[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4804 Referred in Senate (RFS)]
109th CONGRESS
2d Session
H. R. 4804
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 26, 2006
Received; read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
AN ACT
To modernize the manufactured housing loan insurance program under
title I of the National Housing Act.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This title may be cited as the ``FHA Manufactured Housing Loan
Modernization Act of 2006''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) manufactured housing plays a vital role in providing
housing for low- and moderate-income families in the United
States;
(2) the FHA title I insurance program for manufactured home
loans traditionally has been a major provider of mortgage
insurance for home-only transactions;
(3) the manufactured housing market is in the midst of a
prolonged downturn which has resulted in a severe contraction
of traditional sources of private lending for manufactured home
purchases;
(4) during past downturns the FHA title I insurance program
for manufactured homes has filled the lending void by providing
stability until the private markets could recover;
(5) in 1992, during the manufactured housing industry's
last major recession, over 30,000 manufactured home loans were
insured under title I;
(6) in 2004, fewer than 2,000 manufactured housing loans
were insured under title I;
(7) the loan limits for title I manufactured housing loans
have not been adjusted for inflation since 1992; and
(8) these problems with the title I program have resulted
in an atrophied market for manufactured housing loans, leaving
American families who have the most difficulty achieving
homeownership without adequate financing options for home-only
manufactured home purchases.
(b) Purposes.--The purposes of this Act are--
(1) to provide adequate funding for FHA-insured
manufactured housing loans for low- and moderate-income
homebuyers during all economic cycles in the manufactured
housing industry;
(2) to modernize the FHA title I insurance program for
manufactured housing loans to enhance participation by Ginnie
Mae and the private lending markets; and
(3) to adjust the low loan limits for title I manufactured
home loan insurance to reflect the increase in costs since such
limits were last increased in 1992 and to index the limits to
inflation.
SEC. 3. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION PORTFOLIO.
The second sentence of section 2(a) of the National Housing Act (12
U.S.C. 1703(a)) is amended--
(1) by striking ``In no case'' and inserting ``Other than
in connection with a manufactured home or a lot on which to
place such a home (or both), in no case''; and
(2) by striking ``: Provided, That with'' and inserting ``.
With''.
SEC. 4. INSURANCE BENEFITS.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), is amended by adding at the end the
following new paragraph:
``(8) Insurance benefits for manufactured housing loans.--
Any contract of insurance with respect to loans, advances of
credit, or purchases in connection with a manufactured home or
a lot on which to place a manufactured home (or both) for a
financial institution that is executed under this title after
the date of the enactment of the FHA Manufactured Housing Loan
Modernization Act of 2006 by the Secretary shall be conclusive
evidence of the eligibility of such financial institution for
insurance, and the validity of any contract of insurance so
executed shall be incontestable in the hands of the bearer from
the date of the execution of such contract, except for fraud or
misrepresentation on the part of such institution.''.
(b) Applicability.--The amendment made by subsection (a) shall only
apply to loans that are registered or endorsed for insurance after the
date of the enactment of this Act.
SEC. 5. MAXIMUM LOAN LIMITS.
(a) Dollar Amounts.--Paragraph (1) of section 2(b) of the National
Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) in clause (ii) of subparagraph (A), by striking
``$17,500'' and inserting ``$24,500'';
(2) in subparagraph (C) by striking ``$48,600'' and
inserting ``$68,040'';
(3) in subparagraph (D) by striking ``$64,800'' and
inserting ``$90,720'';
(4) in subparagraph (E) by striking ``$16,200'' and
inserting ``$22,680''; and
(5) by realigning subparagraphs (C), (D), and (E) 2 ems to
the left so that the left margins of such subparagraphs are
aligned with the margins of subparagraphs (A) and (B).
(b) Annual Indexing.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions
of this Act, is further amended by adding at the end the following new
paragraph:
``(9) Annual indexing of manufactured housing loans.--The
Secretary shall develop a method of indexing in order to
annually adjust the loan limits established in subparagraphs
(A)(ii), (C), (D), and (E) of this subsection. Such index shall
be based on the manufactured housing price data collected by
the United States Census Bureau. The Secretary shall establish
such index no later than one year after the date of the
enactment of the FHA Manufactured Housing Loan Modernization
Act of 2006.''
(c) Technical and Conforming Changes.--Paragraph (1) of section
2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) by striking ``No'' and inserting ``Except as provided
in the last sentence of this paragraph, no''; and
(2) by adding after and below subparagraph (G) the
following:
``The Secretary shall, by regulation, annually increase the dollar
amount limitations in subparagraphs (A)(ii), (C), (D), and (E) (as such
limitations may have been previously adjusted under this sentence) in
accordance with the index established pursuant to paragraph (9).''.
SEC. 6. INSURANCE PREMIUMS.
Subsection (f) of section 2 of the National Housing Act (12 U.S.C.
1703(f)) is amended--
(1) by inserting ``(1) Premium Charges.--'' after ``(f)'';
and
(2) by adding at the end the following new paragraph:
``(2) Manufactured Home Loans.--Notwithstanding paragraph (1), in
the case of a loan, advance of credit, or purchase in connection with a
manufactured home or a lot on which to place such a home (or both), the
premium charge for the insurance granted under this section shall be
paid by the borrower under the loan or advance of credit, as follows:
``(A) At the time of the making of the loan, advance of
credit, or purchase, a single premium payment in an amount not
to exceed 2.25 percent of the amount of the original insured
principal obligation.
``(B) In addition to the premium under subparagraph (A),
annual premium payments during the term of the loan, advance,
or obligation purchased in an amount not exceeding 1.0 percent
of the remaining insured principal balance (excluding the
portion of the remaining balance attributable to the premium
collected under subparagraph (A) and without taking into
account delinquent payments or prepayments).
``(C) Premium charges under this paragraph shall be
established in amounts that are sufficient, but do not exceed
the minimum amounts necessary, to maintain a negative credit
subsidy for the program under this section for insurance of
loans, advances of credit, or purchases in connection with a
manufactured home or a lot on which to place such a home (or
both), as determined based upon risk to the Federal Government
under existing underwriting requirements.
``(D) The Secretary may increase the limitations on premium
payments to percentages above those set forth in subparagraphs
(A) and (B), but only if necessary, and not in excess of the
minimum increase necessary, to maintain a negative credit
subsidy as described in subparagraph (C).''.
SEC. 7. TECHNICAL CORRECTIONS.
(a) Dates.--Subsection (a) of section 2 of the National Housing Act
(12 U.S.C. 1703(a)) is amended--
(1) by striking ``on and after July 1, 1939,'' each place
such term appears; and
(2) by striking ``made after the effective date of the
Housing Act of 1954''.
(b) Authority of Secretary.--Subsection (c) of section 2 of the
National Housing Act (12 U.S.C. 1703(c)) is amended to read as follows:
``(c) Handling and Disposal of Property.--
``(1) Authority of secretary.--Notwithstanding any other
provision of law, the Secretary may--
``(A) deal with, complete, rent, renovate,
modernize, insure, or assign or sell at public or
private sale, or otherwise dispose of, for cash or
credit in the Secretary's discretion, and upon such
terms and conditions and for such consideration as the
Secretary shall determine to be reasonable, any real or
personal property conveyed to or otherwise acquired by
the Secretary, in connection with the payment of
insurance heretofore or hereafter granted under this
title, including any evidence of debt, contract, claim,
personal property, or security assigned to or held by
him in connection with the payment of insurance
heretofore or hereafter granted under this section; and
``(B) pursue to final collection, by way of
compromise or otherwise, all claims assigned to or held
by the Secretary and all legal or equitable rights
accruing to the Secretary in connection with the
payment of such insurance, including unpaid insurance
premiums owed in connection with insurance made
available by this title.
``(2) Advertisements for proposals.--Section 3709 of the
Revised Statutes shall not be construed to apply to any
contract of hazard insurance or to any purchase or contract for
services or supplies on account of such property if the amount
thereof does not exceed $25,000.
``(3) Delegation of authority.--The power to convey and to
execute in the name of the Secretary, deeds of conveyance,
deeds of release, assignments and satisfactions of mortgages,
and any other written instrument relating to real or personal
property or any interest therein heretofore or hereafter
acquired by the Secretary pursuant to the provisions of this
title may be exercised by an officer appointed by the Secretary
without the execution of any express delegation of power or
power of attorney. Nothing in this subsection shall be
construed to prevent the Secretary from delegating such power
by order or by power of attorney, in the Secretary's
discretion, to any officer or agent the Secretary may
appoint.''.
SEC. 8. REVISION OF UNDERWRITING CRITERIA.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions
of this Act, is further amended by adding at the end the following new
paragraph:
``(10) Financial soundness of manufactured housing
program.--The Secretary shall establish such underwriting
criteria for loans and advances of credit in connection with a
manufactured home or a lot on which to place a manufactured
home (or both), including such loans and advances represented
by obligations purchased by financial institutions, as may be
necessary to ensure that the program under this title for
insurance for financial institutions against losses from such
loans, advances of credit, and purchases is financially
sound.''.
(b) Timing.--Not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall revise the existing underwriting
criteria for the program referred to in paragraph (10) of section 2(b)
of the National Housing Act (as added by subsection (a) of this
section) in accordance with the requirements of such paragraph.
Passed the House of Representatives July 25, 2006.
Attest:
KAREN L. HAAS,
Clerk.