A key housing provision in the government defense spending bill currently under negotiation in Congress will expand the federal definition of manufactured housing and ultimately ease lending for such units if adopted.
Tucked within the latest National Defense Authorization Act are new regulations to remove "permanent chassis" language in current codes. In addition to striking references specifying manufactured homes must sit "on a permanent chassis" to qualify for federal lending programs, the bill would replace the language with the phrase "with or without a permanent chassis.''
Removal of the chassis requirement has long been endorsed
"This change would make manufactured homes not on a chassis eligible for FHA mortgages, which would measurably reduce the cost of financing of units," Ed Groshans, senior policy and research analyst at Compass Point Research & Trading wrote in a flash note.
Along with
The provision, which can be found under the Renewing Opportunity in the American Dream to Housing Act of 2025 within the NDAA, would also mandate states to "subject a manufactured home without a permanent chassis to the same laws and regulations" as similar properties "with respect to financing, title, insurance, manufacture, sale, taxes, transportation and other areas."
While the housing components of the defense bill come with bipartisan backing from the Senate Banking Committee, including both chair and ranking member Sens. Tim Scott, R-S.C., and Elizabeth Warren, D-Mass., they have encountered hurdles from counterparts in the House of Representatives, leading to concerns about their likelihood of passage before the end of the year.
The ROAD to Housing Act
The NDAA traditionally comes with add-on provisions as congressional leaders attempt to push forward proposals that might not otherwise see a vote, but the current bill shows a noticeable skew toward housing and homebuilding policies. Apart from the change in the chassis requirement, the bill also contains associated provisions addressing land use and zoning, all grouped under the ROAD to Housing Act module.
Housing leaders
"Many of the provisions within the bipartisan measure are aimed to take meaningful steps to boost housing supply, cut red tape in federal program offerings and expand access to affordable mortgage credit for families nationwide," said Mortgage Bankers Association CEO and President Bob Broeksmit in October.
Calling it a landmark bill, American Planning Association President Sue Schwartz similarly said it would lead to "critical insights and locally led reforms needed to unlock housing opportunity in communities across the nation."
Taking a more critical view, at least of the change in the permanent chassis requirement, was the Modular Home Builders Association, which claimed this summer that expanding the definition of "manufactured" could undermine consumer confidence and cause confusion
Also included within NDAA was the Modular Housing Production Act, which would initiate a study to help identify barriers to construction of the units in FHA financing programs. The act may potentially offer grant funding to examine the design and feasibility of a standardized uniform commercial code for modular homes.
Congressional talks are ongoing, but language in the ROAD to Housing Act section essentially provides "a blank check" to HUD, Groshans noted, pointing to 10 mentions that authorized HUD appropriations as may be necessary.
"It is not surprising that this language is unpalatable to House Republicans," he said, adding he did not expect it to be included in the final bill text in its current form. The provisions may find their way within the NDAA if "open-ended appropriations sections are removed or capped," he added.
