HUD: FHA Revised Title I Policies Published to Further Future Financing of Manufactured Homes

The Federal Housing Administration (FHA) on Tuesday announced the publication of significantly revised and enhanced policies under its Single-Family Title I Manufactured Home Loan Program for lenders to provide loans for the financing of manufactured homes, including those titled as personal property, and the lots on which these homes will reside. The enhanced policies provide updated guidance that will make the program easier to understand and use for lenders, while providing expanded eligibility requirements for loan financing that are consistent with the criteria for income and property valuations used in real-estate mortgage financing.

“This nation is in an affordable housing crisis and manufactured housing will be a key part of the solution,” said Principal Deputy Assistant Secretary for Housing and the Federal Housing Administration Lopa P. Kolluri. “Our new and updated Title I policies will not only expand access to credit for borrowers seeking loans for quality and affordable personal property manufactured homes, but will also make it to easier for lenders to offer financing through the Title 1 program.”

FHA’s new Title I policies have now been incorporated into the Single Family Housing Policy Handbook 4000.1. This is the first consolidation of policies for the Title I program in almost 40 years and removes the need for lenders to refer to more than 120 separate policy documents. With today’s updates, Title I Manufactured Home Loan Program requirements now include features that remove financing barriers and expand access to credit, including:

  • Enhanced value determinations that use a sales comparison approach, allow for qualified FHA Roster Appraisers to perform valuations;
  • Expanded allowable income sources for borrower qualification that are comparable to FHA’s Title II mortgage insurance programs; and
  • Additional flexibilities which include calculating student loan debt consistent with FHA’s Title II mortgage insurance programs and allowing the use of gift funds from eligible sources.

In addition to Title I Manufactured Home Loan Program updates, today FHA also published updates to the requirements for its Title I Property Improvement Loan Program to make the requirements of this program consistent with current lending practices. The Title I Property Improvement Loan Program is designed to help homeowners finance improvements to improve the livability or utility of a property through a secured or unsecured loan.

Both the Title I Manufactured Home Loan Program and Title I Property Improvement Loan Program updates may be implemented by lenders immediately but must be implemented for loans closed on and after May 9, 2022. Refer to today’s Handbook 4000.1 transmittal for additional information on the effective date.

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