THE FWD #275 • 1,020 words

Boosting factory-built housing is a key pillar of the ROAD to Housing Act. Will removing the permanent chassis requirement and other reforms be enough to make a difference?

Our July breakdown of the 21st Century ROAD to Housing Act flagged manufactured and modular housing as one provision worth watching. Two months later, here’s what the law does, what still needs a federal rulemaking, and what Virginia may want to do on its own.

Fifty years on a chassis

Manufactured homes have carried a permanent steel chassis since 1976. Two years prior, Congress created the Manufactured Home Construction and Safety Standards—more commonly known as the HUD Code. This single federal standard governs the design and production of manufactured housing. State and local building codes do not apply to products built under the HUD Code.

The chassis requirement reflected a simple assumption: these homes were trailers, towable to a site and, if needed, towable away again. But in practice, almost none are ever moved after installation.

That changed this summer. Title III (“Manufactured Housing for America”) of the ROAD to Housing Act rewrites that definition, alongside smaller provisions on modular construction and manufactured home communities.

Manufactured versus modular

We hope most of you won’t need this quick terminology refresher, but just in case:

• Manufactured homes are built entirely in a factory to the HUD Code, usually in just one (single-wide) or two (double-wide) sections.
• Modular homes are also factory-built, but to whichever code would apply on-site. Large prefabricated sections are trucked in and assembled on a permanent foundation. These sections do not have a permanent chassis.

Some manufacturers are capable of building both types, while others specialize in one or the other.

Many important details not yet finalized

The headline change already took effect. Section 301, the Housing Supply Expansion Act, dropped the permanent chassis from the federal definition the moment the law passed, per the Bipartisan Policy Center.

But removing a phrase from the statute is not the same as building to a new standard. HUD still has to write construction and safety standards, including labeling rules, for chassis-free homes.

The agency was already partway through a narrower proposal covering only upper floors when the broader law overtook it. Whether HUD folds that draft into the wider rulemaking, or runs both at once, is still unclear.

Two other sections work the same way. Section 302 orders HUD and FHA to study modular financing barriers and pursue rulemaking if warranted.

Section 303 raises FHA loan limits for manufactured homes and adds accessory dwelling units as an eligible use. That program is tiny today: just three manufactured home loans were financed nationwide in 2021.

Section 304 simply reauthorizes the PRICE grant program for manufactured home communities. No further rulemaking required, but no additional funding allocated, either.

States face a separate deadline of their own. Within one year of enactment, they must certify their laws treat chassis-free homes the same as traditional ones for financing, titling, insurance, and taxes. The General Assembly will need to pass legislation in its next session to meet the July 2027 deadline.

Virginia’s head start—and blind spot

Months prior, state lawmakers arguably stole Congress’ thunder by adopting HB 655 and SB 346. Taking effect July 1, the legislation required localities to allow manufactured homes anywhere site-built housing is already permitted. State law previously limited this provision to agricultural zoning districts only.

Despite this massive expansion of easily-permitted lots for manufactured homes, other barriers remain. Virginia titles manufactured homes as personal property by default, like a car. Converting to real estate under § 46.2-653.1 requires owning the land underneath the home.

Households who own their manufactured home in a lot-lease community (i.e. mobile home park) cannot convert, and cannot get a traditional mortgage as a result. Pew estimates that gap costs affected borrowers over $25,000 over the life of a typical 30-year, $100,000 loan.

According to Fannie Mae, Virginia is in the minority of states that do not allow manufactured homes to be titled as real property in a “leasehold estate.” Pew suggests recent reforms in Georgia and Maine as examples to follow.

Several statutes are worth a look once HUD’s new standards land. Virginia’s laws that cover manufactured home lot rentals and DHCD’s oversight roles for manufactured homes still define them as built “on a permanent chassis.”

Once HUD finalizes chassis-free standards, these state definitions fall out of step, and no longer match what lenders and the industry treat as a complete home.

That mismatch is a far easier fix than titling reform. Virginia’s localities and the General Assembly have little reason to keep a homegrown definition that drifts from the one lenders and the industry use. Aligning state and local code language with whatever HUD finalizes would remove one more source of confusion for everyone involved.

What to reasonably expect

Not everyone reads the chassis change as a breakthrough. Brian Potter, Senior Infrastructure Fellow at The Institute for Progress, notes manufactured homes are already far cheaper than site-built housing, so a few more points off the price may not move demand much.

He’s also skeptical the chassis was ever the main tool localities used to exclude manufactured housing. A locality that wants to keep these homes out can define “manufactured home” in a number of ways that don’t mention anything about a chassis, and keep doing so.

The Manufactured Housing Institute, the industry’s largest trade group, reads the law more optimistically. It frames the change as new tools to challenge zoning barriers and expand opportunities for HUD Code homes.

These two readings aren’t mutually exclusive. The law cuts a fixed cost and loosens a major design constraint, but doesn’t require localities to welcome chassis-free homes once they exist. Luckily, the latest statewide reforms here in Virginia make that much less of a concern.

Will all of this ultimately add up to more affordable homes across the Commonwealth? The answer is probably yes, at least more than what we’d expect without these changes. But exactly how many, to whose benefit, and when? That depends on whether policymakers actually follow through, or just claim victory and move on.