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Chairman Biggert, Ranking Member Gutierrez and Members of the Subcommittee, thank you for the opportunity to testify today on the implementation of Manufactured Housing Improvement Act of 2000, which is administered by the
My remarks will identify key aspects of the Manufactured Housing Improvement Act of 2000, the role HUD has played in implementing that legislation, and the benefits to stakeholders.
Key Aspects of the 2000 Act Implemented by HUD
My testimony will focus on the following key aspects of the 2000 Act:
. the creation of a consensus committee and an organizational infrastructure to support the committee;
. establishment of the process for revising the manufactured housing home construction and safety standards;
. enhanced pre-emption to ensure consistency of building standards nationwide;
. establishment of new model manufactured home installation standards;
. establishment of dispute resolution program standards; and
. establishment and collection of a fee from manufacturers to offset the expenses of the Secretary in carrying out the legislation.
One of the most significant aspects of the 2000 Act was the creation of a "consensus committee" which has come to be known as the Manufactured Housing Consensus Committee (MHCC). The MHCC, which includes stakeholders such as manufacturers, retailers, consumers, state regulators and others, assists HUD in carrying out its mandate under the Act. Established as a
To assist in the management and operation of the committee, the Act provided for the Secretary to contract with an "administering organization" for the purpose of recommending members for the committee, administering the consensus standards development process and the process for procedural and enforcement regulations. HUD first implemented this provision after enactment of the 2000 Act by contracting with an administering organization which commenced a search for the initial committee members and provided ongoing support to the MHCC. Periodically, as dictated under Federal contracting rules, HUD must compete this contract. Throughout the many rounds of mandated competition throughout the years, HUD has always maintained a contract with an administering organization for the purpose of ensuring the committee continues to meet all statutory requirements. By statute, the MHCC is composed of twenty-one voting members appointed by the Secretary that include seven producers/retailers, seven users representing consumer interests and seven persons representing public officials and general interest. HUD implemented these provisions of the Act and announced the names of the initial twenty-one members of the committee in
Since the creation of the committee, approximately thirty-five meetings have been held, an average of three meetings per year. In Fiscal Year 2011, the full consensus committee met on four occasions to discuss Federal standards and subcommittees held ongoing meetings throughout the year.
Revision of Standards
The 2000 Act also established the process for the consideration of revisions to the manufactured home construction and safety standards and outlined the roles and requirements of the MHCC the Secretary in making those revisions. The Federal standards have been the subject of ongoing review and updating. Over the years, numerous standards were reviewed by the committee and submitted to the Secretary. Recent revisions to the standards have included lighting and ventilation, fire protection requirements, the use of thermal insulation materials, and test procedures for roof trusses.
Federal preemption was a key concept in the
Establishment of Model Manufactured Home Installation and Dispute Resolution Program Standards
The 2000 Act also provided for the development and establishment of model manufactured home installation and dispute resolution program standards. HUD has implemented standards for both of these statutory directives. Model Manufactured Home Installation Standards were promulgated by regulation in 2007 and provide minimum requirements for the installation of new manufactured homes. A Dispute Resolution rule was also issued the same year and provides a process for the timely resolution of disputes among manufacturers, retailers and installers.
Collection of Fees
Once a manufactured home is determined to meet the Federal Standards, a "certification" label is permanently affixed to each home. This red label assures the consumer that the home was constructed in accordance with the Federal Standards.
The 2000 Act reaffirmed the authority of the Secretary to establish and collect from manufacturers a reasonable fee to offset the expenses of carrying out the responsibilities under the Act. The label fee was set at
In addition to having oversight over construction and safety standards of manufactured homes, under the National Housing Act (NHA), HUD has authority to insure loans for the purchase of manufactured homes under titles I and II of the National Housing Act. For both insurance programs, the property must be deemed to meet HUD requirements for this type of housing including, for example, existence of the "label".
Generally speaking, under Title I, borrowers can apply for an FHA insured loan for a home that is physically mobile, whereas under Title II - which includes the most commonly used FHA insured loan product, the 203(b) forward mortgage - the manufactured home must be affixed to a permanent foundation.
Any properly originated FHA insured loan, regardless of the underlying loan type, is eligible for inclusion in mortgage backed securities issued by the
Together, FHA and
In closing, I want to assure the Subcommittee that the Department has and continues to fairly and diligently implement the 2000 Act in accordance with the statutory purposes to protect the quality, durability, safety and affordability of manufactured housing. We actively engage with all stakeholders, including the committee, manufacturers, retailers, users, consumer groups, State regulators and others to ensure that manufactured housing continues be available as an affordable and valuable option for housing. I want to thank you for the opportunity to provide testimony before the Subcommittee today and would be pleased to answer any questions.
Read this original document at: http://financialservices.house.gov/UploadedFiles/HHRG-112-BA-WState-HCzauski-20120201.pdf
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