MBA backs HUD's manufactured home chassis rule change

The Mortgage Bankers Association supports the Department of Housing and Urban Development's proposal to loosen the permanent chassis requirement for manufactured homes, but the change will do little for lenders unless appraisal policy moves alongside, the group added in a comment letter.

The trade group described the proposal as a measured and appropriate modernization of the HUD Code and urged the department to finalize it quickly, the comment letter addressed to Secretary Scott Turner said.. 

The rule, published June 12, would amend the Manufactured Home Construction and Safety Standards so that a portable section serving as part of an upper floor no longer has to be transported or built on a permanent chassis. 

But the chassis requirement survives for the bottom floor, making the effect of expanding the pool of manufactured homes financeable through traditional mortgage products to be incremental. 

In June 2025, de facto Federal Housing Commissioner Frank Cassidy told a HUD roundtable the requirement made little practical sense and said the department was gathering industry feedback on eliminating it. An effort to move chassis language through the fiscal 2026 defense bill failed, but the provision was enacted July 11 in the 21st Century ROAD to Housing Act.. This legislation drops the chassis requirement from the statutory definition entirely and directs HUD to write standards for chassis-free units.

As innovative designs reach the market, the letter argued, appraisers will run into limited comparable sales and uneven familiarity with factory-built products. The group asked the Federal Housing Administration to extend interim valuation projections to lenders while the new products mature and comparable data accumulates, and pressed HUD to coordinate with the government-sponsored enterprises and other lenders on border appraisal practice, including whether site-built homes should be acceptable comparables. 

Will lenders actually show up?

Regulatory relief may not be enough to pull large originators into a segment they have historically avoided. 

"One is that the collateral can actually move. You have a borrower that can actually move their property. Two is, unfortunately, manufactured borrowers tend to be more of an alt-A, maybe not subprime, but they're not your prime borrowers, because they're buying a manufactured house. And then the third is that manufactured lending also plays by a different set of rules. They have different regulations that they have to follow," said John Geertsema, managing principal at Capco.

Navigating all three variables at once likely makes the cost of entry prohibitive, said Geertsema. 

The volume, though still points upwards, Mordor Intelligence projects the manufactured homes market will expand from $28.5 billion in 2025 to $42.7 billion by 2031, and HUD in June opened $13 million in funding, $10 million of it for robotics and AI in factory-built production.