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Floor Speech

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Mr. REED. Madam President, today I am introducing the Property Improvement and Manufactured Housing Loan Modernization Act with Senator Lummis. This legislation would strengthen the Federal Housing Administration, FHA, title I loan program to both help more families find and own an affordable home and better preserve our existing housing stock.

Like its better known title II sister program, FHA title I expands access to housing and boosts affordability for families by insuring private market loans. However, title I is targeted towards two underserved portions of our housing market--manufactured homes and property improvement.

For decades, title I has provided low-cost loans that help more families afford a manufactured home or make necessary improvements to their existing home, while expanding and preserving critical portions of housing supply. Indeed, manufactured homes are the largest source of unsubsidized affordable housing in the country, and property improvement loans help prevent more single-family homes and apartments from falling out of our housing stock.

These loans should be a central tool helping to close our nationwide housing shortage, which Freddie Mac estimates at 3.8 million homes. However, outdated loan limits and statutory restrictions have weakened title I's effectiveness and turned the program from success to a missed opportunity.

From the mid-1980s, through the early 1990s lenders offered 15,000 to 25,000 title I manufactured home loans each year, but in 2021, only 3 loans were issued. Similarly, lenders have gone from making more than 70,000 title I property improvement loans annually in the 1990s to making fewer than 1,000 in 2022. That is a 99-percent drop in loan volume. In other words, as many as 99,000 fewer homes being bought, preserved, and included in our housing stock each year.

The Property Improvement and Manufactured Housing Loan Modernization Act would refurbish title I and return it to our housing toolbox. It would expand loan limits and loan terms for all title I loans--making the program fit market demand and needs. Perhaps more importantly. the bill would finally allow FHA to index property improvement loans for inflation and expand the data it uses to set manufactured home loan limits, ensuring title I will remain a crucial tool as home costs rise in future years.

Finally, our legislation makes accesible dwelling units, ADUs, which are small housing units added to a single-family property often for use by a family member, eligible for title I financing. In other words, our bill will make the revamped title I program an even more powerful home- creation program than it was during its prior peak years and will particularly help families who want to provide a safe, comfortable place for aging parents or young adult children to live.

Collectively, these improvements would help more families own a home, remain in homes they have spent decades in, and find an affordable place to live. I urge my colleagues to join Senator Lummis and myself, cosponsor this bill, and support its passage.

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