Manufactured Housing Lending Act
- Sponsor
- Sen. Merkley, Jeff [D-OR]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Jun 17, 2026
Bottom line
The bill aims to expand access to more affordable financing for manufactured homes by involving government-sponsored enterprises, potentially lowering interest rates and increasing housing options for low-income individuals.
What it actually does
This bill mandates that the Federal Housing Finance Agency (FHFA) direct Fannie Mae and Freddie Mac to establish pilot programs within 18 months to purchase or share financial risk on loans for manufactured homes classified as personal property. These programs must incorporate consumer mortgage lending protections, require homes to be in nonprofit, government, or resident-owned communities, ensure secure site occupancy rights, and allow the entities to achieve a reasonable economic return that is less than their comparable mortgage activities.
Proponents argue
Supporters argue that this bill addresses a critical gap in affordable housing by making financing for manufactured homes, often classified as personal property, more accessible and affordable. By bringing Fannie Mae and Freddie Mac into this market, it could reduce high interest rates typically associated with chattel loans, thereby expanding homeownership opportunities for lower-income families and those in rural areas. The requirements for homes to be in specific community types and have secure lease terms also protect consumers.
Opponents contend
Critics might express concerns about the potential for increased risk to Fannie Mae and Freddie Mac, and by extension, to taxpayers, if these loans perform poorly. They may also argue that directing these entities to accept a lower economic return than comparable mortgage activities could distort the market or create an unfair advantage, potentially leading to moral hazard or unintended consequences in the housing finance system.
The bill is very short and straightforward, allowing for quick comprehension by any interested reader.
Section 2(a)
FHFA Directed Pilot Programs
This provision mandates that the Federal Housing Finance Agency (FHFA) instruct Fannie Mae and Freddie Mac to each create a pilot program within 18 months. These programs are specifically designed to facilitate the purchase of, or risk-sharing on, loans for manufactured homes that are considered personal property, rather than real estate.
Supporters argue
Supporters argue this is the foundational step to unlock a new, more affordable financing channel for manufactured homes, which are currently underserved by traditional mortgage markets.
Critics contend
Opponents might argue that this expands the mission of Fannie Mae and Freddie Mac into a potentially riskier asset class, increasing their exposure and potential taxpayer liability.
Tradeoffs
Balances the goal of expanding affordable housing finance against potential increased risk exposure for government-sponsored enterprises.
Section 2(b)
Timeline for Loan Purchases
This section requires Fannie Mae and Freddie Mac to begin purchasing or sharing financial risk on newly originated or existing manufactured home loans within one year after their respective pilot programs are established. This sets a clear deadline for the operationalization of the programs.
Section 2(c)(1) and 2(c)(2)
Consumer Safeguards and Community Focus
This provision mandates that the pilot programs incorporate robust consumer mortgage lending and servicing protections, specifically those found in parts 1024 and 1026 of title 12, Code of Federal Regulations, to the greatest extent practicable. Additionally, it requires that financed manufactured homes must be located in nonprofit, government, or resident-owned communities and include a lease term that either exceeds the loan term or grants a perpetual right to occupy the site.
Section 2(c)(4)
Capped Economic Return
This provision stipulates that Fannie Mae and Freddie Mac are permitted to achieve a reasonable economic return on these manufactured home loan purchases, but this return must be less than the return earned on their other comparable mortgage lending activities.
Requires the pilot programs to incorporate consumer mortgage lending and servicing protections found in parts 1024 and 1026 of title 12, Code of Federal Regulations, to the greatest extent practicable.
Section 2(c)(1)
Why it matters:This is standard legislative practice to avoid reprinting lengthy regulatory text, assuming readers or implementers will have access to the CFR. It is not necessarily evasive.
Case for: Supporters argue that referencing existing, well-established consumer protection regulations ensures a baseline of fairness and transparency for manufactured home loan borrowers without needing to reinvent the wheel.
Case against: Critics might argue that simply referencing external regulations without explicitly detailing them within the bill text makes it less transparent for the average reader to understand the full implications of the protections.
Estimated impact: Ensures a comprehensive set of consumer protections (e.g., disclosure requirements, servicing standards, escrow account rules) are applied to manufactured home loans, potentially reducing predatory practices and improving borrower experience.