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Shutdown threatens manufactured-home industry


The government shutdown hasn’t widely affected the manufactured-housing industry yet, but a prolonged closure has the potential to stop deliveries of new manufactured homes all over the country, an industry trade group says.

The U.S. Department of Housing and Urban Development's (HUD's) Office of Manufactured Housing, an agency that oversees the building code and certification process for manufactured homes, has been closed during what has become the longest government shutdown in U.S. history. This has only so far affected manufacturers producing homes that require letters of approval for alternative construction, according to the Manufactured Housing Institute (MHI), an industry trade group.  

manhomeHUD often opts to approve alterations in approved floor designs or other features in manufactured homes on a case-by-case basis.  Because of the shutdown, HUD’s office can’t do that, leaving some manufacturers in limbo, said Lesli Gooch, MHI’s senior vice president for government affairs.

“If you don’t have approval through the alternative-construction process, that house can’t be delivered because that house can’t receive the HUD code-certification label,” Gooch told Scotsman Guide News. "We have a lot of manufacturers.”

Gooch said one plant in Mississippi, for example, was awaiting approval last week from HUD to install an HVAC unit that isn’t on its approved list. That company is producing manufactured-home units for the Federal Emergency Management Agency (FEMA).

“Because HUD is closed, they are not going to get approval, which means the production of these FEMA units is on hold until they get approval,” Gooch said. She said the trade group is still investigating how many deliveries have similarly been disrupted.

“I don’t have a sense of how large a problem this is as far as production being halted because of the need to renew an alternative-construction letter or the need to obtain an alternative-construction letter,” Gooch said. “The Mississippi issue is one that I was contacted about just because it is one federal agency requesting homes, and they can’t be built because HUD is closed,” she said.

Gooch also said there is the potential for widespread problems should the shutdown drag on for another month. MHI believes there is a possibility that the supply of HUD tags could run out because of the closure and budget impasse.  

Every manufactured home that is built and delivered in the U.S. — roughly 8,000 per month — has to be inspected and certified as having met safety standards. Once inspected, the manufacturer is given a red-metal tag, which is affixed to the exterior of the building to verify that it meets the standard. The home can’t be delivered to a customer until it is tagged.

“Based on our research, the industry’s PIAs [primary inspection agencies] should have enough labels on hand to get through the end of February,” Gooch said. “If the government shutdown continues, early March is our first estimate of when a problem could develop.” 

For the duration of the shutdown, HUD has also stopped the Title 1 loan program, which backs a small number of chattel loans each year used by borrowers to buy manufactured homes that aren't titled as real property.  


 

Questions? Contact at (425) 984-6017 or victorw@scotsmanguide.com.

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