On Sep. 16, HUD issued update to manufactured homes regulations.
HUD updated regulations to lower housing costs and build safe manufactured homes.
Most extensive update to the Manufactured Home Construction and Safety Standards.
Includes 90 new or updated standards to increase innovation and production of homes with features that are sought-after by consumers, such as open floor plans, attics.
Updates amended 24 CFR 3280, Manufactured home construction, safety standards.
Manufactured home regulations 24 CFR 3282, procedural, enforcement; 24 CFR 3285, Model installation standards;24 CFR 3286, installation program regulations.
Manufactured Home Updates
Updates will expedite home production process by cutting red tape and eliminating need for manufacturers to obtain alternative approvals for HUD approved materials.
Manufactured Home Construction and Safety Standards (HUD Code) supports Biden-Harris Administration’s goals to expand domestic supply of manufactured homes.
Final rule enables multi-unit single family manufactured homes to be built under the HUD Code, extending cost-saving benefits of manufactured housing to urban areas.
Aligns HUD Code with current construction standards and reduces complexity.
LifeCycle Cost Analyses
Commenter suggest lifecycle cost analyses justifying quality rules include in sensitivity analysis scenario with discount rate equal to index average MHCSS home chattel loan.
Noted chattel rates can exceed OMB standard 3%, 7% real discount rates in analyses.
The commenter explained that actual financing costs must be considered in lifecycle cost analysis to guarantee real, all-in consumer savings are achieved.
HUD noted although discount rate can be chosen based on mortgage rate, appropriate value would need to be the real interest rate, i.e., the nominal rate minus inflation.
OMB's preferred 3% and 7% real discount rates provide a range that includes the commenter's cited median nominal chattel loan rate of 7.8% minus inflation.
Further, noted only 42% of manufactured housing loans in 2021 were chattel loans.
Thus, using discount rate based solely on chattel loan interest rates is inappropriate.
