MHI Week In Review — November 18, 2011

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Congress Slashes HUD Budget for Manufactured Housing Programs

The Congress, today, finalized Fiscal Year 2012 budget for the Department of Housing and Urban Development (HUD) and several other federal agencies. Reflecting new budget realities, and concerns expressed by MHI, the House and Senate conferees earlier this week agreed to reduce the budget for the manufactured housing program budget by over 50 percent from last year’s appropriation of $14 million.

The final bill and accompanying conference report provides $6.5 million for authorized activities for manufactured housing programs – including administering the Manufactured Housing Consensus Committee, monitoring compliance of the HUD procedural and enforcement regulations, and implementing installation and dispute resolution programs in states that do not have programs.

The conferees adopted the Senate version of the bill, directing HUD to fund $4 million of the $6.5 million through label fees paid by manufacturers, rather than the House version which would have required the entire appropriation to be funded by label fees. Assuming the production levels of 2010, HUD will need to raise the label fee by at least $10 in order to meet this congressional mandate. Any label fee increase proposed will require formal rulemaking.

The Conference Report reflects serious concerns raised by MHI during committee deliberations, that the HUD budget for the manufactured housing program cannot be justified given the reduced level of manufactured home production. In its Conference Report, the conferees said that they were “perplexed” by the lack of information provided by HUD when it submitted its FY 2012 budget. The conferees directed HUD to provide appropriate and accurate information in its future budget justifications, including organizational charts, detailed justification for existing staff, and incremental funding increases and decreases.

The FY 2012 HUD appropriations also include the following budget items of interest:

• $8.2 million for staffing the Office of Risk Retention and Regulatory Affairs, an amount that should be sufficient to fund a non-career administrator position for the Manufactured Housing Program, as recommended by MHI and MHARR in an October 7 letter to Acting FHA Commissioner, Carol Galante.

• $400 million in Community Development Block Grant funding for expenses related to disaster relief and long term recovery in the most impacted and distressed communities resulting from major disasters in 2011. This is in addition to funds provided by FEMA and the Corps of Engineers as authorized by the Stafford Act.

The conference report includes the following funding levels for USDA rural housing programs:

• $900 million for the Section 502 single-family subsidized direct loan program, $219 million less than in FY 2011;

• $24 billion for the Section 502 unsubsidized guaranteed loan program, the same as in FY 2011;

• $11 million for the Section 542 rural housing voucher program, $3 million less than in FY 2011.

According to the accompanying report, the conferees “recognize that many private lenders have been unable to implement the new annual fee for Section 502 guaranteed loans as required by USDA… and that many small rural banks and state housing agencies are precluded from program participation due to their lack of automated systems enhancements.” As a short-term solution, the bill provides the authority to USDA to increase the guarantee fee to cover subsidy costs. The conferees directed USDA to complete all necessary systems enhancements as soon as possible.

Click here to view the Conference Report final bill text.

Click here for the accompanying conference report.

FHA Commissioner Announces New Staff at HUD

On November 8, HUD Acting Assistant Secretary for Housing and FHA Commissioner Carol Galante announced new leadership in three HUD offices: Single Family; Risk Management; and Multifamily Housing.

Frank Vetrano has joined HUD as Senior Advisor for Risk in the Office of Risk Management and Regulatory Affairs. He spent 20 years at Freddie Mac before becoming a Senior VP at Radian Guaranty and has extensive experience in assessing mortgage credit risk.

Sarah Gerecke will now serve as Senior Policy Advisor in the Single Family Office. Gerecke most recently worked at the Furman Center for Real Estate and Urban Policy at NYU’s School of Law, where she launched the Institute for Affordable Housing Policy and co-authored the Directory of Affordable Housing Programs.

Marie Head has been appointed Deputy Assistant Secretary in the Office of Multifamily Housing Programs, a key position overseeing HUD multifamily insurance programs. She most previously served as the President of Prudential Huntoon Paige, the FHA lending business of the Prudential Mortgage Capital Company.

In her November 8 email announcement to stakeholders, Galante said, “In addition to these exciting announcements, I am also hoping to introduce additional critical leadership nominations in the near future.” MHI and MHARR leadership, in a September 22 meeting with Galante, urged her to appoint a Non-Career Administrator for the Manufactured Housing Program.

House Committee to Examine State of Manufactured Housing Industry

On November 29, the House Financial Services Subcommittee on Housing, Insurance and Community Opportunity is tentatively scheduled to hold a field hearing in Danville, Virginia examining the state of the manufactured housing industry. MHI is being invited to testify and provide an overview of the financing impediments and regulatory challenges facing the industry and its homeowners. More information on the hearing will be provided as details become finalized.

Committee Holds Hearing on Measure to Reduce Small Bank Burdens

On November 16, the House Financial Services Committee held a hearing on legislation (H.R. 1697) designed to provide regulatory relief to small community banks. The legislation, which is sponsored by Rep. Blaine Luetkemeyer (R-MO), has garnered bipartisan support from more than 50 Representatives and has received varying levels of support from the American Bankers Association (ABA), Credit Union National Association (CUNA) and the Independent Community Bankers of America (ICBA). Similar legislation (S. 1600) was introduced in the Senate by Sen. Jerry Moran (R-KS).

Among the regulatory relief provisions contained in the bill is one that would eliminate language from the Dodd-Frank Act exempting escrowing requirements for loans for creditors with assets of $10 billion or less who hold those loans in portfolio.

For more information on the measure, Click here.

Getting Involved in Political Campaigns

There is no more effective way to cement a good relationship with a legislator than to participate in his or her election campaign. Most candidates take a very personal view of their election efforts, because their careers are at stake. A very effective and simple way to develop a personal relationship with a legislator, or potential legislator, is to host a candidate fundraiser in your home. Hosting a fundraiser will help to establish you as a key player in the politics of your district or state. There are a wide variety of fundraisers that you could sponsor or host such as small coffees, lunches, and small and large dinners. A fundraiser will provide you with an excellent opportunity to develop a deeper relationship with your representative. If you are a MHI member and wish to host a fundraiser to show your support for a federal candidate and have questions regarding the Federal Election Commission’s guidelines contact MHI Vice President of Political and Legislative Affairs Rae Ann Bevington at 703-558-0675 or

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