PROGRAM HIGHLIGHTS

SUMMARY OF BUDGET ESTIMATES

1. SUMMARY OF BUDGET REQUEST

   There is no discretionary appropriation request for this program which is funded by fees under a mandatory permanent indefinite appropriation. HUD estimates that $17 million in fees will be collected in Fiscal Year 2001 from manufactured home producers based upon the production of 411,000 manufactured homes and 708,000 transportable sections. The fee charge is $24 per transportable section produced. The fee collections are used to: (1) cover the contractual costs of inspecting and monitoring the manufacturers' quality control procedures; (2) make payments to the States for the costs of investigating purchaser complaints; and (3) cover the Department's direct administrative expenses for those staff having enforcement related responsibilities. Payment for this latter item is made through a transfer to the "Salaries and Expenses, HUD" account. The current S&E transfer estimate for 2001 is $1,083 thousand. The Department will ensure that staffing is sufficient to ensure proper enforcement of standards and respond to questions concerning the uniformity and consistency of code revision.

   This program contributes to achieving HUD Strategic Objective 1.3 "American's housing is safe and disaster resistant." By regulating manufactured housing construction, HUD ensures construction conforms to established safety standards.

2. CHANGES FROM 1999 ESTIMATES INCLUDED IN 2000 BUDGET

   A total of 375,000 manufactured homes and 632,000 transportable sections were produced in Fiscal Year 1999. The number of transportable sections were 6,000 more than estimated, reflecting improved industry performance.

3. CHANGES FROM 2000 BUDGET ESTIMATES

The Fiscal Year 2000 revised estimates for manufactured homes and transportable sections produced are the same as the original Budget estimates. Obligations and outlays are reestimates downward reflecting actual spendout rates based on recent experience.

EXPLANATION OF INCREASES AND DECREASES

The number of manufactured homes and transportable sections produced are expected to increase over the 2000 estimated level of 386,000 homes and 664,000 transportable sections by over 6.4 percent. A $24 fee for each transportable section results in $17 million estimated budget authority. Obligation and outlay increases in Fiscal Year 2001 reflect an increase for contracts cost and HUD S&E.

PROGRAM DESCRIPTION

The National Manufactured Housing Construction and Safety Standards Act of 1974, as amended, directed the Secretary of HUD to establish Federal manufactured home construction and safety standards for the construction, design, and performance of manufactured homes. The standards were to govern quality, durability, and safety. The Act took effect June 15, 1976, and all manufactured homes produced since then must meet Federal manufactured home construction and safety standards.

A fee of $24 per transportable section is charged to producers to cover the cost of inspections required under the Act. A singlewide manufactured home has one transportable section, whereas a multiwide home has two or three transportable sections. Therefore, singlewide homes are charged $24, doublewide homes are charged $48 and triplewide homes are charged $72. HUD estimates that about 63 percent of the sections produced will be multiwide. In 1980, a permanent, indefinite appropriation account was established for depositing the fees.

Activities authorized by the Act include the following:

1. Establishment of Standards. Under the Act, the Secretary is directed to establish appropriate Federal manufactured home standards for the construction, design, and performance of manufactured homes which meet the needs of the public, including quality, durability, and safety.
2. National Manufactured Home Advisory Council. Section 605 of the Housing and Community Development Act of 1974 created a 24-member Advisory Council which consults with the Secretary on manufactured home construction and safety standards. This Council meets as necessary to review and comment on the issuance and/or modification of proposed standards.
3. Enforcement of Standards. Enforcement of the standards is accomplished mainly by third-party primary inspection agencies. These agencies can be private or State agencies and are approved and monitored by HUD.
4. Noncompliance with Standards. Title VI of the 1974 Act requires that every company that builds manufactured homes provide HUD with the plans for each model produced. The manufacturer is required to issue a certification that each section built meets the Federal standards in effect at the time of production. If the Department determines that any manufactured home does not comply with standards or contains a defect constituting a significant safety hazard, it may require the producer to notify the purchaser of the manufactured home of the defect. In certain cases, HUD may require repair, replacement or refund of the price of the defective section(s).

PROGRAM ACTIVITY

Currently, 36 States have had their State Administrative Agencies approved for participation in the program. Also, 17 Primary Inspection Agencies (7 private and 10 State) are approved as qualified to serve as a Design Approval Primary Inspection Agency and/or Production Inspection Primary Inspection Agency.

In addition to inspection activities supported directly by fee income, the Department has sponsored research, as needed, relating to manufactured home construction and safety standards which is funded from the Department's Research and Technology appropriation.