According to HousingWire, the Mortgage Bankers Association recently sent feedback to the Federal Housing Finance Agency about proposed changes to its Duty to Serve rule. While the MBA generally supports the FHFA's move toward a more flexible, outcome-based framework for how Fannie Mae and Freddie Mac support manufactured housing and affordable housing, they're raising some caution flags about potential complications that could arise during implementation.
The heart of the concern centers on how the FHFA wants to define manufactured homes going forward. The agency is considering broadening the definition beyond units covered under the traditional HUD code to include newer factory-built products like modular homes. The MBA agrees this makes sense as construction innovation evolves, but they're pointing out that these newer products sometimes use ownership and titling structures that don't fit neatly into the current purchase standards that the government-sponsored enterprises follow. Adding to the complexity, different states have their own titling laws and rules about how these homes can be affixed to land, which creates real operational challenges for lenders trying to finance them.
The MBA is also pushing back on a couple of procedural changes in the draft rule. The FHFA wants to shorten the public comment window on Duty to Serve plans from sixty days down to forty-five days, but the mortgage bankers say that compressed timeline doesn't give the industry enough time to weigh in meaningfully. They're also concerned about language that would severely limit how often Fannie and Freddie can update their three-year plans, allowing revisions only in cases of extraordinary market disruptions. The MBA wants clearer, more specific standards for when plan changes should be permitted.
The mortgage bankers group emphasized that they want the FHFA to coordinate any changes to manufactured housing definitions with other federal initiatives and initiatives from Congress and HUD that are also working to expand factory-built housing. They're essentially saying that regulatory coordination matters here to avoid creating conflicting standards. The MBA framed their overall message as a "do no harm" approach, noting that they support the FHFA's general direction of streamlining the regulations if it's done thoughtfully and with proper safeguards for lenders and the enterprises themselves.
What I am seeing locally in the Bay Area and East Bay is that any regulatory changes affecting how manufactured and factory-built housing gets financed will eventually flow down to my clients. These homes play an important role in helping working families and seniors access affordable housing in our region, where land and construction costs have made traditional building so expensive. If the lending standards and titling issues that the MBA flagged don't get worked out smoothly, we could see delays or complications for buyers trying to finance these units. That said, if the FHFA gets this right and coordinates well with other agencies, it could actually open up more financing options for innovative housing products that our market desperately needs.
