Updating Manufactured Housing Provisions, 55601-55606 [2023-17519]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Housing Service

[Federal Register Volume 88, Number 157 (Wednesday, August 16, 2023)]
[Proposed Rules]
[Pages 55601-55606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17519]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Parts 3550 and 3555

[Docket No. RHS-23-SFH-0007]
RIN 0575-AD32


Updating Manufactured Housing Provisions

AGENCY: Rural Housing Service, Department of Agriculture (USDA).

ACTION: Proposed rule.

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SUMMARY: The Rural Housing Service (RHS or the Agency), a Rural 
Development agency of the United States Department of Agriculture 
(USDA), proposes to amend the current regulations for the Single-Family 
Housing (SFH) Section 502 Direct and the SFH Guaranteed Loan Program. 
The intent of this proposed rule is to allow the Agency to give 
borrowers increased purchase options within a competitive market and 
increase adequate housing along with an enhanced customer experience 
with the SFH programs.

DATES: Comments on the proposed rule must be received on or before 
October 16, 2023.

ADDRESSES: Comments may be submitted electronically by the Federal 
eRulemaking Portal: Go to https://www.regulations.gov and, in the 
``Search Field'' box, labeled ``Search for dockets and documents on 
agency actions,'' enter the following docket number: https://aiomostl0as096.usda.net/desktop/container/?locale=en_US-/home (RHS-23-
SFH-0007) or RIN# 0575-AD32, then click search. To submit or view 
public comments, select the following document title: (Updating 
Manufactured Housing Provisions) from the ``Search Results,'' and 
select the ``Comment'' button. Before inputting your comments, you may 
also review the ``Commenter's Checklist'' (optional). Insert your 
comments under the ``Comment'' title, click ``Browse'' to attach files 
(if available). Input your email address and select ``Submit Comment.'' 
Information on using Regulations.gov, including instructions for 
accessing documents, submitting comments, and viewing the docket after 
the close of the comment period, is available through the site's 
``FAQ'' link.
    Other Information: Additional information about Rural Development 
and its programs is available on the internet at https://www.rurdev.usda.gov/.
    All comments will be available for public inspection online at the 
Federal eRulemaking Portal (https://www.regulations.gov).

FOR FURTHER INFORMATION CONTACT: Sonya Evans, Finance & Loan Analyst, 
SFH Direct Loan Division, Rural Housing Service, Rural Development, 
United States Department of Agriculture, 1400 Independence Avenue SW, 
Washington, DC 20250, Phone: 423-268-4333, Email: [email protected]. 
Or contact Stephanie Freeman, Finance & Loan Analyst, Policy, Analysis, 
and Communications Branch, Single Family Housing Guaranteed Loan 
Division, Rural Housing Service, Rural Development, United States 
Department of Agriculture, 1400 Independence Avenue SW, Washington DC 
20250, Phone: 314-457-6413, Email: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    RHS offers a variety of programs to build or improve housing and 
essential community facilities in rural areas. RHS offers loans, 
grants, and loan guarantees for single- and multifamily housing, 
childcare centers, fire and police stations, hospitals, libraries, 
nursing homes, schools, first responder vehicles and equipment, and 
housing for farm laborers. RHS also provides technical assistance loans 
and grants in partnership with non-profit organizations, Indian tribes, 
state and federal government agencies, and local communities.
    Well built, affordable housing is essential to the vitality of 
communities in rural America. Rural Development's (RD) Single Family 
Housing (SFH) Programs give families and individuals the opportunity to 
buy, build, or repair affordable homes located in rural America. 
Eligibility for these loans, loan guarantees, and grants is based on 
income and varies according to the average median income for each area.
    RHS administers the following SFH Programs under 7 CFR parts 3550 
and 3555 authorized by Section 502 of the Housing Act of 1949, as 
amended, (42 U.S.C. 1472):
     Section 502 Direct Loan Program assists low- and very low-
income applicants who currently do not own adequate housing and cannot 
obtain other credit, the opportunity to acquire, build, rehabilitate, 
improve, or relocate dwellings in rural areas.
     Section 502 Guaranteed Loan Program assists low- and 
moderate-income applicants the opportunity to acquire, build, 
rehabilitate, improve, or relocate dwellings in rural areas.
    The President announced in May 2022, the release of a Housing 
Supply Action Plan (the Plan) to ease the burden of housing costs over 
time, by boosting the supply of quality housing in every community. The 
plan includes legislative and administrative actions that will help 
close America's housing supply shortfall in five years, starting with 
the creation and preservation of hundreds of thousands of affordable 
housing units in the next three years. Under the Plan, the 
Administration intends to deploy new financing mechanisms to build and 
preserve more housing where housing gaps exist. There is special 
emphasis on supporting production and availability of manufactured 
housing through improved loan rates and terms making this type of 
homeownership more attainable and affordable.

II. Discussion of the Proposed Rule

    The Housing and Urban Development's (HUD) Office of Manufactured 
Housing Program regulates the construction of all manufactured homes 
built in the United States. These homes are built and installed in 
accordance with the Federal Manufactured Home Construction and Safety 
Standards (FMHCSS) administered by HUD. FMHCSS became effective June 
15, 1976, replacing the term ``Mobile Home'' with ``Manufactured 
Home.'' These federal standards regulate manufactured housing design 
and construction, installation, strength and durability, 
transportability, fire resistance, energy efficiency and quality. The 
FMHCSS also sets performance standards for the heating, plumbing, air 
conditioning, thermal and electrical systems. Prior to the 
implementation of the FMHCSS in 1976, the construction and installation 
of manufactured homes were not uniformly regulated and were not 
generally considered to be quality, safe

[[Page 55602]]

and sanitary housing. Further improvements to the FMHCSS were enacted 
in 1994 and 2007 with additional improvements in 2021 that included the 
development of mandates for manufactured home installation, the 
creation of a federal installation oversight program, mandated updates 
to the HUD code to enforce construction and safety standards for 
factory built manufactured homes to address items such as structural 
design, wind force resistance, additional loads requirements that are 
in accordance with the design load identified on data plate, and smoke 
alarm requirements. These were all implemented in accordance with the 
Manufactured Home Improvement Act of 2000.
    RHS defines a manufactured home as a structure that is built to 
FMHCSS and placed on a permanent foundation. It is transportable in one 
or more sections, which in the traveling mode is 10-body feet (3.048 
meters) or more in width, and when erected on site is 400 or more 
square feet (37.16 square meters), and which is built on a permanent 
chassis and designed to be used as a dwelling with or without a 
permanent foundation when connected to the required utilities. It is 
designed and constructed for permanent occupancy by a single family and 
contains permanent eating, cooking, sleeping, and sanitary facilities. 
The plumbing, heating, and electrical systems are contained in the 
structure. RHS will continue to require all new and existing 
manufactured homes to be constructed and placed on a permanent 
foundation in accordance with RD Instruction 1924-A, as applicable to 
the Direct Program, and the FMHCSS, established by HUD and found in 24 
CFR part 3280.
    The proposed revisions will allow the Agency to responsibly and 
effectively utilize funds appropriated by Congress by allowing 
borrowers more purchase options within a competitive market and thereby 
increasing the likelihood of finding adequate housing which increases 
program impact. The Agency proposes to modify the direct and guaranteed 
loan regulations as follows:
    1. Update the current regulations to permit the purchase of 
existing manufactured homes for direct and guaranteed loans. The 
current direct and guaranteed regulations prohibit the purchase of a 
manufactured home unless it is a new unit, an existing unit and site 
already financed with a section 502 loan or is a RHS real estate owned 
(REO) property. The Agency has been operating a pilot for the direct 
and guaranteed programs to test the concept of waiving the regulatory 
restrictions to finance existing manufactured homes in selected pilot 
states, even if the home is not currently financed by the agency. Under 
the pilot, the unit must have been constructed on or after January 1, 
2006, in conformance with the Federal Manufactured Home Construction 
and Safety Standards (FMHCSS), as evidenced by an affixed Housing and 
Urban Development (HUD) Certification Label and the unit must not have 
been previously installed on a different homesite, or had any 
structural alterations to it since construction in the factory, except 
for porches, decks or other structures which were built to engineered 
designs or were approved and inspected by local code officials. Once 
this rulemaking is final, these requirements will be the placed in the 
program handbooks and any adjustment to the date will be made public 
through a Federal Register notice. It has been determined that the 
pilot has been successful in increasing homeownership by expanding the 
Direct and Guaranteed portfolios by 1,372 loans. Therefore, regulatory 
revisions are being proposed to provide additional flexibility for the 
programs to lend on existing manufactured homes built in conformance 
with standards and a manufacture date, as determined by the Agency, 
based on factors such as industry standards and practices.
    2. For direct and guaranteed loans, update the current regulations 
language to meet conditions of the ownership requirement for energy 
efficient manufactured and modular home financing in Land-Lease 
Communities Operating on a Nonprofit Basis pilot, and expand this to 
include Tribal lands. These updates are expected to provide additional 
flexibility for new energy efficient manufactured and modular homes 
that meet the conditions of the pilot, as well as provide consistency 
between the direct and guaranteed programs. Currently, the Agency is 
operating an ownership requirement pilot for energy efficient 
manufactured and modular home financing in land-lease communities 
operating on a nonprofit basis, for the direct and guaranteed programs. 
Under the pilot, RD accepts leases with an unexpired term that is at 
least two years beyond the term of the promissory note in the pilot 
states.
    3. Remove the administrative requirements from the regulations for 
review and approval of applications from manufactured housing dealers 
for direct loans. The removal of this requirement will alleviate Agency 
staff from the review and approval of applications from manufactured 
housing dealers and the maintenance of a list that must be updated 
every two years based on the activity of the ``approved'' dealer-
contractors, thus providing the Agency with needed flexibility. This 
review process provided minimal value to both the applicant or dealer 
and contrasted from the requirements for site-built contractors who do 
not have a formal application or approval process nor is there a list 
of approved site-built contractors maintained. The removal will also 
prevent delays in the processing of a manufactured housing purchase 
request by eliminating the need to approve the dealer prior to 
proceeding, which can be time-consuming due to the review of financial 
and credit information for the dealer. The dealer will still be 
required to provide all site services and agree to construction and 
development requirements in 7 CFR 3550.73(d) and standards set forth in 
the FMHCSS.
    4. Revise the definition of ``Manufactured home'' in 7 CFR 3550.10 
Definitions to remove reference to RHS Thermal Performance Standards 
for direct loans.
    The removal of this reference is necessary due to RHS exemption 
from these thermal standards. Instead, RHS relies on HUD FMHCSS for 
thermal performance requirements for construction of manufactured 
homes. This change will also provide further alignment between the 
Section 502 Direct and Guaranteed loan programs.
    The Agency proposes to update the current Section 502 Direct and 
SFH Guaranteed Loan Programs regulations implemented under 7 CFR parts 
3550 and 3555. This will be accomplished by reducing the regulatory 
burdens that are specifically related to manufactured housing 
requirements, enhancing program delivery, customer service, promoting 
consistency between the direct and guaranteed SFH loan programs, and 
reflect current housing market conditions and mortgage loan practices.

III. Summary of Changes

    The Agency proposes to change 7 CFR parts 3555 and 3550 by:
    (1) Update sections 3550.52(e)(1), 3550.73(b)(1), 3555.208(b)(3) 
and add new paragraph 3555.208(a)(3) to clarify that borrowers are 
allowed under the direct and guaranteed loan programs to purchase 
existing manufactured homes constructed in conformance with the FMHCSS 
standards, as specified in program handbooks.
    (2) Update sections 3550.58(b) and 3555.203(b)(3) so that, for the 
direct and guaranteed loan programs, the Agency will accept a land-
lease with an unexpired term that is at least two years longer than the 
mortgage term for new

[[Page 55603]]

energy efficient manufactured and modular home financing in Tribal and 
land-lease communities operating on a nonprofit basis.
    (3) Remove paragraph (c) from section 3550.73 which requires Agency 
approval of manufactured housing dealers for direct loans.
    (4) Update the definition of Manufactured home under section 
3550.10, by removing reference to ``RHS Thermal Performance Standards'' 
for direct loans. SFH is exempt from RHS Thermal Performance Standards 
compliance.

IV. Regulatory Information

Statutory Authority

    Section 510(k) of Title V the Housing Act of 1949 [42 U.S.C. 
1480(k)], as amended, authorizes the Secretary of the Department of 
Agriculture to promulgate rules and regulations as deemed necessary to 
carry out the purpose of that title; and implemented under 7 CFR parts 
3550 and 3555.
Executive Order 12372, Intergovernmental Review of Federal Programs
    These programs are not subject to the requirements of Executive 
Order 12372, ``Intergovernmental Review of Federal Programs,'' as 
implemented under the USDA's regulations at 2 CFR part 415, subpart C.
Executive Order 12866, Regulatory Planning and Review
    This proposed rule has been determined to be non-significant and, 
therefore, was not reviewed by the Office of Management and Budget 
(OMB) under Executive Order 12866.
Executive Order 12988, Civil Justice Reform
    This proposed rule has been reviewed under Executive Order 12988. 
In accordance with this proposed rule: (1) Unless otherwise 
specifically provided, all State and local laws that conflict with this 
proposed rule will be preempted; (2) no retroactive effect will be 
given to this proposed rule except as specifically prescribed in the 
proposed rule; and (3) administrative proceedings of the National 
Appeals Division of the Department of Agriculture (7 CFR part 11) must 
be exhausted before suing in court that challenges action taken under 
this proposed rule.
Executive Order 13132, Federalism
    The policies contained in this proposed rule do not have any 
substantial direct effect on States, on the relationship between the 
National Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. This proposed 
rule does not impose substantial direct compliance costs on state and 
local governments; therefore, consultation with States is not required.
Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments
    This executive order imposes requirements on RHS in the development 
of regulatory policies that have tribal implications or preempt tribal 
laws. RHS has determined that the proposed rule does not have a 
substantial direct effect on one or more Indian tribe(s) or on either 
the relationship or the distribution of powers and responsibilities 
between the Federal Government and Indian tribes. Thus, this proposed 
rule is not subject to the requirements of Executive Order 13175. If 
tribal leaders are interested in consulting with RHS on this rule, they 
are encouraged to contact USDA's Office of Tribal Relations or RD's 
Tribal Coordinator at: [email protected] to request such a consultation.
National Environmental Policy Act
    In accordance with the National Environmental Policy Act of 1969, 
Public Law 91-190, this document has been reviewed in accordance with 7 
CFR part 1970 (``Environmental determined that i) this action meets the 
criteria established in 7 CFR 1970.53(f); ii) no extraordinary 
circumstances exist; and iii) the action is not ``connected'' to other 
actions with potentially significant impacts, is not considered a 
``cumulative action'' and is not precluded by 40 CFR 1506.1. Therefore, 
the Agency has determined that the action does not have a significant 
effect on the human environment, and therefore neither an Environmental 
Assessment nor an Environmental Impact Statement is required.
Regulatory Flexibility Act
    This proposed rule has been reviewed with regard to the 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The 
undersigned has determined and certified by signature on this document 
that this proposed rule will not have a significant economic impact on 
a substantial number of small entities since this rulemaking action 
does not involve a new or expanded program nor does it require any more 
action on the part of a small business than required of a large entity.
Unfunded Mandates Reform Act (UMRA)
    Title II of the UMRA, Public Law 104-4, establishes requirements 
for Federal agencies to assess the effects of their regulatory actions 
on state, local, and tribal governments and on the private sector. 
Under section 202 of the UMRA, the Agency generally must prepare a 
written statement, including cost-benefit analysis, for proposed and 
final rules with Federal mandates that may result in expenditures to 
state, local, or tribal Governments, in the aggregate, or to the 
private sector, of $100 million or more in any one year. When such a 
statement is needed for a rule, section 205 of the UMRA generally 
requires the Agency to identify and consider a reasonable number of 
regulatory alternatives and adopt the least costly, more cost-
effective, or least burdensome alternative that achieves the objectives 
of the rule.
    This proposed rule contains no Federal mandates (under the 
regulatory provisions of title II of the UMRA) for state, local, and 
tribal Governments or for the private sector. Therefore, this proposed 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.
Paperwork Reduction Act
    The Office of Management and Budget's (OMB) regulation (5 CFR part 
1320) implementing provisions of the Paperwork Reduction Act of 1995 
(Pub. L. 104-13) requires that interested members of the public and 
affected agencies have an opportunity to comment on information 
collection and recordkeeping activities (see 5 CFR 1320.8(d)). This 
notice identifies the following information collection that RHS is 
submitting to OMB as a revision to an existing approved collection with 
Agency adjustment. The Agency expects a modest change in burden once 
this proposed rule is published as a final rule in the Federal 
Register.
    Title: Direct Single Family Housing Loan and Grant Programs, 7 CFR 
3550-HB-1-3550, and HB-2-3550.
    OMB Control Number: 0575-0172.
    Expiration Date of Approval: February 28, 2025.
    Type of Request: Revision of a currently approved information 
collection.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .500 hours per response.
    Respondents: Business or other for profit, not-for-profit 
institutions.
    Estimated Number of Respondents: Approximately 50 manufactured 
dealer-

[[Page 55604]]

contractors seeking approval to provide manufactured sales, service and 
site development services.
    Estimated Number of Responses per Respondent: 1.
    Estimated Number of Responses: 50.
    Estimated Total Annual Burden on Respondents: 25 hours.
    Abstract: Through the Section 502 direct single family housing loan 
program, RHS provides 100 percent loan financing to assist eligible 
low- and very low-income applicants purchase modest homes in eligible 
rural areas by providing payment assistance to increase an applicant's 
repayment ability.
    Applicants must provide the Agency with a uniform residential loan 
application and supporting documentation (e.g., verification of income, 
assets, liabilities, etc.) when applying for assistance. The 
information requested is comparable to that required by any public or 
private mortgage lender.
    Applicants who choose to purchase a new manufactured home are 
currently required to purchase from an approved manufactured dealer-
contractor. Manufactured dealer-contractors who wish to participate in 
the Section 502 direct program are required to submit RD Form 1944-5, 
Manufactured Housing Dealer-Contractor Application, along with 
supplementary data sources such as financial statements and tax returns 
to verify or determine employment, income, and held assets. After RHS 
review, a dealer-contractor meeting qualification criteria may be added 
to list of approved dealer-contractors maintained for each state. 
Applicants must choose an approved dealer-contractor from this list for 
purchase and all other site services related to the transaction. If an 
applicant wishes to purchase a new manufactured home from a dealer-
contractor who has not received prior approval, the applicant is 
notified of other approved dealer-contractors on the state list. If 
applicants still request to purchase from a dealer-contractor who has 
not received prior approval, the dealer-contractor must submit the 
required form and supplementary documentation and wait for their 
approval prior to entering into a contract with the applicant. 
Elimination of prior approval will remove obstacles and potential 
delays for applicants to purchase new manufactured housing while 
sustained manufactured construction regulations will continue to 
maintain quality and installation standards.
    Comments are invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility;
    (b) the accuracy of the agency's estimate of the burden of the 
collection of information including the validity of the methodology and 
assumptions used;
    (c) ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (d) ways to minimize the burden of the collection of information on 
respondents, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Copies of this information collection can be obtained from Crystal 
Pemberton, Rural Development Innovation Center--Regulations Management 
Division, at Telephone: (202) 260-8621, Email: 
[email protected].
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record.
E-Government Act Compliance
    RHS is committed to complying with the E-Government Act by 
promoting the use of the internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information, services, and other purposes.
Civil Rights Impact Analysis
    Rural Development has reviewed this proposed rule in accordance 
with USDA Regulation 4300-004, Civil Rights Impact Analysis,'' to 
identify any major civil rights impacts the proposed rule might have on 
program participants on the basis of age, race, color, national origin, 
sex, or disability. After review and analysis of the proposed rule and 
available data, it has been determined that implementation of the 
proposed rule will not adversely or disproportionately impact very low-
, low- and moderate-income populations, minority populations, women, 
Indian tribes, or persons with disability by virtue of their race, 
color, national origin, sex, age, disability, or marital or familial 
status. No major civil rights impact is likely to result from this 
proposed rule.
Assistance Listing
    The programs affected by this regulation are listed in the 
Assistance Listing Catalog (formerly Catalog of Federal Domestic 
Assistance) under number 10.410, Very Low to Moderate Income Housing 
Loans (Section 502 Rural Housing Loans), and number 10.417, Very Low-
Income Housing Repair Loans and Grants (specifically the Section 504 
direct loans and grants).
Non-Discrimination Statement
    In accordance with Federal civil rights laws and USDA civil rights 
regulations and policies, the USDA, its Mission Areas, agencies, staff 
offices, employees, and institutions participating in or administering 
USDA programs are prohibited from discriminating based on race, color, 
national origin, religion, sex, gender identity (including gender 
expression), sexual orientation, disability, age, marital status, 
family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Program information may be made available in languages other than 
English. Persons with disabilities who require alternative means of 
communication to obtain program information (e.g., Braille, large 
print, audiotape, American Sign Language) should contact the 
responsible Mission Area, agency, or staff office; the USDA TARGET 
Center at (202) 720-2600 (voice and TTY); or the Federal Relay Service 
at (800) 877-8339.
    To file a program discrimination complaint, a complainant should 
complete a Form AD-3027, USDA Program Discrimination Complaint Form, 
which can be obtained online at https://www.usda.gov/sites/default/files/documents/ad-3027.pdf, from any USDA office, by calling (866) 
632-9992, or by writing a letter addressed to USDA. The letter must 
contain the complainant's name, address, telephone number, and a 
written description of the alleged discriminatory action in sufficient 
detail to inform the Assistant Secretary for Civil Rights about the 
nature and date of an alleged civil rights violation.
    The completed AD-3027 form or letter must be submitted to USDA by:
    (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410; or
    (2) Fax: (833) 256-1665 or (202) 690-7442; or
    (3) Email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

[[Page 55605]]

List of Subjects

7 CFR Part 3550

    Administrative practice and procedure, Environmental impact 
statements, Fair housing, Grant programs--housing and community 
development, Housing, Loan programs--housing and community development, 
low- and moderate-income housing, Reporting and recordkeeping 
requirements, Rural areas.

7 CFR Part 3555

    Administrative practice and procedure, Business and industry, 
Conflicts of interest, Credit, Environmental impact statements, Fair 
housing, Flood insurance, Grant programs--housing and community 
development, Home improvement, Housing, Loan programs--housing and 
community development, low and moderate-income housing, Manufactured 
homes, Mortgages, Reporting and recordkeeping requirements, Rural 
areas.
    For the reasons set forth in the preamble, the Rural Housing 
Service proposes to amend 7 CFR parts 3550 and 3555 as follows:

PART 3550--DIRECT SINGLE FAMILY HOUSING LOANS AND GRANTS

0
1. The authority citation for part 3550 continues to read as follows:

    Authority: 5 U.S.C. 301; 42 U.S.C. 1480.

Subpart A--General

0
2. Amend Sec.  3550.10 by revising the first sentence of the 
Manufactured home definition to read as follows:


Sec.  3550.10  Definitions.

* * * * *
    Manufactured home. A structure that is built to Federally 
Manufactured Home Construction and Safety Standards established by HUD 
and found at 24 CFR part 3280.
    * * *
* * * * *

Subpart B--Section 502 Origination

0
3. Amend Sec.  3550.52 by revising paragraph (e)(1) to read as follows:


Sec.  3550.52  Loan purposes.

* * * * *
    (e) * * *
    (1) Purchase an existing manufactured home (unless the unit was 
constructed in conformance with Federal Manufactured Home Construction 
and Safety Standards (FMHCSS) standards as evidenced by both an affixed 
HUD Certification label and HUD Data Plate); on or after a date 
specified in the program handbook (any adjustment to the date will be 
made public through a Federal Register notice); and has not been 
previously installed on a different homesite or had any alterations 
since construction in the factory (except for porches, decks or other 
structures which were built to engineered designs or were approved and 
inspected by local code officials), or for any other purposes 
prohibited in Sec.  3550.73(b).
* * * * *
0
4. Amend Sec.  3550.58 by adding a sentence to the end of paragraph (b) 
to read as follows:


Sec.  3550.58  Ownership requirements.

* * * * *
    (b) * * * For new energy efficient manufactured and modular home 
financing in land-lease communities operating on a nonprofit basis, and 
on Tribal Trust land, individual (allotted) Trust land, or Tribal 
restricted fee land, the Agency will accept a lease with an unexpired 
term that is at least 2 years longer than the loan term.
* * * * *
0
5. Amend Sec.  3550.73 by:
0
a. Revising paragraph (b)(1);
0
b. Removing paragraph (c); and
0
c. Redesignating paragraphs (d) through (h) as (c) through (g).
    The revision reads as follows:


Sec.  3550. 73  Manufactured homes.

* * * * *
    (b) * * *
    (1) An existing unit and site unless it is already financed with a 
section 502 loan or is an RHS REO property; or, the unit was 
constructed both in conformance with FMHCSS standards as evidenced by 
both an affixed HUD Certification label and HUD Data Plate on or after 
a date specified in the program handbook, the unit is installed on a 
permanent foundation which meets HUD regulations, and the unit has not 
been previously installed on a different homesite or had any 
alterations since construction in the factory except as specified in 
the program handbook.
* * * * *

PART 3555--GUARANTEED RURAL HOUSING PROGRAM

0
6. The authority citation for part 3555 continues read as follows:

    Authority: 5 U.S.C. 301; 42 U.S.C. 1471 et seq.

Subpart E--Underwriting the Property

0
7. Amend Sec.  3555.203 by revising paragraph (b)(3) to read as 
follows:


Sec.  3555.203  Ownership requirements.

* * * * *
    (b) * * *
    (3) The lease has an unexpired term of at least 45 years from the 
date of loan closing, except in the case of properties located on 
Tribal Trust land, individual (allotted) Trust land, or Tribal 
restricted fee land, where the lease must have an unexpired term at 
least equal to the term of the loan. Leases on Tribal Trust land, 
individual Trust (allotted) land, or Tribal restricted fee land, for 
period of 25 years which are renewable for a second 25 year period are 
permissible, as are leases of a longer duration. For new energy 
efficient manufactured and modular home financing in land-lease 
communities operating on a nonprofit basis and on Tribal Trust land, 
the Agency will accept a lease with an unexpired term that is at least 
two years longer than the loan term;
* * * * *
0
8. Amend Sec.  3555.208 by:
0
a. Adding paragraph (a)(3); and
0
b. Revising paragraphs (b)(3)(iii) and (iv), and adding paragraphs 
(b)(3)(v) through (viii).
    The addition and revisions read as follows:


Sec.  3555.208  Special requirements for manufactured homes.

* * * * *
    (a) * * *
    (3) An existing unit and site, provided:
    (i) The unit was constructed in conformance with the Federal 
Manufactured Home Construction and Safety Standards (FMHCSS) as 
evidenced by both an affixed HUD Certification label and HUD Data 
Plate; and
    (ii) The unit was installed on a permanent foundation in accordance 
to the manufacturer's requirements and HUD installation standards. 
Certification of a proper foundation is required; and
    (iii) The unit has not been previously installed on a different 
homesite, or had any alterations since construction in the factory, 
except for porches, decks or other structures which were built to 
engineered designs or were approved and inspected by local code 
officials; and
    (iv) The unit was constructed on or after the date specified in the 
program handbook (any adjustment to the date will be made public 
through a Federal Register notice).
* * * * *
    (b) * * *
    (3) * * *
    (iii) The unit and site are being sold from the lender's inventory, 
and the

[[Page 55606]]

loan for which the unit and site served as security was a loan 
guaranteed by Rural Development;
    (iv) The unit was installed on its initial installation site on a 
permanent foundation complying with the manufacturers and HUD 
installation standards; or
    (v) The unit was constructed in conformance with the Federal 
Manufactured Home Construction and Safety Standards (FMHCSS) as 
evidenced by an affixed HUD Certification label and HUD Data Plate; and
    (vi) The foundation design meets HUD standards for manufactured 
housing; and
    (vii) The unit has not had any alterations or modifications since 
construction in the factory, except for porches, decks or other 
structures which were built to engineered designs or were approved and 
inspected by local code officials; and
    (viii) The unit was constructed on or after a date, as specified in 
the program handbook (any adjustment to the date will be made public 
through a Federal Register notice) (any adjustment to the date will be 
made public through a Federal Register notice).
* * * * *
    (e) HUD requirements. The FMHCSS and HUD requirements can be 
located in the National Archives Code of Federal Regulations, 24 CFR 
part 3280--Manufactured Home Construction Safety Standards.
* * * * *

Joaquin Altoro,
Administrator, Rural Housing Service.
[FR Doc. 2023-17519 Filed 8-15-23; 8:45 am]
BILLING CODE 3410-XV-P