[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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