U.S. Rep. Andy Barr’s (R-KY) Preserving Access to Manufactured Housing Act of 2017 passed the House of Representatives on Friday with bipartisan support.
The bill makes it easier to finance reasonably priced manufactured homes, which some 22 million Americans rely on for affordable home ownership, according to the House Committee on Financial Services, of which Barr serves as a member.
“Bureaucrats in Washington, who know nothing about rural America, should not stand in the way of those Kentuckians who want to invest in a home of their own, often at a lower cost than rent,” said Barr. “So-called consumer protections that deny hard-working, low and moderate-income Americans the ability to own their own home at an affordable price are harming consumers, not protecting them.”
The Consumer Financial Protection Bureau (CFPB) expanded the range of loan products considered “high-cost” mortgages under the Home Ownership and Equity Protection Act, Barr’s office said. Some lenders will no longer make these loans due to increased legal liabilities and stigma associated with “high-cost” mortgages.
But the CFPB has failed to recognize the unique nature of manufactured housing loans, often favored by rural Americans. Barr’s office said. H.R. 1699 clarifies that a manufactured home salesperson is not originating a loan when they help consumers apply for a mortgage or prepare loan information, unless a creditor, lender, or mortgage broker compensates them and retains consumer protections for buyers.
The bill would also improve the “high-cost” mortgage definition by slightly increasing the maximum interest rate and points and fees cap for manufactured loans for less than $75,000 helping preserve access to mortgage credit for low and moderate-income consumers who want to buy a manufactured home.
Financial Services Committee Chairman Jeb Hensarling (R-TX) spoke to the advantages of Barr’s bill for moderate and low-income Americans.
“Under the CFPB’s regulations, many small-balance manufactured home loans are now being considered high-cost,” Hensarling said. “This means many people, particularly those with lower and moderate incomes who want to buy a manufactured home are not able to buy that home. Their access to credit is being unfairly restricted through no fault of their own.”