[Congressional Record Volume 153, Number 103 (Monday, June 25, 2007)]
[House]
[Pages H7025-H7027]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FHA MANUFACTURED HOUSING LOAN MODERNIZATION ACT OF 2007
Mr. DONNELLY. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 2139) to modernize the manufactured housing loan insurance
program under title I of the National Housing Act, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2139
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This title may be cited as the ``FHA Manufactured Housing
Loan Modernization Act of 2007''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) manufactured housing plays a vital role in providing
housing for low- and moderate-income families in the United
States;
(2) the FHA title I insurance program for manufactured home
loans traditionally has been a major provider of mortgage
insurance for home-only transactions;
(3) the manufactured housing market is in the midst of a
prolonged downturn which has resulted in a severe contraction
of traditional sources of private lending for manufactured
home purchases;
(4) during past downturns the FHA title I insurance program
for manufactured homes has filled the lending void by
providing stability until the private markets could recover;
(5) in 1992, during the manufactured housing industry's
last major recession, over 30,000 manufactured home loans
were insured under title I;
(6) in 2006, fewer than 1,500 manufactured housing loans
were insured under title I;
(7) the loan limits for title I manufactured housing loans
have not been adjusted for inflation since 1992; and
(8) these problems with the title I program have resulted
in an atrophied market for manufactured housing loans,
leaving American families who have the most difficulty
achieving homeownership without adequate financing options
for home-only manufactured home purchases.
(b) Purposes.--The purposes of this Act are--
(1) to provide adequate funding for FHA-insured
manufactured housing loans for low- and moderate-income
homebuyers during all economic cycles in the manufactured
housing industry;
(2) to modernize the FHA title I insurance program for
manufactured housing loans to enhance participation by Ginnie
Mae and the private lending markets; and
(3) to adjust the low loan limits for title I manufactured
home loan insurance to reflect the increase in costs since
such limits were last increased in 1992 and to index the
limits to inflation.
SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION
PORTFOLIO.
The second sentence of section 2(a) of the National Housing
Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``In no case'' and inserting ``Other than
in connection with a manufactured home or a lot on which to
place such a home (or both), in no case''; and
(2) by striking ``: Provided, That with'' and inserting ``.
With''.
SEC. 4. INSURANCE BENEFITS.
(a) In General.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), is amended by
adding at the end the following new paragraph:
``(8) Insurance benefits for manufactured housing loans.--
Any contract of insurance with respect to loans, advances of
credit, or purchases in connection with a manufactured home
or a lot on which to place a manufactured home (or both) for
a financial institution that is executed under this title
after the date of the enactment of the FHA Manufactured
Housing Loan Modernization Act of 2007 by the Secretary shall
be conclusive evidence of the eligibility of such financial
institution for insurance, and the validity of any contract
of insurance so executed shall be incontestable in the hands
of the bearer from the date of the execution of such
contract, except for fraud or misrepresentation on the part
of such institution.''.
(b) Applicability.--The amendment made by subsection (a)
shall only apply to loans that are registered or endorsed for
insurance after the date of the enactment of this Act.
SEC. 5. MAXIMUM LOAN LIMITS.
(a) Dollar Amounts.--Paragraph (1) of section 2(b) of the
National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) in clause (ii) of subparagraph (A), by striking
``$17,500'' and inserting ``$25,090'';
(2) in subparagraph (C) by striking ``$48,600'' and
inserting ``$69,678'';
(3) in subparagraph (D) by striking ``$64,800'' and
inserting ``$92,904'';
(4) in subparagraph (E) by striking ``$16,200'' and
inserting ``$23,226''; and
(5) by realigning subparagraphs (C), (D), and (E) 2 ems to
the left so that the left margins of such subparagraphs are
aligned with the margins of subparagraphs (A) and (B).
(b) Annual Indexing.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this Act, is further amended by
adding at the end the following new paragraph:
``(9) Annual indexing of manufactured housing loans.--The
Secretary shall develop a method of indexing in order to
annually adjust the loan limits established in subparagraphs
(A)(ii), (C), (D), and (E) of this subsection. Such index
shall be based on the manufactured housing price data
collected by the United States Census Bureau. The Secretary
shall establish such index no later than one year after the
date of the enactment of the FHA Manufactured Housing Loan
Modernization Act of 2007.''.
(c) Technical and Conforming Changes.--Paragraph (1) of
section 2(b) of the National Housing Act (12 U.S.C.
1703(b)(1)) is amended--
(1) by striking ``No'' and inserting ``Except as provided
in the last sentence of this paragraph, no''; and
(2) by adding after and below subparagraph (G) the
following:
``The Secretary shall, by regulation, annually increase the
dollar amount limitations in subparagraphs (A)(ii), (C), (D),
and (E) (as such limitations may have been previously
adjusted under this sentence) in accordance with the index
established pursuant to paragraph (9).''.
SEC. 6. INSURANCE PREMIUMS.
Subsection (f) of section 2 of the National Housing Act (12
U.S.C. 1703(f)) is amended--
(1) by inserting ``(1) Premium Charges.--'' after ``(f)'';
and
(2) by adding at the end the following new paragraph:''.
``(2) Manufactured Home Loans.--Notwithstanding paragraph
(1), in the case of a loan, advance of credit, or purchase in
connection with a manufactured home or a lot on which to
place such a home (or both), the premium charge for the
insurance granted under this section shall be paid by the
borrower under the loan or advance of credit, as follows:
``(A) At the time of the making of the loan, advance of
credit, or purchase, a single premium payment in an amount
not to exceed 2.25 percent of the amount of the original
insured principal obligation.
``(B) In addition to the premium under subparagraph (A),
annual premium payments during the term of the loan, advance,
or obligation purchased in an amount not exceeding 1.0
percent of the remaining insured principal balance (excluding
the portion of the remaining balance attributable to the
premium collected under subparagraph (A) and without taking
into account delinquent payments or prepayments).
``(C) Premium charges under this paragraph shall be
established in amounts that are sufficient, but do not exceed
the minimum amounts necessary, to maintain a negative credit
subsidy for the program under this section for insurance of
loans, advances of credit, or purchases in connection with a
manufactured home or a lot on which to place such a home (or
both), as determined based upon risk to the Federal
Government under existing underwriting requirements.
``(D) The Secretary may increase the limitations on premium
payments to percentages above those set forth in
subparagraphs (A) and (B), but only if necessary, and not in
excess of the minimum increase necessary, to maintain a
negative credit subsidy as described in subparagraph (C).''.
[[Page H7026]]
SEC. 7. TECHNICAL CORRECTIONS.
(a) Dates.--Subsection (a) of section 2 of the National
Housing Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``on and after July 1, 1939,'' each place
such term appears; and
(2) by striking ``made after the effective date of the
Housing Act of 1954''.
(b) Authority of Secretary.--Subsection (c) of section 2 of
the National Housing Act (12 U.S.C. 1703(c)) is amended to
read as follows:
``(c) Handling and Disposal of Property.--
``(1) Authority of secretary.--Notwithstanding any other
provision of law, the Secretary may--
``(A) deal with, complete, rent, renovate, modernize,
insure, or assign or sell at public or private sale, or
otherwise dispose of, for cash or credit in the Secretary's
discretion, and upon such terms and conditions and for such
consideration as the Secretary shall determine to be
reasonable, any real or personal property conveyed to or
otherwise acquired by the Secretary, in connection with the
payment of insurance heretofore or hereafter granted under
this title, including any evidence of debt, contract, claim,
personal property, or security assigned to or held by him in
connection with the payment of insurance heretofore or
hereafter granted under this section; and
``(B) pursue to final collection, by way of compromise or
otherwise, all claims assigned to or held by the Secretary
and all legal or equitable rights accruing to the Secretary
in connection with the payment of such insurance, including
unpaid insurance premiums owed in connection with insurance
made available by this title.
``(2) Advertisements for proposals.--Section 3709 of the
Revised Statutes shall not be construed to apply to any
contract of hazard insurance or to any purchase or contract
for services or supplies on account of such property if the
amount thereof does not exceed $25,000.
``(3) Delegation of authority.--The power to convey and to
execute in the name of the Secretary, deeds of conveyance,
deeds of release, assignments and satisfactions of mortgages,
and any other written instrument relating to real or personal
property or any interest therein heretofore or hereafter
acquired by the Secretary pursuant to the provisions of this
title may be exercised by an officer appointed by the
Secretary without the execution of any express delegation of
power or power of attorney. Nothing in this subsection shall
be construed to prevent the Secretary from delegating such
power by order or by power of attorney, in the Secretary's
discretion, to any officer or agent the Secretary may
appoint.''.
SEC. 8. REVISION OF UNDERWRITING CRITERIA.
(a) In General.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this Act, is further amended by
adding at the end the following new paragraph:
``(10) Financial soundness of manufactured housing
program.--The Secretary shall establish such underwriting
criteria for loans and advances of credit in connection with
a manufactured home or a lot on which to place a manufactured
home (or both), including such loans and advances represented
by obligations purchased by financial institutions, as may be
necessary to ensure that the program under this title for
insurance for financial institutions against losses from such
loans, advances of credit, and purchases is financially
sound.''.
(b) Timing.--Not later than the expiration of the 6-month
period beginning on the date of the enactment of this Act,
the Secretary of Housing and Urban Development shall revise
the existing underwriting criteria for the program referred
to in paragraph (10) of section 2(b) of the National Housing
Act (as added by subsection (a) of this section) in
accordance with the requirements of such paragraph.
SEC. 9. REQUIREMENT OF SOCIAL SECURITY ACCOUNT NUMBER FOR
ASSISTANCE.
Section 2 of the National Housing Act (12 U.S.C. 1703) is
amended by adding at the end the following new subsection:
``(j) Requirement of Social Security Account Number for
Financing.--No insurance shall be granted under this section
with respect to any obligation representing any loan, advance
of credit, or purchase by a financial institution unless the
borrower to which the loan or advance of credit was made, and
each member of the family of the borrower who is 18 years of
age or older or is the spouse of the borrower, has a valid
social security number.''.
SEC. 10. GAO STUDY OF MITIGATION OF TORNADO RISKS TO
MANUFACTURED HOMES.
The Comptroller General of the United States shall assess
how the Secretary of Housing and Urban Development utilizes
the FHA manufactured housing loan insurance program under
title I of the National Housing Act, the community
development block grant program under title I of the Housing
and Community Development Act of 1974, and other programs and
resources available to the Secretary to mitigate the risks to
manufactured housing residents and communities resulting from
tornados. The Comptroller General shall submit to the
Congress a report on the conclusions and recommendations of
the assessment conducted pursuant to this section not later
than the expiration of the 12-month period beginning on the
date of the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Indiana (Mr. Donnelly) and the gentlewoman from Florida (Ms. Ginny
Brown-Waite) each will control 20 minutes.
The Chair recognizes the gentleman from Indiana.
General Leave
Mr. DONNELLY. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Indiana?
There was no objection.
Mr. DONNELLY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the FHA Manufactured Housing Loan Modernization Act of
2007, which I introduced with my colleagues Chairman Frank, Mr. Tiberi
and Mr. Feeney, includes important provisions that will help revitalize
the manufactured housing industry, which plays a critical role in
helping Americans achieve the dream of home ownership by providing them
with alternative opportunities for affordable housing. This bill passed
the Financial Services Committee unanimously on May 28, 2007.
This $8 billion a year industry provides jobs for people not only in
the Second District of Indiana, but throughout the country. These homes
house 22 million people in over 10.5 million homes.
Mr. Speaker, I have seen firsthand in my own district how these homes
have continued a tradition of quality and safe construction over many
years. They present a high quality, affordable housing opportunity for
American families.
H.R. 2139 would raise the manufactured housing title I loan limits
and annually index them for inflation. It will also give HUD the
authority to increase insurance premiums and improve underwriting
standards in order to make sure that the program is actuarially sound.
We have a proud and strong tradition in Elkhart and in other Indiana
communities of providing first class housing for Americans, providing
quality jobs for Hoosiers at the same time. It is part of who we are.
In turn, these communities are extraordinarily proud of the role they
play and that we play in our district in providing housing for American
homebuyers.
Unfortunately, title I loan limits have not been adjusted for
inflation since 1992 and the manufactured housing industry has
experienced a major decline since that time. In 1992, in the midst of
the last downturn, FHA insured 30,000 title I loans. In 2006, that
number was less than 1,500. In Indiana alone, that number went from 377
loans in 1992 to only four last year.
These are more than just numbers. They represent a serious drop in a
crucial component of affordable home ownership for Americans. This not
only affects low and moderate income families that these loans are
designed to help, but it affects the manufactured housing industry and
the housing market as a whole.
Because of the drastic reduction in FHA title I loans, American
families are left to struggle to try and find adequate financing
options for their manufactured home purchases. This body has a
responsibility to try and provide affordable housing options for
American families, and this legislation does just that.
As you know, Mr. Speaker, June is Home Ownership Month, and it is
only fitting that we pass this much-needed legislation. Today, I urge
all my colleagues to support H.R. 2139, to strengthen the American
housing market and to put more affordable housing opportunities within
reach for American families.
Mr. Speaker, I reserve the balance of my time.
Ms. GINNY BROWN-WAITE of Florida. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, I rise in support of H.R. 2139, the Manufactured Housing
Loan Improvement Act of 2007. It is virtually identical to legislation
that passed the House last year, only it was called the act of 2006,
and it passed by 412-6. Obviously, it was a very popular bill.
The bill that we are considering today would modernize the FHA title
I manufactured housing loan program, which insures loans for
manufactured homes owned on leased land, for lots used to site
manufactured homes, and for a combination of manufactured homes and
lots. The program is different from the insuring of manufactured homes
under title II of FHA, in which the manufactured home is sited
[[Page H7027]]
on land also owned and mortgaged under the loan.
As the gentleman from Indiana stated, in 1992 some 3,000 loans were
insured under the FHA title I manufactured housing loan program.
However, last year this number dropped to around 1,500 loans. Clearly
this legislation seeks to address the factors that have been widely
cited as the reasons for the steep decline in the number of insured
loans. These include vague underwriting standards; a portfolio cap on
title I loans; a guarantee that is not sufficient for acceptance in the
secondary market; loan limits that have not kept up with inflation,
and, actually, they haven't been adjusted since 1992; and a resulting
reduced private sector loan origination participation.
During the Financial Services Committee markup of this legislation,
Congressman Bachus offered and the committee accepted wording that
would authorize the GAO to assess how the Secretary of Housing and
Urban Development utilizes the FHA manufactured housing loan insurance
program and other programs administered by HUD to mitigate the risk to
manufactured housing residents and communities resulting from
tornadoes.
Every year, an average of 800 tornadoes sweep across the United
States, resulting in more than 80 deaths, more than 1,500 injuries and
millions of dollars in property damage. One of nature's most powerful
and violent storms, large tornadoes often record winds with speeds in
excess of 250 miles an hour.
Florida and parts of my district were ravaged by these tornadoes
earlier this year, which reminded us that natural catastrophes can
strike with little warning, forcing communities to confront a loss of
infrastructure and, unfortunately, sometimes a loss of life.
Many residents of homes have a place to go in the event of a tornado,
whether it is a basement or an interior room. Manufactured housing
residents do not have a basement and they often do not have an interior
room. Despite rapid advances in tornado warning technology, residents
of manufactured housing communities often do not have adequate access
to proper shelter.
{time} 1530
That is why the House passed the Tornado Shelters Act, which was
signed into law in 2003. That bipartisan bill authorized communities to
use community development block grant money to construct or improve
tornado-safe shelters located in manufactured housing park areas.
Unfortunately, it is not used enough. Often in the face of a tornado
threat, it is said we can do two things: pray and prepare. Pray it
won't happen again and prepare for the next line of twisters.
While the residents can pray, our government and this Congress can do
much to help them prepare.
As we improve the title I manufactured housing loan programs, I hope
we can do everything in our power to ensure that residents of
manufactured housing communities have adequate protection from natural
catastrophes such as tornadoes. H.R. 2139 will facilitate greater
access to manufactured housing, and I urge my colleagues to support it.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
Mr. DONNELLY. Mr. Speaker, I want to thank my colleague, the
gentlewoman from Florida (Ms. Ginny Brown-Waite). This is an excellent
piece of legislation. My colleagues on both sides of the aisle are in
support and are participating in H.R. 2139.
Mr. ELLSWORTH. Mr. Speaker, I rise today to urge my colleagues to
support the millions of Americans who live in manufactured housing
across the country.
Over the years, the willingness of Americans to work hard and achieve
their dreams has illustrated the health of our economy and our
democracy. Hoosiers recognize the importance of safe, affordable
housing to the realization of this American Dream, and my constituents
sent me to Congress to make this dream more accessible to Hoosier
families.
And so, I am proud to be a cosponsor of the Manufactured Housing Loan
Modernization Act, which will expand the opportunities of home
ownership. I am also proud to have introduced CJ's Home Protection Act,
which will add to the efforts of housing manufacturers to ensure the
safety of the families in their homes.
Mr. DONNELLY. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Indiana (Mr. Donnelly) that the House suspend the rules
and pass the bill, H.R. 2139, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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