Congress Passes Bipartisan Law to Boost Manufactured Home Affordability

Congress approved a bipartisan housing package that seeks to expand the supply of affordable manufactured homes. A key provision repeals the long-standing requirement that such homes be built on a permanent steel frame, a change the bill’s sponsors say could lower construction costs by as much as $10,000, according to the center-right Niskanen Center. The legislation is framed as a response to a nationwide shortage of multimillion-unit housing and is intended to make factory-built homes cheaper to produce and purchase.

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Manufactured-home buyers typically rely on “personal-property” loans, which cannot be bundled and sold to investors and therefore carry higher interest rates—often approaching double-digit levels. Analysis from the Pew Charitable Trusts notes that 44 percent of borrowers seeking manufactured homes use these loans because they either rent the land their home sits on or face state restrictions that block conventional mortgages.

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Senators Jeff Merkley (D-OR), John Hickenlooper (D-CO) and Peter Welch (D-MA) introduced legislation in June that would give the Federal Housing Finance Agency (FHFA) a 30-month deadline to require Fannie Mae and Freddie Mac to assume some risk on personal-property loans. President Donald Trump’s recent executive order also tasked the FHFA with finding a solution. An FHFA spokesperson praised the president’s leadership and said the agency is working on policies to support these loans, though Fannie Mae and Freddie Mac declined comment.

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Scott Olson, executive director of the industry group Community Home Lenders of America, argues that the market has failed to provide affordable financing and that federal agencies “should be the leaders” in addressing the gap. The Department of Housing and Urban Development (HUD) has updated its insurance program for personal-property financing and adjusted loan-size limits to keep pace with rising manufactured-home prices, but HUD officials acknowledge that administrative requirements still pose challenges for smaller lenders.

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Higher fees on personal-property loans and the lack of uniform consumer-protection rules raise worries about borrower fairness. Daniel Pang, a research associate at the Urban Institute, notes ongoing discussions about extending HUD, Fannie Mae and Freddie Mac protections to these loans to guard against unfair lending practices and sudden rent hikes for owners who live on rented land.

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Proponents contend that more affordable financing will stimulate construction, sales, and overall supply of manufactured homes, helping to meet the law’s broader goal of expanding affordable housing options for American families.

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