Bill Summary
The "Property Improvement and Manufactured Housing Loan Modernization Act of 2025" aims to amend the National Housing Act to enhance access to financing for homeowners and promote the construction of accessory dwelling units (ADUs). Key provisions include:
1. **Increased Loan Limits**: The Act raises the maximum loan amounts available for property improvement loans, specifically for alterations, repairs, and improvements to existing homes, including manufactured homes. For example, the limit for improvements on single-family structures rises to $75,000, while loans for purchasing manufactured homes are adjusted to $106,405 for single-section homes and $195,322 for multi-section homes.
2. **Accessory Dwelling Units**: The legislation explicitly clarifies that property improvement loans can be used for the construction of ADUs, which are secondary housing units on residential properties, helping alleviate housing shortages.
3. **Annual Indexing**: The Act mandates that the Secretary of Housing and Urban Development will develop methods to annually update these loan limits based on relevant economic data, ensuring they keep pace with inflation and housing market changes.
4. **Study on Factory-Built Housing**: The Act requires a study by the Secretary of HUD on the cost-effectiveness of factory-built housing, covering aspects such as manufacturing efficiencies, waste reduction, and potential applications for various types of housing.
Overall, this legislation aims to improve housing affordability and availability by modernizing loan limits and supporting the development of additional housing units.
Possible Impacts
The "Property Improvement and Manufactured Housing Loan Modernization Act of 2025" can affect people in several ways. Here are three examples:
1. **Increased Access to Loans for Home Improvements**: By raising the loan limits for property improvement loans from $60,000 to $150,000, individuals seeking to renovate or improve their homes, including constructing accessory dwelling units (ADUs), will have greater access to financing. This can enable homeowners to undertake significant renovations that enhance their living spaces, potentially increasing property values and improving quality of life.
2. **Affordability of Housing Options**: The legislation allows financing for the construction of ADUs, which can help address housing shortages by enabling homeowners to create additional rental units on their properties. This could provide more affordable housing options in communities where housing is scarce, benefiting both homeowners and renters by increasing available rental units.
3. **Encouragement of Factory-Built Housing**: The requirement for a study on factory-built housing could lead to insights that promote the use of manufactured and modular homes as viable, cost-effective housing solutions. If the study shows benefits like reduced costs and faster construction times, it could lead to greater acceptance and demand for these housing types, offering more affordable homeownership options to lower-income families and those seeking to enter the housing market.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 964 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 964
To amend title I of the National Housing Act to increase the loan
limits and clarify that property improvement loans may be used for
construction of accessory dwelling units.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 11 (legislative day, March 10), 2025
Mr. Reed (for himself and Ms. Lummis) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To amend title I of the National Housing Act to increase the loan
limits and clarify that property improvement loans may be used for
construction of accessory dwelling units.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Property Improvement and
Manufactured Housing Loan Modernization Act of 2025''.
SEC. 2. NATIONAL HOUSING ACT AMENDMENTS.
(a) In General.--Section 2 of the National Housing Act (12 U.S.C.
1703) is amended--
(1) in subsection (a), by inserting ``construction of
additional or accessory dwelling units, as defined by the
Secretary,'' after ``improvements,''; and
(2) in subsection (b)--
(A) in paragraph (1)--
(i) by striking subparagraph (A) and
inserting the following new subparagraph:
``(A) $75,000 if made for the purpose of financing
alterations, repairs and improvements upon or in connection
with an existing single-family structure, including a
manufactured home;'';
(ii) in subparagraph (B)--
(I) by striking ``$60,000'' and
inserting ``$150,000'';
(II) by striking ``$12,000'' and
inserting ``$37,500''; and
(III) by striking ``an apartment
house or'';
(iii) by striking subparagraphs (C) and (D)
and inserting the following:
``(C)(i) $106,405 if made for the purpose of financing the
purchase of a single-section manufactured home; and
``(ii) $195,322 if made for the purpose of financing the
purchase of a multi-section manufactured home;
``(D)(i) $149,782 if made for the purpose of financing the
purchase of a single-section manufactured home and a suitably
developed lot on which to place the home; and
``(ii) $238,699 if made for the purpose of financing the
purchase of a multi-section manufactured home and a suitably
developed lot on which to place the home;'';
(iv) in subparagraph (E)--
(I) by striking ``$23,226'' and
inserting ``$43,377''; and
(II) by striking the period at the
end and inserting a semicolon;
(v) in subparagraph (F), by striking
``and'' at the end;
(vi) in subparagraph (G), by striking the
period at the end and inserting ``; and''; and
(vii) by inserting after subparagraph (G)
the following:
``(H) such principal amount as the Secretary may prescribe
if made for the purpose of financing the construction of an
accessory dwelling unit.''; and
(viii) in the matter preceding paragraph
(2)--
(I) by striking ``regulation'' and
inserting ``notice'';
(II) by striking ``increase'' and
inserting ``set'';
(III) by striking ``(ii), (C), (D),
and (E)'' and inserting ``through
(H)'';
(IV) by inserting ``, or as
necessary to achieve the goals of the
Federal Housing Administration,
periodically reset the dollar amount
limitations in subparagraphs (A)
through (H) based on justification and
methodology set forth in advance by
regulation'' before the period at the
end; and
(V) by adjusting the margins
appropriately;
(B) in paragraph (3), by striking ``exceeds--'' and
all that follows through the period at the end and
inserting ``exceeds such period of time as determined
by the Secretary, not to exceed 30 years.'';
(C) by striking paragraph (9) and inserting the
following:
``(9) Annual Indexing of Certain Dollar Amount Limitations.--The
Secretary shall develop or choose 1 or more methods of indexing in
order to annually set the loan limits established in paragraph (1),
based on data the Secretary determines is appropriate for purposes of
this section.''; and
(D) in paragraph (11), by striking ``lease--'' and
all that follows through the period at the end and
inserting ``unless such lease meets the terms and
conditions established by the Secretary''.
(b) Deadline for Development or Choice of New Index; Interim
Index.--
(1) Deadline for development or choice of new index.--Not
later than 1 year after the date of enactment of this Act, the
Secretary of Housing and Urban Development shall develop or
choose 1 or more methods of indexing as required under section
2(b)(9) of the National Housing Act (12 U.S.C. 1703(b)(9)), as
amended by subsection (a) of this section.
(2) Interim index.--During the period beginning on the date
of enactment of this Act and ending on the date on which the
Secretary of Housing and Urban Development develops or chooses
1 or more methods of indexing as required under section 2(b)(9)
of the National Housing Act (12 U.S.C. 1703(b)(9)), as amended
by subsection (a) of this section, the method of indexing
established by the Secretary under that section before the date
of enactment of this Act shall apply.
SEC. 3. HUD STUDY OF FACTORY-BUILT HOUSING.
(a) Definitions.--In this section:
(1) Factory-built housing.--The term ``factory-built
housing'' includes manufactured homes and modular homes.
(2) Manufactured home.--The term ``manufactured home''
means any home constructed in accordance with the construction
and safety standards established under the National
Manufactured Housing Construction and Safety Standards Act of
1974 (42 U.S.C. 5401 et seq.).
(3) Modular home.--The term ``modular home'' has the
meaning given the term in section 1027(c) of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5517(c)).
(b) Study.--The Secretary of Housing and Urban Development shall
conduct a study and submit to Congress a report on the cost
effectiveness of factory-built housing, that includes--
(1) an analysis of the reductions in costs from the
centralization of manufacturing compared to the expense of
transferring the unit from the factory to its final location;
(2) the advantages in precision and reduction of materials
waste associated with factory-built housing;
(3) the expected replacement and maintenance costs over the
first 40 years of life of factory-built homes; and
(4) opportunities for use beyond single-family housing,
such as applications in accessory dwelling units, two- to four-
unit housing, and large multifamily housing.
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