By Brandon Moseley
Alabama Political Reporter
Wednesday, April 14, the Preserving Access to Manufactured Housing Act (H.R. 650) passed the US House of Representatives. The bill was co-sponsored by US Representative Terri Sewell (D-Selma) to preserve critical access to financing for manufactured homes for low-income and rural families.
Congresswoman Sewell said in a statement, “Manufactured homes provide quality, affordable housing for roughly 22 million Americans. More than 300,000 Alabama families live in manufactured homes, which accounts for over 14 percent of the State’s available housing stock.”
Rep. Sewell continued, “The Preserving Access to Manufactured Housing Act ensures that manufactured homes remain a viable, affordable housing option for families in rural, distressed and underserved areas. Manufactured homes loans are considered personal property loans, which distinguishes them from traditional mortgages.”
Rep. Sewell said, “The Dodd Frank Act was meant to enhance consumer protections, rather than limit consumer access. This bill corrects an unintended consequence of Dodd Frank and makes a simple but necessary adjustment to enable lenders to meet the demand for affordable, responsible mortgage loans for manufactured homes while preserving important consumer protections.”
Alabama’s only Democratic Congresswoman said, “This bill leaves untouched important protections established under the Dodd Frank Act. Consumers will continue to have a wide range of mortgage protections, including the Qualified Mortgage Standards ‘Ability to Repay’ requirement, the prohibition on steering incentives, the prohibition against steering a consumer to a predatory loan, loan term disclosures, the prohibition on mandatory arbitration, as well as other state and federal laws. Without this bill, working families and retirees with limited credit or fixed incomes will be forced into more expensive housing options. I am proud of the bipartisan support the Preserving Access to Manufactured Housing Act received in the House. Today’s vote underscores our commitment to preserving affordable housing choices for all Americans.”
Representative Sewell introduced the legislation along with fellow Representatives Stephen Fincher (R-Tennessee), Andy Barr (R-Kentucky), and Kyrsten Sinema (D-Arizona) on February 2, 2015. The Preserving Access to Manufactured Housing Act (H.R. 650) is intended to alleviate the regulatory burdens that have impeded consumers’ ability to purchase manufactured housing, which is typically used by low and moderate income families across the country.
The Chairman of the Manufacturing Housing Institute Nathan Smith said in a statement, “Working families across the country, particularly in rural areas, depend on access to financing for affordable manufactured homes. Manufactured homes are the largest form of unsubsidized affordable housing in the nation. We thank Representatives Fincher, Sewell, Barr, and Sinema for working to correct the federal regulations that are having a significant impact on credit availability for the purchase of manufactured homes. I applaud them for coming together to protect consumers’ ability to access homeownership through this quality affordable housing option.”
Companion legislation in the Senate last year, S. 1828, was cosponsored by 16 Senators, but never got out of the Senate logjam.
Chairman Smith said, “Despite having broad-based bipartisan support in the 113th Congress, the bill did not make it through the process prior to adjournment. We hope to keep the momentum building for quick passage during this session of Congress. The lack of relief from these regulations has been having a devastating impact on low and moderate income consumers in need of access to affordable housing.”
According to a statement provided by the industry:
The Preserving Access to Manufactured Housing Act amends the thresholds that have caused small balance manufactured home loans to be classified as high-cost. Due to the increased lender liabilities associated with making and obtaining high-cost mortgages, many lenders have exited the manufactured housing market, denying access to necessary credit for new and existing manufactured homes. While the cost of originating and servicing a $250,000 loan and a $25,000 loan are generally the same in terms of real dollars, the cost as a percentage of each loan’s size is significantly different. This difference causes the smaller-sized manufactured home loan to potentially exceed the new thresholds and be categorized as high-cost, even though there is nothing predatory about the features of the loan.
The bipartisan legislation also clarifies that manufactured home retailers and salespersons are not loan originators. The new CFPB definition of a loan originator is based on traditional mortgage market roles that do not equate with the business model of the manufactured housing industry, including lending and retail sales practices.
Smith said, “Folks on the Hill need to know how important access to credit is for our customers and that these federal rules are having a negative impact on their ability to become homeowners. Congress has the opportunity to make this right for consumers before it is too late and we hope this bill is moved through the process quickly.”
The bill now goes on to the Senate for consideration.
Congresswoman Terri Sewell represents Alabama’s Seventh Congressional District.