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Duty to Serve – Impact, Examination – FHFA Washington D.C. Listening Session December 2, 2019


What follows the first illustration below are the comments as prepared for presentation for the Washington, D.C. Listening Session at the FHFA offices on December 2, 2019.  None of the videos or other illustrations will be part of the verbal presentation.



FHFA Listening Session Comments by L. A. ‘Tony’ Kovach, Publisher of MHProNews.com, MHLivingNews.com, Award-Winning Manufactured Home Industry Expert and Consultant (LATonyKovach.com)


The Duty to Serve Rural, Underserved, and Manufactured Housing Markets was enacted as part of the Housing and Economic Recovery Act (HERA) of 2008. The law passed by a widely bipartisan margin.

FHFA’s website says: “The Duty to Serve (DTS) requires Fannie Mae and Freddie Mac (Enterprises) to facilitate a secondary market for mortgages on housing for very low-, low-, and moderate-income families in: Manufactured housing…”

Over a decade later, there is little to no discernible support for the vast majority of HUD Code manufactured homeowners, those seeking affordable housing, or the retailers and others who sell manufactured homes.

Data supplied by the Government Sponsored Enterprises (GSEs) of Fannie and Freddie prove that point.

As a trade journalist who publishes the runaway largest and most-read professional media in our industry – MHProNews.com – and as someone who is also a multiple award-winner in history and manufactured housing, those opening facts beg several questions.


But let’s begin with statements instead.

  • No person or organization is supposed to be above the law.
  • We’ve spoken with lenders that entered the manufactured home market after DTS was passed. They’re successfully making sustainable loans.


  • We’ve spoken with lenders who’ve made manufactured home loans – including personal property or ‘chattel loans’ – sustainably for a decade or more.
  • Given federal law and that others made such loans successfully, why has FHFA tolerated the obvious foot-dragging by Fannie and Freddie to fully enforce and comply with federal law?

Years of research and reports could be boiled down to this claim.

Good federal laws are on the books that support manufactured housing on paper but are going under-enforced and/or are being ignored.  DTS is one of them.

A decade after HERA and DTS passed, where is that secondary market?

Interested parties should look at various letters submitted to FHFA about the current plans and proposed modifications requested by the Enterprises. The Manufactured Housing Institute (MHI) letter by EVP and CEO-elect Lesli Gooch makes some interesting and accurate statements, but also pivots to items that are arguably paltering.

Instead of Gooch making a case for robust support of all HUD Code manufactured homes – which is what one might reasonably expect of the trade association claiming to represent all segments of manufactured housing – instead MHI promotes their so-called ‘new class of homes’ recently dubbed “CrossModTM homes.

Why didn’t MHI pursue robust lending for all manufactured homes, instead for only select “CrossModTM homes” backed by Clayton Homes, Skyline-Champion, Cavco Industries and some MHI member producers?

How did Fannie and Freddie magically establish a special program with specs for those so-called “CrossModTM homes,” reportedly developed in closed doors meetings with MHI?

Why haven’t the minutes for those meetings been released?

As MHI member-producers pointed out to MHProNews, there has long been lending on modular housing on par with conventional housing.

It was illogical and insulting, say those sources, to create a so-called new class of manufactured housing when some of those same factories already built modular coded units.

We have no problem with what products builders want to produce that comply with regulations. But we do have a problem with special lending extended to favored MHI firms by the GSEs with the FHFA’s consent.

HUD Code builders have always had the ability to build manufactured homes to minimum federal standards which provide durable, safe housing with consumer protections affordable for people with lower incomes, as well as more residential style-housing that has more features at a higher cost.

There was therefore no logical reason to create a new class that blurs the line between modular and HUD Code, including through the name of the product.

I’ve personally spoken with people at the GSEs and/or who performed contract work for the Enterprises. Some said the Freddie Mac Choice and MH Advantage by Fannie Mae plans are not how such lending programs are traditionally developed.

Of course not.

Do the GSEs tell site builders how to build their housing units?

Richard Genz did research for the Fannie Mae Foundation published some 2 decades ago. He made the case that manufactured homes were unfairly stigmatized.

In 2011, an Obama Administration era HUD PD&R documented manufactured homes appreciating side-by-side with conventional housing.

So why implement a scheme splitting higher cost ‘new class’ HUD Code homes MHI and the GSEs are pushing? Doesn’t that de facto stigmatize anew the vast majority of millions of existing manufactured homes?

This ploy purportedly fuels stigma, arguably benefiting lenders like 21st Mortgage or Vanderbilt Mortgage and Finance, owned by Berkshire Hathaway.

MHI and the GSEs vaguely admit this new class of ‘CrossModTM homes’ is off to a poor start in the marketplace. New HUD Code production is also down year-over-year. Coincidence?

Given that FHFA as well as the National Association of Realtors in 2018 both reported manufactured homes appreciate, the lack of logic for plans developed by MHI, Fannie, and Freddie behind closed doors is stunning.

The Urban Institute said in 2018 that a lack of lending likely keeps existing manufactured homes from appreciating even more than they already do.

Rephrased, the status quo unduly punishes millions who currently own a manufactured home who could have higher equity and resale values if DTS were fully enforced. That’s billions of collectively lost wealth for manufactured homeowners. When more realize that, there are voters among those 22 million Americans and 111 million renters.

We’ve published an online version of this comments letter on the Masthead Blog on MHProNews.com. It includes illustrations, videos, links to comments, plus historic information by others and us.

We believe evidence and reason suggest that one or more at FHFA actively or tacitly allowed the law to be foiled in a fashion benefiting a few at high cost to the many.

That implies incompetence, collusion, conflicts of interest, and/or corruption.

Therefore, the FHFA has no legal or logical choice but to reject currently promoted plans and call upon Fannie and Freddie to immediately follow the DTS law, no matter whose deep pockets that may upset.

The FHFA and Congress should independently investigate how it’s possible that a decade after this good DTS law passed that it’s still thwarted from providing affordable lending to potentially millions of Americans during an affordable housing crisis.

The status quo is a scandalous disgrace. Thank you.

L. A. ‘Tony’ Kovach,
For Lifestyle Factory Homes, LLC
Parent Company to MHProNews.com, MHLivingNews.com, LATonyKovach.com.


That’s the comments as prepared, sans the illustrations, for what will be presented at the FHFA Listening session in Washington, D.C. on December 2nd, 2019.

Each photo is of a modern manufactured home, which can be 2400 sq ft or more in size, 1 or 2 levels, set over a basement, or can be as modest as 320 sq ft. These homes are all built to federal construction and safety standards that went into effect on June 15, 29176, administered by HUD, and are thus known as “HUD Code Manufactured Homes.”



That’s food for thought for manufactured home “Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © (News, fact-checks, analysis, and commentary. See more below the byline, notices and sign up for our free x2 weekly emailed headline updates.) ## See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them. Third-party images and content are provided under fair use guidelines.)

MHI loves their photo ops. The photo above reflects the point that photo ops can be arranged. What matters more than photo ops is actual positive outcomes for the majority of manufactured industry professionals, not just benefits for a select few. Want more photos? Stay tuned.

By L.A. “Tony” Kovach – for MHProNews.com.

Tony earned a journalism scholarship and was recognized with the prestigious Lottinville Award in history from the University of Oklahoma, where he also studied business management with a perfect 4.0 and made the Dean’s List. Tony has earned multiple awards in manufactured housing and in history. He’s a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

Office 863-213-4090 |Connect on LinkedIn: http://www.linkedin.com/in/latonykovach

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