MHI Applauds Introduction of Bipartisan Bill to Preserve Access to Manufactured Housing Financing
Arlington, VA (March 24, 2017)—The Manufactured Housing Institute (MHI) applauds the bipartisan group of Representatives who introduced a bill yesterday to remove regulatory burdens to manufactured home financing. Recent Home Mortgage Disclosure Act data shows that consumers have been shut out of the market for quality, affordable housing because regulations have decreased the availability of financing for manufactured homes, which are a vital source of affordable housing for millions of low- and moderate-income families across the country.
H.R. 1699, the Preserving Access to Manufactured Housing Act, was introduced by Representatives Andy Barr (R-KY), Kyrsten Sinema (D-AZ), Bruce Poliquin (R-ME), Terri Sewell (D-AL), David Kustoff (R-TN), and Kathleen Rice (D-NY). It addresses federal regulations implementing the Dodd-Frank Act that do not reflect the unique nature of the manufactured home financing and sales process. This legislation ensures manufactured housing remains available and affordable, without eroding important federal consumer protections established by the Dodd-Frank Act.
“We thank Representatives Barr, Sinema, Poliquin, Sewell, Kustoff, and Rice for working in a bipartisan manner to correct the federal regulations that are significantly impacting credit availability for the purchase of manufactured homes,” said MHI Chairman Tim Williams. “I applaud them for coming together to protect consumers’ ability to access manufactured homeownership.”
When introducing the bill, its sponsor Rep. Barr said, “The CFPB is “protecting” people right out of affordable manufactured homeownership. Congress should fight to give families opportunities – not take them away. This bill is for the millions who rely on manufactured housing but have been seriously harmed by crushing federal regulations. I am proud to have introduced legislation with my colleagues on both sides of the aisle to stop the government from taking the American dream of homeownership away. I look forward to Congress passing this important bill as soon as possible.”
H.R. 1699 modifies the definition of “high-cost” loans so that manufactured home loans are not unfairly swept under this designation simply due to their small size. The provision of the Dodd-Frank Act that established parameters for which mortgage loans are classified as “high cost” included more flexible annual percentage rate (APR) and points and fees provisions for small loans. This was in recognition of the simple mathematical fact that fixed costs on smaller loans translate into higher percentages of the total loan. In practice, this flexibility has not been sufficient to address market realities. Thus, some manufactured housing lenders have exited the market and others are no longer offering smaller dollar amount (and most affordable) loans.
The bipartisan legislation also clarifies that manufactured home retailers and salespersons are not loan originators. The current 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.
This bill amends the SAFE Act and the Truth in Lending Act to exclude manufactured housing retailers and sellers from the definition of a loan originator, so long as they are only receiving compensation for the sale of the home and not engaged in financing the loans.
“Congress needs to understand how important access to credit is for working families, veterans, retirees, and those living in rural America. The negative impact these federal rules are having on their ability to become homeowners can be corrected with this bill,” Williams said. “We hope the momentum created in the previous Congress carries over and this legislation is moved through the process quickly.”
During the 114th Congress, similar legislation (H.R. 650) was passed by the House of Representatives in April 2015 by a bipartisan vote. The legislation was included in the Fiscal Year 2017 Financial Services Appropriations bill, which passed in the House in July 2016. It was also included in the Financial CHOICE Act, which passed the House Financial Services Committee in September 2016. In the Senate, the legislation (S. 682) was included in the Financial Regulatory Improvement package that the Senate Banking Committee passed in May 2015. The language was also included in the Financial Services Appropriations bill that passed the Senate Appropriations Committee in July 2015. MHI is the only national trade organization representing all segments of the factory-built housing industry. MHI members include home builders, lenders, home retailers, community owners and managers, suppliers and 50-affiliated state organizations. MHI members represent about 85 percent of manufactured homes produced each year. Visit us on Twitter @MHIUpdate, and Facebook.