Federal Housing Administration: Insurance for Manufactured Housing, 53346-53350 [E8-20787]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 73, Number 179 (Monday, September 15, 2008)]
[Proposed Rules]
[Pages 53346-53350]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-20787]



[[Page 53345]]

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Part III





Department of Housing and Urban Development





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24 CFR Parts 201 and 203



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Federal Housing Administration: Insurance for Manufactured Housing; 
Proposed Rule

Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / 
Proposed Rules

[[Page 53346]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 201 and 203

[Doc. No. FR-5075-P-01]
RIN 2502-AI45


Federal Housing Administration: Insurance for Manufactured 
Housing

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend HUD's regulations governing 
manufactured homes that are to be the security for Federal Housing 
Administration (FHA) Title I loans and Title II insured mortgages. The 
proposed rule would permit, as eligible for FHA insurance, mortgages on 
manufactured homes to be installed in accordance with the Model 
Installation Standards, which were the subject of notice and rulemaking 
that resulted in a final rule published on October 19, 2007. Acceptance 
of mortgages on these manufactured homes for FHA insurance will provide 
for greater flexibility of design, thereby permitting additional 
options for affordable housing. This proposed rule would apply to all 
newly installed manufactured homes that are to be security for Title I 
and Title II loans and any manufactured home that has been previously 
set up and erected at another location and that is to be security for a 
Title I loan. An existing manufactured home that secures a Title I loan 
and that has been installed or erected on a homesite in compliance with 
the manufacturer's requirements for anchoring, support, stability, and 
maintenance would be exempt from compliance with this proposed rule, 
unless it is relocated from the site of its original installation after 
the effective date of this proposed rule.

DATES: Comment Due Date: November 14, 2008.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room 10276, Washington, DC 20410-0500. Communications must 
refer to the above docket number and title. There are two methods for 
submitting public comments. All submissions must refer to the above 
docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, 
Washington, DC 20410-0001.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
https://www.regulations.gov. HUD strongly encourages commenters to 
submit comments electronically. Electronic submission of comments 
allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt by HUD, and enables HUD to make them immediately 
available. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
rule. No Facsimile Comments. Facsimile (FAX) comments are not 
acceptable.

    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at (202) 708-3055 (this 
is not a toll-free number). Individuals with speech or hearing 
impairments may access this number via TTY by calling the Federal 
Information Relay Service at (800) 877-8339. Copies of all comments 
submitted are available for inspection and downloading at https://
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Peter Gillispie, Home Valuation Policy 
Division, Office of Housing, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Room 9270, Washington, DC 20410-
8000, telephone number (202) 708-2121 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 2 of the National Housing Act (12 U.S.C. 1703) (the NHA) 
authorizes the Secretary to insure approved lenders against losses 
sustained as a result of borrower default on, among other things, 
manufactured home loans. The regulations implementing the Title I 
programs are found in 24 CFR part 201. Section 201.21 establishes the 
eligibility requirements for manufactured home loans. Section 
201.21(c)(3) provides, in part, that any permanent foundation shall be 
constructed in accordance with the current edition of HUD's Permanent 
Foundations Guide for Manufactured Housing (HUD Handbook 4930.3).
    Under Title II of the NHA, section 203 authorizes the Secretary to 
insure mortgages used to finance the purchase of single-family homes. 
HUD's regulations implementing section 203 of the Act are located at 24 
CFR part 203 (entitled ``Single Family Mortgage Insurance''). Section 
203.43f contains the eligibility criteria for FHA-insured mortgages 
covering manufactured homes, describing the physical characteristics 
the home and foundation must possess, as well as required terms and 
conditions of the mortgage.
    Specifically, the requirements currently contained in Sec.  
203.43f(c)(i) and (ii) provide that a manufactured home must be erected 
on a site-built permanent foundation that meets or exceeds the 
applicable requirements of the Minimum Property Standards (MPS) for 
One- and Two-Family Dwellings (24 CFR 200.929(b)(1)), among other 
requirements, and that the space beneath a manufactured home be 
enclosed by continuous foundation-type construction designed to resist 
all forces to which it is subjected without transmitting forces to the 
building superstructure. HUD has determined that satisfying the 
requirements of these regulations is not the only means of protecting 
the Mutual Mortgage Insurance Fund (MMIF) and that the regulations 
should reflect current developments in the installation of manufactured 
homes.
    The Manufactured Housing Improvements Act of 2000 (the Act), which 
amended the National Manufactured Housing Construction and Safety Act 
of 1974 (42 U.S.C. 5401-5426), established new requirements pertaining 
to the installation of manufactured homes. One of the provisions 
requires HUD to establish Model Manufactured Home Installation 
Standards.
    On October 19, 2007 (72 FR 59338), HUD published its Model 
Manufactured Home Installation Standards final rule. HUD's final rule 
codified the Model Manufactured Home Installation Standards (Model 
Installation Standards) in a new part 3285 of Title 24 of the Code of 
Federal Regulations

[[Page 53347]]

(CFR). The Model Installation Standards contain both minimum acceptable 
nationwide standards for the installation and set-up of manufactured 
homes and detailed methods for the design and construction of 
foundations, based on site conditions and home design features that 
support manufactured housing. The Model Installation Standards also 
allow alternative foundation systems or designs that meet or exceed the 
requirements of the Model Installation Standards, provided the methods 
are approved by a professional engineer or a registered architect in 
accordance with acceptable engineering practice.
    On June 20, 2008 (73 FR 35270), HUD published a final rule 
entitled, ``Manufactured Home Installation Program,'' which established 
a federal manufactured home installation program in accordance with the 
National Manufactured Housing Construction and Safety Standards Act of 
1974, as amended by the Manufactured Housing Act of 2000. The 
installation program final rule is a companion rule to the Model 
Installation Standards final rule. The installation program sets out 
manufactured home installation requirements that are applicable in all 
states, requirements that are applicable in only those states in which 
HUD is administering the installation program, and requirements for 
states that choose to administer their own installation programs in 
lieu of the HUD program. The new elements required by the Manufactured 
Housing Improvement Act of 2000 to be integrated into an acceptable 
manufactured home installation program are the establishment of 
qualified installation standards, licensing and training of installers, 
and inspection of the installation of manufactured homes. The June 20, 
2008, final rule established the HUD-administered installation program 
that operates in a state, unless that state certifies that it has its 
own qualifying program.

II. This Proposed Rule

    This proposed rule would revise the existing requirements contained 
in 24 CFR parts 201 and 203, which pertain to eligibility of mortgages 
on manufactured homes for FHA insurance, by removing all requirements 
for site-built permanent foundations and perimeter enclosures designed 
in compliance with the Permanent Foundations Guide for Manufactured 
Housing (HUD Handbook 4930.3G). In place of the current requirements, 
the proposed rule would allow FHA insurance for mortgages on 
manufactured homes that are installed in a manner that meets or exceeds 
the requirements set forth in the Model Installation Standards, which 
HUD has codified at 24 CFR part 3285.
    This proposed rule would prevent HUD from having two different 
foundation standards for the installation of manufactured homes that 
are security for FHA-insured mortgages. The Model Installation 
Standards will establish the minimum acceptable standards nationwide 
for the installation and set up of new manufactured homes and also 
serve as the basis for qualifying a state's installation program under 
the Manufactured Home Installation Program. HUD believes that the 
benefits of this proposed rule significantly outweigh its costs, 
especially in light of the recently adopted Model Installation 
Standards and the Manufactured Home Installation Program.
    The Model Installation Standards will protect FHA's interest in 
manufactured homes financed with HUD-insured loans, and the MMIF will 
not be exposed to any additional risk by the Department's adoption of 
these standards as the eligibility requirements for FHA-insured 
financing. In developing the Model Installation Standards, the 
Department was required to consider proposed standards recommended by a 
consensus committee. Both the consensus committee and the Department 
were required to consider relevant data, including research, 
development, and testing activities by private and government 
organizations, to determine how to protect the interests of the public, 
as well as the Department. The resulting Model Installation Standards 
provide greater clarity, precision, and objectivity for requirements 
that apply to the set-up of manufactured homes. They require that 
foundations for manufactured home installations be based on site 
conditions, home design features, and the loads the home was designed 
to withstand as evidenced on the home's data plate. The standards have 
been evaluated by HUD and have been determined to provide adequate 
resistance to the design loads established by the Manufactured Home 
Construction and Safety Standards. With these uniform, minimum 
standards, supported by a rigorous program of licensing and training of 
installers and inspections of manufactured home installations, HUD 
believes the result will be a more reliable set of benchmarks and that 
risk to the MMIF would be reduced, not increased.
    Similarly, HUD believes the benefits for homebuyers will also 
outweigh any increased costs they face. On June 14, 2006, HUD published 
estimated costs of compliance with installation program requirements 
for states in which HUD administers an installation program, as well as 
for states that choose to administer their own installation programs. 
(See 71 FR 34483, left column.) The cost of complying with the 
installation program in states that administer their own programs was 
estimated at $17 per manufactured home. In states where HUD administers 
the installation program, the cost was estimated at $1,126 per single-
wide manufactured home and $1,176 per double-wide manufactured home. 
HUD assumes that a portion of these costs would be passed on to the 
consumer. Nonetheless, by making manufactured homes installed in 
compliance with the Model Installation Standards eligible for FHA 
financing, HUD will provide financing alternatives for homeowners whose 
options might otherwise be limited to the subprime market. Homeowners 
will also benefit by knowing that their homes have been installed by 
trained, licensed installers and that installations are subject to 
inspection. By replacing FHA's current foundation requirements with the 
Model Installation Standards, HUD would promote affordable housing by 
reducing set-up costs. Through the same measure, HUD would provide for 
the quality and safety of manufactured homes by applying minimum 
nationwide standards and deferring to the states for establishment of 
additional requirements for the set-up and installation of manufactured 
homes by licensed installers overseen by inspectors who meet HUD 
qualifications.
    This proposed rule would require all new and existing manufactured 
homes that are to be security for Title II FHA-insured mortgages and 
all new manufactured homes that are to be security for Title I loans to 
be in compliance with the Model Installation Standards. A manufactured 
home that is to be security for a Title I loan and that has been 
relocated from the original homesite upon which it had been installed 
and set-up must be in compliance with the Model Installation Standards. 
A manufactured home that has been installed or erected on a homesite in 
compliance with the manufacturer's requirements for anchoring, support, 
stability, and maintenance would be exempt from compliance with this 
rule, unless it is relocated from the site of its original installation 
after the effective date of this proposed rule.

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    Even with the changes proposed by this rule, in order to qualify 
for FHA mortgage insurance, manufactured homes in some states may have 
to be installed or erected in accordance with requirements beyond those 
in the Model Installation Standards. FHA is authorized to insure loans 
under Title II of the National Housing Act only if the loan is secured 
by ``real estate.'' If a manufactured home installed in accordance with 
the Model Installation Standards would be classified and taxed as 
personal property under state or local law, then the installation or 
erection would have to meet such additional requirements as necessary 
for it to be classified as real property. The determination whether a 
manufactured home is classified and taxed as real property, and 
therefore eligible for insurance under Title II, may depend on the 
foundation and the manner of attachment of the home to the foundation.
    Additionally, this proposed rule would revise the eligibility 
requirements for Title II manufactured homes that are located in areas 
designated by the Federal Emergency Management Agency (FEMA) as 
floodplain areas having special flood hazards. Specifically, this 
proposed rule would require that the elevation of the lowest floor of 
the manufactured home must be at or above the FEMA-designated base 
flood elevation and eliminate the requirement that the finished grade 
level beneath the manufactured home be at or above the base flood 
elevation. This change will align the flood hazard requirements for 
manufactured homes with that of stick-built homes.
    HUD expects and invites comments in response to this proposed rule 
on the suitability of using the Model Installation Standards for FHA 
insurance eligibility purposes. With the Model Installation Standards 
having now been issued in final form (with an effective date of October 
20, 2008), the public has an opportunity to submit comments in response 
to this proposed rule for HUD's consideration that may result in 
appropriate changes to the final, effective version of this rule. 
However, extensive comments on the technical aspects of the Model 
Installation Standards have already been received and were considered 
by HUD in the development of the final rule on Model Installation 
Standards, and such comments do not need to be resubmitted in response 
to this proposed rule. Comments submitted to HUD on the Model 
Installation Standards also recommended that any references by HUD in 
any housing program only use the Model Installation Standards adopted 
under part 3285 or a state equivalent, and this proposed rule would be 
responsive to such comments.

III. Findings and Certifications

Executive Order 12866

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866 (entitled ``Regulatory Planning and Review''). 
OMB determined that this rule is a ``significant regulatory action,'' 
as defined in section 3(f) of the Order (although not economically 
significant, as provided in section 3(f)(1) of the Order). The docket 
file is available for public inspection in the Regulations Division, 
Office of General Counsel, Department of Housing and Urban Development, 
451 Seventh Street, SW., Room 10276, Washington, DC 20410-0500. Due to 
security measures at the HUD Headquarters building, please schedule an 
appointment to review the docket file by calling the Regulations 
Division at (202) 708-3055 (this is not a toll-free number). Hearing-or 
speech-impaired individuals may access this number through TTY by 
calling the toll-free Federal Information Relay Service at (800) 877-
8339.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments, and the private sector. This proposed rule does not 
impose any federal mandates on any state, local, or tribal government, 
or the private sector within the meaning of UMRA.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on state and local governments and 
is not required by statute, or preempts state law, unless the relevant 
requirements of section 6 of the executive order are met. This rule 
does not have federalism implications and does not impose substantial 
direct compliance costs on state and local governments or preempt state 
law within the meaning of the executive order.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 605(b)) generally requires 
an agency to conduct regulatory flexibility analysis of any rule 
subject to notice and comment rulemaking requirements, unless the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities, which are the FHA-
approved lenders that are directly affected by this rule. This rule 
will not have a significant economic impact on a substantial number of 
small entities for the following reasons. This rule would remove, from 
its regulations governing mortgages on manufactured homes that are 
eligible for FHA insurance, those prescriptive foundation requirements 
for manufactured homes and would establish the minimum acceptable 
standards nationwide for the installation and set-up of manufactured 
homes. The removal of prescriptive requirements eases the burden on 
FHA-approved lenders of having to ensure that manufactured homes for 
which homebuyers are seeking FHA insurance for their mortgages meet 
standards different from the more widely used Model Installation 
Standards. Therefore, the undersigned certifies that this proposed rule 
will not have a significant economic impact on a substantial number of 
small entities, and an initial regulatory flexibility analysis is not 
required.
    Notwithstanding HUD's determination that this rule will not have a 
significant economic impact on a substantial number of small entities, 
HUD specifically invites comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
which implement section 102(2)(C) of the National Environmental Policy 
Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant 
Impact is available for public inspection between the hours of 8 a.m. 
and 5 p.m. weekdays in the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room 10276, Washington, DC 20410-0500. Due to security 
measures at the HUD Headquarters building, an advance appointment to 
review the finding must be scheduled by calling the Regulations 
Divisions at (202) 708-3055 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
through TTY by calling the toll-free Federal Information Relay Service 
at (800) 877-8339.

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Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance Number (CFDA) for 
Manufactured Home Loan Insurance is 14.110, and the CFDA for Mortgage 
Insurance (Homes) is 14.117.

List of Subjects

24 CFR Part 201

    Claims, Health facilities, Historic preservation, Home improvement, 
Loan programs-housing and community development, Manufactured homes, 
Mortgage insurance, Reporting and recordkeeping requirements.

24 CFR Part 203

    Hawaiian Natives, Home improvement, Indians-lands, Loan programs-
housing and community development, Mortgage insurance, Reporting and 
recordkeeping requirements, Solar energy.

    Accordingly, HUD proposes to amend 24 CFR parts 201 and 203, as 
follows:

PART 201--TITLE I PROPERTY IMPROVEMENT AND MANUFACTURED HOME LOANS

    1. The authority citation for part 201 continues to read as 
follows:

    Authority: 12 U.S.C. 1703 and 3535(d).

    2. Revise Sec.  201.21(c)(3), to read as follows:


Sec.  201.21  Manufactured home loan eligibility.

* * * * *
    (c) * * *
    (3) Except for an existing manufactured home that has not been 
relocated from the homesite upon which it was originally erected or 
installed, the installation or erection of a manufactured home on the 
homesite must meet or exceed the requirements set forth in 24 CFR part 
3285, the Model Manufactured Home Installation Standards, and all 
applicable state and local requirements governing the installation and 
construction of the manufactured home foundation system. An existing 
manufactured home that has not been relocated from the homesite upon 
which it was originally erected must have been installed in compliance 
with the manufacturer's requirements for anchoring, support, stability, 
and maintenance.
* * * * *
    3. Revise Sec.  201.26(b)(4)(iii), to read as follows:


Sec.  201.26  Conditions for loan disbursement.

* * * * *
    (b) * * *
    (4) * * *
    (iii) Except for an existing manufactured home that has not been 
relocated from the homesite upon which it was originally erected or 
installed, the installation or erection of a manufactured home on the 
homesite meets or exceeds the requirements set forth in 24 CFR part 
3285, the Model Installation Standards, and all applicable state and 
local requirements governing the installation and construction of the 
manufactured home foundation system. An existing manufactured home that 
has not been relocated from the homesite upon which it was originally 
erected has been installed in compliance with the manufacturer's 
requirements for anchoring, support, stability, and maintenance.
* * * * *

PART 203--SINGLE FAMILY MORTGAGE INSURANCE

    1. The authority citation for 24 CFR part 203 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 5301-5320.

    2. Amend Sec.  203.43f as follows:
    a. Remove paragraph (c)(ii);
    b. Redesignate paragraph (b) as paragraph (b)(1) and add paragraph 
(b)(2),
    c. Redesignate paragraph (c)(i) as paragraph (c)(1) and paragraphs 
(c)(iii) through (vi) as (c)(2) through (5), and
    d. Revise paragraph (a) and newly redesignated paragraphs (c)(1) 
and (c)(5), and paragraph (d).
    The amendments read as follows:


Sec.  203.43f  Eligibility of mortgages covering manufactured homes.

* * * * *
    (a) The manufactured home, when erected on site, shall have floor 
space area of not less than 400 square feet and shall have been 
constructed in conformance with the National Manufactured Home 
Construction and Safety Standards, as evidenced by a certification 
label affixed thereto in accordance with 24 CFR 3280.8. A manufactured 
home that has been moved from the site upon which it was originally 
installed is not eligible for insurance.
    (b) * * *
    (2) In jurisdictions where compliance with the Model Manufactured 
Home Installation Standards, as set forth at 24 CFR part 3285, does not 
result in the classification and taxation of the manufactured home as 
real estate, the foundation of the home and the manner of its 
attachment to the foundation must be adapted in such a manner as to 
cause the home to be classified and taxed as real estate, as well as 
meet or exceed the requirements of 24 CFR part 3285, in order for the 
home to be eligible for mortgage insurance.
    (c) * * *
    (1) The installation or erection of a manufactured home on the 
homesite must meet or exceed the requirements set forth in 24 CFR part 
3285 and all applicable state and local requirements governing the 
installation and construction of the manufactured home foundation 
system, as determined by an inspection performed in accordance with 24 
CFR part 3286. The requirement for an inspection performed in 
accordance with 24 CFR part 3286 does not apply to FHA-to-FHA 
refinancing transactions. The towing hitch or running gear, which 
includes axles, brakes, wheels, and other parts of the chassis that 
operate only during transportation, shall have been removed. The 
elevation of the lowest floor in structures with basements shall be at 
or above the Federal Emergency Management Agency (FEMA) designated base 
flood elevation (as defined in 44 CFR 59.1) and meet or exceed the 
requirements set forth in 44 CFR 60.3(a) through (e). The elevation of 
the lowest floor structures without basements shall be at or above the 
FEMA-designated base flood elevation and meet or exceed the 
requirements set forth in 44 CFR 60.3(a) through (e). Basements or any 
permanent enclosure of space below the lowest floor of a structure are 
prohibited for manufactured homes located in FEMA-designated ``coastal 
high hazard areas.'' For purposes of this rule, the term ``coastal high 
hazard area'' has the meaning set forth in FEMA regulations at 44 CFR 
59.1. The site, site improvements, and all other features of the 
mortgaged property not addressed by the Manufactured Home Construction 
and Safety Standards or the Model Installation Standards shall meet or 
exceed the Minimum Property Standards (see 24 CFR 200.926 through 
200.926d) and applicable state and local government requirements 
governing the installation and construction of the manufactured home 
supporting foundation.
* * * * *
    (5) Section 203.14 of this subpart is modified to the extent 
provided in this paragraph. Applications relating to insurance of 
mortgages under this paragraph (c) must be accompanied by an agreement 
in form satisfactory to the Commissioner executed by the seller or 
builder or such other person as the Commissioner may require agreeing 
that

[[Page 53350]]

in the event of any sale or conveyance of the dwelling within a period 
of one year beginning with the date of initial occupancy, the seller, 
builder, or such other person will at the time of such sale or 
conveyance deliver to the purchaser or owner of such property the 
manufacturer's warranty on a form prescribed by the Commissioner, which 
shall provide that the manufacturer's warranty is in addition to and 
not in derogation of all other rights and remedies the purchaser or 
owner may have, and a warranty in form satisfactory to the Commissioner 
warranting that the manufactured home, installation, and all site 
improvements are constructed in substantial conformity with the plans 
and specifications (including amendments thereof or changes and 
variations therein that have been approved in writing by the 
Commissioner) on which the Commissioner has based his valuation of the 
dwelling. The warranty shall also include provisions that the 
manufactured home sustained no hidden damage during transportation, and 
if the manufactured home is a double-wide, that the sections were 
properly joined and sealed. Such agreement must provide that upon the 
sale or conveyance of the dwelling and delivery of the warranty, the 
seller, builder or such other person will promptly furnish the 
Commissioner with a conformed copy of the warranty establishing by the 
purchaser's receipt thereon that the original warranty has been 
delivered to the purchaser in accordance with this section.
    (d) In the case of a manufactured home that has been permanently 
erected on a site for more than one year prior to the date of the 
application for mortgage insurance:
    (1) The foundation shall meet or exceed the standards set forth in 
24 CFR part 3285 and all applicable state and local government 
requirements.
    (2) The site, site improvements, and all other features of the 
mortgaged property not addressed by the Manufactured Home Construction 
and Safety Standards or the Model Installation Standards shall meet or 
exceed applicable requirements of the Requirements for Existing 
Housing-- One to Four Family Living Units (HUD Handbook 4905.1). The 
elevation of the lowest floor in structures with basements as defined 
in FEMA regulations at 44 CFR 59.1 shall be at or above the FEMA-
designated base flood elevation and meet or exceed the requirements set 
forth in 44 CFR 60.3(a) through (e). The elevation of the lowest floor 
in structures without basements shall be at or above the FEMA-
designated base flood elevation and meet or exceed the requirements set 
forth in 44 CFR 60.3(a) through (e). Basements or any permanent 
enclosure of space below the lowest floor of a structure are prohibited 
for manufactured homes located in FEMA-designated ``coastal high hazard 
areas.''
    (3) The manufactured home shall have been occupied only at the 
location subject to the mortgage sought to be insured.

    Dated: August 14, 2008.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. E8-20787 Filed 9-12-08; 8:45 am]
BILLING CODE 4210-67-P