Manufactured Housing

Background

Manufactured housing refers to pre-fabricated homes that are produced in a factory and then assembled at the building site. It provides a major source of unsubsidized but affordable housing for households with low and moderate incomes. People age 65 and older owned or rented some 1.8 million of these units in 2013.

Housing affordability—manufactured housing plays a critical role in serving the housing needs of older Americans. Without this option, many would find it difficult to afford housing. Sixty percent of people age 50 and over living in manufactured homes have low incomes, although they typically receive no direct housing subsidy.

Even though manufactured housing tends to be more affordable, financing, utilities, maintenance, and repair costs can cause financial hardship. Improving manufactured housing construction and safety standards would help manufactured housing residents reduce their maintenance and repair costs.

Reforms—the 1994 National Commission on Manufactured Housing made recommendations on modernizing the National Manufactured Housing Construction and Safety Standards Act of 1974. These included:

  • creating a balanced consensus committee to update relevant federal construction and safety standards in the Department of Housing and Urban Development (HUD) code,
  • developing an expedited standards-adoption process to ensure that changes in the HUD code are made in a timely manner,
  • eliminating a requirement that manufactured homes have a permanent chassis, and
  • enacting a federal requirement that manufacturers provide a one-year warranty for all structural defects and a five-year warranty for certain structural defects that occur during the manufacture, installation, and transportation of a manufactured home.

Many of these reforms have yet to be addressed, but enactment of the American Homeownership and Economic Opportunity Act of 2000 made significant progress. It created a 21-member Manufactured Housing Consensus Committee—including representatives from the industry, consumer groups, and building-code experts—to recommend revisions to manufactured housing standards.

Issues facing owners of manufactured housing units—owners of manufactured housing face several issues that do not affect conventional housing. Manufactured housing unit owners often do not own the underlying land and may therefore have to move when the land is sold or changes uses. Residents sometimes fear retaliation from community owners for attempting to form resident associations in states that have minimal protections for unit owners, as doing so can include eviction. Community or land owners have other leverage over unit owners. They can deny a potential buyer the right to keep a home in its location. This lack of protection limits unit owners in their ability to exercise control over their homes.

Manufactured homes built before implementation of the Manufactured Home Construction and Safety Standards in 1976 are generally considered to be substandard and can face both energy-efficiency and safety issues. Funds from the Weatherization Assistance Program can be used to improve energy efficiency in manufactured housing (see Assistance Programs in Chapter 10, Utilities: Telecommunications, Energy, and Other Services). Advocates for manufactured homeowners promote a range of policy options to improve financing and land-ownership options for homeowners and thus increase home values. New manufactured homes may also provide a platform for certain universal design features (see this chapter’s section Housing Accessibility and Universal Design).

Manufactured Housing: Policy

Resident ownership of communities

In this policy: State

States should establish programs and policies to help residents of manufactured home communities purchase their community land and establish cooperative nonprofit or other forms of resident-controlled ownership, including codifying the first right of purchase or providing tax incentives for purchase by residents of parks that are for sale.

Manufactured housing as real property

In this policy: State

States should pass laws similar to the Uniform Law CommissionThe ULC, also known as the National Conference of Commissioners on Uniform State Laws), established in 1892, provides states with non-partisan, well-conceived and well-drafted legislation that brings clarity and stability to critical areas of state statutory law. ’s Uniform Manufactured Housing Act to ensure a fair process for considering certain manufactured housing to be real property.

Rent stabilization

In this policy: State

States should permit local governments to initiate and enforce rent stabilization programs in manufactured housing communities.

Funding assistance for closures

In this policy: State

States should establish funding assistance to help owners of manufactured homes who must relocate due to a manufactured home community’s closure or sale.

Financing

In this policy: FederalState

States should consider provisions that improve the financing options for manufactured housing, including allowing manufactured housing to be treated as real estate regardless of land ownership.

The Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac)—in cooperation with the Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA), the Veterans Administration (VA), and the Rural Housing Service (RHS)—should expand access to financing beyond the existing retailer network through the greater use of conventional mortgage financing with more competitive rates. They should also provide adequate consumer protections.

Consumer protection

In this policy: FederalState

States should enact legislation to protect the rights of all owners of manufactured homes based on the Manufactured Homeowners’ Bill of Rights developed by the National Consumer Law Center.

States should enforce antitrust statutes regarding retailer tie-ins and restraints of trade.

HUD should ensure adequate funding for its activities and for those of state agencies designated to act on its behalf to implement and enforce consumer protections that have been developed in accordance with the American Homeownership and Economic Opportunity Act of 2000.

Warranties

In this policy: FederalState

States should license manufacturers (both in- and out-of-state) and establish manufactured home recovery funds to assist with warranty repairs if a manufacturer goes out of business or refuses to provide warranty service.

Congress should reject efforts to circumvent stronger state laws through federal preemption and should pass a warranty requirement for manufactured homes and their installation.

Warranty and installation requirements under the FHA, VA, and RHS mortgage insurance programs for manufactured homes should be upgraded.

HUD should revise the Manufactured Home Procedural and Enforcement Regulations to provide regulatory relief to manufacturers that voluntarily provide a five-year warranty to purchasers, as recommended by the National Commission on Manufactured Housing.

Replacement of dilapidated homes

In this policy: FederalState

Policymakers should establish programs to facilitate the replacement of dilapidated and substandard manufactured homes with new, energy-efficient homes for households with low incomes.

Bankruptcy protection

In this policy: Federal

Congress should pass legislation to protect the owners of manufactured homes who face bankruptcy proceedings because of debt obligations that exceed the current market value of the collateral.