secretary shall consult with appropriate Federal agencies.
    (1) The Secretary may not determine that a State law or regulation 
is inconsistent with any provision of RESPA or this part, if the 
Secretary determines that such law or regulation gives greater 
protection to the consumer.
    (2) In determining whether provisions of State law or regulations 
concerning affiliated business arrangements are inconsistent with RESPA 
or this part, the Secretary may not construe those provisions that 
impose more stringent limitations on affiliated business arrangements as 
inconsistent with RESPA so long as they give more protection to 
consumers and/or competition.
    (c) Any person may request the Secretary to determine whether an 
inconsistency exists by submitting to the address indicated in Sec. 
3500.3, a copy of the State law in question, any other law or judicial 
or administrative opinion that implements, interprets or applies the 
relevant provision, and an explanation of the possible inconsistency. A 
determination by the Secretary that an inconsistency with State law 
exists will be made by publication of a notice in the Federal Register. 
``Law'' as used in this section includes regulations and any enactment 
which has the force and effect of law and is issued by a State or any 
political subdivision of a State.
    (d) A specific preemption of conflicting State laws regarding 
notices

[[Page 374]]

and disclosures of mortgage servicing transfers is set forth in Sec. 
3500.21(h).

[61 FR 13233, Mar. 26, 1996, as amended at 61 FR 58476, Nov. 15, 1996]



Sec. 3500.14  Prohibition against kickbacks and unearned fees.

    (a) Section 8 violation. Any violation of this section is a 
violation of section 8 of RESPA (12 U.S.C. 2607) and is subject to 
enforcement as such under Sec. 3500.19.
    (b) No referral fees. No person shall give and no person shall 
accept any fee, kickback or other thing of value pursuant to any 
agreement or understanding, oral or otherwise, that business incident to 
or part of a settlement service involving a federally related mortgage 
loan shall be referred to any person. Any referral of a settlement 
service is not a compensable service, except as set forth in Sec. 
3500.14(g)(1). A company may not pay any other company or the employees 
of any other company for the referral of settlement service business.
    (c) No split of charges except for actual services performed. No 
person shall give and no person shall accept any portion, split, or 
percentage of any charge made or received for the rendering of a 
settlement service in connection with a transaction involving a 
federally related mortgage loan other than for services actually 
performed. A charge by a person for which no or nominal services are 
performed or for which duplicative fees are charged is an unearned fee 
and violates this section. The source of the payment does not determine 
whether or not a service is compensable. Nor may the prohibitions of 
this part be avoided by creating an arrangement wherein the purchaser of 
services splits the fee.
    (d) Thing of value. This term is broadly defined in section 3(2) of 
RESPA (12 U.S.C. 2602(2)). It includes, without limitation, monies, 
things, discounts, salaries, commissions, fees, duplicate payments of a 
charge, stock, dividends, distributions of partnership profits, 
franchise royalties, credits representing monies that may be paid at a 
future date, the opportunity to participate in a money-making program, 
retained or increased earnings, increased equity in a parent or 
subsidiary entity, special bank deposits or accounts, special or unusual 
banking terms, services of all types at special or free rates, sales or 
rentals at special prices or rates, lease or rental payments based in 
whole or in part on the amount of business referred, trips and payment 
of another person's expenses, or reduction in credit against an existing 
obligation. The term ``payment'' is used throughout Sec. Sec. 3500.14 
and 3500.15 as synonymous with the giving or receiving any ``thing of 
value'' and does not require transfer of money.
    (e) Agreement or understanding. An agreement or understanding for 
the referral of business incident to or part of a settlement service 
need not be written or verbalized but may be established by a practice, 
pattern or course of conduct. When a thing of value is received 
repeatedly and is connected in any way with the volume or value of the 
business referred, the receipt of the thing of value is evidence that it 
is made pursuant to an agreement or understanding for the referral of 
business.
    (f) Referral. (1) A referral includes any oral or written action 
directed to a person which has the effect of affirmatively influencing 
the selection by any person of a provider of a settlement service or 
business incident to or part of a settlement service when such person 
will pay for such settlement service or business incident thereto or pay 
a charge attributable in whole or in part to such settlement service or 
business.
    (2) A referral also occurs whenever a person paying for a settlement 
service or business incident thereto is required to use (see Sec. 
3500.2, ``required use'') a particular provider of a settlement service 
or business incident thereto.
    (g) Fees, salaries, compensation, or other payments. (1) Section 8 
of RESPA permits:
    (i) A payment to an attorney at law for services actually rendered;
    (ii) A payment by a title company to its duly appointed agent for 
services actually performed in the issuance of a policy of title 
insurance;
    (iii) A payment by a lender to its duly appointed agent or 
contractor for services actually performed in the origination, 
processing, or funding of a loan;

[[Page 375]]

    (iv) A payment to any person of a bona fide salary or compensation 
or other payment for goods or facilities actually furnished or for 
services actually performed;
    (v) A payment pursuant to cooperative brokerage and referral 
arrangements or agreements between real estate agents and real estate 
brokers. (The statutory exemption restated in this paragraph refers only 
to fee divisions within real estate brokerage arrangements when all 
parties are acting in a real estate brokerage capacity, and has no 
applicability to any fee arrangements between real estate brokers and 
mortgage brokers or between mortgage brokers.);
    (vi) Normal promotional and educational activities that are not 
conditioned on the referral of business and that do not involve the 
defraying of expenses that otherwise would be incurred by persons in a 
position to refer settlement services or business incident thereto; or
    (vii) An employer's payment to its own employees for any referral 
activities.
    (2) The Department may investigate high prices to see if they are 
the result of a referral fee or a split of a fee. If the payment of a 
thing of value bears no reasonable relationship to the market value of 
the goods or services provided, then the excess is not for services or 
goods actually performed or provided. These facts may be used as 
evidence of a violation of section 8 and may serve as a basis for a 
RESPA investigation. High prices standing alone are not proof of a RESPA 
violation. The value of a referral (i.e., the value of any additional 
business obtained thereby) is not to be taken into account in 
determining whether the payment exceeds the reasonable value of such 
goods, facilities or services. The fact that the transfer of the thing 
of value does not result in an increase in any charge made by the person 
giving the thing of value is irrelevant in determining whether the act 
is prohibited.
    (3) Multiple services. When a person in a position to refer 
settlement service business, such as an attorney, mortgage lender, real 
estate broker or agent, or developer or builder, receives a payment for 
providing additional settlement services as part of a real estate 
transaction, such payment must be for services that are actual, 
necessary and distinct from the primary services provided by such 
person. For example, for an attorney of the buyer or seller to receive 
compensation as a title agent, the attorney must perform core title 
agent services (for which liability arises) separate from attorney 
services, including the evaluation of the title search to determine the 
insurability of the title, the clearance of underwriting objections, the 
actual issuance of the policy or policies on behalf of the title 
insurance company, and, where customary, issuance of the title 
commitment, and the conducting of the title search and closing.
    (h) Recordkeeping. Any documents provided pursuant to this section 
shall be retained for five (5) years from the date of execution.
    (i) Appendix B of this part. Illustrations in appendix B of this 
part demonstrate some of the requirements of this section.

[61 FR 13233, Mar. 26, 1996, as amended at 61 FR 29252, June 7, 1996; 61 
FR 58476, Nov. 15, 1996]

    Effective Date Note: At 61 FR 29252, June 7, 1996, Sec. 3500.14 was 
amended by revising the last sentence of paragraph (b), the heading of 
paragraph (g), and paragraph (g)(1), effective Oct. 7, 1996. At 61 FR 
51782, Oct. 4, 1996, the effective date was delayed until further 
notice. For the convenience of the user, the new text is set forth as 
follows:



Sec. 3500.14  Prohibition against kickbacks and unearned fees.

                                * * * * *

    (b) * * * A business entity (whether or not in an affiliate 
relationship) may not pay any other business entity or the employees of 
any other business entity for the referral of settlement service 
business.

                                * * * * *

    (g) Exemptions for fees, salaries, compensation, 
    or other payments. 
(1) The following are permissible:
    (i) A payment to an attorney at law for services actually rendered;
    (ii) A payment by a title company to its duly appointed agent for 
services actually performed in the issuance of a policy of title 
insurance;

[[Page 376]]

    (iii) A payment by a lender to its duly appointed agent or 
contractor for services actually performed in the origination, 
processing, or funding of a loan;
    (iv) A payment to any person of a bona fide salary or compensation 
or other payment for goods or facilities actually furnished or for 
services actually performed;
    (v) A payment pursuant to cooperative brokerage and referral 
arrangements or agreements between real estate agents and real estate 
brokers. (The statutory exemption restated in this paragraph refers only 
to fee divisions within real estate brokerage arrangements when all 
parties are acting in a real estate brokerage capacity, and has no 
applicability to any fee arrangements between real estate brokers and 
mortgage brokers or between mortgage brokers.)
    (vi) Normal promotional and educational activities that are not 
conditioned on the referral of business and do not involve the defraying 
of expenses that otherwise would be incurred by persons in a position to 
refer settlement services or business incident thereto;
    (vii) A payment by an employer to its own bona fide employee for 
generating business for that employer;
    (viii) In a controlled business arrangement, a payment by an 
employer of a bonus to a managerial employee based on criteria relating 
to performance (such as profitability, capture rate, or other 
thresholds) of a business entity in the controlled business arrangement. 
However, the amount of such bonus may not be calculated as a multiple of 
the number or value of referrals of settlement service business to a 
business entity in a controlled business arrangement; and
    (ix)(A) A payment by an employer to its bona fide employee for the 
referral of settlement service business to a settlement service provider 
that has an affiliate relationship with the employer or in which the 
employer has a direct or beneficial ownership interest of more than 1 
percent, if the following conditions are met:
    (1) The employee does not perform settlement services in any 
transaction; and
    (2) Before the referral, the employee provides to the person being 
referred a written disclosure in the format of the Controlled Business 
Arrangement Disclosure Statement, set forth in appendix D to this part.
    (B) For purposes of this paragraph (g)(1)(ix), the marketing of a 
settlement service or product of an affiliated entity, including the 
collection and conveyance of information or the taking of an application 
or order for an affiliated entity, does not constitute the performance 
of a settlement service. Under this paragraph (g)(1)(ix), marketing of a 
settlement service or product may include incidental communications with 
the consumer after the application or order, such as providing the 
consumer with information about the status of an application or order; 
marketing shall not include serving as the ongoing point of contact for 
coordinating the delivery and provision of settlement services.

                                * * * * *



Sec. 3500.15  Affiliated business arrangements.

    (a) General. An affiliated business arrangement is defined in 
section 3(7) of RESPA (12 U.S.C. 2602(7)).
    (b) Violation and exemption. An affiliated business arrangement is 
not a violation of section 8 of RESPA (12 U.S.C. 2607) and of Sec. 
3500.14 if the conditions set forth in this section are satisfied. 
Paragraph (b)(1) of this section shall not apply to the extent it is 
inconsistent with section 8(c)(4)(A) of RESPA (12 U.S.C. 2607(c)(4)(A)).
    (1) The person making each referral has provided to each person 
whose business is referred a written disclosure, in the format of the 
Affiliated Business Arrangement Disclosure Statement set forth in 
appendix D of this part, of the nature of the relationship (explaining 
the ownership and financial interest) between the provider of settlement 
services (or business incident thereto) and the person making the 
referral and of an estimated charge or range of charges generally made 
by such provider (which describes the charge using the same terminology, 
as far as practical, as section L of the HUD-1 settlement statement). 
The disclosures must be provided on a separate piece of paper no later 
than the time of each referral or, if the lender requires use of a 
particular provider, the time of loan application, except that:
    (i) Where a lender makes the referral to a borrower, the condition 
contained in paragraph (b)(1) of this section may be satisfied at the 
time that the good faith estimate or a statement under Sec. 3500.7(d) 
is provided; and
    (ii) Whenever an attorney or law firm requires a client to use a 
particular title insurance agent, the attorney or law firm shall provide 
the disclosures no later than the time the attorney or law firm is 
engaged by the client. Failure to comply with the disclosure 
requirements of this section may be overcome if the person making a 
referral

[[Page 377]]

can prove by a preponderance of the evidence that procedures reasonably 
adopted to result in compliance with these conditions have been 
maintained and that any failure to comply with these conditions was 
unintentional and the result of a bona fide error. An error of legal 
judgment with respect to a person's obligations under RESPA is not a 
bona fide error. Administrative and judicial interpretations of section 
130(c) of the Truth in Lending Act shall not be binding interpretations 
of the preceding sentence or section 8(d)(3) of RESPA (12 U.S.C. 
2607(d)(3)).
    (2) No person making a referral has required (as defined in Sec. 
3500.2, ``required use'') any person to use any particular provider of 
settlement services or business incident thereto, except if such person 
is a lender, for requiring a buyer, borrower or seller to pay for the 
services of an attorney, credit reporting agency, or real estate 
appraiser chosen by the lender to represent the lender's interest in a 
real estate transaction, or except if such person is an attorney or law 
firm for arranging for issuance of a title insurance policy for a 
client, directly as agent or through a separate corporate title 
insurance agency that may be operated as an adjunct to the law practice 
of the attorney or law firm, as part of representation of that client in 
a real estate transaction.
    (3) The only thing of value that is received from the arrangement 
other than payments listed in Sec. 3500.14(g) is a return on an 
ownership interest or franchise relationship.
    (i) In an affiliated business arrangement:
    (A) Bona fide dividends, and capital or equity distributions, 
related to ownership interest or franchise relationship, between 
entities in an affiliate relationship, are permissible; and
    (B) Bona fide business loans, advances, and capital or equity 
contributions between entities in an affiliate relationship (in any 
direction), are not prohibited--so long as they are for ordinary 
business purposes and are not fees for the referral of settlement 
service business or unearned fees.
    (ii) A return on an ownership interest does not include:
    (A) Any payment which has as a basis of calculation no apparent 
business motive other than distinguishing among recipients of payments 
on the basis of the amount of their actual, estimated or anticipated 
referrals;
    (B) Any payment which varies according to the relative amount of 
referrals by the different recipients of similar payments; or
    (C) A payment based on an ownership, partnership or joint venture 
share which has been adjusted on the basis of previous relative 
referrals by recipients of similar payments.
    (iii) Neither the mere labelling of a thing of value, nor the fact 
that it may be calculated pursuant to a corporate or partnership 
organizational document or a franchise agreement, will determine whether 
it is a bona fide return on an ownership interest or franchise 
relationship. Whether a thing of value is such a return will be 
determined by analyzing facts and circumstances on a case by case basis.
    (iv) A return on franchise relationship may be a payment to or from 
a franchisee but it does not include any payment which is not based on 
the franchise agreement, nor any payment which varies according to the 
number or amount of referrals by the franchisor or franchisee or which 
is based on a franchise agreement which has been adjusted on the basis 
of a previous number or amount of referrals by the franchiser or 
franchisees. A franchise agreement may not be constructed to insulate 
against kickbacks or referral fees.
    (c) Definitions. As used in this section:
    (1) Associate is defined in section 3(8) of RESPA (12 U.S.C. 
2602(8)).
    (2) Affiliate relationship means the relationship among business 
entities where one entity has effective control over the other by virtue 
of a partnership or other agreement or is under common control with the 
other by a third entity or where an entity is a corporation related to 
another corporation as parent to subsidiary by an identity of stock 
ownership.
    (3) Beneficial ownership means the effective ownership of an 
interest in a provider of settlement services or the right to use and 
control the ownership

[[Page 378]]

interest involved even though legal ownership or title may be held in 
another person's name.
    (4) Control, as used in the definitions of ``associate'' and 
``affiliate relationship,'' means that a person:
    (i) Is a general partner, officer, director, or employer of another 
person;
    (ii) Directly or indirectly or acting in concert with others, or 
through one or more subsidiaries, owns, holds with power to vote, or 
holds proxies representing, more than 20 percent of the voting interests 
of another person;
    (iii) Affirmatively influences in any manner the election of a 
majority of the directors of another person; or
    (iv) Has contributed more than 20 percent of the capital of the 
other person.
    (5) Direct ownership means the holding of legal title to an interest 
in a provider of settlement service except where title is being held for 
the beneficial owner.
    (6) Franchise is defined in 16 CFR 436.2(a).
    (7) Franchisor is defined in 16 CFR 436.2(c).
    (8) Franchisee is defined in 16 CFR 436.2(d).
    (9) Person who is in a position to refer settlement service business 
means any real estate broker or agent, lender, mortgage broker, builder 
or developer, attorney, title company, title agent, or other person 
deriving a significant portion of his or her gross income from providing 
settlement services.
    (d) Recordkeeping. Any documents provided pursuant to this section 
shall be retained for 5 years after the date of execution.
    (e) Appendix B of this part. Illustrations in appendix B of this 
part demonstrate some of the requirements of this section.

[61 FR 13233, Mar. 26, 1996, as amended at 61 FR 29252, June 7, 1996; 61 
FR 58476, Nov. 15, 1996]

    Effective Date Note: At 61 FR 29252, June 7, 1996, Sec. 3500.15 was 
amended by revising the introductory text of paragraph (b)(1), effective 
Oct. 7, 1996. At 61 FR 51782, Oct. 4, 1996, the effective date was 
delayed until further notice. For the convenience of the user, the new 
text is set forth as follows:



Sec. 3500.15  Controlled business arrangements.

                                * * * * *

    (b) * * *
    (1) Prior to the referral, the person making a referral has provided 
to each person whose business is referred a written disclosure, in the 
format of the Controlled Business Arrangement Disclosure Statement set 
forth in appendix D of this part. This disclosure shall specify the 
nature of the relationship (explaining the ownership and financial 
interest) between the person performing settlement services (or business 
incident thereto) and the person making the referral, and shall describe 
the estimated charge or range of charges (using the same terminology, as 
far as practical, as section L of the HUD-1 or HUD-1A settlement 
statement) generally made by the provider of settlement services. The 
disclosure must be provided on a separate piece of paper no later than 
the time of each referral or, if the lender requires the use of a 
particular provider, the time of loan application, except that:

                                * * * * *



Sec. 3500.16  Title companies.

    No seller of property that will be purchased with the assistance of 
a federally related mortgage loan shall violate section 9 of RESPA (12 
U.S.C. 2608). Section 3500.2 defines ``required use'' of a provider of a 
settlement service. Section 3500.19(c) explains the liability of a 
seller for a violation of this section.



Sec. 3500.17  Escrow accounts.

    (a) General. This section sets out the requirements for an escrow 
account that a lender establishes in connection with a federally related 
mortgage loan. It sets limits for escrow accounts using calculations 
based on monthly payments and disbursements within a calendar year. If 
an escrow account involves biweekly or any other payment period, the 
requirements in this section shall be modified accordingly. A HUD Public 
Guidance Document entitled ``Biweekly Payments--Example'' provides 
examples of biweekly accounting and a HUD Public Guidance Document 
entitled ``Annual Escrow Account Disclosure Statement--Example'' 
provides examples of a 3-year accounting cycle that may be used in 
accordance with paragraph (c)(9) of this section. A HUD Public Guidance 
Document entitled

[[Page 379]]

``Consumer Disclosure for Voluntary Escrow Account Payments'' provides a 
model disclosure format that originators and servicers are encouraged, 
but not required, to provide to consumers when the originator or 
servicer anticipates a substantial increase in disbursements from the 
escrow account after the first year of the loan. The disclosures in that 
model format may be combined with or included in the Initial Escrow 
Account Statement required in Sec. 3500.17(g).
    (b) Definitions. As used in this section:
    Aggregate (or) composite analysis, hereafter called aggregate 
analysis, means an accounting method a servicer uses in conducting an 
escrow account analysis by computing the sufficiency of escrow account 
funds by analyzing the account as a whole. Appendix E to this part sets 
forth examples of aggregate escrow account analyses.
    Annual escrow account statement means a statement containing all of 
the information set forth in Sec. 3500.17(i). As noted in Sec. 
3500.17(i), a servicer shall submit an annual escrow account statement 
to the borrower within 30 calendar days of the end of the escrow account 
computation year, after conducting an escrow account analysis.
    Cushion or reserve (hereafter cushion) means funds that a servicer 
may require a borrower to pay into an escrow account to cover 
unanticipated disbursements or disbursements made before the borrower's 
payments are available in the account, as limited by Sec. 3500.17(c).
    Deficiency is the amount of a negative balance in an escrow account. 
As noted in Sec. 3500.17(f), if a servicer advances funds for a 
borrower, then the servicer must perform an escrow account analysis 
before seeking repayment of the deficiency.
    Delivery means the placing of a document in the United States mail, 
first-class postage paid, addressed to the last known address of the 
recipient. Hand delivery also constitutes delivery.
    Disbursement date means the date on which the servicer actually pays 
an escrow item from the escrow account.
    Escrow account means any account that a servicer establishes or 
controls on behalf of a borrower to pay taxes, insurance premiums 
(including flood insurance), or other charges with respect to a 
federally related mortgage loan, including charges that the borrower and 
servicer have voluntarily agreed that the servicer should collect and 
pay. The definition encompasses any account established for this 
purpose, including a ``trust account'', ``reserve account'', ``impound 
account'', or other term in different localities. An ``escrow account'' 
includes any arrangement where the servicer adds a portion of the 
borrower's payments to principal and subsequently deducts from principal 
the disbursements for escrow account items. For purposes of this 
section, the term ``escrow account'' excludes any account that is under 
the borrower's total control.
    Escrow account analysis means the accounting that a servicer 
conducts in the form of a trial running balance for an escrow account 
to:
    (1) Determine the appropriate target balances;
    (2) Compute the borrower's monthly payments for the next escrow 
account computation year and any deposits needed to establish or 
maintain the account; and
    (3) Determine whether shortages, surpluses or deficiencies exist.
    Escrow account computation year is a 12-month period that a servicer 
establishes for the escrow account beginning with the borrower's initial 
payment date. The term includes each 12-month period thereafter, unless 
a servicer chooses to issue a short year statement under the conditions 
stated in Sec. 3500.17(i)(4).
    Escrow account item or separate item means any separate expenditure 
category, such as ``taxes'' or ``insurance'', for which funds are 
collected in the escrow account for disbursement. An escrow account item 
with installment payments, such as local property taxes, remains one 
escrow account item regardless of multiple disbursement dates to the tax 
authority.
    Initial escrow account statement means the first disclosure 
statement that the servicer delivers to the borrower concerning the 
borrower's escrow account. The initial escrow account statement shall 
meet the requirements of

[[Page 380]]

Sec. 3500.17(g) and be in substantially the format set forth in Sec. 
3500.17(h).
    Installment payment means one of two or more payments payable on an 
escrow account item during an escrow account computation year. An 
example of an installment payment is where a jurisdiction bills 
quarterly for taxes.
    Payment due date means the date each month when the borrower's 
monthly payment to an escrow account is due to the servicer. The initial 
payment date is the borrower's first payment due date to an escrow 
account.
    Penalty means a late charge imposed by the payee for paying after 
the disbursement is due. It does not include any additional charge or 
fee imposed by the payee associated with choosing installment payments 
as opposed to annual payments or for choosing one installment plan over 
another.
    Pre-accrual is a practice some servicers use to require borrowers to 
deposit funds, needed for disbursement and maintenance of a cushion, in 
the escrow account some period before the disbursement date. Pre-accrual 
is subject to the limitations of Sec. 3500.17(c).
    Shortage means an amount by which a current escrow account balance 
falls short of the target balance at the time of escrow analysis.
    Single-item analysis means an accounting method servicers use in 
conducting an escrow account analysis by computing the sufficiency of 
escrow account funds by considering each escrow item separately. 
Appendix E to this part sets forth examples of single-item analysis.
    Submission (of an escrow account statement) means the delivery of 
the statement.
    Surplus means an amount by which the current escrow account balance 
exceeds the target balance for the account.
    System of recordkeeping means the servicer's method of keeping 
information that reflects the facts relating to that servicer's handling 
of the borrower's escrow account, including, but not limited to, the 
payment of amounts from the escrow account and the submission of initial 
and annual escrow account statements to borrowers.
    Target balance means the estimated month end balance in an escrow 
account that is just sufficient to cover the remaining disbursements 
from the escrow account in the escrow account computation year, taking 
into account the remaining scheduled periodic payments, and a cushion, 
if any.
    Trial running balance means the accounting process that derives the 
target balances over the course of an escrow account computation year. 
Section 3500.17(d) provides a description of the steps involved in 
performing a trial running balance.
    (c) Limits on payments to escrow accounts. (1) A lender or servicer 
(hereafter servicer) shall not require a borrower to deposit into any 
escrow account, created in connection with a federally related mortgage 
loan, more than the following amounts:
    (i) Charges at settlement or upon creation of an escrow account. At 
the time a servicer creates an escrow account for a borrower, the 
servicer may charge the borrower an amount sufficient to pay the charges 
respecting the mortgaged property, such as taxes and insurance, which 
are attributable to the period from the date such payment(s) were last 
paid until the initial payment date. The ``amount sufficient to pay'' is 
computed so that the lowest month end target balance projected for the 
escrow account computation year is zero (-0-) (see Step 2 in appendix E 
to this part). In addition, the servicer may charge the borrower a 
cushion that shall be no greater than one-sixth (\1/6\) of the estimated 
total annual payments from the escrow account.
    (ii) Charges during the life of the escrow account. Throughout the 
life of an escrow account, the servicer may charge the borrower a 
monthly sum equal to one-twelfth (\1/12\) of the total annual escrow 
payments which the servicer reasonably anticipates paying from the 
account. In addition, the servicer may add an amount to maintain a 
cushion no greater than one-sixth (\1/6\) of the estimated total annual 
payments from the account. However, if a servicer determines through an 
escrow account analysis that there is a shortage or deficiency, the 
servicer may require the borrower to pay additional deposits to make up 
the shortage or eliminate the deficiency, subject

[[Page 381]]

to the limitations set forth in Sec. 3500.17(f).
    (2) Escrow analysis at creation of escrow account. Before 
establishing an escrow account, the servicer must conduct an escrow 
account analysis to determine the amount the borrower must deposit into 
the escrow account (subject to the limitations of paragraph (c)(1)(i) of 
this section), and the amount of the borrower's periodic payments into 
the escrow account (subject to the limitations of paragraph (c)(1)(ii) 
of this section). In conducting the escrow account analysis, the 
servicer must estimate the disbursement amounts according to paragraph 
(c)(7) of this section. Pursuant to paragraph (k) of this section, the 
servicer must use a date on or before the deadline to avoid a penalty as 
the disbursement date for the escrow item and comply with any other 
requirements of paragraph (k) of this section. Upon completing the 
initial escrow account analysis, the servicer must prepare and deliver 
an initial escrow account statement to the borrower, as set forth in 
paragraph (g) of this section. The servicer must use the escrow account 
analysis to determine whether a surplus, shortage, or deficiency exists 
and must make any adjustments to the account pursuant to paragraph (f) 
of this section.
    (3) Subsequent escrow account analyses. For each escrow account, the 
servicer must conduct an escrow account analysis at the completion of 
the escrow account computation year to determine the borrower's monthly 
escrow account payments for the next computation year, subject to the 
limitations of paragraph (c)(1)(ii) of this section. In conducting the 
escrow account analysis, the servicer must estimate the disbursement 
amounts according to paragraph (c)(7) of this section. Pursuant to 
paragraph (k) of this section, the servicer must use a date on or before 
the deadline to avoid a penalty as the disbursement date for the escrow 
item and comply with any other requirements of paragraph (k) of this 
section. The servicer must use the escrow account analysis to determine 
whether a surplus, shortage, or deficiency exists, and must make any 
adjustments to the account pursuant to paragraph (f) of this section. 
Upon completing an escrow account analysis, the servicer must prepare 
and submit an annual escrow account statement to the borrower, as set 
forth in paragraph (i) of this section.
    (4) Aggregate accounting required. All servicers must use the 
aggregate accounting method in conducting escrow account analyses.
    (5) Cushion. The cushion must be no greater than one-sixth (\1/6\) 
of the estimated total annual disbursements from the escrow account.
    (6) Restrictions on pre-accrual. A servicer must not practice pre-
accrual.
    (7) Servicer estimates of disbursement amounts. To conduct an escrow 
account analysis, the servicer shall estimate the amount of escrow 
account items to be disbursed. If the servicer knows the charge for an 
escrow item in the next computation year, then the servicer shall use 
that amount in estimating disbursement amounts. If the charge is unknown 
to the servicer, the servicer may base the estimate on the preceding 
year's charge, or the preceding year's charge as modified by an amount 
not exceeding the most recent year's change in the national Consumer 
Price Index for all urban consumers (CPI, all items). In cases of 
unassessed new construction, the servicer may base an estimate on the 
assessment of comparable residential property in the market area.
    (8) Provisions in mortgage documents. The servicer must examine the 
mortgage loan documents to determine the applicable cushion for each 
escrow account. If the mortgage loan documents provide for lower cushion 
limits, then the terms of the loan documents apply. Where the terms of 
any mortgage loan document allow greater payments to an escrow account 
than allowed by this section, then this section controls the applicable 
limits. Where the mortgage loan documents do not specifically establish 
an escrow account, whether a servicer may establish an escrow account 
for the loan is a matter for determination by other Federal or State 
law. If the mortgage loan document is silent on the escrow account 
limits and a servicer establishes an escrow account under other Federal 
or State

[[Page 382]]

law, then the limitations of this section apply unless applicable 
Federal or State law provides for a lower amount. If the loan documents 
provide for escrow accounts up to the RESPA limits, then the servicer 
may require the maximum amounts consistent with this section, unless an 
applicable Federal or State law sets a lesser amount.
    (9) Assessments for periods longer than one year. Some escrow 
account items may be billed for periods longer than one year. For 
example, servicers may need to collect flood insurance or water 
purification escrow funds for payment every three years. In such cases, 
the servicer shall estimate the borrower's payments for a full cycle of 
disbursements. For a flood insurance premium payable every 3 years, the 
servicer shall collect the payments reflecting 36 equal monthly amounts. 
For two out of the three years, however, the account balance may not 
reach its low monthly balance because the low point will be on a three-
year cycle, as compared to an annual one. The annual escrow account 
statement shall explain this situation (see example in the HUD Public 
Guidance Document entitled ``Annual Escrow Account Disclosure 
Statement--Example'', available in accordance with Sec. 3500.3).
    (d) Methods of escrow account analysis. (1) The following sets forth 
the steps servicers must use to determine whether their use of aggregate 
analysis conforms with the limitations in Sec. 3500.17(c)(1). The steps 
set forth in this section result in maximum limits. Servicers may use 
accounting procedures that result in lower target balances. In 
particular, servicers may use a cushion less than the permissible 
cushion or no cushion at all. This section does not require the use of a 
cushion.
    (2) Aggregate analysis. (i) In conducting the escrow account 
analysis using aggregate analysis, the target balances may not exceed 
the balances computed according to the following arithmetic operations:
    (A) The servicer first projects a trial balance for the account as a 
whole over the next computation year (a trial running balance). In doing 
so the servicer assumes that it will make estimated disbursements on or 
before the earlier of the deadline to take advantage of discounts, if 
available, or the deadline to avoid a penalty. The servicer does not use 
pre-accrual on these disbursement dates. The servicer also assumes that 
the borrower will make monthly payments equal to one-twelfth of the 
estimated total annual escrow account disbursements.
    (B) The servicer then examines the monthly trial balances and adds 
to the first monthly balance an amount just sufficient to bring the 
lowest monthly trial balance to zero, and adjusts all other monthly 
balances accordingly.
    (C) The servicer then adds to the monthly balances the permissible 
cushion. The cushion is two months of the borrower's escrow payments to 
the servicer or a lesser amount specified by State law or the mortgage 
document (net of any increases or decreases because of prior year 
shortages or surpluses, respectively).
    (ii) Lowest monthly balance. Under aggregate analysis, the lowest 
monthly target balance for the account shall be less than or equal to 
one-sixth of the estimated total annual escrow account disbursements or 
a lesser amount specified by State law or the mortgage document. The 
target balances that the servicer derives using these steps yield the 
maximum limit for the escrow account. Appendix E to this part 
illustrates these steps.
    (e) Transfer of servicing. (1) If the new servicer changes either 
the monthly payment amount or the accounting method used by the 
transferor (old) servicer, then the new servicer shall provide the 
borrower with an initial escrow account statement within 60 days of the 
date of servicing transfer.
    (i) Where a new servicer provides an initial escrow account 
statement upon the transfer of servicing, the new servicer shall use the 
effective date of the transfer of servicing to establish the new escrow 
account computation year.
    (ii) Where the new servicer retains the monthly payments and 
accounting method used by the transferor servicer, then the new servicer 
may continue to use the escrow account computation year established by 
the transferor servicer or may choose to establish a different 
computation year using a

[[Page 383]]

short-year statement. At the completion of the escrow account 
computation year or any short year, the new servicer shall perform an 
escrow analysis and provide the borrower with an annual escrow account 
statement.
    (2) The new servicer shall treat shortages, surpluses and 
deficiencies in the transferred escrow account according to the 
procedures set forth in Sec. 3500.17(f).
    (f) Shortages, surpluses, and deficiencies requirements--(1) Escrow 
account analysis. For each escrow account, the servicer shall conduct an 
escrow account analysis to determine whether a surplus, shortage or 
deficiency exists.
    (i) As noted in Sec. 3500.17(c)(2) and (3), the servicer shall 
conduct an escrow account analysis upon establishing an escrow account 
and at completion of the escrow account computation year.
    (ii) The servicer may conduct an escrow account analysis at other 
times during the escrow computation year. If a servicer advances funds 
in paying a disbursement, which is not the result of a borrower's 
payment default under the underlying mortgage document, then the 
servicer shall conduct an escrow account analysis to determine the 
extent of the deficiency before seeking repayment of the funds from the 
borrower under this paragraph (f).
    (2) Surpluses. (i) If an escrow account analysis discloses a 
surplus, the servicer shall, within 30 days from the date of the 
analysis, refund the surplus to the borrower if the surplus is greater 
than or equal to 50 dollars ($50). If the surplus is less than 50 
dollars ($50), the servicer may refund such amount to the borrower, or 
credit such amount against the next year's escrow payments.
    (ii) These provisions regarding surpluses apply if the borrower is 
current at the time of the escrow account analysis. A borrower is 
current if the servicer receives the borrower's payments within 30 days 
of the payment due date. If the servicer does not receive the borrower's 
payment within 30 days of the payment due date, then the servicer may 
retain the surplus in the escrow account pursuant to the terms of the 
mortgage loan documents.
    (iii) After an initial or annual escrow analysis has been performed, 
the servicer and the borrower may enter into a voluntary agreement for 
the forthcoming escrow accounting year for the borrower to deposit funds 
into the escrow account for that year greater than the limits 
established under paragraph (c) of this section. Such an agreement shall 
cover only one escrow accounting year, but a new voluntary agreement may 
be entered into after the next escrow analysis is performed. The 
voluntary agreement may not alter how surpluses are to be treated when 
the next escrow analysis is performed at the end of the escrow 
accounting year covered by the voluntary agreement.
    (3) Shortages. (i) If an escrow account analysis discloses a 
shortage of less than one month's escrow account payment, then the 
servicer has three possible courses of action:
    (A) The servicer may allow a shortage to exist and do nothing to 
change it;
    (B) The servicer may require the borrower to repay the shortage 
amount within 30 days; or
    (C) The servicer may require the borrower to repay the shortage 
amount in equal monthly payments over at least a 12-month period.
    (ii) If an escrow account analysis discloses a shortage that is 
greater than or equal to one month's escrow account payment, then the 
servicer has two possible courses of action:
    (A) The servicer may allow a shortage to exist and do nothing to 
change it; or
    (B) The servicer may require the borrower to repay the shortage in 
equal monthly payments over at least a 12-month period.
    (4) Deficiency. If the escrow account analysis confirms a 
deficiency, then the servicer may require the borrower to pay additional 
monthly deposits to the account to eliminate the deficiency.
    (i) If the deficiency is less than one month's escrow account 
payment, then the servicer:
    (A) May allow the deficiency to exist and do nothing to change it;
    (B) May require the borrower to repay the deficiency within 30 days; 
or

[[Page 384]]

    (C) May require the borrower to repay the deficiency in 2 or more 
equal monthly payments.
    (ii) If the deficiency is greater than or equal to 1 month's escrow 
payment, the servicer may allow the deficiency to exist and do nothing 
to change it or may require the borrower to repay the deficiency in two 
or more equal monthly payments.
    (iii) These provisions regarding deficiencies apply if the borrower 
is current at the time of the escrow account analysis. A borrower is 
current if the servicer receives the borrower's payments within 30 days 
of the payment due date. If the servicer does not receive the borrower's 
payment within 30 days of the payment due date, then the servicer may 
recover the deficiency pursuant to the terms of the mortgage loan 
documents.
    (5) Notice of shortage or deficiency in escrow account. The servicer 
shall notify the borrower at least once during the escrow account 
computation year if there is a shortage or deficiency in the escrow 
account. The notice may be part of the annual escrow account statement 
or it may be a separate document.
    (g) Initial escrow account statement. (1) Submission at settlement, 
or within 45 calendar days of settlement. As noted in Sec. 
3500.17(c)(2), the servicer shall conduct an escrow account analysis 
before establishing an escrow account to determine the amount the 
borrower shall deposit into the escrow account, subject to the 
limitations of Sec. 3500.17(c)(1)(i). After conducting the escrow 
account analysis for each escrow account, the servicer shall submit an 
initial escrow account statement to the borrower at settlement or within 
45 calendar days of settlement for escrow accounts that are established 
as a condition of the loan.
    (i) The initial escrow account statement shall include the amount of 
the borrower's monthly mortgage payment and the portion of the monthly 
payment going into the escrow account and shall itemize the estimated 
taxes, insurance premiums, and other charges that the servicer 
reasonably anticipates to be paid from the escrow account during the 
escrow account computation year and the anticipated disbursement dates 
of those charges. The initial escrow account statement shall indicate 
the amount that the servicer selects as a cushion. The statement shall 
include a trial running balance for the account.
    (ii) Pursuant to Sec. 3500.17(h)(2), the servicer may incorporate 
the initial escrow account statement into the HUD-1 or HUD-1A settlement 
statement. If the servicer does not incorporate the initial escrow 
account statement into the HUD-1 or HUD-1A settlement statement, then 
the servicer shall submit the initial escrow account statement to the 
borrower as a separate document.
    (2) Time of submission of initial escrow account statement for an 
escrow account established after settlement. For escrow accounts 
established after settlement (and which are not a condition of the 
loan), a servicer shall submit an initial escrow account statement to a 
borrower within 45 calendar days of the date of establishment of the 
escrow account.
    (h) Format for initial escrow account statement. (1) The format and 
a completed example for an initial escrow account statement are set out 
in HUD Public Guidance Documents entitled ``Initial Escrow Account 
Disclosure Statement--Format'' and ``Initial Escrow Account Disclosure 
Statement--Example'', available in accordance with Sec. 3500.3.
    (2) Incorporation of initial escrow account statement into HUD-1 or 
HUD-1A settlement statement. Pursuant to Sec. 3500.9(a)(11), a servicer 
may add the initial escrow account statement to the HUD-1 or HUD-1A 
settlement statement. The servicer may include the initial escrow 
account statement in the basic text or may attach the initial escrow 
account statement as an additional page to the HUD-1 or HUD-1A 
settlement statement.
    (3) Identification of payees. The initial escrow account statement 
need not identify a specific payee by name if it provides sufficient 
information to identify the use of the funds. For example, appropriate 
entries include: county taxes, hazard insurance, condominium dues, etc. 
If a particular payee, such as a taxing body, receives more than one 
payment during the escrow account

[[Page 385]]

computation year, the statement shall indicate each payment and 
disbursement date. If there are several taxing authorities or insurers, 
the statement shall identify each taxing body or insurer (e.g., ``City 
Taxes'', ``School Taxes'', ``Hazard Insurance'', or ``Flood Insurance,'' 
etc.).
    (i) Annual escrow account statements. For each escrow account, a 
servicer shall submit an annual escrow account statement to the borrower 
within 30 days of the completion of the escrow account computation year. 
The servicer shall also submit to the borrower the previous year's 
projection or initial escrow account statement. The servicer shall 
conduct an escrow account analysis before submitting an annual escrow 
account statement to the borrower.
    (1) Contents of annual escrow account statement. The annual escrow 
account statement shall provide an account history, reflecting the 
activity in the escrow account during the escrow account computation 
year, and a projection of the activity in the account for the next year. 
In preparing the statement, the servicer may assume scheduled payments 
and disbursements will be made for the final 2 months of the escrow 
account computation year. The annual escrow account statement must 
include, at a minimum, the following (the items in paragraphs (i)(1)(i) 
through (i)(1)(iv) must be clearly itemized):
    (i) The amount of the borrower's current monthly mortgage payment 
and the portion of the monthly payment going into the escrow account;
    (ii) The amount of the past year's monthly mortgage payment and the 
portion of the monthly payment that went into the escrow account;
    (iii) The total amount paid into the escrow account during the past 
computation year;
    (iv) The total amount paid out of the escrow account during the same 
period for taxes, insurance premiums, and other charges (as separately 
identified);
    (v) The balance in the escrow account at the end of the period;
    (vi) An explanation of how any surplus is being handled by the 
servicer;
    (vii) An explanation of how any shortage or deficiency is to be paid 
by the borrower; and
    (viii) If applicable, the reason(s) why the estimated low monthly 
balance was not reached, as indicated by noting differences between the 
most recent account history and last year's projection. HUD Public 
Guidance Documents entitled ``Annual Escrow Account Disclosure 
Statement--Format'' and ``Annual Escrow Account Disclosure Statement--
Example'' set forth an acceptable format and methodology for conveying 
this information.
    (2) No annual statements in the case of default, foreclosure, or 
bankruptcy. This paragraph (i)(2) contains an exemption from the 
provisions of Sec. 3500.17(i)(1). If at the time the servicer conducts 
the escrow account analysis the borrower is more than 30 days overdue, 
then the servicer is exempt from the requirements of submitting an 
annual escrow account statement to the borrower under Sec. 3500.17(i). 
This exemption also applies in situations where the servicer has brought 
an action for foreclosure under the underlying mortgage loan, or where 
the borrower is in bankruptcy proceedings. If the servicer does not 
issue an annual statement pursuant to this exemption and the loan 
subsequently is reinstated or otherwise becomes current, the servicer 
shall provide a history of the account since the last annual statement 
(which may be longer than 1 year) within 90 days of the date the account 
became current.
    (3) Delivery with other material. The servicer may deliver the 
annual escrow account statement to the borrower with other statements or 
materials, including the Substitute 1098, which is provided for federal 
income tax purposes.
    (4) Short year statements. A servicer may issue a short year annual 
escrow account statement (``short year statement'') to change one escrow 
account computation year to another. By using a short year statement a 
servicer may adjust its production schedule or alter the escrow account 
computation year for the escrow account.
    (i) Effect of short year statement. The short year statement shall 
end the ``escrow account computation year'' for the escrow account and 
establish

[[Page 386]]

the beginning date of the new escrow account computation year. The 
servicer shall deliver the short year statement to the borrower within 
60 days from the end of the short year.
    (ii) Short year statement upon servicing transfer. Upon the transfer 
of servicing, the transferor (old) servicer shall submit a short year 
statement to the borrower within 60 days of the effective date of 
transfer.
    (iii) Short year statement upon loan payoff. If a borrower pays off 
a mortgage loan during the escrow account computation year, the servicer 
shall submit a short year statement to the borrower within 60 days after 
receiving the pay-off funds.
    (j) Formats for annual escrow account statement. The formats and 
completed examples for annual escrow account statements using single-
item analysis (pre-rule accounts) and aggregate analysis are set out in 
HUD Public Guidance Documents entitled ``Annual Escrow Account 
Disclosure Statement--Format'' and ``Annual Escrow Account Disclosure 
Statement--Example''.
    (k) Timely payments. (1) If the terms of any federally related 
mortgage loan require the borrower to make payments to an escrow 
account, the servicer must pay the disbursements in a timely manner, 
that is, on or before the deadline to avoid a penalty, as long as the 
borrower's payment is not more than 30 days overdue.
    (2) The servicer must advance funds to make disbursements in a 
timely manner as long as the borrower's payment is not more than 30 days 
overdue. Upon advancing funds to pay a disbursement, the servicer may 
seek repayment from the borrower for the deficiency pursuant to 
paragraph (f) of this section.
    (3) For the payment of property taxes from the escrow account, if a 
taxing jurisdiction offers a servicer a choice between annual and 
installment disbursements, the servicer must also comply with this 
paragraph (k)(3). If the taxing jurisdiction neither offers a discount 
for disbursements on a lump sum annual basis nor imposes any additional 
charge or fee for installment disbursements, the servicer must make 
disbursements on an installment basis. If, however, the taxing 
jurisdiction offers a discount for disbursements on a lump sum annual 
basis or imposes any additional charge or fee for installment 
disbursements, the servicer may at the servicer's discretion (but is not 
required by RESPA to), make lump sum annual disbursements in order to 
take advantage of the discount for the borrower or avoid the additional 
charge or fee for installments, as long as such method of disbursement 
complies with paragraphs (k)(1) and (k)(2) of this section. HUD 
encourages, but does not require, the servicer to follow the preference 
of the borrower, if such preference is known to the servicer.
    (4) Notwithstanding paragraph (k)(3) of this section, a servicer and 
borrower may mutually agree, on an individual case basis, to a different 
disbursement basis (installment or annual) or disbursement date for 
property taxes from that required under paragraph (k)(3) of this 
section, so long as the agreement meets the requirements of paragraphs 
(k)(1) and (k)(2) of this section. The borrower must voluntarily agree; 
neither loan approval nor any term of the loan may be conditioned on the 
borrower's agreeing to a different disbursement basis or disbursement 
date.
    (l) System of recordkeeping. (1) Each servicer shall keep records, 
which may involve electronic storage, microfiche storage, or any method 
of computerized storage, so long as the information is easily 
retrievable, reflecting the servicer's handling of each borrower's 
escrow account. The servicer's records shall include, but not be limited 
to, the payment of amounts into and from the escrow account and the 
submission of initial and annual escrow account statements to the 
borrower.
    (2) The servicer responsible for servicing the borrower's escrow 
account shall maintain the records for that account for a period of at 
least five years after the servicer last serviced the escrow account.
    (3) A servicer shall provide the Secretary with information 
contained in the servicer's records for a specific escrow account, or 
for a number or class of escrow accounts, within 30 days of the 
Secretary's written request for the information. The servicer shall 
convert

[[Page 387]]

any information contained in electronic storage, microfiche or 
computerized storage to paper copies for review by the Secretary.
    (i) To aid in investigations, the Secretary may also issue an 
administrative subpoena for the production of documents, and for the 
testimony of such witnesses as the Secretary deems advisable.
    (ii) If the subpoenaed party refuses to obey the Secretary's 
administrative subpoena, the Secretary is authorized to seek a court 
order requiring compliance with the subpoena from any United States 
district court. Failure to obey such an order of the court may be 
punished as contempt of court.
    (4) Borrowers may seek information contained in the servicer's 
records by complying with the provisions set forth in 12 U.S.C. 2605(e) 
and Sec. 3500.21(f).
    (5) After receiving a request (by letter or subpoena) from the 
Department for information relating to whether a servicer submitted an 
escrow account statement to the borrower, the servicer shall respond 
within 30 days. If the servicer is unable to provide the Department with 
such information, the Secretary shall deem that lack of information to 
be evidence of the servicer's failure to submit the statement to the 
borrower.
    (m) Penalties. (1) A servicer's failure to submit to a borrower an 
initial or annual escrow account statement meeting the requirements of 
this part shall constitute a violation of section 10(d) of RESPA (12 
U.S.C. 2609(d)) and this section. For each such violation, the Secretary 
shall assess a civil penalty of 75 dollars ($75), except that the total 
of the assessed penalties shall not exceed $130,000 for any one servicer 
for violations that occur during any consecutive 12-month period.
    (2) Violations described in paragraph (m)(1) of this section do not 
require any proof of intent. However, if a lender or servicer is shown 
to have intentionally disregarded the requirements that it submit the 
escrow account statement to the borrower, then the Secretary shall 
assess a civil penalty of $110 for each violation, with no limit on the 
total amount of the penalty.
    (n) Civil penalties procedures. The following procedures shall apply 
whenever the Department seeks to impose a civil money penalty for 
violation of section 10(c) of RESPA (12 U.S.C. 2609(c)):
    (1) Purpose and scope. This paragraph (n) explains the procedures by 
which the Secretary may impose penalties under 12 U.S.C. 2609(d). These 
procedures include administrative hearings, judicial review, and 
collection of penalties. This paragraph (n) governs penalties imposed 
under 12 U.S.C. 2609(d) and, when noted, adopts those portions of 24 CFR 
part 30 that apply to all other civil penalty proceedings initiated by 
the Secretary.
    (2) Authority. The Secretary has the authority to impose civil 
penalties under section 10(d) of RESPA (12 U.S.C. 2609(d)).
    (3) Notice of intent to impose civil money penalties. Whenever the 
Secretary intends to impose a civil money penalty for violations of 
section 10(c) of RESPA (12 U.S.C. 2609(c)), the responsible program 
official, or his or her designee, shall serve a written Notice of Intent 
to Impose Civil Money Penalties (Notice of Intent) upon any servicer on 
which the Secretary intends to impose the penalty. A copy of the Notice 
of Intent must be filed with the Docket Clerk, Office of Administrative 
Law Judges, at the address provided in the Notice of Intent. The Notice 
of Intent will provide:
    (i) A short, plain statement of the facts upon which the Secretary 
has determined that a civil money penalty should be imposed, including a 
brief description of the specific violations under 12 U.S.C. 2609(c) 
with which the servicer is charged and whether such violations are 
believed to be intentional or unintentional in nature, or a combination 
thereof;
    (ii) The amount of the civil money penalty that the Secretary 
intends to impose and whether the limitations in 12 U.S.C. 2609(d)(1), 
apply;
    (iii) The right of the servicer to a hearing on the record to appeal 
the Secretary's preliminary determination to impose a civil penalty;
    (iv) The procedures to appeal the penalty;
    (v) The consequences of failure to appeal the penalty; and

[[Page 388]]

    (vi) The name, address, and telephone number of the representative 
of the Department, and the address of the Docket Clerk, Office of 
Administrative Law Judges, should the servicer decide to appeal the 
penalty.
    (4) Appeal procedures. (i) Answer. To appeal the imposition of a 
penalty, a servicer shall, within 30 days after receiving service of the 
Notice of Intent, file a written Answer with the Docket Clerk, Office of 
Administrative Law Judges, Department of Housing and Urban Development, 
at the address provided in the Notice of Intent. The Answer shall 
include a statement that the servicer admits, denies, or does not have 
(and is unable to obtain) sufficient information to admit or deny each 
allegation made in the Notice of Intent. A statement of lack of 
information shall have the effect of a denial. Any allegation that is 
not denied shall be deemed admitted. Failure to submit an Answer within 
the required period of time will result in a decision by the 
Administrative Law Judge based upon the Department's submission of 
evidence in the Notice of Intent.
    (ii) Submission of evidence. A servicer that receives the Notice of 
Intent has a right to present evidence. Evidence must be submitted 
within 45 calendar days from the date of service of the Notice of 
Intent, or by such other time as may be established by the 
Administrative Law Judge (ALJ). The servicer's failure to submit 
evidence within the required period of time will result in a decision by 
the Administrative Law Judge based upon the Department's submission of 
evidence in the Notice of Intent. The servicer may present evidence of 
the following:
    (A) The servicer did submit the required escrow account statement(s) 
to the borrower(s); or
    (B) Even if the servicer did not submit the required statement(s), 
that the failure was not the result of an intentional disregard of the 
requirements of RESPA (for purposes of determining the penalty).
    (iii) Review of the record. The Administrative Law Judge will review 
the evidence submitted by the servicer, if any, and that submitted by 
the Department. The Administrative Law Judge shall make a determination 
based upon a review of the written record, except that the 
Administrative Law Judge may order an oral hearing if he or she finds 
that the determination turns on the credibility or veracity of a 
witness, or that the matter cannot be resolved by review of the 
documentary evidence. If the Administrative Law Judge decides that an 
oral hearing is appropriate, then the procedural rules set forth at 24 
CFR part 30 shall apply, to the extent that they are not inconsistent 
with this section.
    (iv) Burden of proof. The burden of proof or the burden of going 
forward with the evidence shall be upon the proponent of an action. The 
Department's submission of evidence that the servicer's system of 
records lacks information that the servicer submitted the escrow account 
statement(s) to the borrower(s) shall satisfy the Department's burden. 
Upon the Department's presentation of evidence of this lack of 
information in the servicer's system of records, the burden of proof 
shifts from the Secretary to the servicer to provide evidence that it 
submitted the statement(s) to the borrower.
    (v) Standard of proof. The standard of proof shall be the 
preponderance of the evidence.
    (5) Determination of the Administrative Law Judge. (i) Following the 
hearing or the review of the written record, the Administrative Law 
Judge shall issue a decision that shall contain findings of fact, 
conclusions of law, and the amount of any penalties imposed. The 
decision shall include a determination of whether the servicer has 
failed to submit any required statements and, if so, whether the 
servicer's failure was the result of an intentional disregard for the 
law's requirements.
    (ii) The Administrative Law Judge shall issue the decision to all 
parties within 30 days of the submission of the evidence or the post-
hearing briefs, whichever is the last to occur.
    (iii) The decision of the Administrative Law Judge shall constitute 
the final decision of the Department and shall be final and binding on 
the parties.
    (6) Judicial review. (i) A person against whom the Department has 
imposed a civil money penalty under this

[[Page 389]]

part may obtain a review of the Department's final decision by filing a 
written petition for a review of the record with the appropriate United 
States district court.
    (ii) The petition must be filed within 30 days after the decision is 
filed with the Docket Clerk, Office of Administrative Law Judges.
    (7) Collection of penalties. (i) If any person fails to comply with 
the Department's final decision imposing a civil money penalty, the 
Secretary, if the time for judicial review of the decision has expired, 
may request the Attorney General to bring an action in an appropriate 
United States district court to obtain a judgment against the person 
that has failed to comply with the Department's final decision.
    (ii) In any such collection action, the validity and appropriateness 
of the Department's final decision imposing the civil penalty shall not 
be subject to review in the district court.
    (iii) The Secretary may obtain such other relief as may be 
available, including attorney fees and other expenses in connection with 
the collection action.
    (iv) Interest on and other charges for any unpaid penalty may be 
assessed in accordance with 31 U.S.C. 3717.
    (8) Offset. In addition to any other rights as a creditor, the 
Secretary may seek to collect a civil money penalty through 
administrative offset.
    (9) At any time before the decision of the Administrative Law Judge, 
the Secretary and the servicer may enter into an administrative 
settlement. The settlement may include provisions for interest, 
attorney's fees, and costs related to the proceeding. Such settlement 
will terminate the appearance before the Administrative Law Judge.
    (o) Discretionary payments. Any borrower's discretionary payment 
(such as credit life or disability insurance) made as part of a monthly 
mortgage payment is to be noted on the initial and annual statements. If 
a discretionary payment is established or terminated during the escrow 
account computation year, this change should be noted on the next annual 
statement. A discretionary payment is not part of the escrow account 
unless the payment is required by the lender, in accordance with the 
definition of ``settlement service'' in Sec. 3500.2, or the servicer 
chooses to place the discretionary payment in the escrow account. If a 
servicer has not established an escrow account for a federally related 
mortgage loan and only receives payments for discretionary items, this 
section is not applicable.

(Approved by the Office of Management and Budget under control number 
2502-0501)

[61 FR 13233, Mar. 26, 1996, as amended at 61 FR 46510, Sept. 3, 1996; 
61 FR 50219, Sept. 24, 1996; 61 FR 58476, Nov. 15, 1996; 63 FR 3236, 
Jan. 21, 1998; 68 FR 12789, Mar. 17, 2003; 72 FR 5589, Feb. 6, 2007; 73 
FR 68242, Nov. 17, 2008; 74 FR 4636, Jan. 26, 2009]



Sec. 3500.18  Validity of contracts and liens.

    Section 17 of RESPA (12 U.S.C. 2615) governs the validity of 
contracts and liens under RESPA.



Sec. 3500.19  Enforcement.

    (a) Enforcement policy. It is the policy of the Secretary regarding 
RESPA enforcement matters to cooperate with Federal, State, or local 
agencies having supervisory powers over lenders or other persons with 
responsibilities under RESPA. Federal agencies with supervisory powers 
over lenders may use their powers to require compliance with RESPA. In 
addition, failure to comply with RESPA may be grounds for administrative 
action by the Secretary under 2 CFR part 2424 concerning debarment, 
suspension, ineligibility of contractors and grantees, or under part 25 
of this title concerning the HUD Mortgagee Review Board. Nothing in this 
paragraph is a limitation on any other form of enforcement that may be 
legally available.
    (b) Violations of section 8 of RESPA (12 U.S.C. 2607), Sec. 
3500.14, or Sec. 3500.15. Any person who violates Sec. Sec. 3500.14 or 
3500.15 shall be deemed to violate section 8 of RESPA and shall be 
sanctioned accordingly.
    (c) Violations of section 9 of RESPA (12 U.S.C. 2608) or Sec. 
3500.16. Any person who violates section 3500.16 of this part shall be 
deemed to violate section 9 of RESPA and shall be sanctioned 
accordingly.

[[Page 390]]

    (d) Investigations. The procedures for investigations and 
investigational proceedings are set forth in 24 CFR part 3800.

[61 FR 13233, Mar. 26, 1996, as amended at 72 FR 73497, Dec. 27, 2007]



Sec. 3500.20  [Reserved]



Sec. 3500.21  Mortgage servicing transfers.

    (a) Definitions. As used in this section:
    Master servicer means the owner of the right to perform servicing, 
which may actually perform the servicing itself or may do so through a 
subservicer.
    Mortgage servicing loan means a federally related mortgage loan, as 
that term is defined in Sec. 3500.2, subject to the exemptions in Sec. 
3500.5, when the mortgage loan is secured by a first lien. The 
definition does not include subordinate lien loans or open-end lines of 
credit (home equity plans) covered by the Truth in Lending Act and 
Regulation Z, including open-end lines of credit secured by a first 
lien.
    Qualified written request means a written correspondence from the 
borrower to the servicer prepared in accordance with paragraph (e)(2) of 
this section.
    Subservicer means a servicer who does not own the right to perform 
servicing, but who does so on behalf of the master servicer.
    Transferee servicer means a servicer who obtains or who will obtain 
the right to perform servicing functions pursuant to an agreement or 
understanding.
    Transferor servicer means a servicer, including a table funding 
mortgage broker or dealer on a first lien dealer loan, who transfers or 
will transfer the right to perform servicing functions pursuant to an 
agreement or understanding.
    (b) Servicing Disclosure Statement; Requirements. (1) At the time an 
application for a mortgage servicing loan is submitted, or within 3 
business days after submission of the application, the lender, mortgage 
broker who anticipates using table funding, or dealer who anticipates a 
first lien dealer loan shall provide to each person who applies for such 
a loan a Servicing Disclosure Statement. A format for the Servicing 
Disclosure Statement appears as Appendix MS-1 to this part. The specific 
language of the Servicing Disclosure Statement is not required to be 
used. The information set forth in ``Instructions to Preparer'' on the 
Servicing Disclosure Statement need not be included with the information 
given to applicants, and material in square brackets is optional or 
alternative language. The model format may be annotated with additional 
information that clarifies or enhances the model language. The lender, 
table funding mortgage broker, or dealer should use the language that 
best describes the particular circumstances.
    (2) The Servicing Disclosure Statement must indicate whether the 
servicing of the loan may be assigned, sold, or transferred to any other 
person at any time while the loan is outstanding. If the lender, table 
funding mortgage broker, or dealer in a first lien dealer loan will 
engage in the servicing of the mortgage loan for which the applicant has 
applied, the disclosure may consist of a statement that the entity will 
service such loan and does not intend to sell, transfer, or assign the 
servicing of the loan. If the lender, table funding mortgage broker, or 
dealer in a first lien dealer loan will not engage in the servicing of 
the mortgage loan for which the applicant has applied, the disclosure 
may consist of a statement that such entity intends to assign, sell, or 
transfer servicing of such mortgage loan before the first payment is 
due. In all other instances, the disclosure must state that the 
servicing of the loan may be assigned, sold or transferred while the 
loan is outstanding.
    (c) Servicing Disclosure Statement; Delivery. The lender, table 
funding mortgage broker, or dealer that anticipates a first lien dealer 
loan shall deliver the Servicing Disclosure Statement within 3 business 
days from receipt of the application by hand delivery, by placing it in 
the mail, or, if the applicant agrees, by fax, e-mail, or other 
electronic means. In the event the borrower is denied credit within the 
3 business-day period, no servicing disclosure statement is required to 
be delivered. If co-applicants indicate the same address on their 
application, one

[[Page 391]]

copy delivered to that address is sufficient. If different addresses are 
shown by co-applicants on the application, a copy must be delivered to 
each of the co-applicants.
    (d) Notices of Transfer; loan servicing--(1) Requirement for notice. 
(i) Except as provided in this paragraph (d)(1)(i) or paragraph 
(d)(1)(ii) of this section, each transferor servicer and transferee 
servicer of any mortgage servicing loan shall deliver to the borrower a 
written Notice of Transfer, containing the information described in 
paragraph (d)(3) of this section, of any assignment, sale, or transfer 
of the servicing of the loan. The following transfers are not considered 
an assignment, sale, or transfer of mortgage loan servicing for purposes 
of this requirement if there is no change in the payee, address to which 
payment must be delivered, account number, or amount of payment due:
    (A) Transfers between affiliates;
    (B) Transfers resulting from mergers or acquisitions of servicers or 
subservicers; and
    (C) Transfers between master servicers, where the subservicer 
remains the same.
    (ii) The Federal Housing Administration (FHA) is not required under 
paragraph (d) of this section to submit to the borrower a Notice of 
Transfer in cases where a mortgage insured under the National Housing 
Act is assigned to FHA.
    (2) Time of notice. (i) Except as provided in paragraph (d)(2)(ii) 
of this section:
    (A) The transferor servicer shall deliver the Notice of Transfer to 
the borrower not less than 15 days before the effective date of the 
transfer of the servicing of the mortgage servicing loan;
    (B) The transferee servicer shall deliver the Notice of Transfer to 
the borrower not more than 15 days after the effective date of the 
transfer; and
    (C) The transferor and transferee servicers may combine their 
notices into one notice, which shall be delivered to the borrower not 
less than 15 days before the effective date of the transfer of the 
servicing of the mortgage servicing loan.
    (ii) The Notice of Transfer shall be delivered to the borrower by 
the transferor servicer or the transferee servicer not more than 30 days 
after the effective date of the transfer of the servicing of the 
mortgage servicing loan in any case in which the transfer of servicing 
is preceded by:
    (A) Termination of the contract for servicing the loan for cause;
    (B) Commencement of proceedings for bankruptcy of the servicer; or
    (C) Commencement of proceedings by the Federal Deposit Insurance 
Corporation (FDIC) or the Resolution Trust Corporation (RTC) for 
conservatorship or receivership of the servicer or an entity that owns 
or controls the servicer.
    (iii) Notices of Transfer delivered at settlement by the transferor 
servicer and transferee servicer, whether as separate notices or as a 
combined notice, will satisfy the timing requirements of paragraph 
(d)(2) of this section.
    (3) Notices of Transfer; contents. The Notices of Transfer required 
under paragraph (d) of this section shall include the following 
information:
    (i) The effective date of the transfer of servicing;
    (ii) The name, consumer inquiry addresses (including, at the option 
of the servicer, a separate address where qualified written requests 
must be sent), and a toll-free or collect-call telephone number for an 
employee or department of the transferee servicer;
    (iii) A toll-free or collect-call telephone number for an employee 
or department of the transferor servicer that can be contacted by the 
borrower for answers to servicing transfer inquiries;
    (iv) The date on which the transferor servicer will cease to accept 
payments relating to the loan and the date on which the transferee 
servicer will begin to accept such payments. These dates shall either be 
the same or consecutive days;
    (v) Information concerning any effect the transfer may have on the 
terms or the continued availability of mortgage life or disability 
insurance, or any other type of optional insurance, and any action the 
borrower must take to maintain coverage;
    (vi) A statement that the transfer of servicing does not affect any 
other

[[Page 392]]

term or condition of the mortgage documents, other than terms directly 
related to the servicing of the loan; and
    (vii) A statement of the borrower's rights in connection with 
complaint resolution, including the information set forth in paragraph 
(e) of this section. Appendix MS-2 of this part illustrates a statement 
satisfactory to the Secretary.
    (4) Notices of Transfer; sample notice. Sample language that may be 
used to comply with the requirements of paragraph (d) of this section is 
set out in appendix MS-2 of this part. Minor modifications to the sample 
language may be made to meet the particular circumstances of the 
servicer, but the substance of the sample language shall not be omitted 
or substantially altered.
    (5) Consumer protection during transfer of servicing. During the 60-
day period beginning on the effective date of transfer of the servicing 
of any mortgage servicing loan, if the transferor servicer (rather than 
the transferee servicer that should properly receive payment on the 
loan) receives payment on or before the applicable due date (including 
any grace period allowed under the loan documents), a late fee may not 
be imposed on the borrower with respect to that payment and the payment 
may not be treated as late for any other purposes.
    (e) Duty of loan servicer to respond to borrower inquiries--(1) 
Notice of receipt of inquiry. Within 20 business days of a servicer of a 
mortgage servicing loan receiving a qualified written request from the 
borrower for information relating to the servicing of the loan, the 
servicer shall provide to the borrower a written response acknowledging 
receipt of the qualified written response. This requirement shall not 
apply if the action requested by the borrower is taken within that 
period and the borrower is notified of that action in accordance with 
the paragraph (f)(3) of this section. By notice either included in the 
Notice of Transfer or separately delivered by first-class mail, postage 
prepaid, a servicer may establish a separate and exclusive office and 
address for the receipt and handling of qualified written requests.
    (2) Qualified written request; defined. (i) For purposes of 
paragraph (e) of this section, a qualified written request means a 
written correspondence (other than notice on a payment coupon or other 
payment medium supplied by the servicer) that includes, or otherwise 
enables the servicer to identify, the name and account of the borrower, 
and includes a statement of the reasons that the borrower believes the 
account is in error, if applicable, or that provides sufficient detail 
to the servicer regarding information relating to the servicing of the 
loan sought by the borrower.
    (ii) A written request does not constitute a qualified written 
request if it is delivered to a servicer more than 1 year after either 
the date of transfer of servicing or the date that the mortgage 
servicing loan amount was paid in full, whichever date is applicable.
    (3) Action with respect to the inquiry. Not later than 60 business 
days after receiving a qualified written request from the borrower, and, 
if applicable, before taking any action with respect to the inquiry, the 
servicer shall:
    (i) Make appropriate corrections in the account of the borrower, 
including the crediting of any late charges or penalties, and transmit 
to the borrower a written notification of the correction. This written 
notification shall include the name and telephone number of a 
representative of the servicer who can provide assistance to the 
borrower; or
    (ii) After conducting an investigation, provide the borrower with a 
written explanation or clarification that includes:
    (A) To the extent applicable, a statement of the servicer's reasons 
for concluding the account is correct and the name and telephone number 
of an employee, office, or department of the servicer that can provide 
assistance to the borrower; or
    (B) Information requested by the borrower, or an explanation of why 
the information requested is unavailable or cannot be obtained by the 
servicer, and the name and telephone number of an employee, office, or 
department of the servicer that can provide assistance to the borrower.

[[Page 393]]

    (4) Protection of credit rating. (i) During the 60-business day 
period beginning on the date of the servicer receiving from a borrower a 
qualified written request relating to a dispute on the borrower's 
payments, a servicer may not provide adverse information regarding any 
payment that is the subject of the qualified written request to any 
consumer reporting agency (as that term is defined in section 603 of the 
Fair Credit Reporting Act, 15 U.S.C. 1681a).
    (ii) In accordance with section 17 of RESPA (12 U.S.C. 2615), the 
protection of credit rating provision of paragraph (e)(4)(i) of this 
section does not impede a lender or servicer from pursuing any of its 
remedies, including initiating foreclosure, allowed by the underlying 
mortgage loan instruments.
    (f) Damages and costs. (1) Whoever fails to comply with any 
provision of this section shall be liable to the borrower for each 
failure in the following amounts:
    (i) Individuals. In the case of any action by an individual, an 
amount equal to the sum of any actual damages sustained by the 
individual as the result of the failure and, when there is a pattern or 
practice of noncompliance with the requirements of this section, any 
additional damages in an amount not to exceed $1,000.
    (ii) Class actions. In the case of a class action, an amount equal 
to the sum of any actual damages to each borrower in the class that 
result from the failure and, when there is a pattern or practice of 
noncompliance with the requirements of this section, any additional 
damages in an amount not greater than $1,000 for each class member. 
However, the total amount of any additional damages in a class action 
may not exceed the lesser of Sec. 500,000 or 1 percent of the net worth 
of the servicer.
    (iii) Costs. In addition, in the case of any successful action under 
paragraph (f) of this section, the costs of the action and any 
reasonable attorneys' fees incurred in connection with the action.
    (2) Nonliability. A transferor or transferee servicer shall not be 
liable for any failure to comply with the requirements of this section, 
if within 60 days after discovering an error (whether pursuant to a 
final written examination report or the servicer's own procedures) and 
before commencement of an action under this section and the receipt of 
written notice of the error from the borrower, the servicer notifies the 
person concerned of the error and makes whatever adjustments are 
necessary in the appropriate account to ensure that the person will not 
be required to pay an amount in excess of any amount that the person 
otherwise would have paid.
    (g) Timely payments by servicer. If the terms of any mortgage 
servicing loan require the borrower to make payments to the servicer of 
the loan for deposit into an escrow account for the purpose of assuring 
payment of taxes, insurance premiums, and other charges with respect to 
the mortgaged property, the servicer shall make payments from the escrow 
account in a timely manner for the taxes, insurance premiums, and other 
charges as the payments become due, as governed by the requirements in 
Sec. 3500.17(k).
    (h) Preemption of State laws. A lender who makes a mortgage 
servicing loan or a servicer shall be considered to have complied with 
the provisions of any State law or regulation requiring notice to a 
borrower at the time of application for a loan or transfer of servicing 
of a loan if the lender or servicer complies with the requirements of 
this section. Any State law requiring notice to the borrower at the time 
of application or at the time of transfer of servicing of the loan is 
preempted, and there shall be no additional borrower disclosure 
requirements. Provisions of State law, such as those requiring 
additional notices to insurance companies or taxing authorities, are not 
preempted by section 6 of RESPA or this section, and this additional 
information may be added to a notice prepared under this section, if the 
procedure is allowable under State law.

(Approved by the Office of Management and Budget under control number 
2502-0458)

[61 FR 13233, Mar. 26, 1996, as amended at 73 FR 68242, Nov. 17, 2008]

[[Page 394]]



Sec. 3500.22  Severability.

    If any particular provision of this part or the application of any 
particular provision to any person or circumstance is held invalid, the 
remainder of this part and the application of such provisions to other 
persons or circumstances shall not be affected by such holding.

[73 FR 68242, Nov. 17, 2008]



Sec. 3500.23  ESIGN applicability.

    The Electronic Signatures in Global and National Commerce Act 
(``ESIGN''), 15 U.S.C. 7001-7031, shall apply to this part.

[73 FR 68243, Nov. 17, 2008]



Sec. Appendix A to Part 3500--Instructions for Completing HUD-1 and HUD-
      1a Settlement Statements; Sample HUD-1 and HUD-1a Statements

    The following are instructions for completing the HUD-1 settlement 
statement, required under section 4 of RESPA and 24 CFR part 3500 
(Regulation X) of the Department of Housing and Urban Development 
regulations. This form is to be used as a statement of actual charges 
and adjustments paid by the borrower and the seller, to be given to the 
parties in connection with the settlement. The instructions for 
completion of the HUD-1 are primarily for the benefit of the settlement 
agents who prepare the statements and need not be transmitted to the 
parties as an integral part of the HUD-1. There is no objection to the 
use of the HUD-1 in transactions in which its use is not legally 
required. Refer to the definitions section of HUD's regulations (24 CFR 
3500.2) for specific definitions of many of the terms that are used in 
these instructions.

                          General Instructions

    Information and amounts may be filled in by typewriter, hand 
printing, computer printing, or any other method producing clear and 
legible results. Refer to HUD's regulations (Regulation X) regarding 
rules applicable to reproduction of the HUD-1 for the purpose of 
including customary recitals and information used locally in 
settlements; for example, a breakdown of payoff figures, a breakdown of 
the Borrower's total monthly mortgage payments, check disbursements, a 
statement indicating receipt of funds, applicable special stipulations 
between Borrower and Seller, and the date funds are transferred.
    The settlement agent shall complete the HUD-1 to itemize all charges 
imposed upon the Borrower and the Seller by the loan originator and all 
sales commissions, whether to be paid at settlement or outside of 
settlement, and any other charges which either the Borrower or the 
Seller will pay at settlement. Charges for loan origination and title 
services should not be itemized except as provided in these 
instructions. For each separately identified settlement service in 
connection with the transaction, the name of the person ultimately 
receiving the payment must be shown together with the total amount paid 
to such person. Items paid to and retained by a loan originator are 
disclosed as required in the instructions for lines in the 800-series of 
the HUD-1 (and for per diem interest, in the 900-series of the HUD-1).
    As a general rule, charges that are paid for by the seller must be 
shown in the seller's column on page 2 of the HUD-1 (unless paid outside 
closing), and charges that are paid for by the borrower must be shown in 
the borrower's column (unless paid outside closing). However, in order 
to promote comparability between the charges on the GFE and the charges 
on the HUD-1, if a seller pays for a charge that was included on the 
GFE, the charge should be listed in the borrower's column on page 2 of 
the HUD-1. That charge should also be offset by listing a credit in that 
amount to the borrower on lines 204-209 on page 1 of the HUD-1, and by a 
charge to the seller in lines 506-509 on page 1 of the HUD-1. If a loan 
originator (other than for no-cost loans), real estate agent, other 
settlement service provider, or other person pays for a charge that was 
included on the GFE, the charge should be listed in the borrower's 
column on page 2 of the HUD-1, with an offsetting credit reported on 
page 1 of the HUD-1, identifying the party paying the charge.
    Charges paid outside of settlement by the borrower, seller, loan 
originator, real estate agent, or any other person, must be included on 
the HUD-1 but marked ``P.O.C.'' for ``Paid Outside of Closing'' 
(settlement) and must not be included in computing totals. However, 
indirect payments from a lender to a mortgage broker may not be 
disclosed as P.O.C., and must be included as a credit on Line 802. 
P.O.C. items must not be placed in the Borrower or Seller columns, but 
rather on the appropriate line outside the columns. The settlement agent 
must indicate whether P.O.C. items are paid for by the Borrower, Seller, 
or some other party by marking the items paid for by whoever made the 
payment as ``P.O.C.'' with the party making the payment identified in 
parentheses, such as ``P.O.C. (borrower)'' or ``P.O.C. (seller)''.
    In the case of ``no cost'' loans where ``no cost'' encompasses third 
party fees as well as the upfront payment to the loan originator,

[[Page 395]]

the third party services covered by the ``no cost'' provisions must be 
itemized and listed in the borrower's column on the HUD-1/1A with the 
charge for the third party service. These itemized charges must be 
offset with a negative adjusted origination charge on Line 803 and 
recorded in the columns.
    Blank lines are provided in section L for any additional settlement 
charges. Blank lines are also provided for additional insertions in 
sections J and K. The names of the recipients of the settlement charges 
in section L and the names of the recipients of adjustments described in 
section J or K should be included on the blank lines.
    Lines and columns in section J which relate to the Borrower's 
transaction may be left blank on the copy of the HUD-1 which will be 
furnished to the Seller. Lines and columns in section K which relate to 
the Seller's transaction may be left blank on the copy of the HUD-1 
which will be furnished to the Borrower.

                         Line Item Instructions

    Instructions for completing the individual items on the HUD-1 
follow.
    Section A. This section requires no entry of information.
    Section B. Check appropriate loan type and complete the remaining 
items as applicable.
    Section C. This section provides a notice regarding settlement costs 
and requires no additional entry of information.
    Sections D and E. Fill in the names and current mailing addresses 
and zip codes of the Borrower and the Seller. Where there is more than 
one Borrower or Seller, the name and address of each one is required. 
Use a supplementary page if needed to list multiple Borrowers or 
Sellers.
    Section F. Fill in the name, current mailing address and zip code of 
the Lender.
    Section G. The street address of the property being sold should be 
listed. If there is no street address, a brief legal description or 
other location of the property should be inserted. In all cases give the 
zip code of the property.
    Section H. Fill in name, address, zip code and telephone number of 
settlement agent, and address and zip code of ``place of settlement.''
    Section I. Fill in date of settlement.
    Section J. Summary of Borrower's Transaction. Line 101 is for the 
contract sales price of the property being sold, excluding the price of 
any items of tangible personal property if Borrower and Seller have 
agreed to a separate price for such items.
    Line 102 is for the sales price of any items of tangible personal 
property excluded from Line 101. Personal property could include such 
items as carpets, drapes, stoves, refrigerators, etc. What constitutes 
personal property varies from state to state. Manufactured homes are not 
considered personal property for this purpose.
    Line 103 is used to record the total charges to Borrower detailed in 
Section L and totaled on Line 1400.
    Lines 104 and 105 are for additional amounts owed by the Borrower, 
such as charges that were not listed on the GFE or items paid by the 
Seller prior to settlement but reimbursed by the Borrower at settlement. 
For example, the balance in the Seller's reserve account held in 
connection with an existing loan, if assigned to the Borrower in a loan 
assumption case, will be entered here. These lines will also be used 
when a tenant in the property being sold has not yet paid the rent, 
which the Borrower will collect, for a period of time prior to the 
settlement. The lines will also be used to indicate the treatment for 
any tenant security deposit. The Seller will be credited on Lines 404-
405.
    Lines 106 through 112 are for items which the Seller had paid in 
advance, and for which the Borrower must therefore reimburse the Seller. 
Examples of items for which adjustments will be made may include taxes 
and assessments paid in advance for an entire year or other period, when 
settlement occurs prior to the expiration of the year or other period 
for which they were paid. Additional examples include flood and hazard 
insurance premiums, if the Borrower is being substituted as an insured 
under the same policy; mortgage insurance in loan assumption cases; 
planned unit development or condominium association assessments paid in 
advance; fuel or other supplies on hand, purchased by the Seller, which 
the Borrower will use when Borrower takes possession of the property; 
and ground rent paid in advance.
    Line 120 is for the total of Lines 101 through 112.
    Line 201 is for any amount paid against the sales price prior to 
settlement.
    Line 202 is for the amount of the new loan made by the Lender when a 
loan to finance construction of a new structure constructed for sale is 
used as or converted to a loan to finance purchase. Line 202 should also 
be used for the amount of the first user loan, when a loan to purchase a 
manufactured home for resale is converted to a loan to finance purchase 
by the first user. For other loans covered by 24 CFR part 3500 
(Regulation X) which finance construction of a new structure or purchase 
of a manufactured home, list the sales price of the land on Line 104, 
the construction cost or purchase price of manufactured home on Line 105 
(Line 101 would be left blank in this instance) and amount of the loan 
on Line 202. The remainder of the form should be completed taking

[[Page 396]]

into account adjustments and charges related to the temporary financing 
and permanent financing and which are known at the date of settlement.
    Line 203 is used for cases in which the Borrower is assuming or 
taking title subject to an existing loan or lien on the property.
    Lines 204-209 are used for other items paid by or on behalf of the 
Borrower. Lines 204-209 should be used to indicate any financing 
arrangements or other new loan not listed in Line 202. For example, if 
the Borrower is using a second mortgage or note to finance part of the 
purchase price, whether from the same lender, another lender or the 
Seller, insert the principal amount of the loan with a brief explanation 
on Lines 204-209. Lines 204-209 should also be used where the Borrower 
receives a credit from the Seller for closing costs, including seller-
paid GFE charges. They may also be used in cases in which a Seller 
(typically a builder) is making an ``allowance'' to the Borrower for 
items that the Borrower is to purchase separately.
    Lines 210 through 219 are for items which have not yet been paid, 
and which the Borrower is expected to pay, but which are attributable in 
part to a period of time prior to the settlement. In jurisdictions in 
which taxes are paid late in the tax year, most cases will show the 
proration of taxes in these lines. Other examples include utilities used 
but not paid for by the Seller, rent collected in advance by the Seller 
from a tenant for a period extending beyond the settlement date, and 
interest on loan assumptions.
    Line 220 is for the total of Lines 201 through 219.
    Lines 301 and 302 are summary lines for the Borrower. Enter total in 
Line 120 on Line 301. Enter total in Line 220 on Line 302.
    Line 303 must indicate either the cash required from the Borrower at 
settlement (the usual case in a purchase transaction), or cash payable 
to the Borrower at settlement (if, for example, the Borrower's earnest 
money exceeds the Borrower's cash obligations in the transaction or 
there is a cash-out refinance). Subtract Line 302 from Line 301 and 
enter the amount of cash due to or from the Borrower at settlement on 
Line 303. The appropriate box should be checked. If the Borrower's 
earnest money is applied toward the charge for a settlement service, the 
amount so applied should not be included on Line 303 but instead should 
be shown on the appropriate line for the settlement service, marked 
``P.O.C. (Borrower)'', and must not be included in computing totals.
    Section K. Summary of Seller's Transaction. Instructions for the use 
of Lines 101 and 102 and 104-112 above, apply also to Lines 401-412. 
Line 420 is for the total of Lines 401 through 412.
    Line 501 is used if the Seller's real estate broker or other party 
who is not the settlement agent has received and holds a deposit against 
the sales price (earnest money) which exceeds the fee or commission owed 
to that party. If that party will render the excess deposit directly to 
the Seller, rather than through the settlement agent, the amount of 
excess deposit should be entered on Line 501 and the amount of the total 
deposit (including commissions) should be entered on Line 201.
    Line 502 is used to record the total charges to the Seller detailed 
in section L and totaled on Line 1400.
    Line 503 is used if the Borrower is assuming or taking title subject 
to existing liens which are to be deducted from sales price.
    Lines 504 and 505 are used for the amounts (including any accrued 
interest) of any first and/or second loans which will be paid as part of 
the settlement.
    Line 506 is used for deposits paid by the Borrower to the Seller or 
other party who is not the settlement agent. Enter the amount of the 
deposit in Line 201 on Line 506 unless Line 501 is used or the party who 
is not the settlement agent transfers all or part of the deposit to the 
settlement agent, in which case the settlement agent will note in 
parentheses on Line 507 the amount of the deposit that is being 
disbursed as proceeds and enter in the column for Line 506 the amount 
retained by the above-described party for settlement services. If the 
settlement agent holds the deposit, insert a note in Line 507 which 
indicates that the deposit is being disbursed as proceeds.
    Lines 506 through 509 may be used to list additional liens which 
must be paid off through the settlement to clear title to the property. 
Other Seller obligations should be shown on Lines 506-509, including 
charges that were disclosed on the GFE but that are actually being paid 
for by the Seller. These Lines may also be used to indicate funds to be 
held by the settlement agent for the payment of either repairs, or 
water, fuel, or other utility bills that cannot be prorated between the 
parties at settlement because the amounts used by the Seller prior to 
settlement are not yet known. Subsequent disclosure of the actual amount 
of these post-settlement items to be paid from settlement funds is 
optional. Any amounts entered on Lines 204-209 including Seller 
financing arrangements should also be entered on Lines 506-509.
    Instructions for the use of Lines 510 through 519 are the same as 
those for Lines 210 to 219 above.
    Line 520 is for the total of Lines 501 through 519.
    Lines 601 and 602 are summary lines for the Seller. Enter the total 
in Line 420 on Line 601. Enter the total in Line 520 on Line 602.
    Line 603 must indicate either the cash required to be paid to the 
Seller at settlement (the usual case in a purchase transaction), or the 
cash payable by the Seller at settlement.

[[Page 397]]

Subtract Line 602 from Line 601 and enter the amount of cash due to or 
from the Seller at settlement on Line 603. The appropriate box should be 
checked.
    Section L. Settlement Charges.
    Line 700 is used to enter the sales commission charged by the sales 
agent or real estate broker.
    Lines 701-702 are to be used to state the split of the commission 
where the settlement agent disburses portions of the commission to two 
or more sales agents or real estate brokers.
    Line 703 is used to enter the amount of sales commission disbursed 
at settlement. If the sales agent or real estate broker is retaining a 
part of the deposit against the sales price (earnest money) to apply 
towards the sales agent's or real estate broker's commission, include in 
Line 703 only that part of the commission being disbursed at settlement 
and insert a note on Line 704 indicating the amount the sales agent or 
real estate broker is retaining as a ``P.O.C.'' item.
    Line 704 may be used for additional charges made by the sales agent 
or real estate broker, or for a sales commission charged to the 
Borrower, which will be disbursed by the settlement agent.
    Line 801 is used to record ``Our origination charge,'' which 
includes all charges received by the loan originator, except any charge 
for the specific interest rate chosen (points). This number must not be 
listed in either the buyer's or seller's column. The amount shown in 
Line 801 must include any amounts received for origination services, 
including administrative and processing services, performed by or on 
behalf of the loan originator.
    Line 802 is used to record ``Your credit or charge (points) for the 
specific interest rate chosen,'' which states the charge or credit 
adjustment as applied to ``Our origination charge,'' if applicable. This 
number must not be listed in either column or shown on page one of the 
HUD-1.
    For a mortgage broker originating a loan in its own name, the amount 
shown on Line 802 will be the difference between the initial loan amount 
and the total payment to the mortgage broker from the lender. The total 
payment to the mortgage broker will be the sum of the price paid for the 
loan by the lender and any other payments to the mortgage broker from 
the lender, including any payments based on the loan amount or loan 
terms, and any flat rate payments. For a mortgage broker originating a 
loan in another entity's name, the amount shown on Line 802 will be the 
sum of all payments to the mortgage broker from the lender, including 
any payments based on the loan amount or loan terms, and any flat rate 
payments.
    In either case, when the amount paid to the mortgage broker exceeds 
the initial loan amount, there is a credit to the borrower and it is 
entered as a negative amount. When the initial loan amount exceeds the 
amount paid to the mortgage broker, there is a charge to the borrower 
and it is entered as a positive amount. For a lender, the amount shown 
on Line 802 may include any credit or charge (points) to the Borrower.
    Line 803 is used to record ``Your adjusted origination charges,'' 
which states the net amount of the loan origination charges, the sum of 
the amounts shown in Lines 801 and 802. This amount must be listed in 
the columns as either a positive number (for example, where the 
origination charge shown in Line 801 exceeds any credit for the interest 
rate shown in Line 802 or where there is an origination charge in Line 
801 and a charge for the interest rate (points) is shown on Line 802) or 
as a negative number (for example, where the credit for the interest 
rate shown in Line 802 exceeds the origination charges shown in Line 
801).
    In the case of ``no cost'' loans, where ``no cost'' refers only to 
the loan originator's fees, the amounts shown in Lines 801 and 802 
should offset, so that the charge shown on Line 803 is zero. Where ``no 
cost'' includes third party settlement services, the credit shown in 
Line 802 will more than offset the amount shown in Line 801. The amount 
shown in Line 803 will be a negative number to offset the settlement 
charges paid indirectly through the loan originator.
    Lines 804-808 may be used to record each of the ``Required services 
that we select.'' Each settlement service provider must be identified by 
name and the amount paid recorded either inside the columns or as paid 
to the provider outside closing (``P.O.C.''), as described in the 
General Instructions.
    Line 804 is used to record the appraisal fee.
    Line 805 is used to record the fee for all credit reports.
    Line 806 is used to record the fee for any tax service.
    Line 807 is used to record any flood certification fee.
    Lines 808 and additional sequentially numbered lines, as needed, are 
used to record other third party services required by the loan 
originator. These Lines may also be used to record other required 
disclosures from the loan originator. Any such disclosures must be 
listed outside the columns.
    Lines 901-904. This series is used to record the items which the 
Lender requires to be paid at the time of settlement, but which are not 
necessarily paid to the lender (e.g., FHA mortgage insurance premium), 
other than reserves collected by the Lender and recorded in the 1000-
series.
    Line 901 is used if interest is collected at settlement for a part 
of a month or other period between settlement and the date from which 
interest will be collected with the first regular monthly payment. Enter 
that amount here and include the per diem

[[Page 398]]

charges. If such interest is not collected until the first regular 
monthly payment, no entry should be made on Line 901.
    Line 902 is used for mortgage insurance premiums due and payable at 
settlement, including any monthly amounts due at settlement and any 
upfront mortgage insurance premium, but not including any reserves 
collected by the Lender and recorded in the 1000-series. If a lump sum 
mortgage insurance premium paid at settlement is included on Line 902, a 
note should indicate that the premium is for the life of the loan.
    Line 903 is used for homeowner's insurance premiums that the Lender 
requires to be paid at the time of settlement, except reserves collected 
by the Lender and recorded in the 1000-series.
    Lines 904 and additional sequentially numbered lines are used to 
list additional items required by the Lender (except for reserves 
collected by the Lender and recorded in the 1000-series), including 
premiums for flood or other insurance. These lines are also used to list 
amounts paid at settlement for insurance not required by the Lender.
    Lines 1000-1007. This series is used for amounts collected by the 
Lender from the Borrower and held in an account for the future payment 
of the obligations listed as they fall due. Include the time period 
(number of months) and the monthly assessment. In many jurisdictions 
this is referred to as an ``escrow'', ``impound'', or ``trust'' account. 
In addition to the property taxes and insurance listed, some Lenders may 
require reserves for flood insurance, condominium owners' association 
assessments, etc. The amount in line 1001 must be listed in the columns, 
and the itemizations in lines 1002 through 1007 must be listed outside 
the columns.
    After itemizing individual deposits in the 1000 series, the servicer 
shall make an adjustment based on aggregate accounting. This adjustment 
equals the difference between the deposit required under aggregate 
accounting and the sum of the itemized deposits. The computation steps 
for aggregate accounting are set out in 24 CFR Sec. 3500.17(d). The 
adjustment will always be a negative number or zero (-0-), except for 
amounts due to rounding. The settlement agent shall enter the aggregate 
adjustment amount outside the columns on a final line of the 1000 series 
of the HUD-1 or HUD-1A statement. Appendix E to this part sets out an 
example of aggregate analysis.
    Lines 1100-1108. This series covers title charges and charges by 
attorneys and closing or settlement agents. The title charges include a 
variety of services performed by title companies or others, and include 
fees directly related to the transfer of title (title examination, title 
search, document preparation), fees for title insurance, and fees for 
conducting the closing. The legal charges include fees for attorneys 
representing the lender, seller, or borrower, and any attorney preparing 
title work. The series also includes any settlement, notary, and 
delivery fees related to the services covered in this series. 
Disbursements to third parties must be broken out in the appropriate 
lines or in blank lines in the series, and amounts paid to these third 
parties must be shown outside of the columns if included in Line 1101. 
Charges not included in Line 1101 must be listed in the columns.
    Line 1101 is used to record the total for the category of ``Title 
services and lender's title insurance.'' This amount must be listed in 
the columns.
    Line 1102 is used to record the settlement or closing fee.
    Line 1103 is used to record the charges for the owner's title 
insurance and related endorsements. This amount must be listed in the 
columns.
    Line 1104 is used to record the lender's title insurance premium and 
related endorsements.
    Line 1105 is used to record the amount of the lender's title policy 
limit. This amount is recorded outside of the columns.
    Line 1106 is used to record the amount of the owner's title policy 
limit. This amount is recorded outside of the columns.
    Line 1107 is used to record the amount of the total title insurance 
premium, including endorsements, that is retained by the title agent. 
This amount is recorded outside of the columns.
    Line 1108 used to record the amount of the total title insurance 
premium, including endorsements, that is retained by the title 
underwriter. This amount is recorded outside of the columns.
    Additional sequentially numbered lines in the 1100-series may be 
used to itemize title charges paid to other third parties, as identified 
by name and type of service provided.
    Lines 1200-1206. This series covers government recording and 
transfer charges. Charges paid by the borrower must be listed in the 
columns as described for lines 1201 and 1203, with itemizations shown 
outside the columns. Any amounts that are charged to the seller and that 
were not included on the Good Faith Estimate must be listed in the 
columns.
    Line 1201 is used to record the total ``Government recording 
charges,'' and the amount must be listed in the columns.
    Line 1202 is used to record, outside of the columns, the itemized 
recording charges.
    Line 1203 is used to record the transfer taxes, and the amount must 
be listed in the columns.
    Line 1204 is used to record, outside of the columns, the amounts for 
local transfer taxes and stamps.

[[Page 399]]

    Line 1205 is used to record, outside of the columns, the amounts for 
State transfer taxes and stamps.
    Line 1206 and additional sequentially numbered lines may be used to 
record specific itemized third party charges for government recording 
and transfer services, but the amounts must be listed outside the 
columns.
    Line 1301 and additional sequentially numbered lines must be used to 
record required services that the borrower can shop for, such as fees 
for survey, pest inspection, or other similar inspections. These lines 
may also be used to record additional itemized settlement charges that 
are not included in a specific category, such as fees for structural and 
environmental inspections; pre-sale inspections of heating, plumbing or 
electrical equipment; or insurance or warranty coverage. The amounts 
must be listed in either the borrower's or seller's column.
    Line 1400 must state the total settlement charges as calculated by 
adding the amounts within each column.

                                 Page 3

      Comparison of Good Faith Estimate (GFE) and HUD-1/1A Charges

    The HUD-1/1-A is a statement of actual charges and adjustments. The 
comparison chart on page 3 of the HUD-1 must be prepared using the exact 
information and amounts for the services that were purchased or provided 
as part of the transaction, as that information and those amounts are 
shown on the GFE and in the HUD-1. If a service that was listed on the 
GFE was not obtained in connection with the transaction, pages 1 and 2 
of the HUD-1 should not include any amount for that service, and the 
estimate on the GFE of the charge for the service should not be included 
in any amounts shown on the comparison chart on Page 3 of the HUD-1. The 
comparison chart is comprised of three sections: ``Charges That Cannot 
Increase'', ``Charges That Cannot Increase More Than 10%'', and 
``Charges That Can Change''.
    ``Charges That Cannot Increase More Than 10%''. A description of 
each charge included in Blocks 3 and 7 on the borrower's GFE must be 
entered on separate lines in this section, with the amount shown on the 
borrower's GFE for each charge entered in the corresponding line in the 
Good Faith Estimate column. For each charge included in Blocks 4, 5 and 
6 on the borrower's GFE for which the loan originator selected the 
provider or for which the borrower selected a provider identified by the 
loan originator, a description must be entered on a separate line in 
this section, with the amount shown on the borrower's GFE for each 
charge entered in the corresponding line in the Good Faith Estimate 
column. The loan originator must identify any third party settlement 
services for which the borrower selected a provider other than one 
identified by the loan originator so that the settlement agent can 
include those charges in the appropriate category. Additional lines may 
be added if necessary. The amounts shown on the HUD-1/1A for each line 
must be entered in the HUD-1/1A column next to the corresponding charge 
from the GFE, along with the appropriate HUD-1/1A line number. The HUD-
1/1A column must include any amounts shown on page 2 of the HUD-1 in the 
column as paid for by the borrower, plus any amounts that are shown as 
P.O.C. by or on behalf of the borrower.
    The amounts shown in the Good Faith Estimate and HUD-1/1A columns 
for this section must be separately totaled and entered in the 
designated line. If the total for the HUD-1/1A column is greater than 
the total for the Good Faith Estimate column, then the amount of the 
increase must be entered both as a dollar amount and as a percentage 
increase in the appropriate line.
    ``Charges That Can Change''. The amounts shown in Blocks 9, 10 and 
11 on the borrower's GFE must be entered in the appropriate line in the 
Good Faith Estimate column. Any third party settlement services for 
which the borrower selected a provider other than one identified by the 
loan originator must also be included in this section. The amounts shown 
on the HUD-1/1A for each charge in this section must be entered in the 
corresponding line in the HUD-1/1A column, along with the appropriate 
HUD-1/1A line number. The HUD-1/1A column must include any amounts shown 
on page 2 of the HUD-1 in the column as paid for by the borrower, plus 
any amounts that are shown as P.O.C. by or on behalf of the borrower. 
Additional lines may be added if necessary.

                               Loan Terms

    This section must be completed in accordance with the information 
and instructions provided by the lender. The lender must provide this 
information in a format that permits the settlement agent to simply 
enter the necessary information in the appropriate spaces, without the 
settlement agent having to refer to the loan documents themselves.

                   Instructions for Completing HUD-1A

    Note: The HUD-1A is an optional form that may be used for 
refinancing and subordinate-lien federally related mortgage loans, as 
well as for any other one-party transaction that does not involve the 
transfer of title to residential real property. The HUD-1 form may also 
be used for such transactions, by utilizing the borrower's side of the 
HUD-1 and following the relevant parts of the instructions as set forth 
above. The use of either the HUD-1 or HUD-1A is not mandatory for open-
end lines of credit

[[Page 400]]

(home-equity plans), as long as the provisions of Regulation Z are 
followed.

                               Background

    The HUD-1A settlement statement is to be used as a statement of 
actual charges and adjustments to be given to the borrower at 
settlement, as defined in this part. The instructions for completion of 
the HUD-1A are for the benefit of the settlement agent who prepares the 
statement; the instructions are not a part of the statement and need not 
be transmitted to the borrower. There is no objection to using the HUD-
1A in transactions in which it is not required, and its use in open-end 
lines of credit transactions (home-equity plans) is encouraged. It may 
not be used as a substitute for a HUD-1 in any transaction that has a 
seller.
    Refer to the ``definitions'' section (Sec. 3500.2) of 24 CFR part 
3500 (Regulation X) for specific definitions of terms used in these 
instructions.

                          General Instructions

    Information and amounts may be filled in by typewriter, hand 
printing, computer printing, or any other method producing clear and 
legible results. Refer to 24 CFR 3500.9 regarding rules for reproduction 
of the HUD-1A. Additional pages may be attached to the HUD-1A for the 
inclusion of customary recitals and information used locally for 
settlements or if there are insufficient lines on the HUD-1A. The 
settlement agent shall complete the HUD-1A in accordance with the 
instructions for the HUD-1 to the extent possible, including the 
instructions for disclosing items paid outside closing and for no cost 
loans.
    Blank lines are provided in Section L for any additional settlement 
charges. Blank lines are also provided in Section M for recipients of 
all or portions of the loan proceeds. The names of the recipients of the 
settlement charges in Section L and the names of the recipients of the 
loan proceeds in Section M should be set forth on the blank lines.

                         Line-Item Instructions

                                 Page 1

    The identification information at the top of the HUD-1A should be 
completed as follows:
    The borrower's name and address is entered in the space provided. If 
the property securing the loan is different from the borrower's address, 
the address or other location information on the property should be 
entered in the space provided. The loan number is the lender's 
identification number for the loan. The settlement date is the date of 
settlement in accordance with 24 CFR 3500.2, not the end of any 
applicable rescission period. The name and address of the lender should 
be entered in the space provided.
    Section L. Settlement Charges. This section of the HUD-1A is similar 
to Section L of the HUD-1, with minor changes or omissions, including 
deletion of lines 700 through 704, relating to real estate broker 
commissions. The instructions for Section L in the HUD-1, should be 
followed insofar as possible. Inapplicable charges should be ignored, as 
should any instructions regarding seller items.
    Line 1400 in the HUD-1A is for the total settlement charges charged 
to the borrower. Enter this total on line 1601. This total should 
include Section L amounts from additional pages, if any are attached to 
this HUD-1A.
    Section M. Disbursement to Others. This section is used to list 
payees, other than the borrower, of all or portions of the loan proceeds 
(including the lender, if the loan is paying off a prior loan made by 
the same lender), when the payee will be paid directly out of the 
settlement proceeds. It is not used to list payees of settlement 
charges, nor to list funds disbursed directly to the borrower, even if 
the lender knows the borrower's intended use of the funds.
    For example, in a refinancing transaction, the loan proceeds are 
used to pay off an existing loan. The name of the lender for the loan 
being paid off and the pay-off balance would be entered in Section M. In 
a home improvement transaction when the proceeds are to be paid to the 
home improvement contractor, the name of the contractor and the amount 
paid to the contractor would be entered in Section M. In a consolidation 
loan, or when part of the loan proceeds is used to pay off other 
creditors, the name of each creditor and the amount paid to that 
creditor would be entered in Section M. If the proceeds are to be given 
directly to the borrower and the borrower will use the proceeds to pay 
off existing obligations, this would not be reflected in Section M.
    Section N. Net Settlement. Line 1600 normally sets forth the 
principal amount of the loan as it appears on the related note for this 
loan. In the event this form is used for an open-ended home equity line 
whose approved amount is greater than the initial amount advanced at 
settlement, the amount shown on Line 1600 will be the loan amount 
advanced at settlement. Line 1601 is used for all settlement charges 
that both are included in the totals for lines 1400 and 1602, and are 
not financed as part of the principal amount of the loan. This is the 
amount normally received by the lender from the borrower at settlement, 
which would occur when some or all of the settlement charges were paid 
in cash by the borrower at settlement, instead of being financed as part 
of the principal amount of the loan. Failure to include any such amount 
in line 1601 will result in an

[[Page 401]]

error in the amount calculated on line 1604. Items paid outside of 
closing (P.O.C.) should not be included in Line 1601.
    Line 1602 is the total amount from line 1400.
    Line 1603 is the total amount from line 1520.
    Line 1604 is the amount disbursed to the borrower. This is 
determined by adding together the amounts for lines 1600 and 1601, and 
then subtracting any amounts listed on lines 1602 and 1603.

                                 Page 2

    This section of the HUD-1A is similar to page 3 of the HUD-1. The 
instructions for page 3 of the HUD-1, should be followed insofar as 
possible. The HUD-1/1A Column should include any amounts shown on page 1 
of the HUD-1A in the column as paid for by the borrower, plus any 
amounts that are shown as P.O.C. by the borrower. Inapplicable charges 
should be ignored.

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[73 FR 68243, Nov. 17, 2008, as amended at 76 FR 40616, July 11, 2011]



  Sec. Appendix B to Part 3500--Illustrations of Requirements of RESPA

    The following illustrations provide additional guidance on the 
meaning and coverage of the provisions of RESPA. Other provisions of 
Federal or State law may also be applicable to the practices and 
payments discussed in the following illustrations.
    1. Facts: A, a provider of settlement services, provides settlement 
services at abnormally low rates or at no charge at all to B, a builder, 
in connection with a subdivision being developed by B. B agrees to refer 
purchasers of the completed homes in the subdivision to A for the 
purchase of settlement services in connection with the sale of 
individual lots by B.
    Comments: The rendering of services by A to B at little or no charge 
constitutes a thing of value given by A to B in return for the referral 
of settlement services business and both A and B are in violation of 
section 8 of RESPA.
    2. Facts: B, a lender, encourages persons who receive federally-
related mortgage loans from it to employ A, an attorney, to perform 
title searches and related settlement services in connection with their 
transaction. B and A have an understanding that in return for the 
referral of this business A provides legal services to B or B's officers 
or employees at abnormally low rates or for no charge.
    Comments: Both A and B are in violation of section 8 of RESPA. 
Similarly, if an attorney gives a portion of his or her fees to another 
attorney, a lender, a real estate broker or any other provider of 
settlement services, who had referred prospective clients to the 
attorney, section 8 would be violated by both persons.
    3. Facts: A, a real estate broker, obtains all necessary licenses 
under state law to act as a title insurance agent. A refers individuals 
who are purchasing homes in transactions in which A participates as a 
broker to B, an unaffiliated title company, for the purchase of title 
insurance services. A performs minimal, if any, title services in 
connection with the issuance of the title insurance policy (such as 
placing an application with the title company). B pays A a commission 
(or A retains a portion of the title insurance premium) for the 
transactions or alternatively B receives a portion of the premium paid 
directly from the purchaser.
    Comments: The payment of a commission or portion of the title 
insurance premium by B to A, or receipt of a portion of the payment for 
title insurance under circumstances where no substantial services are 
being performed by A is a violation of section 8 of RESPA. It makes no 
difference whether the payment comes from B or the purchaser. The amount 
of the payment must bear a reasonable relationship to the services 
rendered. Here A really is being compensated for a referral of business 
to B.
    4. Facts: A is an attorney who, as a part of his legal 
representation of clients in residential real estate transactions, 
orders and reviews title insurance policies for his clients. A enters 
into a contract with B, a title company, to be an agent of B under a 
program set up by B. Under the agreement, A agrees to prepare and 
forward title insurance applications to B, to re-examine the preliminary 
title commitment for accuracy and if he chooses to attempt to clear 
exceptions to the title policy before closing. A agrees to assume 
liability for waiving certain exceptions to title, but never exercises 
this authority. B performs the necessary title search and examination 
work, determines insurability of title, prepares documents containing 
substantive information in title commitments, handles closings for A's 
clients and issues title policies. A receives a fee from his client for 
legal services and an additional fee for his title agent ``services'' 
from the client's title insurance premium to B.
    Comments: A and B are violating section 8 of RESPA. Here, A's 
clients are being double billed because the work A performs as a ``title 
agent'' is that which he already performs for his client in his capacity 
as an attorney. For A to receive a separate payment as a title agent, A 
must perform necessary core title work and may not contract out the 
work. To receive additional compensation as a title agent for this 
transaction, A must provide his client with core title agent services 
for which he assumes liability, and which includes, at a minimum, the 
evaluation of the title search to determine insurability of the title, 
and the issuance of a title commitment where customary, the clearance of 
underwriting objections, and the actual issuance of the policy or 
policies on behalf of the title company. A may not be compensated for 
the mere re-examination of work performed by B. Here, A is not 
performing these services and may not be compensated as a title agent 
under section 8(c)(1)(B). Referral fees or splits of fees may not be 
disguised as title agent commissions when the core title agent work is 
not performed. Further, because B created the program and gave A the 
opportunity to collect fees (a thing of value) in exchange for the 
referral of settlement service business, it has violated section 8 of 
RESPA.
    5. Facts: A, a ``mortgage originator,'' receives loan applications, 
funds the loans with its own money or with a wholesale line of credit 
for which A is liable, and closes the loans in A's own name. 
Subsequently, B, a mortgage lender, purchases the loans and compensates 
A for the value of the loans, as well as for any mortgage servicing 
rights.

[[Page 408]]

    Comments: Compensation for the sale of a mortgage loan and servicing 
rights constitutes a secondary market transaction, rather than a 
referral fee, and is beyond the scope of section 8 of RESPA. For 
purposes of section 8, in determining whether a bona fide transfer of 
the loan obligation has taken place, HUD examines the real source of 
funding, and the real interest of the named settlement lender.
    6. Facts. A, a credit reporting company, places a facsimile 
transmission machine (FAX) in the office of B, a mortgage lender, so 
that B can easily transmit requests for credit reports and A can 
respond. A supplies the FAX machine at no cost or at a reduced rental 
rate based on the number of credit reports ordered.
    Comments: Either situation violates section 8 of RESPA. The FAX 
machine is a thing of value that A provides in exchange for the referral 
of business from B. Copying machines, computer terminals, printers, or 
other like items which have general use to the recipient and which are 
given in exchange for referrals of business also violate RESPA.
    7. Facts: A, a real estate broker, refers title business to B, a 
company that is a licensed title agent for C, a title insurance company. 
A owns more than 1% of B. B performs the title search and examination, 
makes determinations of insurability, issues the commitment, clears 
underwriting objections, and issues a policy of title insurance on 
behalf of C, for which C pays B a commission. B pays annual dividends to 
its owners, including A, based on the relative amount of business each 
of its owners refers to B.
    Comments: The facts involve an affiliated business arrangement. The 
payments of a commission by C to B is not a violation of section 8 of 
RESPA if the amount of the commission constitutes reasonable 
compensation for the services performed by B for C. The payment of a 
dividend or the giving of any other thing of value by B to A that is 
based on the amount of business referred to B by A does not meet the 
affiliated business agreement exemption provisions and such actions 
violate section 8. Similarly, if the amount of stock held by A in B (or, 
if B were a partnership, the distribution of partnership profits by B to 
A) varies based on the amount of business referred or expected to be 
referred, or if B retained any funds for subsequent distribution to A 
where such funds were generally in proportion to the amount of business 
A referred to B relative to the amount referred by other owners such 
arrangements would violate section 8. The exemption for controlled 
business arrangements would not be available because the payments here 
would not be considered returns on ownership interests. Further, the 
required disclosure of the affiliated business arrangement and estimated 
charges have not been provided.
    8. Facts: Same as illustration 7, but B pays annual dividends in 
proportion to the amount of stock held by its owners, including A, and 
the distribution of annual dividends is not based on the amount of 
business referred or expected to be referred.
    Comments: If A and B meet the requirements of the affiliated 
business arrangement exemption there is not a violation of RESPA. Since 
the payment is a return on ownership interests, A and B will be exempt 
from section 8 if (1) A also did not require anyone to use the services 
of B, and (2) A disclosed its ownership interest in B on a separate 
disclosure form and provided an estimate of B's charges to each person 
referred by A to B (see appendix D of this part), and (3) B makes no 
payment (nor is there any other thing of value exchanged) to A other 
than dividends.
    9. Facts: A, a franchisor for franchised real estate brokers, owns 
B, a provider of settlement services. C, a franchisee of A, refers 
business to B.
    Comments: This is an affiliated business arrangement. A, B and C 
will all be exempt from section 8 if C discloses its franchise 
relationship with the owner of B on a separate disclosure form and 
provides an estimate of B's charges to each person referred to B (see 
appendix D of this part) and C does not require anyone to use B's 
services and A gives no thing a value to C under the franchise agreement 
(such as an adjusted level of franchise payment based on the referrals), 
and B makes no payments to A other than dividends representing a return 
on ownership interest (rather than, e.g., an adjusted level of payment 
being based on the referrals). Nor may B pay C anything of value for the 
referral.
    10. Facts: A is a real estate broker who refers business to its 
affiliate title company B. A makes all required written disclosures to 
the homebuyer of the arrangement and estimated charges and the homebuyer 
is not required to use B. B refers or contracts out business to C who 
does all the title work and splits the fee with B. B passes its fee to A 
in the form of dividends, a return on ownership interest.
    Comments: The relationship between A and B is an affiliated business 
arrangement. However, the affiliated business arrangement exemption does 
not provide exemption between an affiliated entity, B, and a third 
party, C. Here, B is a mere ``shell'' and provides no substantive 
services for its portion of the fee. The arrangement between B and C 
would be in violation of section 8(a) and (b). Even if B had an 
affiliate relationship with C, the required exemption criteria have not 
been met and the relationship would be subject to section 8.
    11. Facts: A, a mortgage lender is affiliated with B, a title 
company, and C, an escrow company and offers consumers a package of

[[Page 409]]

mortgage title and escrow services at a discount from the prices at 
which such services would be sold if purchased separately. Neither A, B, 
nor C, requires consumers to purchase the services of their sister 
companies and each company sells such services separately and as part of 
the package. A also pays its employees (i.e., loan officers, 
secretaries, etc.,) a bonus for each loan, title insurance or closing 
that A's employees generate for A, B, or C respectively. A pays such 
employee bonuses out of its own funds and receives no payments or 
reimbursements for such bonuses from B or C. At or before the time that 
customers are told by A or its employees about the services offered by B 
and C and/of the package of services that is available, the customers 
are provided with an affiliated business disclosure form.
    Comments: A's selling of a package of settlement services at a 
discount to a settlement service purchaser does not violate section 8 of 
RESPA. A's employees are making appropriate affiliated business 
disclosures and since the services are available separately and as part 
of a package, there is not ``required use'' of the additional services. 
A's payments of bonuses to its employees for the referral of business to 
A or A's affiliates, B and C, are exempt from section 8 under section 
3500.14(g)(1). However, if B or C reimbursed A for any bonuses that A 
paid to its employees for referring business to B or C, such 
reimbursements would violate section 8. Similarly, if B or C paid 
bonuses to A's employees directly for generating business for them, such 
payments would violate section 8.
    12. Facts: A, a real estate broker, is affiliated with B, a mortgage 
lender, and C, a title agency. A employs F to advise and assist any 
customers of A who have executed sales contracts regarding mortgage 
loans and title insurance. F collects and transmits (by computer, fax, 
mail, or other means) loan applications or other information to B and C 
for processing. A pays F a small salary and a bonus for every loan 
closed with B or title insurance issued with C. F furnishes the 
controlled business disclosure to consumers at the time of each 
referral. F receives no other compensation from the real estate or 
mortgage transaction and performs no settlement services in any 
transaction. At the end of each of A's fiscal years, M, a managerial 
employee of A, receives a $1,000 bonus if 20% of the consumers who 
purchase a home through A close a loan on the home with B and have the 
title issued by C. During the year, M acted as a real estate agent for 
his neighbor and received a real estate sales commission for selling his 
neighbor's home.
    Comments: Under Sec. 3500.14(g)(1), employers may pay their own 
bona fide employees for generating business for their employer (Sec. 
3500.14(g)(1)(vii)). Employers may also pay their own bona fide 
employees for generating business for their affiliate business entities 
(Sec. 3500.14(g)(1)(ix)), as long as the employees do not perform 
settlement services in any transaction and disclosure is made. This 
permits a company to employ a person whose primary function is to market 
the employer's or its affiliate's settlement services (frequently 
referred to as a Financial Services Representative, or ``FSR''). An FSR 
may not perform any settlement services including, for example, those 
services of a real estate agent, loan processor, settlement agent, 
attorney, or mortgage broker. In accordance with the terms of the 
exemption at Sec. 3500.14(g)(1)(ix), the marketing of a settlement 
service or product of an affiliated entity, including the collection and 
conveyance of information or the taking of an application or order for 
the services of an affiliated entity, does not constitute the 
performance of a settlement service. Under the exemption, marketing of a 
settlement service or product also may include incidental communications 
with the consumer after the application or order, such as providing the 
consumer with information about the status of an application or order; 
marketing may not include serving as the ongoing point of contact for 
coordinating the delivery and provision of settlement services.
    Thus, in the circumstances described, F and M may receive the 
additional compensation without violating RESPA.
    Also, employers may pay managerial employees compensation in the 
form of bonuses based on a percentage of transactions completed by an 
affiliated company (frequently called a ``capture rate''), as long as 
the payment is not directly calculated as a multiple of the number or 
value of the referrals. 24 CFR 3500.14(g)(1)(viii). A managerial 
employee who receives compensation for performing settlement services in 
three or fewer transactions in any calendar year ``does not routinely'' 
deal directly with the consumer and is not precluded from receiving 
managerial compensation.
    13. Facts. A is a mortgage broker who provides origination services 
to submit a loan to a Lender for approval. The mortgage broker charges 
the borrower a uniform fee for the total origination services, as well 
as a direct up-front charge for reimbursement of credit reporting, 
appraisal services or similar charges.
    Comment. The mortgage broker's fee must be itemized in the Good 
Faith Estimate and on the HUD-1 Settlement Statement. Other charges 
which are paid for by the borrower and paid in advance are listed as 
P.O.C. on the HUD-1 Settlement Statement, and reflect the actual 
provider charge for such services. Also, any other fee or payment 
received by the mortgage broker from either the lender or the borrower 
arising from the

[[Page 410]]

initial funding transaction, including a servicing release premium or 
yield spread premium, is to be noted on the Good Faith Estimate and 
listed in the 800 series of the HUD-1 Settlement Statement.
    14. Facts. A is a dealer in home improvements who has established 
funding arrangements with several lenders. Customers for home 
improvements receive a proposed contract from A. The proposal requires 
that customers both execute forms authorizing a credit check and 
employment verification, and, frequently, execute a dealer consumer 
credit contract secured by a lien on the customer's (borrower's) 1- to 
4-family residential property. Simultaneously with the completion and 
certification of the home improvement work, the note is assigned by the 
dealer to a funding lender.
    Comments. The loan that is assigned to the funding lender is a loan 
covered by RESPA, when a lien is placed on the borrower's 1- to 4-family 
residential structure. The dealer loan or consumer credit contract 
originated by a dealer is also a RESPA-covered transaction, except when 
the dealer is not a ``creditor'' under the definition of ``federally 
related mortgage loan'' in Sec. 3500.2. The lender to whom the loan 
will be assigned is responsible for assuring that the lender or the 
dealer delivers to the borrower a Good Faith Estimate of closing costs 
consistent with Regulation X, and that the HUD-1 or HUD-1A Settlement 
Statement is used in conjunction with the settlement of the loan to be 
assigned. A dealer who, under Sec. 3500.2, is covered by RESPA as a 
creditor is responsible for the Good Faith Estimate of Closing Costs and 
the use of the appropriate settlement statement in connection with the 
loan.

[57 FR 49607, Nov. 2, 1992; 57 FR 56857, Dec. 1, 1992, as amended at 59 
FR 6521, Feb. 10, 1994; 61 FR 13251, Mar. 26, 1996; 61 FR 29253, June 7, 
1996; 61 FR 58476, Nov. 15, 1996]

    Effective Date Note: At 61 FR 29253, June 7, 1996, appendix B to 
part 3500 was amended by revising Illustration 11, redesignating 
Illustrations 12 and 13 as Illustrations 13 and 14, respectively, and 
adding a new Illustration 12, effective Oct. 7, 1996. At 61 FR 51782, 
Oct. 4, 1996, the effective date was delayed until further notice. For 
the convenience of the user, the revised text is set forth as follows:

     Appendix B to Part 3500--Illustrations of Requirements of RESPA

                                * * * * *

    11. Facts: A, a mortgage lender, is affiliated with B, a title 
company, and C, an escrow company, and offers consumers a package of 
mortgage, title, and escrow services at a discount from the prices at 
which such services would be sold if purchased separately. A, B, and C 
are subsidiaries of H, a holding company, which also controls a retail 
stock brokerage firm, D. None of A, B, or C requires consumers to 
purchase the services of its sister companies, and each company sells 
such services separately and as part of the package. A also pays an 
employee T, a full-time bank teller who does not perform settlement 
services, a bonus for each loan, title insurance binder, or closing that 
T generates for A, B, or C. A pays T these bonuses out of A's own funds 
and receives no reimbursements for these bonuses from B, C, or H. At the 
time that T refers customers to B and C, T provides the customers with a 
disclosure using the controlled business arrangement disclosure format. 
Also, Z, a stockbroker employee of D, occasionally refers her customers 
to A, B, or C; gives a statement in the controlled business disclosure 
format; and receives a payment from D for each referral.
    Comments: Selling a package of settlement services at a discount is 
not prohibited by RESPA, consistent with the definition of ``required 
use'' in 24 CFR 3500.2. Also, A is always allowed to compensate its own 
employees for business generated for A's company. Here, A may also 
compensate T, an employee who does not perform settlement services in 
this or any transaction, for referring business to a business entity in 
an affiliate relationship with A. Z, who does not perform settlement 
services in this or any transaction, can also be compensated by D, but 
not by anyone else. Employees who perform settlement services cannot be 
compensated for referrals to other settlement service providers. None of 
the entities in an affiliated relationship with each other may pay for 
referrals received from an affiliate's employees. Sections 
3500.15(b)(3)(i)(A) and (B) set forth the permissible exchanges of funds 
between controlled business entities. In all circumstances described a 
statement in the controlled business disclosure format must be provided 
to a potential consumer at or before the time that the referral is made.

                                * * * * *



  Sec. Appendix C to Part 3500--Instructions for Completing Good Faith 
                           Estimate (GFE) Form

    The following are instructions for completing the GFE required under 
section 5 of RESPA and 24 CFR 3500.7 of the Department of Housing and 
Urban Development regulations. The standardized form set forth in this 
Appendix is the required GFE form and must be provided exactly as 
specified. The instructions for completion of the GFE are primarily for 
the benefit of the loan originator who prepares the form and need not be 
transmitted to the borrower(s) as an integral part

[[Page 411]]

of the GFE. The required standardized GFE form must be prepared 
completely and accurately. A separate GFE must be provided for each loan 
where a transaction will involve more than one mortgage loan.

                          General Instructions

    The loan originator preparing the GFE may fill in information and 
amounts on the form by typewriter, hand printing, computer printing, or 
any other method producing clear and legible results. Under these 
instructions, the ``form'' refers to the required standardized GFE form. 
Although the standardized GFE is a prescribed form, Blocks 3, 6, and 11 
on page 2 may be adapted for use in particular loan situations, so that 
additional lines may be inserted there, and unused lines may be deleted.
    All fees for categories of charges shall be disclosed in U.S. dollar 
and cent amounts.

                          Specific Instructions

                                 Page 1

    Top of the Form--The loan originator must enter its name, business 
address, telephone number, and email address, if any, on the top of the 
form, along with the applicant's name, the address or location of the 
property for which financing is sought, and the date of the GFE.
    ``Purpose.''--This section describes the general purpose of the GFE 
as well as additional information available to the applicant.
    ``Shopping for your loan.''--This section requires no loan 
originator action.
    ``Important dates.''--This section briefly states important 
deadlines after which the loan terms that are the subject of the GFE may 
not be available to the applicant. In Line 1, the loan originator must 
state the date and, if necessary, time until which the interest rate for 
the GFE will be available. In Line 2, the loan originator must state the 
date until which the estimate of all other settlement charges for the 
GFE will be available. This date must be at least 10 business days from 
the date of the GFE. In Line 3, the loan originator must state how many 
calendar days within which the applicant must go to settlement once the 
interest rate is locked. In Line 4, the loan originator must state how 
many calendar days prior to settlement the interest rate would have to 
be locked, if applicable.
    ``Summary of your loan.''--In this section, for all loans the loan 
originator must fill in, where indicated:
    (i) The initial loan amount;
    (ii) The loan term; and
    (iii) The initial interest rate.
    The loan originator must fill in the initial monthly amount owed for 
principal, interest, and any mortgage insurance. The amount shown must 
be the greater of: (1) The required monthly payment for principal and 
interest for the first regularly scheduled payment, plus any monthly 
mortgage insurance payment; or (2) the accrued interest for the first 
regularly scheduled payment, plus any monthly mortgage insurance 
payment.
    The loan originator must indicate whether the interest rate can 
rise, and, if it can, must insert the maximum rate to which it can rise 
over the life of the loan. The loan originator must also indicate the 
period of time after which the interest rate can first change.
    The loan originator must indicate whether the loan balance can rise 
even if the borrower makes payments on time, for example in the case of 
a loan with negative amortization. If it can, the loan originator must 
insert the maximum amount to which the loan balance can rise over the 
life of the loan. For federal, state, local, or tribal housing programs 
that provide payment assistance, any repayment of such program 
assistance should be excluded from consideration in completing this 
item. If the loan balance will increase only because escrow items are 
being paid through the loan balance, the loan originator is not required 
to check the box indicating that the loan balance can rise.
    The loan originator must indicate whether the monthly amount owed 
for principal, interest, and any mortgage insurance can rise even if the 
borrower makes payments on time. If the monthly amount owed can rise 
even if the borrower makes payments on time, the loan originator must 
indicate the period of time after which the monthly amount owed can 
first change, the maximum amount to which the monthly amount owed can 
rise at the time of the first change, and the maximum amount to which 
the monthly amount owed can rise over the life of the loan. The amount 
used for the monthly amount owed must be the greater of: (1) The 
required monthly payment for principal and interest for that month, plus 
any monthly mortgage insurance payment; or (2) the accrued interest for 
that month, plus any monthly mortgage insurance payment.
    The loan originator must indicate whether the loan includes a 
prepayment penalty, and, if so, the maximum amount that it could be.
    The loan originator must indicate whether the loan requires a 
balloon payment and, if so, the amount of the payment and in how many 
years it will be due.
    ``Escrow account information.''--The loan originator must indicate 
whether the loan includes an escrow account for property taxes and other 
financial obligations. The amount shown in the ``Summary of your loan'' 
section for ``Your initial monthly amount owed for principal, interest, 
and any mortgage insurance'' must be entered in the space for the 
monthly amount owed in this section.
    ``Summary of your settlement charges.''--On this line, the loan 
originator must state the

[[Page 412]]

Adjusted Origination Charges from subtotal A of page 2, the Charges for 
All Other Settlement Services from subtotal B of page 2, and the Total 
Estimated Settlement Charges from the bottom of page 2.

                                 Page 2

    ``Understanding your estimated settlement charges.''--This section 
details 11 settlement cost categories and amounts associated with the 
mortgage loan. For purposes of determining whether a tolerance has been 
met, the amount on the GFE should be compared with the total of any 
amounts shown on the HUD-1 in the borrower's column and any amounts paid 
outside closing by or on behalf of the borrower.

                   Your Adjusted Origination Charges''

    Block 1, ``Our origination charge.''--The loan originator must state 
here all charges that all loan originators involved in this transaction 
will receive, except for any charge for the specific interest rate 
chosen (points). A loan originator may not separately charge any 
additional fees for getting this loan, including for application, 
processing, or underwriting. The amount stated in Block 1 is subject to 
zero tolerance, i.e., the amount may not increase at settlement.
    Block 2, ``Your credit or charge (points) for the specific interest 
rate chosen.''--For transactions involving mortgage brokers, the 
mortgage broker must indicate through check boxes whether there is a 
credit to the borrower for the interest rate chosen on the loan, the 
interest rate, and the amount of the credit, or whether there is an 
additional charge (points) to the borrower for the interest rate chosen 
on the loan, the interest rate, and the amount of that charge. Only one 
of the boxes may be checked; a credit and charge cannot occur together 
in the same transaction.
    For transactions without a mortgage broker, the lender may choose 
not to separately disclose in this block any credit or charge for the 
interest rate chosen on the loan; however, if this block does not 
include any positive or negative figure, the lender must check the first 
box to indicate that ``The credit or charge for the interest rate you 
have chosen'' is included in ``Our origination charge'' above (see Block 
1 instructions above), must insert the interest rate, and must also 
insert ``0'' in Block 2. Only one of the boxes may be checked; a credit 
and charge cannot occur together in the same transaction.
    For a mortgage broker, the credit or charge for the specific 
interest rate chosen is the net payment to the mortgage broker from the 
lender (i.e., the sum of all payments to the mortgage broker from the 
lender, including payments based on the loan amount, a flat rate, or any 
other computation, and in a table funded transaction, the loan amount 
less the price paid for the loan by the lender). When the net payment to 
the mortgage broker from the lender is positive, there is a credit to 
the borrower and it is entered as a negative amount in Block 2 of the 
GFE. When the net payment to the mortgage broker from the lender is 
negative, there is a charge to the borrower and it is entered as a 
positive amount in Block 2 of the GFE. If there is no net payment (i.e., 
the credit or charge for the specific interest rate chosen is zero), the 
mortgage broker must insert ``0'' in Block 2 and may check either the 
box indicating there is a credit of ``0'' or the box indicating there is 
a charge of ``0''.
    The amount stated in Block 2 is subject to zero tolerance while the 
interest rate is locked, i.e., any credit for the interest rate chosen 
cannot decrease in absolute value terms and any charge for the interest 
rate chosen cannot increase. (Note: An increase in the credit is allowed 
since this increase is a reduction in cost to the borrower. A decrease 
in the credit is not allowed since it is an increase in cost to the 
borrower.)
    Line A, ``Your Adjusted Origination Charges.''--The loan originator 
must add the numbers in Blocks 1 and 2 and enter this subtotal at 
highlighted Line A. The subtotal at Line A will be a negative number if 
there is a credit in Block 2 that exceeds the charge in Block 1. The 
amount stated in Line A is subject to zero tolerance while the interest 
rate is locked.
    In the case of ``no cost'' loans, where ``no cost'' refers only to 
the loan originator's fees, Line A must show a zero charge as the 
adjusted origination charge. In the case of ``no cost'' loans where ``no 
cost'' encompasses third party fees as well as the upfront payment to 
the loan originator, all of the third party fees listed in Block 3 
through Block 11 to be paid for by the loan originator (or borrower, if 
any) must be itemized and listed on the GFE. The credit for the interest 
rate chosen must be large enough that the total for Line A will result 
in a negative number to cover the third party fees.

           ``Your Charges for All Other Settlement Services''

    There is a 10 percent tolerance applied to the sum of the prices of 
each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, 
where the loan originator requires the use of a particular provider or 
the borrower uses a provider selected or identified by the loan 
originator. Any services in Block 4, Block 5, or Block 6 for which the 
borrower selects a provider other than one identified by the loan 
originator are not subject to any tolerance and, at settlement, would 
not be included in the sum of the charges on which the 10 percent 
tolerance is based. Where a loan originator permits a borrower to shop 
for third party settlement services, the loan

[[Page 413]]

originator must provide the borrower with a written list of settlement 
services providers at the time of the GFE, on a separate sheet of paper.
    Block 3, ``Required services that we select.''--In this block, the 
loan originator must identify each third party settlement service 
required and selected by the loan originator (excluding title services), 
along with the estimated price to be paid to the provider of each 
service. Examples of such third party settlement services might include 
provision of credit reports, appraisals, flood checks, tax services, and 
any upfront mortgage insurance premium. The loan originator must 
identify the specific required services and provide an estimate of the 
price of each service. Loan originators are also required to add the 
individual charges disclosed in this block and place that total in the 
column of this block. The charge shown in this block is subject to an 
overall 10 percent tolerance as described above.
    Block 4, ``Title services and lender's title insurance.''--In this 
block, the loan originator must state the estimated total charge for 
third party settlement service providers for all closing services, 
regardless of whether the providers are selected or paid for by the 
borrower, seller, or loan originator. The loan originator must also 
include any lender's title insurance premiums, when required, regardless 
of whether the provider is selected or paid for by the borrower, seller, 
or loan originator. All fees for title searches, examinations, and 
endorsements, for example, would be included in this total. The charge 
shown in this block is subject to an overall 10 percent tolerance as 
described above.
    Block 5, ``Owner's title insurance.''--In this block, for all 
purchase transactions the loan originator must provide an estimate of 
the charge for the owner's title insurance and related endorsements, 
regardless of whether the providers are selected or paid for by the 
borrower, seller, or loan originator. For non-purchase transactions, the 
loan originator may enter ``NA'' or ``Not Applicable'' in this Block. 
The charge shown in this block is subject to an overall 10 percent 
tolerance as described above.
    Block 6, ``Required services that you can shop for.''--In this 
block, the loan originator must identify each third party settlement 
service required by the loan originator where the borrower is permitted 
to shop for and select the settlement service provider (excluding title 
services), along with the estimated charge to be paid to the provider of 
each service. The loan originator must identify the specific required 
services (e.g., survey, pest inspection) and provide an estimate of the 
charge of each service. The loan originator must also add the individual 
charges disclosed in this block and place the total in the column of 
this block. The charge shown in this block is subject to an overall 10 
percent tolerance as described above.
    Block 7, ``Government recording charges.''--In this block, the loan 
originator must estimate the state and local government fees for 
recording the loan and title documents that can be expected to be 
charged at settlement. The charge shown in this block is subject to an 
overall 10 percent tolerance as described above.
    Block 8, ``Transfer taxes.''--In this block, the loan originator 
must estimate the sum of all state and local government fees on 
mortgages and home sales that can be expected to be charged at 
settlement, based upon the proposed loan amount or sales price and on 
the property address. A zero tolerance applies to the sum of these 
estimated fees.
    Block 9, ``Initial deposit for your escrow account.''--In this 
block, the loan originator must estimate the amount that it will require 
the borrower to place into a reserve or escrow account at settlement to 
be applied to recurring charges for property taxes, homeowner's and 
other similar insurance, mortgage insurance, and other periodic charges. 
The loan originator must indicate through check boxes if the reserve or 
escrow account will cover future payments for all tax, all hazard 
insurance, and other obligations that the loan originator requires to be 
paid as they fall due. If the reserve or escrow account includes some, 
but not all, property taxes or hazard insurance, or if it includes 
mortgage insurance, the loan originator should check ``other'' and then 
list the items included.
    Block 10, ``Daily interest charges.''--In this block, the loan 
originator must estimate the total amount that will be due at settlement 
for the daily interest on the loan from the date of settlement until the 
first day of the first period covered by scheduled mortgage payments. 
The loan originator must also indicate how this total amount is 
calculated by providing the amount of the interest charges per day and 
the number of days used in the calculation, based on a stated projected 
closing date.
    Block 11, ``Homeowner's insurance.''--The loan originator must 
estimate in this block the total amount of the premiums for any hazard 
insurance policy and other similar insurance, such as fire or flood 
insurance that must be purchased at or before settlement to meet the 
loan originator's requirements. The loan originator must also separately 
indicate the nature of each type of insurance required along with the 
charges. To the extent a loan originator requires that such insurance be 
part of an escrow account, the amount of the initial escrow deposit must 
be included in Block 9.
    Line B, ``Your Charges for All Other Settlement Services.''--The 
loan originator must add the numbers in Blocks 3 through 11 and

[[Page 414]]

enter this subtotal in the column at highlighted Line B.
    Line A+B, ``Total Estimated Settlement Charges.''--The loan 
originator must add the subtotals in the right-hand column at 
highlighted Lines A and B and enter this total in the column at 
highlighted Line A+B.

                                 Page 3

                            ``Instructions''

    ``Understanding which charges can change at settlement.''--This 
section informs the applicant about which categories of settlement 
charges can increase at closing, and by how much, and which categories 
of settlement charges cannot increase at closing. This section requires 
no loan originator action.
    ``Using the tradeoff table.''--This section is designed to make 
borrowers aware of the relationship between their total estimated 
settlement charges on one hand, and the interest rate and resulting 
monthly payment on the other hand. The loan originator must complete the 
left hand column using the loan amount, interest rate, monthly payment 
figure, and the total estimated settlement charges from page 1 of the 
GFE. The loan originator, at its option, may provide the borrower with 
the same information for two alternative loans, one with a higher 
interest rate, if available, and one with a lower interest rate, if 
available, from the loan originator. The loan originator should list in 
the tradeoff table only alternative loans for which it would presently 
issue a GFE based on the same information the loan originator considered 
in issuing this GFE. The alternative loans must use the same loan amount 
and be otherwise identical to the loan in the GFE. The alternative loans 
must have, for example, the identical number of payment periods; the 
same margin, index, and adjustment schedule if the loans are adjustable 
rate mortgages; and the same requirements for prepayment penalty and 
balloon payments. If the loan originator fills in the tradeoff table, 
the loan originator must show the borrower the loan amount, alternative 
interest rate, alternative monthly payment, the change in the monthly 
payment from the loan in this GFE to the alternative loan, the change in 
the total settlement charges from the loan in this GFE to the 
alternative loan, and the total settlement charges for the alternative 
loan. If these options are available, an applicant may request a new 
GFE, and a new GFE must be provided by the loan originator.
    ``Using the shopping chart.''--This chart is a shopping tool to be 
provided by the loan originator for the borrower to complete, in order 
to compare GFEs.
    ``If your loan is sold in the future.''--This section requires no 
loan originator action.

[[Page 415]]

[GRAPHIC] [TIFF OMITTED] TR17NO08.089


[[Page 416]]


[GRAPHIC] [TIFF OMITTED] TR17NO08.090


[[Page 417]]


[GRAPHIC] [TIFF OMITTED] TR17NO08.091


[73 FR 68253, Nov. 17, 2008]

[[Page 418]]



Sec. Appendix D to Part 3500--Affiliated Business Arrangement Disclosure 
                            Statement Format
[GRAPHIC] [TIFF OMITTED] TR15NO96.000

[GRAPHIC] [TIFF OMITTED] TR15NO96.001


[61 FR 58477, Nov. 15, 1996]

[[Page 419]]



             Sec. Appendix E to Part 3500--Arithmetic Steps

               I. Example Illustrating Aggregate Analysis:

                              ASSUMPTIONS:

Disbursements:
    $360 for school taxes disbursed on September 20
    $1,200 for county property taxes:
    $500 disbursed on July 25
    $700 disbursed on December 10
Cushion: One-sixth of estimated annual disbursements
Settlement: May 15
First Payment: July 1

                      Step 1--Initial Trial Balance
------------------------------------------------------------------------
                                                      Aggregate
                                           -----------------------------
                                               pmt      disb       bal
------------------------------------------------------------------------
Jun.......................................         0         0         0
Jul.......................................       130       500      -370
Aug.......................................       130         0      -240
Sep.......................................       130       360      -470
Oct.......................................       130         0      -340
Nov.......................................       130         0      -210
Dec.......................................       130       700      -780
Jan.......................................       130         0      -650
Feb.......................................       130         0      -520
Mar.......................................       130         0      -390
Apr.......................................       130         0      -260
May.......................................       130         0      -130
Jun.......................................       130         0         0
------------------------------------------------------------------------


                     Step 2--Adjusted Trial Balance
       [Increase monthly balances to eliminate negative balances]
------------------------------------------------------------------------
                                                      Aggregate
                                           -----------------------------
                                               pmt      disb       bal
------------------------------------------------------------------------
Jun.......................................         0         0       780
Jul.......................................       130       500       410
Aug.......................................       130         0       540
Sep.......................................       130       360       310
Oct.......................................       130         0       440
Nov.......................................       130         0       570
Dec.......................................       130       700         0
Jan.......................................       130         0       130
Feb.......................................       130         0       260
Mar.......................................       130         0       390
Apr.......................................       130         0       520
May.......................................       130         0       650
Jun.......................................       130         0       780
------------------------------------------------------------------------


                   Step 3--Trial Balance With Cushion
------------------------------------------------------------------------
                                                      Aggregate
                                           -----------------------------
                                               pmt      disb       bal
------------------------------------------------------------------------
Jun.......................................         0         0      1040
Jul.......................................       130       500       670
Aug.......................................       130         0       800
Sep.......................................       130       360       570
Oct.......................................       130         0       700
Nov.......................................       130         0       830
Dec.......................................       130       700       260
Jan.......................................       130         0       390
Feb.......................................       130         0       520
Mar.......................................       130         0       650
Apr.......................................       130         0       780
May.......................................       130         0       910
Jun.......................................       130         0      1040
------------------------------------------------------------------------

              II. Example Illustrating Single-Item Analysis

                              ASSUMPTIONS:

Disbursements:
    $360 for school taxes disbursed on September 20
    $1,200 for county property taxes:
    $500 disbursed on July 25
    $700 disbursed on December 10
Cushion: One-sixth of estimated annual disbursements
Settlement: May 15
First Payment: July 1

                                          Step 1--Initial Trial Balance
----------------------------------------------------------------------------------------------------------------
                                                                              Single-item
                                                     -----------------------------------------------------------
                                                                  Taxes                     School taxes
                                                     -----------------------------------------------------------
                                                         pmt      disb       bal       pmt      disb       bal
----------------------------------------------------------------------------------------------------------------
June................................................         0         0         0         0         0         0
July................................................       100       500      -400        30         0        30
August..............................................       100         0      -300        30         0        60
September...........................................       100         0      -200        30       360      -270
October.............................................       100         0      -100        30         0      -240
November............................................       100         0         0        30         0      -210
December............................................       100       700      -600        30         0      -180
January.............................................       100         0      -500        30         0      -150
February............................................       100         0      -400        30         0      -120
March...............................................       100         0      -300        30         0       -90
April...............................................       100         0      -200        30         0       -60
May.................................................       100         0      -100        30         0       -30
June................................................       100         0         0        30         0         0
----------------------------------------------------------------------------------------------------------------


[[Page 420]]


            Step 2--Adjusted Trial Balance (Increase Monthly Balances To Eliminate Negative Balances)
----------------------------------------------------------------------------------------------------------------
                                                                              Single-item
                                                     -----------------------------------------------------------
                                                                  Taxes                     School taxes
                                                     -----------------------------------------------------------
                                                         pmt      disb       bal       pmt      disb       bal
----------------------------------------------------------------------------------------------------------------
Jun.................................................         0         0       600         0         0       270
Jul.................................................       100       500       200        30         0       300
Aug.................................................       100         0       300        30         0       330
Sep.................................................       100         0       400        30       360         0
Oct.................................................       100         0       500        30         0        30
Nov.................................................       100         0       600        30         0        60
Dec.................................................       100       700         0        30         0        90
Jan.................................................       100         0       100        30         0       120
Feb.................................................       100         0       200        30         0       150
Mar.................................................       100         0       300        30         0       180
Apr.................................................       100         0       400        30         0       210
May.................................................       100         0       500        30         0       240
Jun.................................................       100         0       600        30         0       270
----------------------------------------------------------------------------------------------------------------


                                       Step 3--Trial Balance With Cushion
----------------------------------------------------------------------------------------------------------------
                                                                              Single-Item
                                                     -----------------------------------------------------------
                                                                  Taxes                     School taxes
                                                     -----------------------------------------------------------
                                                         pmt      disb       bal       pmt      disb       bal
----------------------------------------------------------------------------------------------------------------
Jun.................................................         0         0       800         0         0       330
Jul.................................................       100       500       400        30         0       360
Aug.................................................       100         0       500        30         0       390
Sep.................................................       100         0       600        30       360        60
Oct.................................................       100         0       700        30         0        90
Nov.................................................       100         0       800        30         0       120
Dec.................................................       100       700       200        30         0       150
Jan.................................................       100         0       300        30         0       180
Feb.................................................       100         0       400        30         0       210
Mar.................................................       100         0       500        30         0       240
Apr.................................................       100         0       600        30         0       270
May.................................................       100         0       700        30         0       300
Jun.................................................       100         0       800        30         0       330
----------------------------------------------------------------------------------------------------------------


[59 FR 53908, Oct. 26, 1994, as amended at 60 FR 8816, Feb. 15, 1995. 
Redesignated at 61 FR 58479, Nov. 15, 1996; 73 FR 68259, Nov. 17, 2008]



                     Sec. Appendix MS-1 to Part 3500

    [Sample language; use business stationery or similar heading]
    [Date]

   SERVICING DISCLOSURE STATEMENT NOTICE TO FIRST LIEN MORTGAGE LOAN 
  APPLICANTS: THE RIGHT TO COLLECT YOUR MORTGAGE LOAN PAYMENTS MAY BE 
                               TRANSFERRED

    You are applying for a mortgage loan covered by the Real Estate 
Settlement Procedures Act (RESPA) (12 U.S.C. 2601 et seq.). RESPA gives 
you certain rights under Federal law. This statement describes whether 
the servicing for this loan may be transferred to a different loan 
servicer. ``Servicing'' refers to collecting your principal, interest, 
and escrow payments, if any, as well as sending any monthly or annual 
statements, tracking account balances, and handling other aspects of 
your loan. You will be given advance notice before a transfer occurs.

                     Servicing Transfer Information

    [We may assign, sell, or transfer the servicing of your loan while 
the loan is outstanding.]
    [or]
    [We do not service mortgage loans of the type for which you applied. 
We intend to assign, sell, or transfer the servicing of your mortgage 
loan before the first payment is due.]
    [or]
    [The loan for which you have applied will be serviced at this 
financial institution and we do not intend to sell, transfer, or assign 
the servicing of the loan.]

[[Page 421]]

    [INSTRUCTIONS TO PREPARER: Insert the date and select the 
appropriate language under ``Servicing Transfer Information.'' The model 
format may be annotated with further information that clarifies or 
enhances the model language.]

[73 FR 68259, Nov. 17, 2008]



                     Sec. Appendix MS-2 to Part 3500
[GRAPHIC] [TIFF OMITTED] TR26MR96.000


[[Page 422]]


[GRAPHIC] [TIFF OMITTED] TR26MR96.001


[[Page 423]]


[GRAPHIC] [TIFF OMITTED] TR26MR96.002


[61 FR 13252, Mar. 26, 1996]



PART 3800_INVESTIGATIONS IN CONSUMER REGULATORY PROGRAMS--
Table of Contents



Sec.
3800.10 Scope of rules.
3800.20 Subpoenas in investigations.
3800.30 Subpoena enforcement in district court.
3800.40 Investigational proceedings.
3800.50 Rights of witnesses in investigational proceedings.
3800.60 Settlements.

    Authority: 12 U.S.C. 2601 et seq.; 15 U.S.C. 1714; 42 U.S.C. 3535(d) 
and 5413.

    Source: 61 FR 10441, Mar. 13, 1996, unless otherwise noted.



Sec. 3800.10  Scope of rules.

    This part applies to investigations and investigational proceedings 
undertaken by the Secretary, or the Secretary's designee, pursuant to 
the following:
    (a) The Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1701 et 
seq.;
    (b) The National Manufactured Housing Construction and Safety 
Standards Act of 1974, 42 U.S.C. 5401 et seq.; and
    (c) The Real Estate Settlement Procedures Act of 1974, 12 U.S.C. 
2601 et seq.



Sec. 3800.20  Subpoenas in investigations.

    (a) The Secretary may issue subpoenas relating to any matter under 
investigation. A subpoena may:
    (1) Require testimony to be taken by interrogatories;
    (2) Require the attendance and testimony of witnesses at a specific 
time and place;
    (3) Require access to, examination of, and the right to copy 
documents; and
    (4) Require the production of documents at a specific time and 
place.
    (b) A subpoenaed person may petition the Secretary or the 
Secretary's designee to modify or withdraw a subpoena by filing the 
petition within 10 days after service of the subpoena. The petition may 
be in letter form, but must set forth the facts and law upon which the 
petition is based.



Sec. 3800.30  Subpoena enforcement in district court.

    In the case of contumacy of a witness or a witness's refusal to obey 
a subpoena or order of the Secretary, the United States district court 
for the jurisdiction in which an investigation is carried on may issue 
an order requiring compliance with the subpoena. HUD headquarters in 
Washington, DC, is one of the locations in which the Secretary

[[Page 424]]

carries on investigations of its consumer regulatory programs.



Sec. 3800.40  Investigational proceedings.

    (a) For the purpose of hearing the testimony of witnesses and 
receiving documents and other data relating to any subject under 
investigation, the Secretary, or the Secretary's designee, may conduct 
an investigational proceeding.
    (b) The Secretary, or the Secretary's designee, (``presiding 
official'') shall preside over the investigational proceeding. The 
proceeding shall be stenographically or mechanically reported. A 
transcript shall be a part of the record of the investigation.
    (c) Unless the presiding official determines otherwise, 
investigational proceedings shall be public.
    (d) The presiding official shall take all necessary action to 
regulate the course of the proceeding to avoid delay and to maintain 
order. If necessary to maintain order, the presiding official may 
exclude a witness or counsel from a proceeding. The Department may also 
take further action as permitted by statute.



Sec. 3800.50  Rights of witnesses in investigational proceedings.

    (a) Any person who testifies at a public investigational proceeding 
shall be entitled, on payment of costs, to purchase a copy of a 
transcript of the testimony the person provided.
    (b) In a nonpublic investigational proceeding, the presiding 
official may for good cause limit a witness to an inspection of the 
official transcript of that witness's testimony.
    (c) Any person subpoenaed to appear at an investigational proceeding 
may be represented by counsel as follows:
    (1) With respect to any question asked of a witness, a witness may 
obtain confidential advice from counsel;
    (2) If a witness refuses to answer a question, counsel for the 
witness may briefly state the legal grounds for the refusal;
    (3) Counsel for the witness may object to a question or a request 
for production of documents that is beyond the scope of the 
investigation or for which a privilege of the witness to refuse to 
answer may be invoked. In so doing, counsel for the witness may state 
briefly the grounds for the objection. Objections will be deemed 
continuing throughout the course of the proceeding. Repetitious or 
cumulative statements of an objection or the grounds for an objection 
are unnecessary and impermissible; and
    (4) After the Department's examination of a witness, counsel for the 
witness may request that the witness be permitted to clarify any answers 
to correct any ambiguity, equivocation, or incompleteness in the 
witness's testimony. The decision to grant or deny this request is 
within the sole discretion of the presiding official.



Sec. 3800.60  Settlements.

    (a) At any time during an investigation, the Department and the 
parties subject to an investigation may conduct settlement negotiations.
    (b) When the Secretary or Secretary's designee deems it appropriate, 
the Department may enter into a settlement agreement.

[[Page 425]]



   CHAPTER XXIV--BOARD OF DIRECTORS OF THE HOPE FOR HOMEOWNERS PROGRAM




  --------------------------------------------------------------------
Part                                                                Page
4000            Board of Directors of the Hope for 
                    Homeowners Program......................         427
4001            Hope for Homeowners Program.................         427

[[Page 427]]



PART 4000_BOARD OF DIRECTORS OF THE HOPE FOR HOMEOWNERS PROGRAM--
Table of Contents



  Subpart A_Rules Regarding Access to Information Under the Freedom of 
                             Information Act

Sec.
4000.1 Purpose and scope.
4000.2 Freedom of Information Act.

    Authority: 5 U.S.C. 552; 12 U.S.C. 1715z-22.

    Source: 74 FR 7813, Feb. 20, 2009, unless otherwise noted.



  Subpart A_Rules Regarding Access to Information Under the Freedom of 
                             Information Act



Sec. 4000.1  Purpose and scope.

    This subpart establishes the Board's procedures governing access to 
records of the Board under the Freedom of Information Act (5 U.S.C. 
552).



Sec. 4000.2  Freedom of Information Act.

    (a) In general. While the Board is not part of the Department of 
Housing and Urban Development (``HUD''), the Board follows the 
regulations promulgated by HUD at subparts A and B (``FOIA Disclosure 
Information'') of part 15 (``Public access to HUD records under the 
Freedom of Information Act and testimony and production of information 
by HUD employees'') of Title 24 (``Housing and Urban Development'') of 
the Code of Federal Regulations (``CFR''), except as otherwise provided 
in this section. Any reference in 24 CFR 15.1 through 15.112 to ``HUD'' 
shall be construed to refer to the Board. In the event that the 
regulations at subparts A and B of part 15 of title 24 of the CFR 
subsequently are amended by HUD, the Board will follow those amended 
regulations. The following additional information is provided to 
implement 24 CFR 15.1 through 15.112 as such sections apply to the 
Board.
    (b) Requests for information. All requests to the Board for access 
to records of the Board should be directed to the attention of the Board 
at the U.S. Department of Housing and Urban Development (HUD), Freedom 
of Information Act Office, 451 Seventh Street, SW., Room 10139, 
Washington, DC 20410-3000 (HUD Headquarters), where the Board maintains 
its principal place of business. Requestors should follow the directions 
for requesting records as provided in the regulations in 24 CFR part 15, 
subpart B. The public reading rooms for the Board are the reading rooms 
located at HUD Headquarters in Washington, DC. Due to security measures 
at HUD Headquarters, an advance appointment to review the public 
comments must be scheduled by calling the FOIA Office at 202-708-3054 
(this is not a toll-free number).
    (c) Requests for records. Initial determinations whether to grant 
requests for records of the Board will be made by the Secretary of the 
Board or the designee of such official. Requests for records by mail 
should be addressed to the same address as that provided in paragraph 
(a) of this section.
    (d) Administrative appeal of initial determination to deny records. 
(1) Appellate determinations with respect to the records of the Board 
will be made by an official, designated by the Executive Director of the 
Board, who had no involvement in the initial determination of the 
request for records that is the subject of the appeal.
    (2) Appellate determinations with respect to requests for expedited 
processing shall be made by the Secretary of the Board or the designee 
of such official.
    (3) Appeals should be addressed to the address provided in paragraph 
(a) of this section.
    (e) Delivery of process. Service of process will be received by 
Counselor to the Board or the designee of such official and shall be 
delivered to the address provided in paragraph (a) of this section to 
the attention of Counselor to the Board.



PART 4001_HOPE FOR HOMEOWNERS PROGRAM--Table of Contents



       Subpart A_HOPE for Homeowners Program_General Requirements

Sec.
4001.01 Purpose of program.
4001.03 Requirements and delegated authority.
4001.05 Approval of mortgagees.
4001.07 Definitions.

[[Page 428]]

     Subpart B_Eligibility Requirements and Underwriting Procedures

4001.102 Cross-reference.
4001.104 Eligible mortgages.
4001.106 Eligible mortgagors.
4001.108 Eligible properties.
4001.110 Underwriting.
4001.112 Income verification.
4001.114 Appraisal.
4001.116 Representations and prohibitions.
4001.118 Equity sharing.
4001.120 Appreciation sharing or upfront payment.
4001.122 Fees and closing costs.

    Subpart C_Rights and Obligations under the Contract of Insurance

4001.201 Cross-reference.
4001.203 Calculation of upfront and annual mortgage insurance premiums 
          for Program mortgages.

                  Subpart D_Servicing responsibilities

4001.301 Cross-reference.
4001.303 Prohibition on subordinate liens during first five years.

                          Subpart E_Enforcement

                       Mortgagor False Information

4001.401 Notice of false information from mortgagor-procedure.

                         Appraiser Independence

4001.403 Prohibitions on interested parties in insured mortgage 
          transaction.

                               Mortgagees

4001.405 Mortgagees.

Appendix A to Part 4001--Calculation of Upfront Payment or Future 
          Appreciation Payment.

    Authority: 12 U.S.C. 1701z-22.

    Source: 73 FR 58420, Oct. 6, 2008, unless otherwise noted.



       Subpart A_HOPE for Homeowners Program_General Requirements



Sec. 4001.01  Purpose of program.

    The HOPE for Homeowners Program is a temporary program authorized by 
section 257 of the National Housing Act, established within the Federal 
Housing Administration (FHA) of the Department of Housing and Urban 
Development (HUD) that offers homeowners and existing loan holders (or 
servicers acting on their behalf) FHA insurance on refinanced loans for 
distressed borrowers to support long-term sustainable homeownership by, 
among other things, allowing homeowners to avoid foreclosure. The HOPE 
for Homeowners Program is administered by HUD through FHA.



Sec. 4001.03  Requirements and delegated authority.

    (a) Core requirements. This subpart establishes the core 
requirements for the HOPE for Homeowners Program that have been adopted 
by the Board of Directors (Board) for the HOPE for Homeowners Program 
(Program). In addition to the core requirements, codified in this 
subpart, the Board of Directors may adopt and issue additional 
requirements, standards and policies through non-codified regulations, 
including through order, Federal Register notice, or other statement, 
such as a mortgagee letter, to be issued and implemented by FHA.
    (b) Basic Program parameters. (1) FHA is authorized to insure 
eligible refinanced mortgages under the Program commencing no earlier 
than October 1, 2008. The authority to insure additional mortgages under 
the Program expires September 30, 2011.
    (2) Under this Program, an eligible mortgagor may obtain a 
refinancing of his or her existing mortgage(s) with a new mortgage loan 
insured by FHA, subject to conditions and restrictions specified in 
section 257 of the National Housing Act and requirements established by 
the Board.
    (c) Delegated authority. HUD is statutorily charged with 
administering, through FHA, the Program. In carrying out the Program 
requirements established by the Board, FHA is directed to issue such 
interim guidance and mortgagee letters as FHA determines necessary or 
appropriate, within the parameters of the requirements, standards and 
policies adopted by the Board. In addition to FHA's statutory charge, 
the Board of Directors authorizes FHA to address unique or case-by-case 
situations as may be encountered by FHA in carrying out the Program, and 
to take such action as may be necessary to implement the Board's 
requirements. This delegated implementing authority

[[Page 429]]

includes, but is not limited to, specifying application forms, mortgage 
application procedures, certifications or other assurances, and other 
information collection requirements, subject to such rules, standards 
and policies as the Board may adopt.
    (d) Other applicable requirements. Except as may be otherwise 
provided by the Board, the provisions and requirements in the FHA 
regulations in 24 CFR part 203, which are generally applicable to all 
FHA-insured single family mortgage insurance programs, also apply with 
respect to the insurance of a refinanced eligible mortgage under the 
Program.



Sec. 4001.05  Approval of mortgagees.

    (a) Eligibility. In order for a mortgage to be eligible for 
insurance under this part, the mortgagee originating the mortgage loan 
and seeking mortgage insurance under this part shall have been approved 
by the Secretary pursuant to 24 CFR part 202.
    (b) Mortgagee whose loan is to be refinanced. A mortgagee holding or 
servicing an eligible mortgage to be refinanced and insured under 
section 257 of the National Housing Act is not required to be an 
approved mortgagee as required in paragraph (a) of this section, unless 
it seeks to be the originator of the refinanced mortgage to be insured 
by FHA.



Sec. 4001.07  Definitions.

    As used in this part and in the Program, the following definitions 
apply.
    Act means the National Housing Act (12 U.S.C. 1701 et seq.).
    Allowable closing costs mean charges, fees and discounts that the 
mortgagee may collect from the mortgagor as provided in 24 CFR 
203.27(a).
    Board means the Board of Directors for the HOPE for Homeowners 
Program, which is comprised of the Secretary of HUD, the Secretary of 
the Treasury, the Chairman of the Board of Governors of the Federal 
Reserve System (Federal Reserve Board), and the Chairperson of the Board 
of Directors of the Federal Deposit Insurance Corporation or the 
designees of each such individual.
    Capital improvements means a repair, renovation, or addition to a 
property that significantly enhances the value of the property, but does 
not include expenses for interior decor, landscape maintenance, or 
normal maintenance or replacement expenses.
    Contract of insurance means the agreement by which FHA provides 
mortgage insurance to a mortgagee.
    Default and delinquency fees means late charges contained in a 
mortgage/security instrument for the late or non-receipt of payments 
from mortgagors after the date upon which payment is due, including 
charges imposed by the mortgagee for the return of payments on the 
mortgage due to non-sufficient funds.
    Direct financial benefit, as used in section 257(e)(1)(A)(ii)(II) of 
the Act, consists of the greater of two factors:
    (1) The amount of initial equity the mortgagor has in the property 
at the closing for the Program mortgage as determined under Sec. 
4001.118; and
    (2) The total amount that the existing senior mortgage and all 
existing subordinate mortgages on the property have been written down.
    Disposition means any transaction that results in whole or partial 
transfer of title of a property other than--
    (1) A sale of the property; or
    (2) Any transaction or transfer specified in 12 U.S.C. Sec. 1701j-
3(d)(1) through (8).
    Eligible Mortgage means a mortgage as defined in Sec. 4001.104.
    Existing senior mortgage means an eligible mortgage that has 
superior priority and is being refinanced by a mortgage insured under 
section 257 of the Act.
    Existing subordinate mortgage means a mortgage that is subordinate 
in priority to an eligible mortgage which is being refinanced by a 
mortgage insured under section 257 of the Act.
    FHA means the Federal Housing Administration.
    HOPE for Homeowners Program (or Program) means the program 
established under section 257 of the Act.
    HUD means the Department of Housing and Urban Development.
    Intentionally defaulted for purposes of section 257(e)(1)(A) of the 
Act means the mortgagor:
    (1) Knowingly failed to make payment on the mortgage or debt;

[[Page 430]]

    (2) Had available funds at the time payment on the mortgage or debt 
was due that could pay the mortgage or debt without undue hardship; and
    (3) The debt was not subject to a bona fide dispute.
    Mortgage has the same meaning as provided in 24 CFR 203.17(a)(1).
    Mortgagee has the same meaning as provided in 24 CFR 203.251(f).
    Mortgagor has the same meaning as provided in 24 CFR 203.251(e).
    Premium pricing means the price for the sale of a mortgage loan with 
an above market rate of interest.
    Prepayment penalties mean such amounts as defined in 12 CFR 
226.32(d)(6) of the Federal Reserve Board's Regulation Z (Truth in 
Lending).
    Primary residence means the dwelling where the mortgagor maintains 
his or her permanent place of abode and typically spends the majority of 
the calendar year. A mortgagor can only have one primary residence.
    Program mortgage means the mortgage into which the existing senior 
mortgage is refinanced.
    Related party of a person means any of the following or another 
person acting on behalf of the person or any of the following--
    (1) The person's father, mother, stepfather, stepmother, brother, 
sister, stepbrother, stepsister, son, daughter, stepson, stepdaughter, 
grandparent, grandson, granddaughter, father-in-law, mother-in-law, 
brother-in-law, sister-in-law, son-in-law, daughter-in-law, the spouse 
of any of the foregoing, and the person's spouse;
    (2) Any entity of which 25 percent or more of any class of voting 
securities is owned, controlled or held in the aggregate by the person 
or the persons referred to in paragraph (1); and
    (3) Any entity of which the person or any person referred to in 
paragraph (1) serves as a trustee, general partner, limited partner, 
managing member, or director.
    Secretary means the Secretary of Housing and Urban Development.
    Total monthly mortgage payment means the sum of:
    (1) Principal and interest, as determined on a fully indexed and 
fully amortized basis; and
    (2) Escrowed amounts. (i) The monthly required amount collected by 
or on behalf of the mortgagee for real estate taxes, premiums for 
required hazard and mortgage insurance, homeowners' association dues, 
ground rent, special assessments, water and sewer charges and other 
similar charges required by the note or security instrument; or
    (ii) For mortgages not subject to escrow deposits, \1/12\ of the 
estimated annual costs for items listed in paragraph (2)(i) of this 
definition.

[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 621, Jan. 7, 2009]



     Subpart B_Eligibility Requirements and Underwriting Procedures



Sec. 4001.102  Cross-reference.

    (a) All of the provisions of 24 CFR part 203, subpart A, concerning 
eligibility requirements of mortgages covering one-family dwellings 
under section 203 of the National Housing Act (12 U.S.C. 1709) apply to 
mortgages on one-family dwellings to be insured under section 257 of the 
National Housing Act (12 U.S.C. 1701z-22), except the following 
provisions: 203.7 Commitment Process; 203.10 Informed consumer choice 
for prospective FHA mortgagors; 203.12 Mortgage insurance on proposed or 
new subdivisions; 203.14 Builder's warranty; 203.16 Certificate and 
contract regarding use of dwelling for transient or hotel purposes; 
203.17(d) Maturity; 203.18 Maximum mortgage amounts; 203.18a Solar-
energy system; 203.18b Increased mortgage amount; 203.18c One-time or 
up-front MIP excluded from limitations on maximum mortgage amounts; 
203.18d Minimum principal loan amount; 203.19 Mortgagor's minimum 
investment; 203.20 Agreed interest rate; 203.29 Eligible mortgage in 
Alaska, Guam, Hawaii or the Virgin Islands; 203.32 Mortgage lien; 
203.37a Sale of property; 203.42 Rental properties; 203.43 Eligibility 
of miscellaneous types of mortgages; 203.43a Eligibility of mortgages 
covering housing in certain neighborhoods; 203.43d Eligibility of 
mortgages in certain communities; 203.43e Eligibility of mortgages 
covering houses in

[[Page 431]]

federally impacted areas; 203.43g Eligibility of mortgages in certain 
communities; 203.43h Eligibility of mortgages on Indian land insured 
pursuant to section 248 of the National Housing Act; 203.43i Eligibility 
of mortgages on Hawaiian Home Lands insured pursuant to section 247 of 
the National Housing Act; 203.43j Eligibility of mortgages on Allegany 
Reservation of Seneca Nation Indians; 203.44 Eligibility of advances; 
203.45 Eligibility of graduated payment mortgages; 203.47 Eligibility of 
growing equity mortgages; 203.49 Eligibility of adjustable rate 
mortgages; 203.50 Eligibility of rehabilitation loans; 203.51 
Applicability; and 203.200-203.209 Insured Ten-Year Protection Plans 
(Plan).
    (b) For the purposes of this subpart, all references in 24 CFR part 
203, subpart A, to section 203 of the Act shall be construed to refer to 
section 257 of the Act. Any references in 24 CFR part 203, subpart A, to 
the ``Mutual Mortgage Insurance Fund'' shall be deemed to be to the Home 
Ownership Preservation Entity Fund, and any references to ``the 
Commissioner'' shall be deemed to be to the Board or the Commissioner 
(as the context may require).
    (c) If there is any conflict in the application of any requirement 
of 24 CFR part 203, subpart A, to this part the provisions of this part 
shall control.

[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 621, Jan. 7, 2009]



Sec. 4001.104  Eligible mortgages.

    A mortgage eligible to be refinanced under section 257 of the Act 
must:
    (a) Have been originated on or before January 1, 2008;
    (b) Be secured by a property owned and occupied by the mortgagor as 
his or her primary residence, and be the only residence in which the 
mortgagor has any present ownership interest; and
    (c) Meet such other requirements as the Board may adopt.



Sec. 4001.106  Eligible mortgagors.

    A mortgagor shall be eligible to refinance his or her existing 
mortgages under section 257 of the Act only if:
    (a)(1) The mortgagor had, on March 1, 2008, a total monthly mortgage 
payment (based on mortgages outstanding on March 1, 2008) of more than 
31 percent of the mortgagor's monthly gross income; or
    (2) If the mortgagor's existing senior mortgage or existing 
subordinate mortgage, if any, is an adjustable-rate mortgage that by its 
terms resets after March 1, 2008, the mortgagor has a total monthly 
mortgage payment (based on mortgages outstanding on March 1, 2008) of 
more than 31 percent of the mortgagor's monthly gross income calculated 
as of the date the mortgagor first applies for the Program mortgage;
    (b) The mortgagor does not have an ownership interest in any other 
residential property;
    (c) The mortgagor has not been convicted of fraud under federal or 
state law in the past 10 years;
    (d) The mortgagor certifies that the mortgagor has not intentionally 
defaulted on any mortgage or debt and has not knowingly, or willfully 
and with actual knowledge, furnished material information known to be 
false for purposes of obtaining any Program mortgage; and
    (e) The mortgagor meets such other requirements as the Board may 
adopt.

[74 FR 621, Jan. 7, 2009]



Sec. 4001.108  Eligible properties.

    (a) A mortgage may be insured under the Program only if the property 
that is to be the security for the mortgage is a 1-to-4 unit residence.
    (b) The following property types are eligible to secure a mortgage 
insured under the Program:
    (1) Detached and semi-detached dwellings;
    (2) A condominium unit;
    (3) A cooperative unit; or
    (4) A manufactured home that is permanently affixed to realty and is 
treated as realty under applicable state law except state taxation law.

[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 621, Jan. 7, 2009]



Sec. 4001.110  Underwriting.

    A mortgage may be insured under the Program only if the following 
conditions are met:
    (a) Loan-to-value and income thresholds. The loan-to-value (LTV), 
payment-to-income, and debt-to-income

[[Page 432]]

ratios of the Program mortgage do not exceed the thresholds set forth in 
either paragraph (a)(1) or (a)(2) of this section.
    (1) Program mortgage with LTV ratio of 90 percent or less. (i) The 
initial principal balance of the Program mortgage as a percentage of the 
current appraised value of the property does not exceed 90 percent;
    (ii) The total monthly mortgage payment of the mortgagor under the 
Program mortgage does not exceed 38 percent of the mortgagor's monthly 
gross income; and
    (iii) The sum of the total monthly mortgage payment under the 
Program mortgage and all monthly recurring expenses of the mortgagor 
does not exceed 50 percent of the mortgagor's monthly gross income.
    (2) Program mortgage with up to 96.5 percent LTV. (i) The initial 
principal balance of the Program mortgage as a percentage of the current 
appraised value of the property does not exceed 96.5 percent;
    (ii) The total monthly mortgage payment of the mortgagor under the 
Program mortgage does not exceed 31 percent of the mortgagor's monthly 
gross income; and
    (iii) The sum of the total monthly mortgage payment under the 
Program mortgage and all monthly recurring expenses of the mortgagor 
does not exceed 43 percent of the mortgagor's monthly gross income.
    (b) Past credit performance. The mortgagor must have made at least 
six full payments on the existing senior mortgage being refinanced under 
the Program.
    (c) The Program mortgage shall have a maturity of not less than 30 
years and not more than 40 years from the date of origination.
    (d) Non-occupant co-borrowers. A mortgage loan may be insured by the 
FHA under the Program, even if one of the mortgagors on the loan (i.e. , 
a co-signer) does not reside at the residence securing the loan, 
provided that the non-resident mortgagor relinquishes all interests in 
the property that is to be security for the mortgage before an 
application is submitted for FHA insurance under the Program.
    (e) Amount of new mortgage payment. The mortgagor's total monthly 
payment on the mortgage to be insured under the Program must not be 
greater than the mortgagor's aggregate total monthly mortgage payment 
under the mortgagor's existing senior mortgage and all existing 
subordinate mortgages.
    (f) Limit on origination fees. Mortgagees may charge and collect 
from mortgagors allowable closing costs.

[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 621, Jan. 7, 2009]



Sec. 4001.112  Income verification.

    The mortgagee shall use FHA's procedures to verify the mortgagor's 
income and shall comply with the following additional requirements:
    (a) The mortgagee shall document and verify the income of the 
mortgagor by obtaining a transcript of the borrower's Federal income tax 
returns or a copy of the borrower's Federal income tax returns obtained 
directly from the Internal Revenue Service for the most recent two 
years; and
    (b) The mortgagee shall document and verify the mortgagor's income 
in any case in which the mortgagor has not filed a Federal income tax 
return.



Sec. 4001.114  Appraisal.

    (a) The property shall be appraised by an appraiser on the FHA 
Appraiser Roster.
    (b) An appraisal of a property to be security for a Program mortgage 
shall be conducted in accordance with Uniform Standards of Professional 
Appraisal Practice (USPAP) but dated no more than 90 days from the date 
on which the mortgage transaction is closed, except as otherwise 
provided by the Board.
    (c) The mortgagee must inform the appraiser that copies of the 
appraisal may be shared with holders and servicers of existing 
subordinate mortgages.



Sec. 4001.116  Representations and prohibitions.

    (a) Underwriting and appraisal standards. In order for the Program 
mortgage to be eligible for insurance under the Program, the underwriter 
and the mortgagee must provide certifications, in a format approved by 
the FHA, that

[[Page 433]]

the mortgage is in compliance with the underwriting and the appraisal 
standards set forth in this part, and that it meets all requirements 
applicable to the Program. FHA may require additional certifications by 
the mortgagee to ensure compliance with such additional standards as the 
FHA deems necessary given the specific mortgage transaction presented.
    (b) Mortgagor's liability for repayment. (1) The mortgagor shall 
provide a certification to FHA that the mortgagor has not:
    (i) Intentionally defaulted on the mortgagor's existing mortgage(s), 
or any other debt; or
    (ii) Knowingly or willfully and with actual knowledge furnished 
material information known to be false for the purpose of obtaining the 
mortgagor's existing mortgage(s).
    (2) The mortgagor shall provide any other certifications that FHA 
may otherwise require.
    (3) A mortgagor obligated under a Program mortgage shall agree in 
writing, on a form approved by the Board, to be liable to pay to FHA any 
Direct Financial Benefit achieved from the reduction of indebtedness on 
the existing senior and subordinate mortgages that are being refinanced 
under the Program if he or she makes a false statement or other 
misrepresentation in the certifications and documentation required for 
Program eligibility, including but not limited to the certifications 
required under section 257(e)(1)(A)(i) of the Act.
    (c) Mortgagee in violation of Program requirements. (1) If the 
mortgagee holds a Program mortgage that it originated and/or underwrote, 
and FHA finds that the mortgagee violated the Program requirements, FHA 
is prohibited from paying FHA insurance benefits to that mortgagee.
    (2) If the mortgagee no longer holds the Program mortgage that it 
originated and/or underwrote, FHA will pay the insurance claim to the 
mortgagee presently holding the Program mortgage (if all other 
requirements of the contract for mortgage insurance are met and the 
present holder did not participate in the violation of Program 
requirements) and shall seek indemnification from the non-holding 
mortgagee.
    (d) FHA insurance. A mortgage is eligible for insurance if the 
mortgagee submits a complete case binder within such time period as the 
Board prescribes. The binder shall include evidence acceptable to the 
Board that the mortgage is current.
    (e) Mortgagor failure to make first mortgage payment. FHA shall not 
pay a mortgage insurance claim to any mortgagee if the first total 
monthly mortgage payment is not made within 120 days from the date of 
closing of the mortgage. The mortgagee shall not, directly or 
indirectly, make all or a part of the first total monthly mortgage 
payment on behalf of the mortgagor. The mortgagee is prohibited from 
escrowing funds at closing for all or part of the first total monthly 
mortgage payment.

[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 621, Jan. 7, 2009]



Sec. 4001.118  Equity sharing.

    (a) Initial Equity. For purposes of section 257(k)(1) of the Act, 
the initial equity created as a direct result of the origination of a 
Program mortgage on a property, as calculated by the Program mortgage 
lender, shall equal:
    (1) The lesser of--
    (i) The appraised value of the property that was used at the time of 
origination of the Program mortgage to underwrite the mortgage and to 
determine compliance with the maximum loan-to-value ratio at origination 
established by section 257(e)(2)(B) of the Act; or
    (ii) The outstanding amount due under all existing senior mortgages, 
existing subordinate mortgages, and non-mortgage liens on the property; 
less
    (2) The original principal amount of the Program mortgage on the 
property.
    (b) FHA's interest. Upon the sale or disposition of a property or 
Program mortgage refinancing, FHA shall calculate and be entitled to 
receive the portion of the initial equity (as defined by paragraph (a) 
of this section) set forth in section 257(k)(1) of the Act,

[[Page 434]]

subject to such standards and policies as the Board may establish.

[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 622, Jan. 7, 2009]



Sec. 4001.120  Appreciation sharing or upfront payment.

    (a) Calculation of appreciation. For purposes of section 257(k)(2) 
of the Act, the amount of the appreciation in value of a property 
securing a Program mortgage that occurs between the date the mortgage 
was insured under section 257 of the Act and the date of any subsequent 
sale or disposition of the property shall be equal to the following, as 
such amounts of appreciation may be established to the satisfaction of 
FHA:
    (1) In the case of--
    (i) A sale of the property to one or more persons none of which is a 
related party of the mortgagor, the gross proceeds from the sale of the 
property; or
    (ii) A disposition of the property or the sale of the property to a 
related party of the mortgagor, the current appraised value of the 
property at the time of the disposition or sale; less
    (2) The amount of closing costs, as adopted by the Board, incurred 
by the mortgagor(s) in connection with such sale or disposition, if any; 
less
    (3) Seventy-five percent, as may be modified by the Board, of the 
actual expenditures for Capital Improvements made by the mortgagor(s) 
after the date of origination of the Program mortgage; and less
    (4) The appraised value of the property that was used at the time of 
origination of the Program mortgage to underwrite that mortgage and 
determine compliance with the maximum loan-to-value ratio at origination 
established by section 257(e)(2)(B) of the Act.
    (b) HUD's interest in appreciation. Upon sale or disposition of a 
property securing a Program mortgage, FHA shall be entitled to receive 
an amount equal to 50 percent of the appreciation in value of the 
property calculated in accordance with paragraph (a) of this section.
    (c) Eligibility of subordinate mortgage holders to receive a portion 
of appreciation in value. The persons or entities that hold, on the date 
of origination of a Program mortgage, an existing subordinate mortgage 
on the property shall be eligible to receive a portion of FHA's interest 
in the appreciation in value of the property, as determined in 
accordance with the provisions of this section and such additional 
standards and policies that the Board may establish, if:
    (1) The existing subordinate mortgage was originated on or before 
January 1, 2008;
    (2) The amount of the unpaid principal and interest on such existing 
subordinate mortgage, as of the first day of the month in which the 
mortgagor made application for the Program mortgage, is at least $2,500; 
and
    (3) Each person holding such existing subordinate mortgage agrees, 
in connection with the origination of the Program mortgage, to fully 
release:
    (i) The mortgagor(s) from any indebtedness under the existing 
subordinate mortgage; and
    (ii) The holder's mortgage lien on the property.
    (d) Shared appreciation interest of subordinate mortgage holders.
    (1) In general. The eligible holder(s) of an existing subordinate 
mortgage on a property securing a Program mortgage shall be eligible to 
receive, subject to paragraph (c)(3) of this section, an interest in 
FHA's interest in the appreciation in the value of such property up to 
the amount set forth in the Appendix to this part.
    (2) Form. The interest of an eligible holder of an existing 
subordinate mortgage under paragraph (d) of this section is evidenced in 
a shared appreciation certificate or other documentation to be issued 
by, or on behalf of, HUD.
    (3) Multiple subordinate liens. If there is more than one eligible 
existing subordinate mortgage on a property securing a Program mortgage, 
the interests of such eligible existing subordinate mortgages under 
paragraph (d)(1) of this section shall have priority among each other in 
the same order of priority that existed among the existing subordinate 
mortgages on the date of origination of the Program mortgage.
    (4) Distribution of appreciation interest to subordinate mortgage 
holders. Upon the sale or disposition of a property securing a Program 
mortgage other than

[[Page 435]]

sale or disposition related to a default, any proceeds due to FHA as a 
result of the appreciation in value of the property (as calculated in 
accordance with paragraph (a) of this section) shall be distributed:
    (i) First to the holders of any shared appreciation certificate or 
other documentation issued by HUD with respect to the property, if any, 
in accordance with paragraphs (d)(1), (d)(2), and (d)(3) of this 
section; and
    (ii) The remaining amounts, if any, will be retained by FHA.
    (e) Election to receive upfront payment in lieu of a share of 
appreciation. Upon meeting the requirements of paragraph (c) of this 
section, the eligible holder(s) of an existing subordinate mortgage on a 
property securing a Program mortgage may elect to receive, 
contemporaneously with the origination of the Program mortgage, a 
payment from FHA in an aggregate amount determined in accordance with 
the formula provided in Appendix A to this part in lieu of any right to 
receive a portion of FHA's 50 percent interest in the future 
appreciation in the appraised value of such property under paragraph (c) 
of this section.

[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 622, Jan. 7, 2009]



Sec. 4001.122  Fees and closing costs.

    (a) The holder or servicer of the existing senior and subordinate 
mortgages shall either forgive or waive all prepayment penalties and 
delinquency and default fees.
    (b) Allowable closing costs incurred in connection with the 
refinancing and insurance of a mortgage under the Program can be paid 
from the following sources:
    (1) The mortgagor's assets;
    (2) The mortgagee holding or servicing the existing senior and 
subordinate mortgage or the mortgagee originating the Program mortgage;
    (3) Premium pricing by the mortgagee providing the Program mortgage;
    (4) Financed as part of the Program mortgage provided that the 
mortgage amount is adjusted accordingly, and the loan-to-value ratio 
does not exceed 90 percent (including the up-front premium required 
under Sec. 4001.203(a)(1));
    (5) A Federal, state, county or parish, or municipal program; or
    (6) Such other sources as the Board may permit.



    Subpart C_Rights and Obligations Under the Contract of Insurance



Sec. 4001.201  Cross-reference.

    (a) All of the provisions of 24 CFR part 203, subpart B, covering 
mortgages insured under section 203 of the Act shall apply to mortgages 
insured under section 257 of the Act, except the following sections: 
203.256 Insurance of open-end advances; 203.259a Scope; 203.260 Amount 
of insurance premium; 203.261 Calculation of periodic MIP (periodic 
MIP); 203.270 Open-end insurance charges; 203.280 One-time of Up-front 
MIP; 203.281 Calculation of one-time MIP; 203.283 Refund of one-time 
MIP; 203.284 Calculation of up-front and annual MIP on or after July 1, 
1991; 203.285 Fifteen year mortgages: calculation of up-front and annual 
MIP on or after December 26, 1992; 203.415-203.417 Certificate of Claim; 
203.420-203.427 Mutual Mortgage Insurance Fund and Distributive Shares; 
203.436 Claim procedures--graduated payment mortgages; 203.438 Mortgages 
on Indian land insured pursuant to section 248 of the National Housing 
Act; 203.439 Mortgages on Hawaiian home lands insured pursuant to 
section 247 of the National Housing Act; 203.439a Mortgages on property 
in Allegheny Reservation of Seneca Nation of Indians authorized by 
section 203(q) of the National Housing Act; and 203.440-203.495 
Rehabilitation Loans.
    (b) For the purposes of this subpart, all references in 24 CFR part 
203, subpart B, to section 203 of the Act shall be construed to refer to 
section 257 of the Act. Any references in 24 CFR part 203, subpart B, to 
the ``Mutual Mortgage Insurance Fund'' shall be deemed to be to the Home 
Ownership Preservation Entity Fund, and any references to ``the 
Commissioner'' shall be deemed to be to the Board or the Commissioner 
(as the context may require).
    (c) If there is any conflict in the application of any requirement 
of 24 CFR part 203, subpart B, to this part 4001, the provisions of part 
4001 shall control.

[[Page 436]]



Sec. 4001.203  Calculation of upfront and annual mortgage insurance 
premiums for Program mortgages.

    (a) Applicable premiums. Any mortgage presented for endorsement 
under section 257 on or after October 1, 2008, and prior to September 
30, 2011, shall be subject to the following requirements:
    (1) Upfront premium. FHA shall establish and collect a single 
premium payment equal to 3 percent of the amount of the original insured 
principal obligation of the Program mortgage.
    (2) Annual premium. In addition to the premium under paragraph 
(a)(1) of this section, FHA shall establish and collect an annual 
premium payment in an amount equal to 1.5 percent of the amount of the 
remaining insured principal balance of the Program mortgage.
    (b) Proceeds for payment of the upfront premium. The up-front 
premium shall be paid with proceeds from the Program mortgage through a 
reduction of the amount of indebtedness that existed on the eligible 
mortgage prior to its being refinanced.



                  Subpart D_Servicing Responsibilities



Sec. 4001.301  Cross-reference.

    (a) All of the provisions of 24 CFR part 203, subpart C, covering 
mortgages insured under section 203 of the Act shall apply to mortgages 
insured under section 257 of the Act, except as follows: 203.664 
Processing defaulted mortgages on property located on Indian land; 
203.665 Processing defaulted mortgages on property located on Hawaiian 
home lands; 203.666 Processing defaulted mortgages on property in 
Allegany Reservation of Seneca Nation of Indians; and 203-670-203.681 
Occupied Conveyance.
    (b) For the purposes of this subpart, all references in 24 CFR part 
203, subpart C, to section 203 of the Act shall be construed to refer to 
section 257 of the Act. Any references in 24 CFR part 203, subpart C, to 
the ``Mutual Mortgage Insurance Fund'' shall be deemed to be to the Home 
Ownership Preservation Entity Fund, and any references to ``the 
Commissioner'' shall be deemed to be to the Board or the Commissioner 
(as the context may require).
    (c) If there is any conflict in the application of any requirement 
of 24 CFR part 203, subpart C, to this part 4001, the provisions of part 
4001 shall control.



Sec. 4001.303  Prohibition on subordinate liens during first five years.

    (a) Prohibition on subordinate liens during first five years. Except 
as provided in paragraph (b) of this section, a mortgagor shall not, 
during the first 5 years of the term of the mortgagor's Program 
mortgage, incur any debt, take any action, or fail to take any action 
that would have the direct result of causing a lien to be placed on the 
property securing the Program mortgage if such lien would be subordinate 
to the Program mortgage.
    (b) Property preservation exception. Paragraph (a) of this section 
shall not prevent a mortgagor on the Program mortgage from incurring new 
mortgage debt secured by a lien on the property securing the Program 
mortgage that is subordinate to the Program mortgage if:
    (1) The proceeds of the new mortgage debt are necessary to ensure 
the maintenance of property standards, including health and safety 
standards;
    (2) Repair or remediation of the condition would preserve or 
increase the property's value;
    (3) The cost of the proposed repair or remediation is reasonable for 
the geographic market area;
    (4) The results of the repair or remediation are not primarily 
cosmetic;
    (5) The repair or remediation does not represent routine 
maintenance;
    (6) The new mortgage debt is closed-end credit, as defined in Sec. 
226.2 of the Federal Reserve Board's Regulation Z (12 CFR 226.2); and
    (7) The sum of the unpaid principal balance and accrued and unpaid 
interest on the Program mortgage and the original principal balance of 
the new mortgage debt:
    (i) Does not exceed 95 percent of the estimated appraised value of 
the property securing the Program mortgage after completion of the 
proposed repair or remediation; and
    (ii) Is less than:

[[Page 437]]

    (A) The estimated appraised value of the property securing the 
Program mortgage after completion of the proposed repair or remediation; 
less
    (B) FHA's proportionate share of the initial equity created upon 
origination of the Program mortgage as determined pursuant to the 
schedule set forth in section 257(k)(1) of the Act as if a sale of the 
property had occurred on the date of origination of the new mortgage 
debt.



                          Subpart E_Enforcement

                       Mortgagor False Information



Sec. 4001.401  Notice of false information from mortgagor-procedure.

    (a) If FHA finds that the mortgagor has made a false certification 
or provided false information via any means, including but not limited 
to false documentation, FHA shall inform the mortgagor, in writing or 
any other acceptable format, of such fact.
    (b) The notice shall be sent to the mortgagor's last known address 
by both certified and ordinary mail. The notice shall state with 
specificity the misrepresentation or false statement made by the 
mortgagor. The notice shall include a request for repayment of the 
Direct Financial Benefit that the mortgagor is deemed to have received, 
as determined by FHA, by the refinancing of the eligible mortgage and 
subordinate mortgages. This does not preclude HUD or the United States 
from bringing any other action that they may be authorized to bring.
    (c) The mortgagor may request a hearing before a Hearing Officer. 
The hearing will be conducted in accordance with the provisions of 24 
CFR part 26, subpart A, except as modified by this section. Requests for 
a hearing must be made within 45 days from the date of the false 
information notice.

                         Appraiser Independence



Sec. 4001.403  Prohibitions on interested parties in insured mortgage
transaction.

    (a) A mortgage lender, mortgage broker, mortgage banker, real estate 
broker, appraisal management company or employee thereof, and any person 
with an interest in a real estate transaction involving an appraisal 
conducted as part of the process for insuring a mortgage under section 
257 of the Act shall not improperly influence or attempt to improperly 
influence through any means, including but not limited to coercion, 
extortion, collusion, compensation, instruction, inducement, 
intimidation, nonpayment for services rendered, or bribery, the 
development, reporting, result or review of a real estate appraisal 
sought in connection with the origination, processing and closing of the 
mortgage for insurance.
    (b) HUD may, pursuant to its authority under section 536(a) of the 
Act, bring an action to impose a civil money penalty for a violation of 
paragraph (a) of this section.
    (c) The authority to bring a civil money penalty under this section 
shall not preclude HUD from bringing any other action that HUD may be 
authorized to bring for a violation of paragraph (a) of this section.

                               Mortgagees



Sec. 4001.405  Mortgagees.

    (a) FHA is authorized by the Board to engage in monitoring 
activities to ensure mortgagee compliance with the requirements of this 
Program. The Mortgagee Review Board at HUD is authorized by the Board to 
impose sanctions and civil money penalties against mortgagees that 
violate program requirements under this part. The authority of the 
Mortgagee Review Board to impose sanctions and civil penalties shall not 
preclude HUD from bringing any other action that HUD may be authorized 
to bring.
    (b) Nonpayment of mortgage insurance claims for reasons established 
in Sec. 4001.16 shall not preclude the Mortgagee Review Board or HUD 
from bringing any action against the mortgagee that the Mortgagee Review 
Board or HUD are authorized to bring.
    (c) The mortgagee may request a hearing before a Hearing Officer. 
The hearing will be conducted in accordance with the provisions of 24 
CFR part 26, subpart A, except as modified by this section. Requests for 
a hearing must be made within 45 days from the date of the false 
information notice.

[[Page 438]]



 Sec. Appendix A to Part 4001--Calculation of Upfront Payment or Future 
                          Appreciation Payment

----------------------------------------------------------------------------------------------------------------
                                                                                           Future appreciation
                                                                 Upfront payment option     option* Percent of
                                                                   Percent of unpaid       unpaid principal and
Subordinate mortgage lien holder's cumulative combined loan-to-  principal and interest     interest that lien
                          value ratio                             that lien holder is     holder is eligible to
                                                                  eligible to receive       receive 
                                                                   (percent)           (percent)
----------------------------------------------------------------------------------------------------------------
135%...............................................                        3                        9
<=135%........................................................                        4                       12
----------------------------------------------------------------------------------------------------------------
* A payment to a subordinate mortgage lien holder will depend on actual appreciation of the property as
  determined in accordance with 24 CFR 4001.120. Payment will be made according to the subordinate lien holder's
  position of priority in relation to the property at the time the Program mortgage is originated.
 Payment will be based upon principal and interest as of the first day of the month in which the
  borrower made application for the Program mortgage, calculated at the pre-default contract rate of interest.


[74 FR 622, Jan. 7, 2009]

[[Page 439]]



           CHAPTER XXV--NEIGHBORHOOD REINVESTMENT CORPORATION




  --------------------------------------------------------------------
Part                                                                Page
4100            Organization and channeling of functions....         441

[[Page 441]]



PART 4100_ORGANIZATION AND CHANNELING OF FUNCTIONS--Table of Contents



Sec.
4100.1 Functions and activities.
4100.2 General organization.
4100.3 Field activities.
4100.4 Inquiries.

    Authority: Title VI, Pub. L. 95-557, 92 Stat. 2115 (42 U.S.C. 8101 
et seq.); as amended by sec. 315, Pub. L. 96-399, 94 Stat. 1645; sec. 
710, Pub. L. 97-320, 96 Stat. 1544; and sec. 520, Pub. L. 100-242, 101 
Stat. 1815.

    Source: 49 FR 12700, Mar. 30, 1984, unless otherwised noted.



Sec. 4100.1  Functions and activities.

    (a) General statement. The Neighborhood Reinvestment Corporation 
(referred to in this part as the Corporation) was established by 
Congress in the Neighborhood Reinvestment Corporation Act (title VI of 
the Housing and Community Development Amendments of 1978, Pub. L. 95-
557, October 31, 1978). The Corporation is not a department, agency, or 
instrumentality of the Federal Government.
    (b) The Corporation is authorized to receive and expend Federal 
appropriations and other public and private revenues to conduct a 
variety of programs designed primarily to revitalize older urban 
neighborhoods by mobilizing public, private, and community resources at 
the neighborhood level. These programs include:
    (1) Neighborhood Housing Services. The major effort of the 
Corporation is to assist local communities in the development, expansion 
and provision of technical services to local Neighborhood Housing 
Services (NHS) programs. NHS programs are based upon partnerships of 
community residents, and representatives of local governments and 
financial institutions. Each local program is administered by an 
autonomous, private, non-profit corporation, and conducts a 
comprehensive revitalization effort in locally selected neighborhoods. 
Services to neighborhood residents include rehabilitation counseling, 
construction assistance, financial counseling, loan referrals and loans 
at flexible rates and terms to homeowners who do not meet private 
lending criteria. Programs and strategies to remove blighting 
influences, obtain improved public services and amenities, and improve 
the neighborhood's image and the functioning of its real estate market 
are also undertaken. To insure the continuing effectiveness of NHS 
programs, the Corporation provides grants, training, information and 
technical services to NHS programs.'
    (2) Mutual Housing Associations. The Corporation also supports the 
organizational development of, and provides technical assistance to, 
Mutual Housing Associations. Mutual Housing Associations are private, 
nonprofit organizations which own, manage and continually develop 
affordable housing. Mutual Housing residents are members of the 
Association which owns and manages their buildings; thus they enjoy the 
security of long-term housing tenure. Mutual Housing developments are 
capitalized through up-front grants and mortgages in a combination that 
ensures permanent affordability to low- and moderate-income families. 
Monthly housing charges to residents are kept at affordable levels on a 
continuing basis. A key element of Mutual Housing is the Association's 
commitment to use all resources in excess of operating and maintenance 
costs for the production of additional units. A Mutual Housing 
Association's board of directors includes current member-residents, 
potential residents, and representatives from the community, local 
government and business. Residents and community members make up the 
majority on the board. A highly qualified professional staff, employed 
by the Mutual Housing Association, carries out the day-to-day activities 
of the organization. In addition to creating new affordable housing 
opportunities, Mutual Housing Associations offer a creative alternative 
for subsidized rental housing developments whose subsidies are scheduled 
to expire.
    (3) Neighborhood preservation projects. The Corporation identifies, 
monitors, evaluates and supports through demonstration grants and 
technical assistance other promising neighborhood preservation 
strategies based on local, public-private partnerships.

[[Page 442]]

    (4) Programmatic supplements. Proven, replicable programmatic tools 
are offered as broadly as resources permit. Often, these selected 
strategies are supported by Neighborhood Reinvestment grants. The 
Corporation's major programmatic supplements include the following:
    (i) Neighborhood economic development and commercial revitalization 
strategies. The Corporation's neighborhood economic development and 
commercial revitalization strategies offer NHSs a variety of tools 
designed to stabilize and enhance the economic base of NHS 
neighborhoods. They complement NHSs' revitalization mission by focusing 
the energies and resources of the partnership on the economic issues 
underlying neighborhood decline. Neighborhood economic development and 
commercial revitalization assures a viable neighborhood economy by 
strengthening small businesses and improving the physical environment of 
the area, thus providing additional goods, services, and employment 
opportunities for the community.
    (ii) Housing Development Strategies. The Corporation's Housing 
Development Strategies program addresses the shortage of affordable, 
quality housing available to low to moderate income families in NHS 
neighborhoods, as well as the blighting effect of vacant lots and 
substandard properties. Home ownership opportunities are created through 
the planning and implementation of a variety of housing mechanisms by 
the NHS, which are intended to reverse negative real estate market 
trends, enhance new residential growth, and create renewed neighborhood 
pride. The mechanisms being used to achieve these goals include the 
following.
    (A) The Owner Built Housing program is a supervised housing 
construction process that helps moderate-income homeowners to 
collectively build their own homes. The NHS provides technical 
assistance while private lenders and public bodies providing financing.
    (B) The Owner Rehab Housing program assists low to moderate income 
families in collectively rehabilitating existing blighted and vacant 
structures.
    (C) The Infill Housing program provides a mechanism for assisting 
NHSs in building new units on vacant land to meet the needs of 
prospective lower income homeowners.
    (D) The Urban Subdivisions program focuses on providing low cost, 
new housing for low-to-moderate income families on tracts of land 
suitable for the construction of 20 or more units.
    (iii) Problem properties strategies. This program assists NHSs in 
addressing specific problem areas beyond the scope of basic NHS services 
and typical financial resources. Through the implementation of various 
problem properties strategies, NHS programs are able to assist tenants 
to purchase, improve the physical condition of target blocks, eliminate 
vacant neighborhood eyesores, develop housing and service facilities for 
special populations, and stimulate private reinvestment and new 
conventional mortgages in the NHS community.
    (5) Apartment Improvement Program. The goal of the Apartment 
Improvement Program is to provide an effective, economical means of 
revitalizing and preserving neighborhoods with multi-family housing for 
the benefit of the current residents. The program is based upon a 
partnership of tenants and community representatives, property owners 
and managers, financial institutions and local government. The program 
assists in the development of an individually tailored improvement plan 
of activities from which each building may benefit, including tenant 
participation, tax assessment reviews, and increased investment or 
restructured mortgages to improve the economic viability of the 
buildings and to finance improvements.
    (6) Neighborhood Housing Services of America. The Corporation also 
supports Neighborhood Housing Services of America (NHSA), an 
independent, private, non-profit corporation which provides a variety of 
services to local NHS programs, including a secondary market for NHS 
revolving loan fund loans, and the strengthening of private sector 
resources available to the network of local NHSs.

[49 FR 12700, Mar. 30, 1984, as amended at 54 FR 13061, Mar. 30, 1989]

[[Page 443]]



Sec. 4100.2  General organization.

    (a) The Board of Directors. (1) The Corporation is under the 
direction of a Board of Directors composed of six members: the Chairman 
of the Federal Home Loan Bank Board or a member of the Federal Home Loan 
Bank Board designated by the Chairman; the Secretary of Housing and 
Urban Development; the Chairman of the Board of Governors of the Federal 
Reserve System, or a member of the Board of Governors of the Federal 
Reserve System designated by the Chairman; the Chairman of the Federal 
Deposit Insurance Corporation or the appointive member of the Board of 
Directors of the Federal Deposit Insurance Corporation if so designated 
by the Chairman; the Comptroller of the Currency; and the Chairman of 
the National Credit Union Administration, or a member of the Board of 
the National Credit Union Administration designated by the Chairman. 
Members of the Board serve without additional compensation. The Board 
elects from among its members a Chairman and Vice-Chairman. The Bylaws 
of the Corporation provide for the creation of an Audit Committee, and 
such other committees as the Board may from time to time establish.
    (2) The Board holds an Annual Meeting each year during the month of 
May (or as the Bylaws or the Board may specify). The Board also holds 
regular meetings at least quarterly and special meetings as required. 
The meetings of the Board are conducted in accordance with provisions of 
the Neighborhood Reinvestment Corporation Act, the Government in the 
Sunshine Act (5 U.S.C. 552b), the Corporation's Bylaws, and when not 
inconsistent with the foregoing, with Robert's Rules of Order. Every 
portion of every meeting of the Board is open to public observation 
except as provided by the Government in the Sunshine Act. Interested 
members of the public may attend such meetings, but may not participate 
therein unless invited or permitted to do so by the Board.
    (3) The Secretary of the Corporation, in consultation with the 
Corporation's General Counsel, is responsible for taking such steps as 
are required to ensure the Corporation's compliance with the Government 
in the Sunshine Act, as that Act may be amended from time to time. 
Consistent with this responsibility, the Secretary of the Corporation 
provides to the Communications Department at the principal office of the 
Corporation such records as the Act requires to be made available to the 
public for access during regular office hours on regular business days.
    (b) The Officers. (1) The officers of the Corporation are the 
Executive Director, the Deputy Executive Director, the Secretary, the 
Treasurer, and such other officer positions as the Board may, in 
consultation with the Executive Director, create. The Board elects the 
officers of the Corporation annually.
    (2) The Neighborhood Reinvestment Corporation Act provides that the 
Executive Director shall serve as the chief executive officer of the 
Corporation. Consistent with that authority, the Corporation's Bylaws 
provide that the Executive Director shall have the responsibility and 
authority for the day-to-day administration of the affairs of the 
Corporation under the general supervision of the Board. The Board 
periodically reviews the activities of the Executive Director and, from 
time to time, provides guidance and policy direction to the Executive 
Director in the exercise of his or her authority.
    (3) The responsibilities and authorities of the other officers of 
the Corporation are set forth in the Corporation's Bylaws, resolutions 
and policies adopted by the Board, duties and authorities delegated to 
each officer, other statutes and this statement. (See, for example, the 
Government in the Sunshine Act and paragraph (a)(3) of this section for 
specific duties of the Secretary and General Counsel.)
    (c) Principal office. The Corporation maintains its principal office 
in the District of Columbia. Currently, the principal office is 
maintained at 1325 G Street NW., Suite 800, Washington, DC 20005.

[49 FR 12700, Mar. 30, 1984, as amended at 54 FR 13062, Mar. 30, 1989]



Sec. 4100.3  Field activities.

    The Corporation conducts its field activities from district and 
field offices around the country. District offices

[[Page 444]]

provide coordination of field activities in support of local programs 
within the geographic limits of each district. Field offices within each 
district provide assistance in the development and support of local 
programs. A current directory of all district and field offices can be 
obtained upon request from the Communications Department, Neighborhood 
Reinvestment Corporation, 1325 G Street NW., Suite 800, Washington, DC 
20005.

[49 FR 12700, Mar. 30, 1984, as amended at 54 FR 13061, Mar. 30, 1989]



Sec. 4100.4  Inquiries.

    (a) General. All requests for information, forms, and records should 
be addressed to: Communications Department, Neighborhood Reinvestment 
Corporation, 1325 G Street NW., Suite 800, Washington, DC 20005.
    (b) Applications. Applications for the Corporation's assistance in 
the development of NHS programs and complementary programs and 
strategies, or the support of other promising neighborhood strategies 
are accepted on an ongoing basis. Local governmental or nonprofit 
entities should submit completed applications (forms are available upon 
request), including supportive materials, to the Corporation at the 
address stated in paragraph (a) of this section. The Corporation reviews 
applications to determine their readiness for development or support. 
Promising applications are selected for field reviews. Subject to the 
availability of the Corporation's resources, the Corporation may enter 
into agreements with top ranking applicants to provide financial and 
technical assistance in the development or support of selected programs. 
The application form contains a list of the criteria used for 
determining the readiness and promise of applications.
    (c) Records. (1) The Corporation maintains such records and 
information for public inspection and copying as are required by the 
Freedom of Information Act (5 U.S.C. 552), as that Act may be amended 
from time to time. Records are available for public inspection and 
copying during regular business hours on regular business days at the 
address stated in paragraph (a) of this section. Requests for records 
should be submitted in writing and state the full name and address of 
the person requesting the records and a description of the records or 
other information sought that is reasonably sufficient to permit their 
identification without undue difficulty. A request should be submitted 
sufficiently in advance of the date inspection or copying is desired, 
preferably by mail.
    (2) Although the Corporation finds that the publication of indexes 
of statements of policy and interpretations or administrative staff 
manuals and instructions would be unnecessary and impracticable, such 
information will be made available upon request.
    (d) Fees for providing copies for records. Fees shall be assessed 
pursuant to the Freedom of Information Act (5 U.S.C. 552) in order to 
recover the full allowable direct costs of providing copies of records. 
For purposes of this section, the term direct costs means those 
expenditures which the Corporation actually incurs in searching for and 
duplicating (and in the case of commercial use requesters, reviewing) 
documents to respond to a Freedom of Information Act (``FOIA'') request. 
Direct costs include, for example, the salaries of the employees 
performing the work (the basic rate of pay plus 16 percent of that rate 
to cover benefits) and the cost of operating duplicating equipment. The 
term search includes all time spent looking for material that is 
responsive to a request, including page-by-page or line-by-line 
identification of material within documents. Searches may be done 
manually or by computer using existing programming. The term duplication 
refers to the process of making a copy of a document necessary to 
respond to a FOIA request. Such copies can take the form of paper copy, 
microfilm, audiovisual materials, or machine readable documentation 
(e.g., magnetic tape or disk), among others. The term review refers to 
the process of examining documents located in response to a commercial 
use request to determine whether any portion of any document is 
permitted to be withheld. It also includes processing any documents for 
disclosure, e.g., doing all that is necessary to exise them and 
otherwise prepare them for release. Review does not include time spent 
resolving general

[[Page 445]]

legal or policy issues regarding the application of exemptions. A 
schedule based on these principles is set forth in paragraph (d)(9) of 
this section.
    (1) Categories of requesters. Fees will be assessed according to the 
category of the requester. There are four categories:
    (i) Commercial use requesters. For purposes of this section, the 
term commercial use request refers to a request from or on behalf of one 
who seeks information for a use or purpose that furthers the commercial, 
trade, or profit interests of the requester or the person on whose 
behalf the request is made. In determining whether a requester properly 
belongs in this category, the Corporation will look to the use to which 
the requester will put the documents requested. If the use is not clear 
from the request itself, or if there is reasonable cause to doubt the 
requester's stated use, the Corporation shall seek additional 
clarification before assigning the request to a specific category.
    (ii) Educational and noncommercial scientific institution 
requesters. For purposes of this section, the term educational 
institution refers to a preschool, a public or private elementary or 
secondary school, an institution of graduate higher education, an 
institution of undergraduate higher education, an institution of 
professional education, or an institution of vocational education, which 
operates a program or programs of scholarly research. The term 
noncommercial scientific institution refers to an institution that is 
not operated on a commercial basis, as that term is used in paragraph 
(d)(1)(i) of this section, and which is operated solely for the purpose 
of conducting scientific research the results of which are not intended 
to promote any particular product or industry. To be eligible for 
inclusion in this category, requesters must show that the request is 
made as authorized by and under the auspices of a qualifying 
institution, and that the records are not sought for a commercial use, 
but are sought in furtherance of scholarly (if the request is from an 
educational institution) or scientific (if the request is from a 
noncommercial scientific institution) research.
    (iii) Requesters who are representatives of the news media. For 
purposes of this section, the term representative of the news media 
refers to any person actively gathering information for an entity that 
is organized and operated to publish or broadcast news to the public. 
Examples of news media entities include television or radio stations 
broadcasting to the public at large, and publishers of periodicals (but 
only in those instances when they can qualify as disseminators of news) 
who make their products available for purchase or subscription by the 
general public. These examples are not intended to be all-inclusive. In 
the case of freelance journalists, they may be regarded as working for a 
news organization if they demonstrate a solid basis for expecting 
publication through that organization, even though not actually employed 
by it. A publication contract would be the clearest proof, but the 
Corporation may also look at the past publication record of a requester 
in making this determination. To be eligible for inclusion in this 
category, a requester must meet the criteria above, and his or her 
request must not be made for a commerical use. In reference to this 
class of requester, a request for records supporting the news 
dissemination function of the requester shall not be considered to be a 
request that is for a commercial use.
    (iv) All other requesters.
    (2) Limitations on fees to be charged--(i) Commercial use 
requesters. Commercial use requesters shall be assessed the full direct 
costs for searching for, reviewing, and duplicating records, in 
accordance with the fee schedule at paragraph (d)(9) of this section. 
Commercial use requesters are not entitled to the free search time or 
free pages of duplication provided to other categories of requesters.
    (ii) Educational and noncommercial scientific institution 
requesters. Requesters in this category may be assessed fees only for 
duplication of records in excess of the first 100 pages. Requesters in 
this category may not be assessed fees for search or review.
    (iii) Requesters who are representatives of the news media. 
Requesters in this category may be assessed fees only for duplication of 
records in excess of the

[[Page 446]]

first 100 pages. Requesters in this category may not be assessed fees 
for research or review.
    (iv) All other requesters. Requesters who do not fit into any of the 
categories above shall be assessed fees only for searching and 
duplicating records, except that the first 100 pages of duplication and 
the first two hours of search time shall be furnished without charge. 
Requesters in this category may not be assessed fees for review.
    (v) Review of records. Charges will be assessed only for the initial 
review of the located documents and not for time spent at the 
administrative appeal level on an exemption applied at the initial 
determination level. However, where records or portions of records are 
withheld in full under an exemption which is subsequently determined not 
to apply, and these records are reviewed again to determine the 
applicability of other exemptions not previously considered, charges for 
review are properly assessable.
    (vi) Additional copies. The Corporation will normally furnish only 
one copy of any record. The allowance of 100 free pages of duplication 
under paragraphs (d)(2) (ii), (iii), and (iv) of this section shall not 
apply to additional copies furnished at the request of the record 
requester. Full duplication fees shall be assessed for each page of each 
such additional copy.
    (3) Charges for unsuccessful search. Where applicable under 
paragraph (d)(2) of this section search fees may be assessed for time 
spent searching, even if the Corporation fails to locate the records or 
if records located are determined to be exempt from disclosure.
    (4) Notice of anticipated fees in excess of $25.00. Unless the 
person making the request states in his or her initial request that he 
or she will pay all costs regardless of amount, the Corporation will 
notify him or her as soon as possible if there is reason to believe that 
the cost for obtaining access to and/or copies of such records will 
exceed $25. If such notice is given, the time limitations contained in 
the Freedom of Information Act shall not commence until the person 
making the intitial request agrees in writing to pay such cost.
    (5) Advance payments. The Communications Director is authorized to 
require an advance payment of an amount up to the full estimated charges 
whenever he or she determines that:
    (i) The allowable charges that a requester may be required to pay 
are likely to exceed $250 and the requester has no history of payment 
and cannot provide satisfactory assurance that payment will be made; or
    (ii) A requester has previously failed to pay a fee charged in a 
timely manner.

If such a payment is required, the time limitations contained in the 
Freedom of Information Act shall not commence until payment is made.
    (6) Charging interest. The Corporation will assess interest charges 
on any unpaid fees starting on the 31st day following the day on which 
the billing for fees was sent to the requester. Interest will be at the 
rate prescribed in 31 U.S.C. 3717 and will accrue from the date of the 
billing. Receipt of the fee by the Corporation, even if not processed, 
will stay the accrual of interest. Interest is not chargeable for unpaid 
advance payments under paragraph (d)(5) of this section.
    (7) Aggregating requests. A requester may not file multiple requests 
at the same time, each seeking portions of the document or documents, 
solely in order to avoid payment of fees. When the Corporation 
reasonably believes that a requester, or a group of requesters acting in 
concert, is attempting to break a request down into a series of requests 
for the purpose of evading the assessment of fees, the Corporation may 
aggregate any such requests and charge accordingly.
    (8) Waiver or reduction of fee. The Corporation will furnish 
documents without charge or at a reduced charge when it is determined 
that disclosure of the information is in the public interest because it 
is likely to contribute significantly to public understanding of the 
operations or activities of the Corporation and is not primarily in the 
commercial interest of the requester. In making a request for a waiver 
or reduction of fees, a requester should include a clear statement of 
his or her interest in the requested documents: The

[[Page 447]]

proposed use for the documents and whether the requester will derive 
income or other benefit from such use; and a statement of how the public 
will benefit from such use. Determinations concerning waiver or 
reduction of fees shall be made by the Executive Director, or his or her 
designee.
    (9) Schedule of fees. Fees for searching for, reviewing, 
duplicating, and providing records and information of the Corporation 
under this section will be assessed in accordance with the following 
schedule:
    (i) Manual search. For each quarter hour or fraction thereof: $3.37.
    (ii) Computer search. For each quarter hour or fraction thereof: 
$3.37.
    (iii) Review. For each quarter hour or fraction thereof: $4.87.
    (iv) Duplication.
    (A) For a paper photocopy of an existing paper record, $.10 per 
page.
    (B) For duplication of records other than existing paper records 
(such as computer-stored information, audio or video tapes, microfiche 
or microfilm), the fee shall equal the actual direct cost of production 
and duplication of the records or information in a form that is 
reasonably usable by the requester.
    (10) Processing costs. The Communications Director will waive 
payment in instances in which the costs of routine collection and 
processing of the fee are likely to equal or exceed the amount of the 
fee.

[49 FR 12700, Mar. 30, 1984, as amended at 54 FR 50953, Dec. 19, 1989]

[[Page 449]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 451]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2012)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Circulars and Guidance 
                (200--299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300-- 
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)

[[Page 452]]

       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)
        II  Recovery Accountability and Transparency Board (Parts 
                200--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600-- 3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)

[[Page 453]]

    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
    LXXXII  Special Inspector General for Iraq Reconstruction 
                (Parts 9200--9299)

[[Page 454]]

     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)

[[Page 455]]

       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

[[Page 456]]

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

[[Page 457]]

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

[[Page 458]]

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

[[Page 459]]

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)

[[Page 460]]

         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

[[Page 461]]

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)

[[Page 462]]

     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense

[[Page 463]]

       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education [Reserved]
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)

[[Page 464]]

        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

[[Page 465]]

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
    62-100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
   103-104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
   129-200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--599)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

[[Page 466]]

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899) 
                [Reserved]
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)

[[Page 467]]

     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)

[[Page 468]]

        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)

[[Page 469]]

       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 471]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2012)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII, L
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV, L
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII, L
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I

[[Page 472]]

Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Bureau of Ocean Energy Management, Regulation,    30, II
     and Enforcement
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
   for the District of Columbia
[[Page 473]]

Customs and Border Protection                     19, I
Defense Contract Audit Agency                     32, I
Defense Department                                2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV

[[Page 474]]

  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX

[[Page 475]]

Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A,
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 6, I; 8, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV

[[Page 476]]

Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Bureau of Ocean Energy Management, Regulation,  30, II
       and Enforcement
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
Iraq Reconstruction, Special Inspector General    5, LXXXVII
     for
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII

[[Page 477]]

  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Office of Workers' Compensation Programs        20, VII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X

[[Page 478]]

National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Offices of Independent Counsel                    28, VI
Office of Workers' Compensation Programs          20, VII
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Recovery Accountability and Transparency Board    4, II
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII, L
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV, L

[[Page 479]]

Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII, L
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII

[[Page 480]]

United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 481]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected 1949-1963, 1964-1972, 1973-1985, and 1986-2000'' published in 
11 separate volumes.

                                  2001

24 CFR
                                                                   66 FR
                                                                    Page
Chapter XX
3500 Policy statement..............................................53052

                                  2002

24 CFR
                                                                   67 FR
                                                                    Page
Chapter XII
2002 Authority citation revised....................................47216
2002.1 Revised.....................................................47216
2002.3 Revised.....................................................47217
2002.7 revised.....................................................47217
2002.9 Revised.....................................................47217
2002.11 (a) revised................................................47217
2002.15 (b) revised................................................47217
2002.17 (a) revised................................................47217
Chapter XX
3280 Waiver........................................................20400
3280.112 Amended; eff. 9-16-02.....................................12817
3280.202 Amended; eff. 9-16-02.....................................12817
    (c)(1) introductory text, (2), (3) revised.....................49795
3280.208 Revised; eff. 9-16-02.....................................12817
3282.203 (b)(4) amended; eff. 9-16-02..............................12817
3284 Added.........................................................52835

                                  2003

24 CFR
                                                                   68 FR
                                                                    Page
Chapter XII
2004 Revised........................................................3366
Chapter XX
3282.10 Revised; eff. 4-16-03......................................12788
3500.17 (m)(1) revised; eff. 4-16-03...............................12789

                                  2004

                       (No regulations published)

                                  2005

24 CFR
                                                                   70 FR
                                                                    Page
Chapter XII
2004.28 Revised....................................................36791
Chapter XX
3280.4 (b) amended; eff. 5-30-06...................................72042
3280.103 (b) revised; eff. 5-30-06.................................72042
3280.202 Amended; eff. 5-30-06.....................................72042
3280.203 (a) introductory text revised; eff. 5-30-06...............72042
3280.206 Revised; eff. 5-30-06.....................................72042
3280.207 (a)(4) introductory text revised; eff. 5-30-06............72043
3280.303 (g) revised; eff. 5-30-06.................................72043
3280.304 (b)(1) revised; eff. 5-30-06..............................72043
3280.305 (g)(3), (4), (5), (i)(l)(i), (ii), (A), (B) and (C) 
        redesignated as (g)(4), (5), (6), (j)(1), (2), (i), (ii) 
        and (iii); (c)(1)(iii), (3)(i)(A), (B), (C), (iv) and new 
        (g)(3) added; (e) and new (j)(1) revised; eff. 5-30-06.....72043
3280.306 (b)(1) revised; eff. 5-30-06..............................72045
3280.401 (a) and (b) revised; eff. 5-30-06.........................72045

[[Page 482]]

3280.403 (b), (d)(2) and (e) revised; eff. 5-30-06.................72046
3280.404 (b) revised; eff. 5-30-06.................................72046
3280.405 (b), (c) and (e) revised; eff. 5-30-06....................72046
3280.406 (b) introductory text revised; eff. 5-30-06...............72046
3280.504 (a)(1) and (b) revised; eff. 5-30-06......................72046
3280.508 (a), (b) and (e) revised; eff. 5-30-06....................72047
3280.510 (d) added; eff. 5-30-06...................................72048
3280.604 (b)(2) and table revised; eff. 5-30-06....................72048
3280.607 (b)(2)(iii), (iv) and (v) redesignated as (b)(2)(iv), (v) 
        and (vi); (a)(6) and new (b)(2)(iii) added; (c)(6)(iv) 
        revised; eff. 5-30-06......................................72049
3280.703 Table revised; eff. 5-30-06...............................72049
3280.704 (b)(5)(i) revised; eff. 5-30-06...........................72050
3280.705 (b)(3), (4), (c)(2), (l)(1), (2)(ii) and (iii) revised; 
        eff. 5-30-06...............................................72050
3280.706 (b)(3) revised; eff. 5-30-06..............................72050
3280.707 (f) revised; eff. 5-30-06.................................72050
3280.709 (h) added; eff. 5-30-06...................................72050
3280.714 (a)(2) revised; eff. 5-30-06..............................72051
3280.715 (c), (e) introductory text and (1) revised; eff. 5-30-06 
                                                                   72051
3280.801 (a) and (b) revised; eff. 5-30-06.........................72051
3280.803 (g) illustration/caption redesignated as (f) 
        illustration/caption; new (f) illustration/caption, 
        (k)(1), (k)(3) introductory text, (ii) and (iii) revised; 
        eff. 5-30-06...............................................72051
3280.804 (a) revised; (k) amended; eff. 5-30-06....................72051
3280.805 (a)(3)(iv) revised; eff. 5-30-06..........................72051
3280.806 (a)(2) and (d)(9) revised; eff. 5-30-06...................72052
3280.807 (c) revised; eff. 5-30-06.................................72052
3280.808 (a), (m), (o) and (q) revised; (r) removed; (s) 
        redesignated as new (r); eff. 5-30-06......................72052
3280.811 (b) introductory text revised; eff. 5-30-06.......