FHA increases manufactured home loan limits in affordable housing push

The Federal Housing Administration (FHA) announced on Monday that it has raised lending limits for its Title I Manufactured Home Loan Program, a move designed to align the FHA with market forces and to encourage more lenders to participate in the program as the Biden administration makes a renewed push on affordable housing.

The move was announced in Title I Letter 488 released on Monday, in conjunction with official statements from FHA and the U.S. Department of Housing and Urban Development (HUD).

The new limits make use of “new methodologies for calculating and updating the program’s limits,” which were part of a final rule published Feb. 29, FHA explained.

They are designed to better align with current market prices and “are expected to encourage more lenders to offer the program to homebuyers seeking to purchase manufactured homes and the lots on which they sit.”

This marks the first update to the Title I program loan limits since 2008. The change is designed to support recent statements from the Biden administration regarding housing supply increases and encouraging the use of manufactured homes “as an affordable housing source,” FHA explained.

The new, nationwide Title I limits are effective for FHA case numbers assigned on or after March 29, 2024. The limits are:

• Combination loan (single-section), $148,909
• Combination loan (multi-section), $237,096
• Manufactured home loan (single-section), $105,532
• Manufactured home loan (multi-section), $193,719
• Manufactured home lot loan, $43,377

“We are using every tool possible to make affordable housing available for all Americans,” HUD Secretary Marcia Fudge said in a statement accompanying the announcement. “Today’s announcement is another positive step toward helping people to buy manufactured homes, an innovative solution to the affordable housing supply crisis.”

FHA Commissioner Julia Gordon emphasized the affordability potential that comes from these changes.

“We hope these changes will prompt more lenders to consider using the Title I program to meet the financing needs of consumers purchasing or refinancing manufactured homes,” she said.

The new limits are supposed to be adjusted on an annual basis. Revisions to the limits and the larger program will be incorporated into the Single Family Housing Handbook 4000.1 at a later date, FHA stated.