Administration Submits Fiscal Year 2011 Budget to Congress — Increase in Manufactured Home Label Fees Proposed

On February 1, the  The budget proposal includes a proposed $10 per floor label fee increase for manufactured homes. Click here to view the budget.

The budget also proposes increases in funding for research and development for innovative building technologies and residential energy weatherization and retrofit programs.

The budget says that the Administration will ask Congress for authorization to increase the Federal Housing Administration (FHA) annual single-family mortgage insurance premium.

MHI will be looking very closely at the 2011 Budget in the coming weeks and throughout the appropriations process, and the impact it will have on the industry and consumers.

The FY 2011 Budget proposal contains the following highlights:

Manufactured Housing Construction and Safety Standards Program

The HUD budget proposes $14 million for the Manufactured Housing program for fiscal year 2011, down from their $16 million request in 2010. This includes a $7 million direct appropriation request to Congress, and $7 million in projected fee income. The $7 million in fee income includes $4 million in certification and label fees, and $3 million in user fee income collected from the dispute resolution and installation program. HUD plans to ask Congress for permission to increase the label fee by $10.00 per transportable unit, from $39 to $49. The budget says HUD needs to raise the label fee because of industry production is lower, while HUD’s responsibilities for manufactured home construction and safety, installation and dispute resolution remain unchanged.

Research and Development for Innovative Building Technologies

The budget proposes $25 million for HUD to support research and development (R&D to focus on the linkages between the built environment and health, hazard risk reduction and resilience, and the development of innovative building technologies and building processes).

Federal Housing Administration

The budget proposes an additional $18 million for FHA to enhance its monitoring and management of its insurance portfolio’s financial risk, and to provide for updated technology to streamline the FHA program. The budget also says that the Administration will ask Congress for authorization to increase the FHA annual single-family mortgage insurance premium to .85 percent of the loan amount for most mortgages and .90 percent for low-down-payment mortgages from the current .50 percent for all mortgages. HUD recently announced it is increasing the FHA upfront premium to 2.25 percent from 1.75 percent. If congress approves the annual premium, HUD will reduce the upfront premium to 1 percent. HUD also plans to raise minimum credit scores for high risk borrowers under the FHA Title II single-family loan program. These changes are intended to reduce the risk to the FHA Insurance Fund and replenish FHA’s capital reserves.

Expands Funding for Sustainable Communities

The budget includes $150 million to help stimulate comprehensive regional and community planning efforts that integrate transportation and housing investments that result in more regional and local sustainable development patterns, reduce greenhouse gases, and increase more transit accessible housing choices for residents.

Energy Efficiency in Buildings

The Department of Energy’s budget proposes to invest $231 million in the Building Technologies program, a 16 percent increase over FY 2010 for R&D to develop and promote deployment of technologies to make new and existing homes and buildings less energy intensive.

The budget also proposes $75 million for state-level programs such as State Energy Program grants and $300 million for its Weatherization Assistance Programs to continue to help citizens implement energy conservation measures, lower energy costs and greenhouse gas emissions, and build a technical workforce. These programs will enable cost-effective energy retrofits of a total of 1 million housing units in 2011.

Rural Housing Loans

The 2011 budget for the U.S. Department of Agriculture provides for a $1.2 billion program level for direct loans for single family housing, a $79 million increase from FY 2010. The FY 2011 budget proposes $12 billion for the single family loan guarantee program, which maintains the 2010 funding level. These funding levels are expected to provide about 98,993 homeownership opportunities in FY 2011.

Energy Assistance to Low-Income Families

The budget for the Department of Health and Human Services includes $3.3 billion for the Low Income Home Energy Assistance Program to help low-income families with their home heating and cooling expenses. In addition, the Administration proposes a new trigger mechanism to provide automatic increases in energy assistance whenever there is a spike in energy costs or large numbers of families in poverty. The trigger allows the program to be more for expect the trigger to provide roughly $2 billion in additional assistance in 2011 and $6.5 billion over 10 years.

Lending in Low-Income Communities

The budget for the Department of Treasury supports the availability of affordable financing in low-income communities by providing targeted support to Community Development Financial Institutions throughout the Nation. The $250 million in financial support will help these local financial institutions offer affordable loans to small businesses, consumers, nonprofit developers, and home buyers in communities that lack access to affordable credit.

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