[Federal Register Volume 89, Number 40 (Wednesday, February 28, 2024)]
[Rules and Regulations]
[Pages 14582-14588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04138]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 201

[Docket No. FR-6207-F-02]
RIN 2502-AJ52


Indexing Methodology for Title I Manufactured Home Loan Limits

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, Department of Housing and Urban Development (HUD).

ACTION: Final rule.

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SUMMARY: Section 2145 of the Housing and Economic Recovery Act of 2008 
(HERA) amended the maximum loan limits for manufactured home loans 
insured under Title I of the National Housing Act and required 
regulations to implement future indexing of the loan limit amounts for 
manufactured homes originated under the Manufactured Home Loan program. 
This rule establishes indexing methodologies using data from the United 
States Census Bureau (``Census'') to annually calculate the loan limits 
for Manufactured Home Loans, Manufactured Home Lot Loans, and 
Manufactured Home and Lot Combination Loans (``Combination Loans'') 
insured under Title I of the National Housing Act for the Manufactured 
Home Loan program. This final rule adopts HUD's October 18, 2022, 
proposed rule with changes.

DATES: Effective March 29, 2024.

FOR FURTHER INFORMATION CONTACT: Mary Jo Houton, Acting Director, 
Department of Housing and Urban Development, 451 7th St. SW, Room 9266, 
Washington, DC 20410-4000; telephone number 202-402-2378 (this is not a 
toll-free number). HUD welcomes and is prepared to receive calls from 
individuals who are deaf or hard of hearing, as well as individuals 
with speech or communication disabilities. To learn more about how to 
make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

    Title I of the National Housing Act authorizes the Secretary of HUD 
to insure, through the Federal Housing Administration (FHA), loans made 
by FHA-approved lenders to eligible borrowers to finance property 
improvement and purchase, or refinance, of a manufactured home, with or 
without the lot. HUD insures these loans under HUD's Property 
Improvement Loan program and HUD's Manufactured Home Loan program. FHA 
insures the lender against loss if the borrower defaults. A Title I 
Manufactured Home Loan may be used for the purchase or refinancing of a 
manufactured home, a lot on which to place a manufactured home, or a 
manufactured home and lot in combination. The manufactured home must be 
used as the principal residence of the borrower. Applicable loan limits 
and requirements are codified in 24 CFR part 201.
    Section 2117 of HERA \1\ added the definition of real estate to 
include all natural resources and structures permanently affixed to the 
land, amended the maximum loan limits for manufactured home loans and 
certain property improvement loans insured under Title I of the 
National Housing Act, and required future changes to the amounts for 
manufactured home loans to be made through regulation. HERA also 
stipulated that the Secretary develop a metric that uses U.S. Census 
Bureau (``Census'') data \2\ on manufactured home prices to calculate 
an index for adjusting loan limits in the future.
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    \1\ Public Law 110-289, section 2117, 122 Stat. 2654, 2844-45 
(2008).
    \2\ See generally, U.S. Commerce Department, Census Bureau data 
on manufactured homes, available at: https://www.census.gov/programs-surveys/mhs.html.
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    In compliance with HERA, on March 3, 2009, HUD published Title I 
Letter TI-480 \3\ notifying lenders of the new statutory loan limits. 
HUD also noted in that Title I Letter the need for the Secretary to 
develop an indexing method that would determine future loan limits. HUD 
regulations still reflect the outdated, pre-HERA Loan Limits. Initially 
after HERA's enactment, Census data showed a decline in home prices. 
However, for compliance with HERA, HUD did not lower loan limits and 
the limits were kept at the threshold set under HERA. The outdated Loan 
Limits, and the 2008 Loan Limits currently in effect for manufactured 
homes as described in the Title I letter are outlined below:
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    \3\ ``Increased Maximum Loan Limits for Title I Manufactured 
Home Loans,'' https://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/title1.

                        Table 1--Loan Limits Under HERA Compared to Pre-HERA Loan Limits
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                                 Eligible loan name                                   2008 loan limit basis per
   Title I loan program name      for property type    Loan limits prior to HERA      HERA currently in effect
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Property Improvement Loan        Manufactured Home   $7,500.......................  $25,090.
 Program.                         Improvement Loan
                                  for units
                                  classified as
                                  real estate.
Manufactured Home Loan Program.  Manufactured Home   $48,600......................  $69,678.
                                  Loan (unit only).
                                 Manufactured Home   $16,200......................  $23,226.
                                  Lot Loan (lot
                                  only).

[[Page 14583]]

 
                                 Manufactured Home   $64,800 ($48,600 + $16,200)..  $92,904 ($69,678 + $23,226).
                                  and Lot
                                  (Combination
                                  Loan).
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II. The Proposed Rule

    On October 18, 2022, as required by HERA, HUD published for public 
comment a proposed rule (87 FR 63018) (``the proposed rule'') to update 
the loan limits in Sec.  201.10 and to establish an index for which 
future loan limits would be revised through notice. HUD also proposed 
to amend the definition of ``manufactured home'' in Sec.  201.2 to 
conform to the loan limit change. HUD proposed to index loan limits 
based on sale prices, unit sizes, and property data collected by the 
Census Bureau.
    HUD proposed to establish separate indexing methodologies to 
annually calculate future loan limits for manufactured home loans, 
manufactured home lot loans, and manufactured home and lot combination 
loans under the Manufactured Home Loan program.
    HUD proposed to create a dual index based on purchase prices of 
manufactured homes, which are collected by the US Census Bureau 
(Census): an index for single-section manufactured homes using only 
single-section home sale data and a separate index for multi-section 
manufactured homes using only double-section home sale data.\4\
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    \4\ For an example of the latest data according to Census, see 
``MHS Latest Data,'' https://www.census.gov/data/tables/time-series/econ/mhs/latest-data.html.
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    HUD also proposed to adjust loan limits for single-section and 
double or greater-section manufactured home loans annually based on 
changes to indexes for the average price of single-section and double-
section manufactured homes, respectively. HUD proposed to set each loan 
limit at the average price data for the most recent 12 months available 
at the time HUD calculates the adjustment, weighted according to the 
number of manufactured units shipped during that same period.
    HUD also proposed creating an index for Manufactured Home Lot Loans 
based on median home prices in Census's New Residential Sales data.\5\
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    \5\ The New Residential Sales data come from Census's Survey of 
Construction. More information can be found here: https://www.census.gov/construction/nrs/index.html.
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    Finally, HUD proposed that the loan limit for manufactured home and 
lot Combination Loans would be determined by adding the manufactured 
home lot loan limit to either the single- or double-section loan limit, 
depending on the home.

III. This Final Rule

    HUD adopts the proposed rule with changes to the indices and 
changes to the regulatory text.

Changes to the Indexing Methodology

    As further discussed in the public comment summary, HUD received 
several comments suggesting that the loan limits set by the proposed 
indexing methodology would be too low to accurately reflect current 
manufactured housing prices and that, if adopted, the proposed indexing 
methodology would frustrate the purpose of section 2145 of HERA which 
is to make FHA housing programs more widely available for low-income 
homebuyers.
    In consideration of these comments, HUD has decided to adjust the 
proposed indexing methodology to more accurately reflect real-world 
manufactured housing costs, improving the viability of the Title I 
Manufactured Housing program and fulfilling HERA's purpose of making 
FHA housing programs available to more homebuyers.
    In addition to using the average manufactured housing prices for 
single- and multi-section homes, HUD will use two additional factors in 
calculating the manufactured home loan limits. First, HUD will set loan 
limits at 15% above the average home price according to the Census data 
for the given type of loan. This is consistent with the initial loan 
limits set by HERA, which were set to about 15% over the average 
manufactured home price at the time. This is also consistent with how 
HUD calculates loan limits under Title II, where FHA limits loans to 
115% of the median home price.
    Second, to account for the time between when the Manufactured 
Housing Survey data was collected and when the limits will be 
effective, HUD will utilize an inflation factor. To calculate this 
inflation factor, HUD will use an inflation forecast such as the CPI-U 
forecast in the President's Economic Assumptions \6\ to increase loan 
limits to account for inflation that has occurred since the relevant 
Census data were collected. This will address the maintenance or 
increase of the sales price from year-to-year according to the Census 
data and intends to more accurately represent current prices for 
manufactured homes.
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    \6\ Available at https://www.whitehouse.gov/omb/budget/mid-session-review/.
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    HUD's updated indexing methodology is demonstrated in the below 
chart:

Table 2--Proposed Index Methodologies for Title I Manufactured Home Loan
                                 Limits
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        Eligible loan types              Proposed methodology/index
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1. Manufactured Home Loan (Home      For single-section homes,
 only).                              the loan limit will be set each
                                     year at 115% of the average single-
                                     section home price with an
                                     adjustment for inflation.
                                     For homes composed of two
                                     or more sections (multi-section
                                     homes), the loan limit will be set
                                     each year at 115% of the average
                                     double-section home price with an
                                     adjustment for inflation.*
2. Manufactured Home Lot Loan (Lot  Manufactured Home Lot Loan limit
 only).                              established by HERA, indexed using
                                     changes in the median new home
                                     price.***

[[Page 14584]]

 
3. Manufactured Home and Lot Loan   The indexed Manufactured Home Lot
 (Combination Loan).                 Loan limit, plus the applicable
                                     Manufactured Home Loan limit.
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* Utilizing single- and double-section price averages based on the most
  recent data from the Manufactured Housing Survey from the Census
  Bureau, adjusted for the effective year of the limit using an
  inflation forecast (such as the CPI-U forecast in the President's
  Economic Assumptions or similar replacement data set or report as may
  be specified by the Secretary). See MHS Latest Data Average Sales
  Price by Region and by Size of Home https://www2.census.gov/programs-surveys/mhs/tables/time-series/mhstabavgsls.xlsx.
** Utilizing median new home price based on the most recent data from
  the Survey of Construction from the Census Bureau. See Median and
  Average Sales Price of Homes Sold https://www.census.gov/construction/nrs/xls/usprice_cust.xls.

    HUD will make changes to the indexing methodology through notice 
where HUD determines that revisions are necessary to enhance or 
maintain the accuracy of the index. HUD anticipates any such change(s) 
would likely be technical in nature, but if a change were more than 
technical, HUD would provide notice to the public with the opportunity 
for comment prior to changing the index.
    Table 3 below shows examples of the loan limits, based on recent 
data from Census.

                                          Table 3--Example Loan Limits
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                                     Loan limit                                       Example 2024 loan limits
    Description of property          methodology       Current limits (per HERA)     (based on 2022 Census data)
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Single-section Manufactured      Set to average of   $69,678......................  $106,405.
 Home (unit only).                115% of single-
                                  section home
                                  prices. Note 1.
Multi-section Manufactured Home  Set to 115% of      $69,678......................  $195,322.
 (unit only).                     average double-
                                  section home
                                  prices. Note 1.
Manufactured Home Lot (lot       Set to median       $23,226......................  $43,377.
 only).                           sales price for
                                  new single-family
                                  homes. Note 2.
Single-section Manufactured      Limit for Single-   $92,904 (69,678 + 23,226)....  $149,782 (106,405 + 43,377).
 Home and Lot (Combination        Section + Limit
 Loan).                           for Lot Loan.
Multi-section Manufactured Home  Limit for Multi-    $92,904 (69,678 + 23,226)....  $238,699 (195,322 + 43,377).
 and Lot (Combination Loan).      Section + Limit
                                  for Lot Loan.
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Table 3 Notes:
1. Indexing to occur at the beginning of each year, based on the weighted average price data for the most recent
  12 months available from the Manufactured Housing Survey.
2. Indexing to occur at the beginning of each year, based on the median sales price of the most recent 12 months
  available from the New Residential Sales data.

Changes to the Regulatory Text

    HUD is making only technical changes at the final rule stage. HUD 
is removing references to ``double-section'' homes as they are already 
covered by ``multi-section'' homes. HUD is also revising Sec.  
201.10(h)(1) and (2) to remove the reference to changes to the 
``average'' price of single-section manufactured home sales as 
superfluous. HUD is also revising Sec.  201.10(h)(2) to change a 
reference to data published by HUD because the data HUD will be using 
is published by the Census Bureau. HUD is also revising Sec.  
201.10(h)(1) through (3) to clarify that HUD will not lower loan limits 
from previous years.

IV. Summary of Public Comments

    The public comment period for the proposed rule closed on December 
19, 2022. HUD received five distinct comments relating to the proposed 
rule. Comments were submitted by an individual, associations 
representing housing industry stakeholders (i.e., community banks, 
manufactured housing, realtors), a lender, and anonymously. The full 
text of each public comment can be found at: https://www.regulations.gov/document/HUD-2022-0078-0001.

A. Support for the Proposed Rule

    Multiple commenters expressed their support for the proposed rule. 
One commenter said they support the proposed rule because of the 
significant cost increase in modular homes since 2008 and because the 
Housing and Economic Recovery Act of 2008's (HERA) current limits are 
too low to allow low-income Americans to afford housing. Commenters 
expressed support for the proposed rule because they said updated loan 
limits would help address the declining trend in loans that qualify for 
the Title I loan program. Another commenter expressed support for the 
proposed rule because it would establish separate loan limits for 
single-section and multi-section manufactured homes. The commenter 
stated that home size has a significant impact on home cost and 
separate loan limits help account for the different cost components 
between single- and multi-section homes.
    A commenter expressed their support for the proposed rule, stating 
it would benefit low to moderate-income and first-time home buyers to 
take advantage of financing through the Federal Housing Administration 
(FHA) and begin to build wealth through homeownership. Another 
commenter said the proposed rule would create opportunities for 
creditworthy borrowers to access manufactured homes, and this is a 
crucial bridge to address the housing supply gap allowing low to 
moderate-income Americans to afford a home.
    A commenter stated that the proposed rule creates a unique indexing 
methodology that increases loan limits through annual adjustments that 
would ensure the limits remain current with the housing market. Another 
commenter stated that they are encouraged by the potential effect of 
the proposed rule's indexing methodology because it will update 
statutory loan limits established

[[Page 14585]]

in 2008 and allow for annual adjustments.
    HUD Response: HUD appreciates these comments and the broad support 
for this rule; these commenters identified many of the reasons why HUD 
undertook this effort. HUD agrees that increased loan limits will 
provide additional opportunities for low-to-moderate income borrowers 
to access homeownership now and in the future.

B. Suggested Revision to the Proposed Rule's Loan Cap and the 130 
Percent Home Invoice Limitation

    A commenter stated they are supportive of the proposed rule's 
attempt at increasing loan limits for FHA's Title I program and 
believed that the index would capture the movement of manufactured home 
pricing. However, the commenter believes that loan limits should be 
increased further than described in the proposed rule. The commenter 
stated that community banks typically choose to portfolio loans that 
may otherwise be eligible for FHA's Title I program because the maximum 
FHA loan amounts often fail to cover the cost of the unit. The 
commenter, a lender, calculated the percentage of its own loans in 2022 
that would have qualified under the proposed rule's example loan limits 
for 2022 to be 22.7 percent of all single-section loans; 47 percent of 
all multi-section loans; 46 percent of all single-section, land loans; 
and 54.6 percent of all multi-section, land loans.
    The commenter encouraged HUD to further increase the proposed loan 
limits because the commenter was discouraged that a higher percentage 
of its loans would not have qualified for the Title I program.
    The commenter also stated that its figures do not account for the 
advance structure limitations that accompany the Title I loan limits, 
such as the 130 percent of home invoice limitation (including itemized 
options and freight). The commenter estimated that only 3.4 percent of 
its originated new home only loans in the last 12 months had a home 
sales price under the 130 percent limitation.
    The commenter stated that, in the commenter's experience, most 
manufactured home retailers sell homes significantly above 130 percent 
of the manufactured home invoice. To address this, the commenter 
suggested that HUD either improve or remove the limitation altogether. 
The commenter stated that annually adjusted loan limits can be a 
sufficient ``check'' to ensure that home prices stay true to recent 
market trends and, therefore, the 130 percent cap is an unnecessary 
limitation that undercuts the effectiveness of the increased loan 
limits. The commenter stated that, as an alternative to eliminating the 
130 percent cap, HUD could increase the limitation to 160 percent. The 
commenter stated that the 160 percent adjustment would represent a more 
practical and realistic percentage that would not require retailers to 
significantly cut sales prices for a home to qualify for a Title I 
loan. The commenter stated that over the last 12 months, 44 percent of 
its loans have involved homes sold under the 160 percent cap, compared 
to only 3.4 percent under the 130 percent cap.
    HUD Response: HUD appreciates the comment that the proposed limits 
should be further increased. Section 2145 of the Housing and Economic 
Recovery Act (HERA) of 2008 amended Title I, Section 2 of the National 
Housing Act (12 U.S.C. 1703) to increase the maximum loan limits for 
manufactured home loans insured under Title I and requires the 
Secretary to develop an index to annually adjust the loan limits based 
on U.S. Census Bureau (Census) data on manufactured home prices. The 
indices adopted by the Secretary for manufactured homes in this 
rulemaking to annually adjust the loan limits are based on the average 
of the year-over-year changes in the all-units price series published 
by Census, at the national level, and for a defined look-back period. 
These indices are based on data from Census-collected surveys of firms 
that sell new manufactured housing to individuals for residential use. 
HUD will also adjust the average sales price, as determined by the 
Census Bureau data, by 115% and apply an inflation factor, which more 
accurately reflects the prices of manufactured homes since the 
publication of the most recent Census Bureau report.
    HUD includes the 130 percent cap on new manufactured homes to 
protect FHA borrowers and in keeping with FHA's fiduciary 
responsibility to taxpayers. The 130 percent cap is not the focus of 
this rulemaking. Nevertheless, HUD will continue to consider this issue 
in regard to the Title I manufactured housing program.

C. Alternate Method of Calculating the Lot Loan Index

    A commenter stated that the proposed indexing methodology is not 
sufficient to capture the reality of land and improvements costs for 
manufactured homes. The commenter stated that the National Housing Act 
requires HUD to base the index on manufactured housing price data 
collected by the Census Bureau; however, the proposed rule seeks to 
create an index based on median home prices in the Census Bureau's New 
Residential Sales data. The commenter stated that the average total 
costs of options (e.g., well, septic, driveway) is $30,000 across all 
of its funded loans. When considering the example loan limit of $37,205 
for 2022, the commenter stated that there is essentially no additional 
room to purchase a parcel of property under the FHA Title I program 
after the cost of options alone. Similarly, the commenter stated that 
the average appraisal value for a parcel of real estate is roughly 
$34,028, which leaves virtually no room for improvements to the land.
    The commenter stated that improvements on purchased land are 
usually vital with the purchase of a manufactured home with land 
because each land site is typically developed individually, unlike 
single-family homes built by a developer with the appropriate 
infrastructure scaled across hundreds of lots.
    To more accurately reflect the actual costs of purchasing a 
manufactured housing lot, the commenter suggested the use of Census 
Bureau MHS Annual Data, Cost & Size Comparison: New Manufactured Homes 
and New Single-Family Site Build Homes that derives the average land 
price for site-built homes, which, while not connected to manufactured 
housing pricing data, at least accounts for the actual cost of land, 
according to the commenter. The commenter stated that the derived 
average land price in the Census Bureau data vastly exceeds the example 
2022 loan limit and is directly related to the cost of land alone.
    HUD Response: HUD appreciates the comment and the commenter's 
opinion that the proposed limits should be further increased. HUD's 
loan limits and indexing are dictated by the Housing and Economic 
Recovery Act of 2008 (HERA). Section 2145 of the Housing and Economic 
Recovery Act (HERA) of 2008 amended the maximum loan limits for 
manufactured home loans insured under Title I and stipulated that the 
Secretary develop a metric that uses U.S. Census Bureau (Census) data 
on average manufactured home prices to calculate an index for adjusting 
loan limits in the future. The index is based on data from the Census' 
site, which is derived from surveys that were collected from firms that 
sell new manufactured homes to individuals for residential use. HUD has 
determined that the New Residential Sales index provides an accurate 
assessment of the manufactured housing market. This index is defined as 
the average of the year-over-year changes in the all-units

[[Page 14586]]

(total) price series published by Census, at the national level, and 
for a defined look-back period. Furthermore, HUD has determined that it 
is appropriate to include additional factors to the indexing 
methodology, accounting for inflation and resulting in adjustments that 
more closely reflect current manufactured home loan values.

D. Establish New Loan Base Limits Using Current Data

    A commenter suggested that loan limits be initially brought up to 
the following values, which the commenter stated were based on the 
commenter's current origination volume for manufactured home lending: 
home only loans, single-section homes to $200,000, multi-section homes 
to $300,000; loans secured by land, single-section homes to $325,000, 
multi-section homes to $350,000. The commenter suggested that the new 
manufactured homes sales price data then be used as the index for year-
over-year loan limit adjustments to this new baseline. The commenter 
stated that if the loan limits were adjusted in the described manner, 
nearly all manufactured home loans could qualify for the Title I 
program, making the program truly viable.
    HUD Response: HUD appreciates the comment that the proposed 
baseline loan limits be further increased and the commenter's interest 
in improving the viability of the Title I Manufactured Home loan 
program. Section 2145 of the Housing and Economic Recovery Act (HERA) 
of 2008, established the baseline loan limits and amended the maximum 
loan limits for manufactured home loans insured under Title I. HERA 
stipulated that the Secretary develop a metric that uses U.S. Census 
Bureau (Census) data on average manufactured home prices to calculate 
an index for adjusting loan limits in the future.

E. Additional Suggested Revisions to FHA's Title I Program

    A commenter provided the following suggestions for changes to FHA's 
Title I program: (1) The origination cap fee should be updated from 2 
percent to the greater of $2,000 or 2 percent because the cost to 
originate a lower balance Title I loan is effectively the same as that 
to originate a larger mortgage; (2) Permit Title I closing-related fees 
and other customary home loan fees (e.g., closing fee, title insurance, 
title search) to be financed in the loan because customers currently 
have to contribute an additional $3,000-$6,000 to cover these fees and 
costs; (3) Allow the seller to pay closing costs up to 6 percent, like 
the Title II program; (4) Revise the collections policy to match the 
Title II policies applicable to medical collections, bankruptcies and 
judgments--currently the Title I program has a blanket limit on 
collections of $1000; (5) Adjust the debt ratio guidelines in Title I 
to match that available for Title II; and (6) Do not require a park/
community agreement for 3 years because it has a negative impact on 
adoptions as community owners already have their own rental agreements, 
the current length of commitment is too long for some owners, and a 
timeline of six months should be acceptable if the community is being 
shut down.
    Another commenter recommended that FHA update its fee structure to 
incentivize lenders to offer loans through the Title I program.
    Another commenter stated that a significant reason that community 
banks are not FHA-approved lenders is because the FHA lender approval 
process is overly complicated and burdensome. The commenter recommended 
that HUD work with community bank stakeholders to determine the best 
way to simplify the FHA lender approval process, thus expanding 
community bank participation in FHA's Title I program. This commenter 
also recommended that HUD create a secondary market facility that 
allowed community banks to sell manufactured home loans, which the 
commenter stated would incentivize lenders to make these loans because 
it would allow lenders to quickly free up capital to further invest in 
the lenders' communities.
    HUD Response: HUD appreciates these suggestions, which the 
commenter believes would improve lender participation in the Title I 
program. These suggestions are outside the scope of this rulemaking 
which is focused on establishing an indexing methodology for 
calculating Title I manufactured home loans. HUD will consider these 
suggestions for future rulemaking or policy changes.

F. Other Comments

    A commenter stated that they found the proposed rule to be an 
interesting proposal to address rising home prices and that using 
indexing methodology and census data on manufactured homes may create a 
fair or unfair opportunity to take out loans on manufactured homes due 
to the potential limitation on loan amounts based on this methodology.
    HUD Response: HUD appreciates this comment. HUD believes the 
changes in this rule will provide additional opportunities for low-to 
moderate income borrowers to participate in the Title I Manufactured 
Housing program.

V. Findings and Certifications

Regulatory Review--Executive Orders 12866, 13563 and 14094

    Pursuant to Executive Order 12866 (Regulatory Planning and Review), 
a determination must be made whether a regulatory action is significant 
and therefore, subject to review by the Office of Management and Budget 
(OMB) in accordance with the requirements of the order. Executive Order 
13563 (Improving Regulations and Regulatory Review) directs executive 
agencies to analyze regulations that are ``outmoded, ineffective, 
insufficient, or excessively burdensome, and to modify, streamline, 
expand, or repeal them in accordance with what has been learned.'' 
Executive Order 13563 also directs that, where relevant, feasible, and 
consistent with regulatory objectives, and to the extent permitted by 
law, agencies are to identify and consider regulatory approaches that 
reduce burdens and maintain flexibility and freedom of choice for the 
public. Executive Order 14094 (Modernizing Regulatory Review) amends 
section 3(f) of Executive Order 12866 (Regulatory Planning and Review), 
among other things.
    This rule has been determined to be a ``significant regulatory 
action,'' as defined in section 3(f) of Executive Order 12866, as 
amended by Executive Order 14094, and therefore was reviewed by OMB. 
However, this final rule was not deemed to be significant under section 
3(f)(1) of the Order. The docket file is available for public 
inspection in the Regulations Division, Office of General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
10276, Washington, DC 20410-0500. Due to security measures at the HUD 
Headquarters building, please schedule an appointment to review the 
docket file by calling the Regulations Division at 202-402-3055 (this 
is not a toll-free number). HUD welcomes and is prepared to receive 
calls from individuals who are deaf or hard of hearing, as well as 
individuals with speech or communication disabilities. To learn more 
about how to make an accessible telephone call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking

[[Page 14587]]

requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Accordingly, the undersigned certifies that this rule does not have a 
significant economic impact on a substantial number of small entities.

Environmental Impact

    This rule establishes and reviews loan limits. Accordingly, under 
24 CFR 50.19(c)(6) this rule is categorically excluded from 
environmental review under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321).

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either: (i) imposes substantial direct compliance costs on state and 
local governments and is not required by statute, or (ii) preempts 
state law, unless the agency meets the consultation and funding 
requirements of section 6 of the Executive order. This rule does not 
have federalism implications and does not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments, and on the private sector. This rule does not 
impose any federal mandates on any state, local, or tribal governments, 
or on the private sector, within the meaning of the UMRA.

List of Subjects in 24 CFR Part 201

    Claims, Health facilities, Historic preservation, Home improvement, 
Loan programs--housing and community development, Manufactured homes, 
Mortgage insurance, Reporting and recordkeeping requirements.

    For the reasons discussed in the preamble, HUD amends 24 CFR part 
201 as follows:

PART 201--TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS

0
1. The authority for 24 CFR part 201 continues to read as follows:

    Authority: 12 U.S.C. 1703; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).


0
2. Amend Sec.  201.2 by revising the definition of ``Manufactured 
Home'' to read as follows:


Sec.  201.2  Definitions.

* * * * *
    Manufactured home means a transportable structure, comprised of one 
or more modules, each built on a permanent chassis, with or without a 
permanent foundation, designed for occupancy as a principal residence 
by a single family. For purposes of the annual adjustments to loan 
limits under this part, a manufactured home may be a single-section 
home comprised of one module or a multi-section home comprised of two 
or more modules. A new manufactured home shall comply with the minimum 
property standards prescribed by the Secretary to assure its livability 
and durability that are published as the Manufactured Home Construction 
and Safety Standards implementing the National Manufactured Housing 
Construction and Safety Standards Act of 1974, 42 U.S.C. 5401-5426, at 
24 CFR part 3280. To qualify for a manufactured home loan insured under 
this part, an existing manufactured home must have been constructed in 
accordance with standards published at 24 CFR part 3280 and must meet 
standards similar to the minimum property standards applicable to 
existing homes insured under title II of the Act, as prescribed by the 
Secretary.
* * * * *

0
3. Amend Sec.  201.10 by revising the introductory texts of paragraphs 
(b)(1) and (2), paragraph (c), and paragraphs (d)(1) and (2), and 
adding paragraph (h) to read as follows:


Sec.  201.10  Loan amounts.

    (b) * * *
    (1) The total principal obligation for a loan to purchase a new 
manufactured home shall not exceed the sum of the following itemized 
amounts, up to a maximum set according to an index established by HUD 
in paragraph (h)(1) of this section and updated through notice which 
shall establish separate loan limits for single-section homes and 
multi-section homes:
* * * * *
    (2) The total principal obligation for a loan to purchase an 
existing manufactured home shall not exceed the lesser of the following 
amounts, up to a maximum set according to an index established by HUD 
in paragraph (h)(1) of this section and updated through notice which 
shall establish separate loan limits for single-section homes and 
multi-section homes:
* * * * *
    (c) Manufactured home lot loans. The total principal obligation for 
a loan to purchase and, if necessary, develop a lot suitable for a 
manufactured home, including on-site water and utility connections, 
sanitary facilities, site improvements and landscaping, shall not 
exceed 95 percent of either the appraised value of the developed lot 
(as determined by a HUD-approved appraisal) or the total of the 
purchase price and development costs, whichever is less, up to a 
maximum set according to an index established by HUD in paragraph 
(h)(2) of this section and updated through notice.
    (d) * * *
    (1) The total principal obligation for a loan to purchase a new 
manufactured home and a lot on which to place the home shall not exceed 
the sum of the following itemized amounts, up to a maximum set 
according to an index established by HUD in paragraph (h)(3) of this 
section and updated through notice which shall establish separate loan 
limits for single-section homes and multi-section homes:
    (2) The total principal obligation for a Combination Loan, to 
purchase an existing manufactured home and lot, shall not exceed the 
lesser of the following amounts, up to a maximum set according to an 
index established by HUD in paragraph (h)(3) of this section and 
updated through notice which shall establish separate loan limits for 
single-section homes and multi-section homes:
* * * * *
    (h) Annual Adjustments. HUD shall adjust the following loan limits 
annually through notice:
    (1) In paragraphs (b)(1) and (2) of this section, the single-
section manufactured home loan limit shall be adjusted to reflect 
changes in single-section manufactured home sales prices and the multi-
section manufactured home loan limit shall be increased to reflect 
changes in double-section manufactured home sales prices, according to 
data published by the Census Bureau, except that the loan limits shall 
not be lowered.
    (2) In paragraph (c) of this section, the manufactured home lot 
loan limit shall be increased to reflect changes in single-family home 
sales prices according to data published by the Census Bureau, except 
that the loan limit shall not be lowered.
    (3) In paragraphs (d)(1) and (2) of this section, the combination 
manufactured home and lot loan limits shall be increased to be the sum 
of the applicable loan limit for the

[[Page 14588]]

manufactured home loan in paragraph (b)(1) and the lot loan limit in 
paragraph (c) of this section, except that the loan limit shall not be 
lowered.

Julia R. Gordon,
Assistant Secretary for Housing--FHA Commissioner.
[FR Doc. 2024-04138 Filed 2-27-24; 8:45 am]
BILLING CODE 4210-67-P