The challenges of securing competitive home financing can, as we all know, seem daunting much of the time. That’s why the NCC continues to pursue an aggressive advocacy program in Washington, while supporting MHI Chair Barry McCabe’s home financing initiative to expand both chattel and real property options.

From a legislative standpoint, I’m pleased to report progress on two FHA reform initiatives that will have a direct impact on financing of homes in communities. First, FHA Title I (chattel) financing reform has been introduced again in this Congress as H.R. 1852 by Reps. Joe Donnelly (D-IN) and Tom Feeney (R-FL), with support from House Financial Services Chairman Barney Frank (D-MA). As you will recall, the NCC-supported Title I bill in last year’s Congress passed the House nearly unanimously but failed to make it through the Senate before the mid-term elections. The bill would increase loan limits on Title I loans from $48,600 to nearly $70,000 and index them annually after that. Additionally, it would revise the co-insurance structure of the program to allow more lenders to originate Title I loans. Back in 1992, there were nearly 30,000 Title I loans originated while only 2,000 last year. This is due in large part to the stagnant loan limits and the inability of lenders to enter to the program, so these changes are critical to reinvigorating the program. This legislation could add significant liquidity to the market and all NCC members are urged to contact their member of Congress and urge them to co-sponsor H.R. 1852. Even if they co-sponsored the bill last year, they need to sign-on again. We are also expecting a companion bill to be introduced shortly in the Senate by Sens. Evan Bayh (D-IN) and Wayne Allard (R-CO).

The second legislative initiative promoted by the NCC involved two amendments recently attached in the House Financial Services Committee to H.R. 1852, the FHA Title II (land/home) reform legislation. Why are these amendments, also sponsored by Rep. Donnelly, important to land-lease communities? The first amendment would make it easier to obtain Title II financing for leasehold mortgages on homes in communities with long-term leases. The amendment would remove the FHA requirement that manufactured homes with leasehold mortgages must be taxed as real property, which very few states allow. Since the end of the Freddie Mac leasehold mortgage program several years ago, there has been no option for community owners who wanted to obtain land/home financing for homes with long-term leases. This amendments brings us one step closer to a viable leasehold mortgage program again.

The second Title II amendment promoted by the NCC would allow FHA financing for manufactured home condominiums. For years, FHA has prohibited a homebuyer from getting an FHA-insured mortgage if the manufactured home was in a condominium. As more community owners diversify into this type of development, having FHA financing available for their buyers is critical. Now H.R. 1852 with both amendments is heading to the full House for approval, with Senate action expected later this summer.

I’m also excited to report that one of Chairman McCabe’s priority issue task forces will be focus on home finance, and several NCC members have already volunteered to play an active role in the task force. While the task force will also be working to assure passage of FHA reform legislation, it will also be focusing on creating and successfully implementing a program to attract new primary lenders to the industry, as well as developing a program to open up new secondary markets for loans secured by manufactured homes. As we all know, such an effort is key to bringing new sources of competitive financing into the market. The task force will also be reviewing federal housing assistance programs and identifying which could support manufactured housing and seek changes, where necessary, to federal law and regulations as necessary. If you haven’t already volunteered to serve on one of the priority issue task forces, there is still time to sign-up via the MHI website.

Beyond the legislative arena this spring, the NCC’s National Sales and Marketing Forum in Las Vegas in April was a huge, sell-out success! Nearly 350 community owners, regional managers and on-site managers attended the Forum the day before the National Congress and Expo and heard from their peers on a wide array of sales and marketing relations topics, while engaging in some excellent networking opportunities. I’d like to thank Rick Rand of Great Value Homes for heading up the planning committee for the Forum, and Michael O’Brien and Ann Parman of the MHI staff for their efforts in organizing the Forum. At our Summer Meeting in July, we will be discussing the focus of next year’s Forum.

As always, feel free to share your thoughts and comments with me at umh2@aol.com.

Christine Lindsey
Chair, National Communities Council
Vice President of Sales, UMH Properties