Indexing Methodology for Title I Manufactured Home Loan Limits rule (2024)

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The Indexing Methodology for Title I Manufactured Home Loan Limits rule is a significant rule issued by the U.S. Department of Housing and Urban Development (HUD) effective March 29, 2024, that established indexing methodology using data from the U.S. Census to annually calculate maximum loan limits for manufactured home loans insured by the Federal Housing Authority. HUD issued this rule pursuant to its authority under the Housing and Economic Recovery Act of 2008.[1]

HIGHLIGHTS
  • Name: Indexing Methodology for Title I Manufactured Home Loan Limits
  • Action: Final rule
  • Type of significant rule: Other significant rule

    • Timeline

    The following timeline details key rulemaking activity:

    Background

    The National Housing Act authorized the U.S. Department of Housing and Urban Development (HUD) to insure lenders against loans for purchasing or refinancing a manufactured home through the Property Improvement Loan and Manufactured Home Loan programs administered by the Federal Housing Authority (FHA). The 2008 Housing and Economic Recovery Act increased the maximum loan limits for manufactured home loans and property improvement loans insured under the National Housing Act and mandated that HUD must use census data on manufactured home prices to adjust the loan limits in the future. The Indexing Methodology for Title I Manufactured Home Loan Limits codified the indexing methodology to calculate future maximum loan limits.[1]

    Summary of the rule

    The following is a summary of the rule from the rule's entry in the Federal Register:[1]

    “ 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.[2] ”

    Summary of provisions

    The following is a summary of the provisions from the rule's entry in the Federal Register:[1]

    “

    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 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.[2]

    		”

    Significant impact

    See also: Significant regulatory action

    Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.

    Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]

    The text of the Indexing Methodology for Title I Manufactured Home Loan Limits rule states that OMB deemed this rule significant, but not economically significant:

    “ 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.[2] ”

    Text of the rule

    The full text of the rule is available below:[1]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Federal Register, "Indexing Methodology for Title I Manufactured Home Loan Limits," March 13, 2024.
    2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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