[Federal Register Volume 64, Number 170 (Thursday, September 2, 1999)]
[Rules and Regulations]
[Pages 48083-48085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22902]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
Farm Service Agency

7 CFR Part 1924

RIN 0575-AC11


Manufactured Housing Thermal Requirements

AGENCIES: Rural Housing Service, Rural Business-Cooperative Service, 
Rural Utilities Service, Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Housing Service (RHS), a part of the former Farmers 
Home Administration (FmHA), and now an agency within the Rural 
Development mission area of the U.S. Department of Agriculture, is 
amending its regulations regarding the thermal requirements for 
manufactured homes. The intended effect is to make the references to 
thermal requirements for manufactured homes consistent with 
requirements for the U.S. Department of Housing and Urban Development 
(HUD) zones that correspond to the RHS climatic zones. This will reduce 
the burden on the manufactured housing industry, RHS field personnel, 
and most importantly RHS customers.

EFFECTIVE DATE: October 4, 1999.

FOR FURTHER INFORMATION CONTACT: Samuel J. Hodges III, Architect, 
Program Support Staff, Rural Housing Service, U.S. Department of 
Agriculture, Stop 0761, Washington, DC 20250-0761, Telephone: (202) 
720-9653.

SUPPLEMENTARY INFORMATION:

Classification

    This rule has been determined to be significant and was reviewed by 
the Office of Management and Budget under Executive Order 12866.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' It is the determination of the 
issuing agency that this action does not constitute a major Federal 
action significantly affecting the quality of the human environment, 
and in accordance with the National Environmental Policy Act of 1969, 
Pub. L. 91-190, an Environmental Impact Statement is not required.

Intergovernmental Consultation

    This action affects the following programs as listed in the Catalog 
of Federal Domestic Assistance:

10.405  Farm Labor Housing Loans and Grants
10.410  Very Low to Moderate Income Housing Loans
10.415  Rural Rental Housing Loans

    All of the affected programs, except 10.410 Very Low to Moderate 
Income Housing Loans, are subject to the provisions of Executive Order 
12372 that requires intergovernmental consultation with State and local 
officials prior to making individual loans.

Civil Justice Reform

    The final rule has been reviewed under Executive Order 12998, Civil 
Justice Reform. In accordance with this rule:
    (1) Unless otherwise specifically provided all state and local laws 
and regulations that are in conflict with this rule will be preempted; 
(2) no retroactive effect will be given to this rule except as 
specifically prescribed in the rule: and (3) administrative proceedings 
of the National Appeals Division (7 CFR part 11) must be exhausted 
before bringing suit.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (44 U.S.C. 3507), 
the information collection requirements included in this rule have been 
approved through 7 CFR part 3550. The assigned OMB number is 0575-0172. 
This rule does not impose any new information collection or 
recordkeeping requirements from those approved by the Office of 
Management and Budget.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. Under section 202 of the UMRA, RHS generally must 
prepare a written statement, including a cost-benefit analysis, for 
proposed and final rules with ``Federal mandates'' that may result in 
expenditures to State, local, and tribal governments, in the aggregate, 
or to the private sector, of $100 million or more in any one year. When 
such a statement is needed for a rule, section 205 of the UMRA 
generally requires RHS to identify and consider a reasonable number of 
regulatory alternatives and adopt the least costly, more cost-effective 
or least burdensome

[[Page 48084]]

alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, and tribal 
governments or the private sector. Thus today's rule is not subject to 
the requirements of sections 202 and 205 of the UMRA.

Background

    Subsection 502(e)(1) of the Housing Act of 1949, 42 U.S.C. 
1472(e)(1), establishes standards for manufactured homes which will be 
financed with RHS single family housing loans under section 502 of the 
Housing Act of 1949. Subsection 502(e)(1)(C) provides that manufactured 
homes must meet the energy conservation requirements applicable to 
other non-manufactured housing financed by RHS single family housing 
loans until the agency established energy conserving requirements under 
section 502(e)(2). The purpose of this regulation is to establish 
energy conserving requirements specifically designed for manufactured 
homes pursuant to section 502(e)(2).
    The section 502(e) criteria for energy conserving requirements for 
RHS financed manufactured housing require that the requirements: ``(A) 
reduce the operating costs for a borrower by maximizing the energy 
savings and be cost-effective over the life of the manufactured home or 
the term of the loan, whichever is shorter, taking into account 
variations in climate, types of energy used, the cost to modify the 
home to meet such requirements, and the estimated value of the energy 
saved over the term of the mortgage; and (B) be established so that the 
increase in the annual loan payment resulting from the added energy 
conserving requirements in excess of those required by the standards 
prescribed under title VI of the Housing and Community Development Act 
of 1974 [42 U.S.C. 5401 et seq.] shall not exceed the projected savings 
in annual energy costs.''
    The agency is adopting the energy conserving standards established 
by HUD under title VI of the Housing and Community Development Act of 
1974 and, as hereinafter discussed, has determined that these zoned 
standards maximize energy savings and are cost-effective to the 
borrower. Under this final rule manufactured homes will no longer be 
required to meet the RHS thermal requirements applicable to non-
manufactured single family housing financed by RHS. Exhibit D of 7 CFR 
part 1924, subpart A, adopts the HUD thermal design zone requirements 
for the Federal Manufactured Home Construction and Safety Standards 
(FMHCSS) that correspond to the RHS climatic zones.
    The existing RHS requirements for a manufactured unit are: (1) The 
unit must meet the FMHCSS, and (2) the unit must meet the same RHS 
thermal requirements as are applicable to other, non-manufactured 
single family housing, financed by RHS prior to the National Energy 
Policy Act of 1992. Since HUD increased its energy requirements for 
manufactured homes (58 FR 54975, Oct. 25, 1993, effective Oct. 25, 
1994), RHS has compared these new requirements with the RHS thermal 
requirements to evaluate the differences.
    Our analysis indicates that the thermal performance of a unit built 
to the HUD requirements is roughly comparable to the thermal 
performance of a unit built to the requirements of the corresponding 
RHS climatic zones. The table below lists the HUD zones that are 
roughly comparable to the RHS climatic zones.

------------------------------------------------------------------------
                                                              HUD zones
              RHS climate zone  (degree-days)                   (state
                                                              boundary)
------------------------------------------------------------------------
0-1000.....................................................            1
1001-2500..................................................            2
2501-4500..................................................            2
4501-6000..................................................            3
>6000......................................................            3
------------------------------------------------------------------------

    The HUD increases in the thermal requirements of the building 
envelope are substantial. However, HUD's requirements are not based on 
climatic region; instead, they are based on state boundary. As an 
example, in the State of California there are 5 RHS climatic zones; 
whereas, HUD has identified the entire state as a single zone (HUD Zone 
2). In California, the HUD-code home would be acceptable to RHS in 
climatic zones with 4500 or less heating degree days. However, in 
colder climates of California, the HUD Zone 2 unit would not be 
adequate. The HUD Zone 3 requirements are roughly comparable to the RHS 
requirements for climatic zones with 4501 or more heating degree days. 
Similar comparisons can be made in other states.
    On this basis, in order to simplify requirements we are amending 
our current energy requirements for manufactured housing to adopt the 
design requirements for the HUD zones that correspond to the RHS 
climatic zones.
    These are the benefits to the manufactured housing industry, RHS, 
and most importantly, RHS customers:
    1. Manufacturers will no longer have to conform with the energy 
requirements of two Federal agencies. As required by federal law, 
manufacturers will continue to follow the FMHCSS for non-thermal 
requirements.
    2. Manufacturers will not have to retain qualified consultants to 
certify that designs conform with the existing RHS thermal 
requirements.
    3. Manufacturers will no longer have to substantiate design 
conformance to RHS thermal standards.
    4. Loan processing will be expedited since less paperwork will have 
to be reviewed by RHS loan approval officials.
    5. RHS will reduce its regulatory requirements.
    6. This will simplify on-site inspection by the RHS Community 
Development Managers (CDM). Since each local office already knows their 
climatic zone, and since HUD requires the thermal zone for which a unit 
is built to be posted on a sticker in the unit, a CDM could quickly 
determine if a unit is acceptable by simply inspecting the HUD required 
sticker. RHS's current requirement for a separate certification sticker 
would be deleted.
    7. The RHS customer will have a wider selection of manufactured 
homes to chose from.
    8. The energy efficiency of the manufactured home will be roughly 
the same and in some cases exceed existing RHS thermal requirements.
    9. The elimination of a separate energy efficiency requirement 
applicable only to RHS manufactured homes will make lending 
institutions more willing to make loans to guarantee RHS customers for 
manufactured homes.

Discussion of Comments

    On October 6, 1998 RHS published a proposed rule in the Federal 
Register, 63 FR 53616. The five comments received were from persons 
representing organizations that are directly affected by the rule. The 
commenters included a housing developer and rural development 
consultant, an engineer with a manufactured housing producer and 
representatives from federal agencies involved in financing 
manufactured homes.
    All commenters approved or supported the adoption of the FMHCSS 
thermal design zone requirements that correspond to RHS climatic zones. 
The positive comments on the proposed rule included such statements as 
it ``is a positive measure'', ``reduce paper work'', ``improves loan 
processing'', ``streamlines lending procedure for manufactured housing 
in rural areas'', ``eliminates the need for manufacturers

[[Page 48085]]

and RHS staff becoming familiar with different standards'', ``will 
reduce the cost of housing for low and moderate income applicants'', 
``will give loan applicants a greater range of choices of housing 
design, style and size for their family needs'', ``improves the 
agencies relationship with the manufactured housing industry and 
lending community'' and ``improves the services to the customer.'' The 
Agency has not changed the basic structure or content of the proposed 
rule.
    Finally, one commenter suggested that a requirement be added to 
Rural Development (RD) Form 1924-25, ``Plan Certification'', that would 
require the dealer-contractor to certify the unit meet the FMHCSS 
thermal design zone requirements that correspond to RHS climatic zones. 
The FMHCSS requires that the manufacturer permanently affix a ``Heating 
Certificate'' that certifies the design zone that the manufactured home 
complies with. This Heating Certificate is affixed to an interior 
surface of the home that is readily visible to the Agency staff and the 
homeowner. It is the Agency's position that the determination as to 
which FMHCSS thermal design zone requirement corresponds to the 
appropriate RHS climatic zones is best covered early in the loan making 
process and will be addressed at or before the pre-construction 
conference. Therefore, the Agency has not changed RD Form 1924-25.

List of Subjects in 7 CFR part 1924

    Agriculture, Construction and repair, Construction management, 
Energy conservation, Housing, Loan programs--Agriculture, Low and 
moderate income housing.

    Therefore, chapter XVIII, title 7, Code of Federal Regulations is 
amended as follows:

PART 1924--CONSTRUCTION AND REPAIR

    1. The authority citation for part 1924 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.

Subpart A--Planning and Performing Construction And Other 
Development

    2. Exhibit D of subpart A to part 1924 is amended by adding 
paragraph IV. G to read as follows:

Exhibit D to Subpart A--Thermal Performance Construction Standards

* * * * *

IV. Minimum Requirements

* * * * *

G. New Manufactured Housing

    The Uo Value Zone indicated on the ``Heating Certificate'' for 
comfort heating shall be equal to or greater than the HUD Zone listed 
in the following table:

------------------------------------------------------------------------
                                                             FMHCSS (HUD
           RHS climate zones (winter degree days)              code) Uo
                                                             value zones
------------------------------------------------------------------------
0-1000.....................................................            1
1001-2500..................................................            2
2501-4500..................................................            2
4501-6000..................................................            3
> 6000.....................................................            3
------------------------------------------------------------------------

    Example: If a manufactured home is to be located in a geographic 
area having between 2501 and 4500 RHS winter degree days, the Agency 
will accept a Uo value Zone 2 unit or Zone 3 unit constructed to the 
HUD FMHCSS.

    If a central air conditioning system is provided by the home 
manufacturer, a ``Comfort Cooling Certificate'' must be permanently 
affixed to an interior surface of the unit that is readily visible. 
This certificate may be combined with the heating certificate on the 
data plate.
* * * * *
    Dated: August 26, 1999.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 99-22902 Filed 9-1-99; 8:45 am]
BILLING CODE 3410-XV-P