Home Builder Guide for Manufactured Housing by fanzhongqing

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                                                        Home Builders’ Guide To
                                                         Manufactured Housing
                                                       U.S. Department of Housing
                                                         and Urban Development
                                                       Office of Policy Development
                                                               and Research
                                                             Washington, D.C.

                                                               Prepared by:
                                                       NAHB Research Center, Inc.
                                                          Upper Marlboro, MD

                                                                May 2000

Home   Builders’   Guide   To Manufactured   Housing                                  i
    This report was prepared by the NAHB Research Center, Inc., for the U.S. Depart­
ment of Housing and Urban Development, Office of Policy Development and Research.
The contents of this report are the views of the contractor and do not necessarily reflect
the views or policies of the U.S. Department of Housing and Urban Development, the
U.S. Government, or any other person or organization.      Trade or manufacturers’ names
herein appear solely because they are considered essential to the object of this report.

      Cover photograph and photos on pages 2 and 3 (left) provided cowtesy of the Manufactured   Housing Institute. Diagram   at bottom
of page 20 and photo at bottom of page 21 provided courtesy of Mr. Stew Hullibarger

ii                                                                                                  Home    Builders’   Guide   To Manufactured   Housing

     Most new homes in the United States are site-built to State and local codes, but an
increasing number are “manufactured homes,” designed and constructed to meet the re­
quirements of the preemptive Federal Manufactured Home Construction and Safety Stan­
dards. For decades, manufactured housing has provided a low-cost alternative to conven­
tional site-built construction.  Evolution of the manufactured home is eliminating many
of the differences with site-built homes, and changes in zoning laws are allowing use of
manufactured homes outside of land zoned for parks in a growing number of States.
     These developments are leading some home builders to consider using manufactured
housing for entryAeve1 product, often with significant site-built improvements or enhance­
ments, instead of site-built homes. The result can be substantially lower production cost or
other economic advantages for the builder and the consumer.
     This Guidebook provides conventional builders and land developers with an introduc­
tion to manufactured housing, focusing on differences between manufactured and conven­
tional homes that are likely to be encountered in practice. Chapters of the Guidebook
describe various options for using these homes. The Guidebook covers finding a manufac­
turer, developing product specifications, potential contractual arrangements, local zoning
and land-use planning considerations, installation and foundation options, site-built im­
provements, regulatory issues and consumer financing. Many references to more detailed
resources are also included. Users of the Guidebook will find a wealth of information to
assist in their business planning and support decisions about whether and how to make
use of manufactured housing as part of a larger home building business.

                                                        Susan M. Wachter
                                                        Assistant Secretary for Policy
                                                          Development and Research

Home   Builders’   Guide   To Manufactured   Housing
A Quick Guide to the Guidebook

                                                                      about how they
     This book presentsinformation for site builders and kmd developers
       can use HUD-Code manufactured housing as part of their business operations.

If You Need an Introduction...
   If you need an introduction to the subject you should start with Chapter One, which
describes the evolution of manufactured housing from a market and design standpoint, and
Chapter Two, which discusses market positioning and the different types of business oppor­
tunities you may want to consider pursuing with HUD-Code homes. These chapters will
help you determine which other parts of the Guidebook to review.

If You Have a Proiect in Mind...
    If you are generally familiar with manufactured housing and already have a tentative busi­
ness concept in mind, you can jump directly into the later chapters that present more de-
tailed information about some of the key issues that may arise in connection with your
 l  Chapter Three goes into detail about identifying, selecting and working with a manufacturer to
identify acceptable designsand strike an appropriate businessrelationship. Every builder who uses
manufactured housing will need to addresstheseissues.
 l  Chapter Four discusses special zoning issuesthat may arise in projects to use manufactured housing,
including state-levelrequirements for using manufactured units on land zoned for single family houses
that should help you work within the local system.
 l  Chapter Five coversunit installation and site-built improvements such as attached garagesor decks,
and how they diff er fr om conventional site-built construction.
  l Chapter Six coversconsumerfinancing alternatives which are critical to any sale, including realand
personal property financing.
 l  Chapter Sevenpresentscasestudies of someprojects that have used manufactured housing.

If You Have Detailed Ouestions or Need More Information...
     The Appendices present other materials that you should find very helpful.
 l   Appendix   A contains a list of manufacturing     plants by state, city and manufacturer.
l  Appendix B contains selected state-level market data and extensive information                      about
state zoning requirements relating to manufactured housing.
l Appendix C contains a list of State Administrative Agencies that participate in enforce­
ment of the HUD regulatory system and may regulate installation or site alterations.
l Appendix  D presents information      about typical development standards for land-lease com­
munities of manufactured homes.
l Appendix  E includes manufacturer contacts, producer web sites, state-level manufactured
housing association web sites and other useful references.

iv                                                                          Home   Builders’   Guide    To Manufactured   Housing
Table of Contents

Introduction ............................................................................................................................................... 


Selectingand Working with aManufacturer .............................................................................................. 15 

Zoning and Land-UseRegulation ..,........................................................................................................... 25 


Installation, Foundationsand SiteBuilt Improvements ...............................................................................31 

ExampleProjects........................................................................................................................................ 3 

Appendix A: List of HUD-Code Manufacturing Facilitiesby Stateand City .............................................. 45 

Appendix B: Market Information and Zoning Lawsby State ..................................................................... 49 

Appendix C: StateAdministrative Agencies ..............................................................................................59 

Appendix D: ManufacturedHome Community Developments..................................................................63 

                   .............................................................................................................................. 9 

AppendixE: Resources

Home     Builders’    Guide     To Manufactured          Housing                                                                                                 ”
List of Tables

Table 1 

Publicly Traded Manufactured Home Producers: 1998 Data ............................................................... 15 

Table 2 

StatesAdopting Revised Zoning Standards for Manufactured Housing, 1987-1999 ......................... 26 

Table 3 

Summary of FHA, VA and RECD Real Property Loan Programs for Manufactured Homes ........... 38 

Table 4 

Summary of Secondary Market Criteria for Conforming Mortgages on Manufactured Homes ....... 39 

Table 5 

Summary of FHA and VA Personal Property Loan Programs............................................................. 42 

Table 6 

Manufactured Housing Projectswith Exemplary Design or Site Characteristics ............................... 44 

vi                                                                                         Home   Builders’   Guide   To Manufactured   Housing
List of Figures

Figure 1 

Percentageof New Conventional Home Salesbelow $100,000, 1982-1998............................................ 2 


Annual Shipmentsof SingleSectionandMulti-Section HUD-Code Homes, 198@1998
                                                                        ................................. 3 


Multi-Section HUD-Code shareofConventional Startsand Multi-Section Home Sales,1997-1998..,.........,..4 


Reported Trends in HUD-Code Land/Home PackageMarket, 1996 ..................................................... 9 

Figure 5 

ReportedTrendsin HUD-Code Infii Market, 1996..................................................................................... 10 


ReportedTrendsin HUD-Code New Community Development,1996........................................................ 12 


U.S. HUD-Code Manufactured Housing Plant Locations, 1999 .........*.................................................16 

Figure 8 

State Laws Regulating Local Zoning of Manufactured Housing, 1999 .................................................. 27 

Figure 9 

StatesClassifying Manufactured Homes on LeasedLand as Personal Property ...................+...............40 

Home   Builders’   Guide   To Manufactured     Housing                                                                                   vii

     The U.S. home building industry is of-       builders have given little thought to using
ten described as consisting of a conventional     manufactured housing.
or “stick-built” sector, that constructs new            There is reason to believe the environ­
homes largely or entirely on site, and an in­     ment is changing. The traditional segmented
dustrialized or “factory-built” sector that as­   view of the market dates back to the origins
sembles homes in a plant, ships them to a         of today’s manufactured housing, the travel
point of sale or use, and installs them on a      trailers and “mobile homes” of previous
prepared site. Th ere are several different       years, which were designed and sold as light-
types of factory-built housing, but by far the    weight, self-contained living units that could
most common is “HUD-Code”          or “manu­      readily be moved from one site to another
factured” housing. HUD-Code manufac­              over the highways. These products were uni­
tured homes are so named because since            formly viewed as a form of personal prop­
 1976 they have been required to be designed      erty, similar to the automobile, not as im­
and constructed to the pre-emptive federal        proved real estate.
Manufactured       Home Construction       and
Safety Standards, administered by the U.S.
Department of Housing and Urban Devel­
opment (HUD). This legally distinguishes
manufactured      homes from factory-built
“modular” homes aswell as site-built homes,
both of which are required to meet appli­
cable state and local construction codes.
     This Guidebook provides information
about HUD-Code homes to an audience of
site builders and land developers. A com­              The appearances of mobile homes
panion Guidebook aimed at HUD-Code                evolved and production grew dramatically
producers and containing information about        through the 1960’s but the basic long rect­
working with site builders and land develop­      angular shape and flat roof line remained.
ers is also available from HUD. Additional        The industry underwent a regulatory trans-
useful background information       about the     formation in the 1970’s and “mobile homes”
site-built, modular and HUD-Code segments         became “manufactured housing.” Yet older
of the housing industry appears in a 1998         products remain in use even today, and atti­
study, Factory and Site-Built Housing: A Com­     tudes about manufactured housing some-
parative Analysis, published by HUD.              times reflect images of older trailer courts
                                                  and mobile home parks where many such
Why Should I be Looking       at                  units are placed close together on small
Manufactured Homes?                               pieces of leased land, and owned or rented
      While both stick-built and manufac­         predominantly by lower-income households.
tured homes provide shelter for the own­
ers or occupants, there have historically been
extensive differences between these two sec­
tors of the industry in terms of product
features, zoning, marketing, financing and
the economic structure of production.
Market overlap between the two sectors has
been considered as minimal due to dissimi­
larities in the underlying products and many                    1960’s   Mobile   Home

lntmduction                                                                                        I
                 Designs and features of both site-built and                   The pace of change has been even faster
                 manufactured homes have been changing                   in the HUD-Code sector. In the early 1980’s,
                 over the decades. On the site-built side, eco­          nearly three-quarters of HUD-Code homes
                 nomic and market forces have led new homes              consisted of a single section, generally 12 to
                 to become larger, better appointed and more              14 feet in width. Most new units were sited
                 expensive than ever before. At the same time            on leased land in a community of similar
                 escalating costs have made it much more dif­            homes. But by 1998 over 60 percent of new
                 ficult, even impossible in some areas, to build         HUD-Code homes included two or more
                 on-site for an affordable, entry-level market.          sections designed to be joined at the site,
                 Figure 1 shows the trend in the percentage              and about 75 percent of new multi-section
                 of new homes priced below $100,000. While               homes were located on private land rather
                 much of this decline represents inflation,              than in a park. Shipments of single-section
                 particularly during the 1980’s, it also reflects         and multi-section HUD-Code units from
                 a tendency for conventional builders who                 1980 through 1999 are plotted in Figure 2
                 once produced starter homes for first-time               (1999 shipments are projections based on
                 buyers to target the move+ip, luxury and                 half-year data). The Figure clearly shows the
                 custom marketplaces rather than concentrat­              substantial growth in multi-section       ship­
                  ing on selling to a less affluent entry-level           ments during the 1990’s.
                  market.                                                      The shift towards multi-section homes
                                                                          has marked a fundamental transition for
                                                                          manufactured housing. Not only do two
                                                                          sections greatly increase living space, but the
                                                                          resulting structure has the rectangular foot-
                                                                          print and aspect ratio of a modest starter
                                                                          home or tract home of a previous era. At
                                                                          the same time there have been changes in
                                                                          interior finishes, siding, appliances and other
                                                                          products and materials that bring HUD-
                                                                          Code homes closer to what is standard in
                       Mid-range   double-section   home   with garage    the site-built sector.

                                                                          1990’s multi-section    home with site-built   garage and
                                                                                                 roof section

                                       1990                                    Some other innovations are equally sig
                                                                         nificant. Steeper roof pitches are becoming
                              FIGURE     1                               available, as well as chassis/floor systems de-
    Percentage   of New Conventional   Home    Sales below $100,000
                                                                         signed for perimeter support aswould be pro­
                                                                         vided by a site-built basement or crawl space,

2                                                                                                                         Introduction
rather than on rows of piers under chassis I-
beams. The technology has led a few pro­
ducers all the way to two-story HUD-Code
units, something that could only be imag­
ined a few years ago.
     Even as some manufactured homes take
on more of the look and feel of some site-
built homes, data from the Bureau of the
Census indicates that the average HUD-
Code unit retails for around $30 per square
foot, and the average double-section home                 -   = Multi
                                                                              1980                       1990
                                                          -   = Single
sold for about $52,000 in 1998. These sell­                                                              Year
ing prices include the cost of production,                                                                                                -1

manufacturer’s profit, cost of shipping, taxes,
                                                                                             FIGURE 2
the retailer’s margin and the basic set-up but          Annual    Shipments     of Single Section and Multi-Section    HUD-Code   Homes
do not include land, site improvements or                                                    1980-1998
the added cost of a permanent foundation
or perimeter chassis design. The prices must
be interpreted cautiously since they are for
average units that would generally require
upgrades to be comparable to site-built starter
homes, but they are evidence of production
cost economies. It is this combination of
technical product improvement and low cost
of production and distribution that is fuel­
ing growth in sales and presenting new op
portunities.                                             Row of Z-story       units nearing completion     in Orange
                                                                               County, California

                                                        ily detached housing starts in 1997 and 1.16
                                                        million in 1998. Yet the shipment data also
                                                        shows that the current market environment
                                                        for HUD-Code homes varies significantly
                                                        across the United States. Detailed factory
                                                        shipment data indicates considerable varia­
                                                        tion between regions, as well as across states
                                                        within any given region.
                                                              Many sources compare total HUD-Code
     Two-story   HUD-Code     homes, Howard   County,   shipments to site-built housing starts, but for
                      Maryland,   1997
                                                        purposes of this Guidebook it is more rel­
                                                        evant to limit this comparison to multi-sec­
What Does the Market Look Like Now?                     tion HUD-Code units versus conventional
     On a national basis, there were a re-              homes. This is because the single-section
ported 353,377 HUD-Code homes shipped                   market is far different and has significantly
in 1997, (including 204,568 multi-section               less overlap with the market for site-built
units) and 372,843 shipped in 1998 (includ­             homes. Therefore, the map in Figure 3 shows
ing 228,515 multi-section units). For com­              the ratio of multi-section HUD-Code homes
parison, there were 1.03 million single-fam­            to total new homes (conventional starts plus

introduction                                                                                                                              3
                         multi-section   HUD-Code placements) by                   ally peaked in 1990 and dropped more than
                         state for the years 1997-98. This ratio ranges            50 percent by 1996 before starting to in-
                         from 1 percent or less in four U.S. states to             crease again.
                         35 percent or more in other states.                       l	 The HUD-Code         market in the West
                                                                                      Coast states and Nevada is more than 90
                                                                                      percent multi-sections.    This area has a
                                                                                      long history of preferring multi-sections
                                                                                      compared to other parts of the country.
                                                                                   l	 HUD-Code units are a large fraction of
                                                                                      total starts in the mountain states, but
                                                                                      overall sales are not large because total
                                                                                      housing production in those states is of-
                                                                                      ten very low.
                                                                                   . 	Southern, South Atlantic and Midwest-
                                                                                      ern states show a high penetration       of
                                                                                      multi-section shipments as a fraction of
                                                                                      total housing starts.
                                                                                   l	 Over half of all HUD-Code shipments
                                                                                      to the South Central states were single-
                                      FIGURE 3                                        section units.
    Multi-Section   HUD-Code    share of Conventional   Starts and Multi-Section
                                                                                   l	 There are very few HUD-Code shipments
                               Home Sales, 1997-1998
                                                                                      to any of the New England states except
                              In areas where multi-section manufac­                   for Maine and Vermont.       Modular con­
                         tured housing has a high share, this is good                 struction is relatively stronger through-
                         evidence of a receptive market from the con­                 out this region.
                         sumer demand side. However, the high share
                         might also indicate some level of saturation              Who Should Use the Guidebook?
                         as well as the potential for strong competi­                   This Guidebook is written as a resource
                         tion from an established HUD-Code retail­                 for site builders and builder/developers that
                         ing segment. On the other hand, a low share               want to know more about how they may be
                         for multi-section manufactured housing may                able to take advantage of manufactured hous­
                         indicate buyer resistance, zoning and land                ing as part of their ongoing business opera­
                         use impediments, or other causes. While a                 tions. Different builders inevitably will have
                         low share may be evidence that using manu­                different motivations for investigating a new
                         factured housing is not appropriate or viable             strategic direction. The Guide can only sum­
                         in a given area, it can also be viewed as a               marize the kinds of business approaches that
                         sign of potential opportunity      and unmet              have been or could potentially be used by
                         needs. Each builder must consider the im­                 conventional builders interested in substitut­
                         plications of this statistic in any given mar­            ing a factory-built home for a site-built one.
                         ket environment.                                                While the use of manufactured housing
                              In addition to data in the map, there                strikes many home builders as a fundamen+
                         are several basic generalizations that can be             tal change in operations, this is not neces­
                         made about the HUD-Code segment in dif­                   sarily so. Most home building companies
                         ferent parts of the U.S.                                  already rely extensively on subcontractors to
                               *The HUD-Code         market has been               perform construction work. Substituting
                         growing in practically every state since 1991,            factory built units for site-built homes can
                         except in California where shipments actu­                be seen as another step in the same direc-

4                                                                                                                       lnrroduction
tion, where most aspects of unit construc­         the materials and methods used in site-built
tion, code compliance and delivery to the          housing construction, as well as the basics
site are handled by the manufacturer. The          of residential land development, zoning and
building company may retain responsibility         mortgage finance. Much of the informa­
for building a suitable foundation, on-site in­    tion in the Guidebook        revolves around
stallation and utilities, finish work, construc­   similarities and differences in these areas that
tion of site-built amenities, marketing, con­      are likely to be encountered where manu­
sumer financing and closing of sales, as well      factured housing is used in lieu of site-built
as local zoning and environmental approv­          construction. The overall focus is on multi-
als. Depending on the project, the builder         section units installed on permanent foun­
or land developer also mayneed to arrange          dations and upgraded with site-built ameni­
for any necessary subdivision development,         ties, to be sold as fee-simple properties eli­
utility infrastructure, community facilities       gible for conventional mortgage financing.
and lot development.                               Several variations on this approach includ­
       Not every firm will be interested in such   ing land-lease developments are also ad-
a change in their way of doing business.           dressed.
Some will conclude that obstacles in their              Most builders who use the Guidebook
market areas, characteristics of their buyers,     should continue by reviewing Chapter 2,
or essential features in the homes they want       which describes alternative ways to use
to market are not consistent with substitut­       manufactured      homes, discusses product
ing manufactured product for site-built hous­      selection and general market positioning,
ing. But there is a growing body of experi­        and identifies key issues that arise under each
ence showing that with careful planning and        alternative relating to product technology,
a cooperative manufacturer,         HUD-Code       zoning, land or site development, and fi­
homes can be an economical alternative to          nancing. This information         can help the
certain types of site-built construction.          builder to think about specific projects that
       The Guidebook presents a comprehen­         might make sense for their housing market
sive introduction      to the technical, market    and target base of customers, and to begin
and business issues relevant to the use of         considering about the desired product de-
manufactured housing. It identifies the key        sign features and types of site amenities.
questions to be asked and choices to be
                                                        Once a project concept is tentatively se­
made, and includes various types of infor­
                                                   lected, users will want to review the more
mation that can be used in developing a
                                                   detailed materials appearing in Chapters 3,
specific business model and evaluating op­
                                                   4,5 and 6 in the context of that project. Of
portunities for using manufactured homes.
                                                   course, not all of the material in those chap
Various specific projects illustrating differ­
                                                   ters is relevant to every project. Chapter 3
ent ways builders have used manufactured
                                                   discusses the process of identifying and work­
housing are listed elsewhere in the Guide-
                                                   ing with a producer to arrive at specifications
book, along with references to further in-
                                                   for HUD-Code units that meet your needs
formation about each project.
                                                   and expectations, and entering into an ap
                                                   propriate business arrangement. Chapter 4
How Do I Use the Guidebook?
                                                   covers local zoning and land use issues that
     The Guidebook is broad and general            can make or break any project involving
in coverage, designed to be useful to vari­        manufactured homes. Chapter 5 covers site
ous types and sizes of building firms. Us­         planning,    foundation     construction,    the
ers are assumed to be generally familiar with      transportation,    delivery, installation    and
    finishingprocesses, and issues relating to site-     company. Appendix B has detailed state-
    built improvements. Chapter 6 reviews the            level information     on shipments, housing
    various methods available for consumer fi­           stock and zoning laws relating specifically
    nancing of manufactured home purchases.              to manufactured housing. Appendix C is
                                                         a list of State Administrative Agencies that
                                                         participate in the HUD regulatory program
                                                         on the state level, including contact names
                                                         and phone numbers. Appendix D is a de­
                                                         scription of the types of development crite­
                                                         ria applied to land-lease manufactured home
                                                         communities, and Appendix E lists printed
                                                         and on-line resources that will be of assis­
                                                         tance to you as you get further into the sub­
                                                               Building upon a review of the Guide-
                                                         book, users will be in a position to develop
                                                         more comprehensive         plans for specific
                                                         project opportunities, and can follow up by
                                                         working actively with manufacturers, local
          Other resource materials also appear in        officials and others to complete the plans and
    the Guidebook.        Chapter 7 identifies a se­     assesstheir viability and economic potential.
    ries of selected projects that have used manu­       If the planning shows the project is viable
    factured homes with innovative designs or            then execution of the plan can proceed.
    in unusual ways, or that otherwise combine           Otherwise the user may wish to return to
    elements of site-built construction           with   Chapter 2 of the Guidebook, evaluate other
    manufactured housing. Appendix A gives a             available project approaches, and pursue
    list of specific plants, sorted by state, city and   those as appropriate through the Guidebook.

6                                                                                             introduction
Basic Considerations

     The potential for expanded use of manu­       may be necessary to preserve or improve
factured housing by today’s site builders rests    profitability. The principal issues under this
largely on the possibility of realizing signifi­   approach are the technical problems of
cantly lower production cost, higher margins,      achieving product comparability, the financ­
improved market share or some combination          ing problems experienced by buyers with
of these potential competitive advantages          lower incomes and less perfect credit records,
through the adoption of a substitute produc­       and availability of suitably zoned land for any
tion and supply technology. Other factors          expanded sales.
that ultimately can contribute to achieving a
competitive advantage include shorter cycle-       Offer a more desirable product
time, less waste at the site, minimizing labor     at a similar price
supply problems, reduction of the need to                Under this approach the existing target
find and coordinate subcontractors, shifting       market of buyers would be retained and more
of warranty responsibility for the factory-built   sales could be made based on improved ap
unit, and reducing the burden of multiple          peal of the product. The buyer market would
local code inspections required for site-built     also be expanded to include purchasers that
units.                                             are attracted to added features or amenities
                                                   that can be included in the manufactured
How Can I Position Myself                          home without raising the cost above pre-ex­
in the Market?                                     isting levels. Product desirability can be en­
                                                   hanced by specifying higher quality products,
     A simplified framework can provide a
                                                   appliances and finishes and by providing at-
basis for planning and market research.
                                                   tractive site-built amenities. The profitabil­
Under this framework, there are three alter-
                                                   ity implications depend on whether per-unit
native possible ways a builder can take ad-
                                                   margins can be preserved or increased. The
vantage of manufactured housing technology
                                                   principal issues under this approach are the
within an existing business orientation:
                                                   technical challenges of producing a more
loffer a comparable product at a lower price,      desirable product without sacrificing mar-
*offer a better product at a similar price, or     gins, and availability of suitably zoned land
*offer a less desirable product at a signifi­      for any expanded sales. Financing issues are
  cantly lower price.                              less important under this approach, since the
Each of these approaches to market posi­           target buyer market is not really changing.
tioning is discussed in this section.
                                                   Offer a lessdesirable product
Offer a comparable product                         at a significantly lower price
at a lower p-ice                                        This strategy represents a clear shift to-
      This is a straightforward substitution ap­   wards supplying more basic, affordable hous­
proach, in which the builder’s current target      ing particularly suitable for first-time buyers
market of buyers would largely be retained,        and others whose incomes cannot support
but more sales could be made to such buyers        the expense of conventional homes. While
based on price competition. The buyer mar­         the product will typically be smaller and more
ket would also be expanded to some degree          economically      appointed than other new
because lower-incomecustomers        at or near    homes built today, it will probably resemble
the margin of qualification would become           entry-level site-built homes that were the
eligible purchasers. Dollar margins will drop      mainstay of the home building industry for
at lower selling prices even if percentage         much of the last 50 years. Technical issues
margins can be preserved, so growth in sales       are the least significant under this approach,

Basic Considerations                                                                                 7
    and financing problems are potentially the       own the underlying land, the question re-
    greatest when doing expanded business with       mains: who does?
    a significantly less affluent buyer group more
                                                     What Types of Business
    likely to have sub-par credit and less access
                                                     Opportunities   Are Available?
    to market-rate mortgage money. Availabil­
    ity of suitably zoned land is also a major is-        Experience suggests there are several dif­
    sue under this approach, because expanded        ferent types of business opportunities     for
    sales will be needed to compensate for lower     site builders considering the use of manu­
    margins on lower-priced product and be-          factured homes. The most appropriate op­
                                                     portunities depend on factors such as the
    cause the product characteristics are most
                                                     builder size, market location, target cus­
    likely to trigger community opposition to any
    required zoning approvals.                       tomer market and current way of doing
                                                     business. Guidebook users should review
    What Other Basic Choices Must I Make?            the six approaches listed and discussed in
          Another basic issue you will face is be-   this section to see which, if any, are appli­
    tween focusing on selling homes together         cable and of interest to them. The list is
    with the land as fee simple properties, ver­     diverse but not exhaustive; over time addi­
    sus selling homes on leased land. Most site      tional business models and applications are
    builders will be far more familiar with fee      very likely to develop.
    simple transactions, and this approach to
    selling homes can be applied to manufac­                                   Atxwoach # 1:
    tured homes. However, experience shows                                     Manufactured
    that there are clear opportunities for land-                               Homes on Scattered
    lease manufactured home community devel­                                    Rural or Suburban
    opment as well. This decision has many im­                                 Sites
    plications that you should consider. The de­                                     This approach
    mographic and economic characteristics of                                  can be used by any
    potential customers will differ significantly                               size of building
    between fee simple and land lease sales, and                                firm, but is best
    this may affect your thinking about appro­                                 suited for smaller
    priate product design, amenities and mar­                                  builders that com­
    keting. Zoning restrictions are sometimes                                   monly use single
    less stringent for homes sold as real prop                                  lots. The approach
    erty while homes on leased land may only                                    is similar to that
    be permitted in communities         zoned for                               generally used in
    HUD-Code homes. Conventional mortgage                                       marketing modu­
    financing may only be available for fee-simple                              lar homes.     It is
    transactions, while personal property loans      the easiest to implement in those states or
    with shorter terms, higher interest rates and    localities where zoning permits use of manu­
    quicker borrower qualification are the norm      factured homes on any residential building
    for homes on leased land. Standards for land     lot, but can be used in other areas unless
    development in a land-lease park can be sig­     prohibited by the zoning.
    nificantly less stringent than the subdivision        The scattered-site approach has seen its
    development standards with which many            widest use in rural areas where ranch-house
    builders are familiar. Owners of homes on        type construction is already common and
    leased land may pay far less in local taxes      zoning restrictions are less stringent. From
    than owners of homes classified as real prop     a practical standpoint, in this type of small
    erty. And where the home owner does not          volume application, the builder has few op-

8                                                                                    Basic Considerations
portunities      to   negotiate   produc
customization with the manufacturer out-
side whatever range of options is already
available from the factory.
     HUD-Code retailers currently sell sub­
stantial amounts of product onto private
land using a related business model, al­
though usually the customer owns the land
before buying the home. A 1996 survey
reported that this land-home package mar­
ket was increasing in all but two of the 25
states that responded, as shown on the map
in Figure 4.
                                                                                      FIGURE 4
Avvroach #2:                                            Reported   Trends   in HUD-Code   Land/Home   Package Market,   1996
Homes on Urban                                      row lots may require single-section homes.
Infill Sites                                        Shipping large floor sections for infill use
      Urban     infill                              into otherwise crowded urban areas can
projects represent a                                raise uniquely difficult     logistical issues.
substantial oppor­                                  Zoning in urban areas may also prohibit
tunity for manu­                                    the use of manufactured housing outside
factured housing,                                   of land zoned for rental communities or
particularly          in                            parks, so special zoning approvals may be
older          cities,                              required.
though experience                                         Infill applications are reported to have
using HUD-Code                                      been going on over the last two decades on
homes in this ap                                    the west coast, but there is much less experi­
plication is relatively limited. Not only are       ence in most eastern cities. The Manufac­
public utilities readily available, but the abil­   tured Housing Institute and other organiza­
ity to place and secure a finished unit             tions have been collaborating for several years
quickly can be especially advantageous in           on an “Urban Design Project” with demon­
urban areas where site-built homes face pro-        stration homes in five different cities, dis­
longed exposure to theft of materials and           cussed in a subsequent Case Study. HUD
vandalism. Special financial incentives may         has also sponsored research into develop
be available for qualifying construction in         ment and prototype production of a “Next
older cities through the federal HOME pro-          Generation” of manufactured home designs,
gram or other state or local sources.               including single section designs intended for
      There is a clear need, but there are also     urban environments.        This work is docu­
special difficulties in this application. One       mented in research reports published by
of the obstacles to infill projects is that most    HUD, and some of the results have been
homes in urban environments are on small            used in the Urban Design Project.
lots and are at least two stories in height.              Figure 5 summarizes survey data indicat­
The limited availability of manufactured            ing that as of 1996, HUD-Code home usage
home designs that will blend gracefully with        on infill sites was expanding in 13 of 25
adjoining buildings in urban areas is a ma­         states that responded, and constant in the
jor impediment to this type of project. Nar-        other 12 states.

Basic Considerations                                                                                                           9
                                                                 or no savings on land or infrastructure.
                                                                 However, economies in unit construction
                                                                 may still lead to production cost savings,
                                                                 and cycle-time can be reduced. Larger sub-
                                                                 divisions can also justify some design revi­
                                                                 sions or enhancements at the manufactur­
                                                                 ing level based on the anticipated volume
                                                                 of production and fill rate.
                                                                      There are variations on this approach
                                                                 where the builder mixes HUD-Code, modu­
                                                                 lar and/or site-built homes within a single
                                                                 subdivision. This offers more product choice
                                                                 to buyers and potentially expands the mar­
                                                                 ketability of the subdivision, but presents
                                                                 more logistical issues to the builder similar
                                                                 to those associated with site-built subdivi­
                                                                 sions in general.
                             FIGURE 5
     Reported    Trends   in HUD-Code Infill   Market,   1996
                                                                 Avvroach #4:
                                                                 Development and
                Annroach #3:                                     Lot Saks
                Fee Simple                                            One of the
                Manufactured                                     principal      im­
                Home                                             pediments       to
                Subdivisions                                     growth in manu­
                     Some of the                                 factured housing
                innovative recent                                is the high cost
                projects that use                                of land and scar-
                manufactured                                     city of suitable
                homes involve                                    sites. As a re­
                entire subdivi­                                  sult, most sales
                sions of HUD-                                    in the current HUD-Code market are made
                Code homes in-                                   to buyers who own their own land, or in
                stalled on perma­                                connection with an available for-rent space
                nent foundations and sold as fee-simple real     in a land-lease community.
                estate. These projects range from small sub-          The approach described here is a pure
                divisions with a handful of lots to larger       land development approach. It provides an
                subdivisions with shared community facili­       alternative to retailers by offering lots in a
                ties. Building firms with experience in land     development that may have superior appeal
                development and subdivision planning are         to manufactured      home purchasers com­
                the logical firms to pursue these opportu­       pared to either a leased park site or an un­
                nities.                                          developed piece of rural property that hap
                      Lot sizes and densities in a fee-simple    pens to be available. It is suited for the land
                subdivision of manufactured homes ordi­          developer who would ordinarily sell finished
                narily will be required to be the same as for    lots to builders or consumers, particularly
                site-built homes, meaning there will be little   in a market with ample land supply. The

10                                                                                              Basic Considerations
terrain in the development must be suit-          ongoing costs of debt service plus land rent,
able for manufactured      homes, which is        but it can greatly reduce the up-front cost
somewhat more restrictive than for site-built     of down payment, loan origination fees and
homes, and the zoning must allow fee              other closing costs associated with real prop
simple manufactured homes.                        erty transactions that constitute a substan­
     The developer pursuing this approach         tial barrier to achieving home ownership.
will likely want to record a set of covenants          A second advantage of land-lease devel­
that impose technical and aesthetic restric­      opment reflects special development stan­
tions on the types of homes that will be          dards that often apply in land-lease com­
allowed in the subdivision, similar to most       munities. These include density limits that
other subdivisions. Permanent foundations         are considerably higher than in fee simple
may or may not be required. The main dif­         subdivisions, as well as relaxed infrastruc­
ference compared to other approaches is           ture requirements for street widths, unit
that under this pure landdevelopment       ap     setbacks and related facilities. These differ­
preach the responsibility for customer mar­       ences can substantially reduce the per-unit
keting, factory orders, installation and fi­      cost of community development.
nancing rests with the manufactured home               One major downside of the land lease
retailer. This means the developer loses the      approach is that many potential buyers will
opportunity to capture the retailer’s mar-        not seriously consider purchasing a home
gin as part of the overall business plan. In      without also buying the land on which it sits.
areas with a competitive retail environment       This may reflect concern about rent increases
for manufactured homes it may be most             over time or opportunities for resale, as well
effective to make lots available through          as a desire for a more traditional ownership
multiple retailers. In other cases it may be      arrangement. Another problem is that in
better to work more closely with a single         some states manufactured homes on leased
retailer.                                         land are not eligible for real property mart-
                                                  gages, because they do not constitute real
                           Avvroach #5:           property. In other states this is not a prob­
                           Development of         lem. In addition, this approach requires
                           New Land-Lease         “patient capital” since the builder must buy
                           Communities            and improve the land but does not sell it.
                                 Part of the      The long-term returns can be very high, but
                           affordability    ad-   the builder/developer       loses the chance to
                           vantage of manu­       cash out of the property and use the pro­
                           factured housing       ceeds to move on to another deal.
                           reflects the con­           From a design standpoint, land lease
                           tinuing practice       communities can range from the subdivi­
                           of selling homes       sion-like “neo-traditional”     design found in
                           separate      from     New Colony Village in Howard County,
                           any interest in        Maryland, all the way to a more conven­
                           land, and plac­        tional mobile home park design and appear­
                           ing the homes          ance. At one extreme the homes would be
                           on leased land.        installed on permanent foundations, sited
                           This      practice     and equipped to resemble site-built homes,
                           does not neces­        and sold together with a transferable long-
                           sarily reduce the      term lease. At the other extreme, non-per-

Basic Considerations                                                                                11
                   manent foundations and short-term land               is more similar to multifamily properties
                   leases can be used. Many special zoning              than to production  and sale of site-built
                   issues arise in considering land-lease devel­        homes.
                   opments and approvals can be difficult or
                   impossible to obtain in communities that             Avvroach #6:
                   do not relish additional     “mobile home            Redevelopment or
                   parks.” In effect the site must be zoned (or         Expansion of
                   rezoned) for ownership as a single parcel            Existing
                   eligible to be used for manufactured homes.          Land-Lease Parks
                         The manufactured     housing industry                Tens       of
                    and certain Real Estate Investment Trusts           thousands        of
                    (REITs) are actively pursuing development           land-lease parks
                    of new rental parks on “greenfield” sites.          exist around the
                    Producers thereby seek to expand the sup­           United      States
                                                                        and millions of
                                                                        homes occupy
                                                                        rental sites in
                                                                        these       parks.
                                                                        California alone
                                                                        is reported      to
                                                                        have over 4,000
                                                                        parks. Many ex­
                                                                         isting parks are
                                                                         older facilities located in the suburban
                                                                         fringes of major metropolitan    areas. Ap
                                                                         pearance standards, target customer market
                                                                         and amenities vary widely. Some existing
                                                                         parks may currently be zoned for expansion.
                                                                        While most parks are located in less desir­
                                                                         able locations, communities also change as
                                 -_-__--                                 they grow, so this is not always the case.
                                 PltiUKE    6
     Reported   Trends   in HUD-Code      New Community   Development         There is a slow but steady turnover of
                                       1996                             rental sites in most land-lease parks. The
                                                                        high cost of relocating a home usually leads
                    ply of home sites, while the REITs are in­          to houses being sold in place, but some
                    terested in the very attractive long-term re-       homes are moved to other sites upon ter­
                    turns for investors in successful parks. A          mination of the land lease. While many
                    map showing reported trends in commu­               park owners engage in retailing within their
                    nity development by state is in Figure 6.           own rental communities, others do not.
                         There are additional issues associated               The phased redevelopment of existing
                    with the ongoing management of a land-lease         land-lease parks offer excellent opportuni­
                    community     that need to be considered.           ties for use of new HUD-Code products,
                    These include most of the usual landlord-           with the type of product dependent upon
                    tenant considerations, rent controls in some        the nature of the park and the surrounding
                    areas, and other regulations unique to the          community.      The land is, by assumption,
                    operation of manufactured housing parks.            zoned for HUD-Code        homes so there is
                    In many respects this type of development           little or no controversy over land use. Com-

12                                                                                                    Basic Considerations
munities that resist permitting new park de­       vestigating manufacturers within the region,
velopment might be expected to welcome             selecting a specific manufacturer and manu­
park redevelopment.       Upgrading the park       facturing facility, and negotiating a suitable
will support higher rents, particularly       if   business arrangement addressing a range of
there is little competition from affordable        issues. If you cannot identify a willing
new home or apartment construction           in    manufacturer and suitable product design,
the area.                                          then there obviously can be no project. See
      You will need to work with the current       Chapter 3 for information about identify­
park owner or acquire the property in order        ing manufacturers,     product specification
to pursue this approach. You will also need        and business arrangements.
to deal with existing tenants and leases dur­
                                                   Stev 2:
ing the redevelopment process. The oppor­
tunities are greatest for parks located in the     Identify Suitable Buitiing Sires
fringes of expanding urban areas where new              You will need to identify or develop
site-built homes are relatively expensive.         building sites that are suitable for use with
                                                   HUD-Code homes. Most single-family lots
How Do I Plan For a Project Using
                                                   will be technically suitable, except those on
Manufactured Homes?
                                                   steep terrain or where access to haul in and
     Once you have tentatively chosen a basic      place the unit is problematic.     The usual
approach to using manufactured housing             development constraints relating to traffic,
and identified a site where the project might      easements, availability of water and sewer,
be located, you can begin looking at the           wetlands, storm water runoff and other fed­
specifics in more detail in order to see if        eral, state and local environmental regula­
your concept is feasible. A feasibility            tions will apply here as for any other single-
assessment will help to screen out projects        family housing. In addition, it is very im­
with little    chance of success before            portant to review the local zoning and land
substantial resources must be invested in          use requirements as they apply to the site,
planning or execution. Ultimately you will         along with any covenants or deed restric­
need to develop a comprehensive business           tions of record, to ensure that manufactured
plan for a project of any significant size. The    homes are a permissible use or to identify
business plan needs to address many things,        specific legal restrictions on their use. If
including the sequence of activities required      HUD-Code units are not permitted by the
to bring the project to market. This series        zoning then a rezoning, special exception
of activities is presented here as four key        or variance would be required in order for
steps that must be addressed in most cases.        the project to proceed. Chapter 4 includes
Further chapters cover these topics in more        information about zoning and land use regu
detail.                                            lations as they apply to manufactured
                                                   homes on land zoned for residential use.
Stev 1:.
ldentifr Basic Product Characteristics             Step 3:
and Select Manufacturer                            Plan for Foundation Construction, Installation
    Unless your sole interest is land devel­       and Site-Built Zmprovements
opment, you will need to review potential               You will need to decide on the type of
sources of supply and identify a suitable          foundation construction to be used for the
HUD-Code product or products that meet             home. Several alternatives will usually be
your basic requirements. This calls for in­        available, but typical foundations used in

Basic Considerations                                                                                13
     site-built homes are often not suitable for      Stev 4: 

     most HUD-Code units. Most foundation             Plan for Marketing and Financing of Sales 

     designs should be engineered for the spe­              You will need to market the units to
     cific unit design, soil type and local frost     consumers, help arrange financing for the
     depth. Either you or the manufacturer will       purchaser and settle the transaction, unless
     need to arrange for transportation      of the   you are partnering with a retailer who per-
     unit from the factory to the building site.      forms these functions. In principle, manu­
     You will need to have a qualified crew place     factured housing can often be financed with
     the unit on the foundation, connect multi-       mortgage instruments similar to those used
     section units and perform various other          for site-built homes. In practice, financing
     exterior and interior finishing tasks associ­    manufactured homes often differs substan­
     ated with installation.   A local installation   tially from financing site-built homes. Fi­
     permit may be required for this purpose.         nancing options often depend on whether
     You will also need to develop designs and        the unit is on a permanent foundation and
     secure required local permits for any site-      is classified as real property by state law.
     built improvements to the unit other than        Chapter 6 describes the types of available
     routine installation work.                       financing and some considerations relating
                                                      to different financing alternatives.
          Examples of work requiring permits
     would be site-built      attached porches,       Comvletine a Business Plan
     garages, fireplaces and other improvements            In order to complete a business plan for
     that attach to or impose loads on the HUD-       a specific project, you will also need to do
     Code unit. Such improvements may need            market studies in order to understand the
     to be designed jointly with or reviewed and      size and nature of the HUD-Code market in
     approved by the manufacturer’s engineer­         the area, and you will ultimately need to es­
     ing staff and third-party design approval        timate unit selling prices, development costs
     agency in order to ensure acceptable per­        and other hard and soft costs, along with
     formance and avoid disputesover warranty         absorption rates, in order to develop cash
     coverage. Chapter 3 covers the design            flow projections and estimate the project
     issues and Chapter 5 covers foundations,         return on investment. These tasks are simi­
     delivery, installation and site-built improve­   lar in nature to those required for any home
     ments.                                           building project.

14                                                                                  Basic Considerations
Selecting and Working with a Manufacturer 

     Everv builder who uses manufactured                                                           HUD-Code
housing will be dealing with a specific manu­        Name                             Units          Plants                Retailers
facturer and specific production       facility.
Selecting the right manufacturer and factory
                                                     Fleet-wood                       65,500            36                 1,470
is a critical decision. Individual producers
may vary widely in their interest, experience,
market orientation and capability for work­          Cavalier                         24,400            23                 1,000            I
ing. with builders rather than through the
existing retailer network. Individual facto­
                                                     Skyline                          17,800            19                 1,300            I
ries will also differ in their production ca­
pacity, overall utilization, product mix, and
technological capabilities.                          American      Homestar           12,300            14                 520              I

Who Are the Major Producers?
       As of 1999 there are nearly 100 U.S.
                                                     Southern Energy                  8,900             9                  588              I
firms that manufacture HUD-Code homes
using a total of over 300 manufacturing fa­
cilities located around the country. Some
regions and states have far more production
facilities and competing manufacturers than                                                 TABLE 1
others. This segment is dominated by a rela­                   Publicly   Traded   Manufactured  Home       Producers:   1998 Data
tively small number of large firms that each
operates multiple plants and does business
 in many states. There are many other manu­        How Do I Find Out My Supply Options?
facturers that do only regional or even state-           As an interested builder you don’t need
level business.                                    to know everything about the industry, but
       In recent years, four companies ac­         at an early stage you will need to identify
counted for more than 50 percent of ship           and learn more about all the manufacturers
ments and 10 companies accounted for               and the production facilities located within
about 70 percent. A total of twelve manu­          a reasonable shipping distance of your tar-
facturers are publicly traded, accounting for      get market. The more firms and plants that
nearly 270,000 units in 1998 as shown at the       meet this criteria the more they are likely to
right. Considerable business and financial         compete for your business, and the more op­
information about these publicly held firms        portunities you will have to work out prod­
is available in annual reports to sharehold­       uct designs and business arrangements that
ers or filings to the Securities and Exchange      are acceptable to both of you.
Commission.       Many of the largest compa­             The map in Figure 7 shows the approxi­
nies also have subsidiaries that handle financ­    mate locations of HUD-Code production
ing and insurance, and there is a growing          facilities around the United States as of late
trend towards selling homes through com­            1999. Individual plants are marked with
pany-owned retailers. The Internet web sites       stars. Most plants tend to be located in ru­
of most firms list plant locations, retail out-    ral areas with good access to major transpor­
lets and contact names. Additional infor­          tation routes. Areas where many production
mation is available from the Manufactured          facilities are concentrated are shown in Fig­
Housing Institute (MHI) and state-level MHI        ure 7 as ovals (e.g., northern Indiana, north-
affiliates. See Appendix E for various types       west Alabama and southern Georgia), along
of contact information.                            with an approximate count of plants in the

Selecting   and Working with a Manufacturer                                                                                            15
     area. Fully 80 percent of all plants are lo­          didate sources of supply. Appendix A lists
     cated in the oval regions shown on the map.           production      facilities shown on the map,
     Builders near such areas will have many al­           sorted by state, city and manufacturer name.
     ternative sources of product. There are also          You can use the list in conjunction with the
     large areas with few or no manufacturing fa­          map to track down more information about
     cilities, particularly in some of the western         plants within a reasonable distance of the
     states. There are no plants in Alaska or Ha­          market where you operate. Note that some
     waii but there are several in Canada and one          of the facilities shown in the map or listed
     in Mexico.                                            in the Appendix may include multiple pro­
            Ultimately you will need to do some in­        duction lines at one address, others only pro­
     vestigation to identify names and addresses           duce single-section units; others produce
     of producers and factories that are your can­         both modular and HUD-Code homes, and

                                                     FIGURE   7

                           U.S. HUD-Code   Manufactured   Housing   Plant Locations,   1999 

     production facilities are periodically added           tional complications       in the form of vari­
     or shut down so the map will change over               able wide load permit requirements and
     time.                                                  maximum widths and heights as well as es­
           Even with good highways, a reasonable            cort requirements by state. Shipping con­
     shipping distance would probably not extend            straints are typically greater in the eastern
     much beyond 250 miles except in some of                and northeastern U.S. than in the western
     the Western states. For maximum efficiency             states, largely a reflection of the age of high-
     in transportation the plant would be located           way infrastructure.
     relatively close to the building site. Longer               While your investigation logically should
     shipments add transportation      cost in the          start with the companies and manufactur­
     range of $3 - $4 p er mile per floor section.           ing plants located nearest to you, it probably
     Shipments that cross state lines face addi­            should not stop there. You should plan to

16                                                                              Selecting and Working with a Manufacturer
check out all the companies producing              manufacturers move towards greater verti­
HUD-Code homes in the area. A more dis­            cal integration.     Working with a company-
tant production facility operated by a differ­     owned retail outlet may prove more effi­
ent company may have more excess capacity,         cient for builder and manufacturer alike.
or greater technological ability to produce        And regardless who owns them, retailers
the kind of home you want to use. Distant          not only have established factory contacts,
manufacturers may be willing to absorb the         they work regularly with local installers and
excess freight charges in order to get your        possibly with foundation         contractors to
business. You should ultimately plan to take       address issues that you will also face. Many       .
time to visit one or more factories where you      retailers are looking for land to use in land-
can observe the production process, take           home deals or may be willing to market
note of the types of materials being used, talk    homes into a subdivision          you develop.
to the engineering staff and find out about        Retailers also are experts in traditional con­
locations of completed homes you can look          sumer financing of manufactured homes,
at. This will help you make more intelligent       which may or may not play a part in your
decisions and prepare you to work closely          business strategy.
with the plant as your homes are produced.               Note that if you choose to deal directly
      Some firms may refer your inquiries to       with the manufacturer, your firm may be clas­
company-owned retail outlets or indepen            sified as a retailer by the state and may there-
dent retailers. Keep in mind that most pro­        fore be subject to requirements for licensure,
ducers have historically relied extensively on     certification or bonding. More information
third-party retail outlets to sell their homes,    about this can be obtained through the State
and may have little experience working di­         Administrative      Agencies or other contacts
rectly with builders or may be reluctant to        listed in Appendix C.
enter into direct sales that could alienate
their retailing partners. You may need to          What Are My Choices For Design?
keep trying to find the right producer.                 Once you have identified        candidate
      Whether or not you choose to involve a       manufacturers, you need to define the kind
retailer as part of your business plan, you will   of product that interests you and approach
probably want to research the retailer mar­        the manufacturers to see what they can pro-
ket in your area. Retailers have historically      vide. Some builders may do this through a
played a critical role in marketing, ordering,     formalized “request for proposals” process,
 installing, arranging financing for and clos­     in which product specifications are submit­
 ing sales of HUD-Code homes, and retail           ted to several area manufacturers along with
margins typically range between 15 and 25          instructions     on submitting   bids. Other
percent of consumer cost.                          builders will probably use a less formal ap­
      There are clear long-term economic ad-       proach,      relying    on review       of the
vantages to working directly with the manu­        manufacturer’s specifications and personal
facturer, since builders who do so have the        contact with the right technical and market­
opportunity     to recoup some or all of the       ing staff at the plant.
margins earned by retailers in exchange for             Naturally at this point you will have ideas
performing      retail functions.     But even     about the size, style and appearance of home
though many builders prefer to work directly       as well as the interior finishes and amenities
with the factory, some find it advantageous        it should contain. Producers will also have
to work with local retailers. Keep in mind         standard designs and option packages that
that most retailers are independents, but a        they are set up to manufacture. This kind of
growing number are company-owned             as    information is often included in sales litera­

Sekcting and Working with a Manufacturer                                                                  17
     ture and selected floor plans may also ap­          and comple&y to unit construction and/
     pear on producer web sites. But while the           or installation, but could be arranged with
     factory production process is relatively effi­      most manufacturers.     Examples include:
     cient, it is not nearly as flexible as site-built   l   steeper roof pitch
     construction.    The challenge will be to de-       l   roof overhangs at eaves 

     fine a design that meets your needs and can         l   gypsum drywall interior finish, or thicker 

     be produced within the constraints of a fac­            drywall
     tory environment. This process will usually
                                                         l   kitchen and bath upgrades including
     require some give-and-take in order to suc­
                                                             countertops, cabinets and fixtures
     ceed. Keep in mind that the factory’s will­
                                                         l   skylights or bay windows
     ingness to accommodate your particular re-
     quests will depend in part on the potential         l   carpeting and flooring upgrades 

     volume of purchases you represent.                  l   interior door styles, heights, widths and 

           The most readily available manufactured           hinge hardware used in site-built homes
     homes suitable for use by conventional              l   upgraded wiring      for telephone     and
     builders would be double-section units in               cable TV
     a one-story rectangular or nearly rectangu­               You may also want to investigate avail-
     lar footprint,   typically around 28 feet in        ability of higher ceilings since many manu­
     depth, with a standard I-beam chassis de-           factured homes come with 7’-6” standard
     sign and a roof pitch up to about 3:12.             ceiling heights while few site-built homes
     Exterior walls are typically 2 x 4 and some-        have ceilings lower than 8’. A factory-in-
     times 2 x 6 studs, but interior walls may be        stalled fireplace is another possible option.
     2 x 3 studs.      Walls sometimes use OSB           Some builders have arranged for site-in-
     panels for bracing but may incorporate              stalled exterior stucco finishes as an alter-
     other bracing systems. Floor decks are fre­         native to standard hardboard or vinyl sid­
     quently particleboard rather than OSB or            ing. Energy-related upgrades such as ther­
     plywood as typically used in site-built             mally improved windows or high-efficiency
     homes. Drywall interiors are usually an up          HVAC equipment are other possibilities to
     grade, and where drywall is used it may be          consider.
     less than l/2” in thickness. Roof trusses                 Naturally, the farther away your “ideal”
      often use smaller members than found in            product     is from typical manufactured
     site-built homes. As a builder you should           homes the less likely you will find it advan­
     readily understand these differences and will        tageous to use HUD-Code product, or the
     want to review detailed specifications for           more closely you and the manufacturer will
     the unit at an early stage.                          have to collaborate in order to develop ac­
           Most conventional builders would prob­         ceptable product. And the time required
     ably want or insist on modifications to the          for formal approval of complex changes by
     readily available designs to bring them closer       the manufacturer’s third-party design review
      to the kind of homes they are accustomed            agency can rise substantially, along with the
      to building.   Some modifications are obvi­         cost of production,     as these features are
      ous while others are more subtle. It may be         added. Builders should identify their gen­
      advisable to use an architect, engineer or          eral needs and priorities and consider how
      consultant who has knowledge of manufac­            flexible they can be with regard to these
      tured housing in working with the manufac­          modifications.    They need to listen to and
      turer to arrive at a final design.                  work with manufacturers to identify changes
     Basic Modifications                                  that can be accommodated in the produc­
         Several typical modifications      add cost      tion process.

18                                                                        Selecting and Working with a Manufacturer
What Kind of Foundation                      Systems        footings to support an I-beam chassis is il­
Can I Use?                                                  lustrated here.
     Various basic design issues arise in con­
nection with foundations, and these issues
must be worked out early in your planning.
Since it is difficult or impossible to separate
the question of foundation type and design
from the chassis design, both topics are dis­
cussed in this section.
     Most HUD-Code homes use a chassis
consisting of two steel I-beams running the
length of each section, reinforced with per­
pendicular outriggers, to support the home
during transport and after installation. The
least expensive installations use piers, some-
times without buried footings, to support the                   Permanent   foundation   with reinforced   piers

I-beams. A non-structural perimeter enclo­
sure is also provided.                                            Setting a floor directly on a slab should
                                                            not be considered, as it creates a shallow
                                                            crawl space that is impossible to enter and
                                                            repair. However, setting a floor on piers
                                                            that are set in turn on a slab creates an ex­
                                                            cellent and economical foundation,          pro­
                                                            vided that the crawl space created is insu­
                                                            lated and not ventilated to the outside, that
                                                            the slab is supported below the frost line,
                                                            and that the slab is poured on a vapor bar­
                                                            rier. The proposed International Code al­
                                                            lows such unvented crawl spaces, provid­
                                                            ing that the equivalent of the required vent
                                                            area for the crawl space connects to the
                                                            home rather than the outside.
                                                                  This particular method of installation,
                                                            like many others, elevates the floor of the
                                                            home well above grade. Despite the fact that
            Standard    I-beam   chassis (single section)   traditional homes nearly always had floor
                                                            levels as much as four to five feet above grade,
      Permanent foundations are frequently                  HUD-Code        homes are often stigmatized
required for zoning approval of fee simple                  because of their high floors, perhaps because
homes, and typically required for FHA or                    the height is accompanied by economical
conventional     mortgage financing.      HUD               vinyl skirting and prefabsteps commonly
has published a guide to permanent foun­                    used with HUD-Code homes. The tradi­
dations (see the reference in Appendix E)                   tional height of HUD-Code pier-set homes
that illustrates several alternative approaches             can be turned to an advantage if the skirt­
to design and identifying systems suitable                  ing is replaced with an attractive frost wall
for use in areas of high wind or seismic ac­                and well-designed stairs are provided.        In
tivity. One example system using piers on                   this design, the home’s exterior walls would

Selecting   and   Working with a Manufacturer                                                                      19
      be supported on the perimeter walls, while                         A unit with a standard I-beam chassis
      the chassis could be supported by ordinary                    can be installed over a basement by using
      piers founded at grade level.                                 additional steel beams to carry loads from
           Designs with      a partially    buried                  the I-beams to the basement walls or center
      crawlspace can also lower the home. This                      beam. This foundation concept is recognized
      typically will require concrete or masonry                    by HUD and illustrated here. One signifi­
     perimeter walls that can withstand any lat­                    cant drawback is the deep and relatively awk­
     eral loads imposed by unbalanced fill. The                     ward floor system that results above the base­
     chassis I-beams and outriggers will also have                  ment. The basement walls are subject to all
      to be recessed from all the edges of the unit                 the same design considerations for thickness
     by about 10” in order to allow the floor joists                and reinforcing as for site-built homes, and
     to sit on the mud sill. Foundation anchor                      the steel cross-beams must be engineered to
     bolt placement must be carefully planned to                    carry the load.
     avoid interfering with the floor joists.                            Many manufacturers address the base­
           All of the permanent foundation systems                  ment issue in a different way. They offer
     discussed above require multiple rows of sup                   optional chassis/floor systems that integrate
     porting piers underneath the home. This is                     or eliminate the I-beams and are specifically
     suitable for use with a crawl space, but sup                   designed for perimeter support. One early
     porting a HUD-Code home over a usable                          example is the Lindsay floor system. Other
     basement space presents additional chal­
     lenges. Providing a basement is likely to be
     a design goal for builders considering use
     of manufactured homes in large areas of the
     country where basements are de facto stan­
     dard in site-built single-family homes, even
     if this adds cost and other systems would
     qualify as permanent foundations.      Provid­
     ing a home on a basement emphasizes the
     similarity of HUD-Code and conventional
     homes in the mind of consumers and the
     community at large.

                                                                      Permanent   foundation     with basement   wall and
                                                                                      transverse    beams

                                                                    chassis/floor designs use combinations of
                                                                    wood and steel, or may be constructed en­
                                                                    tirely of wood. The cost to produce the unit
                                                                    is higher, but the overall process may be easier
                                                                    and less expensive than using transverse steel
                                                                    beams to provide a usable basement under-
                                                                    neath a unit with a standard I-beam chassis.
                                                                    Keep in mind that this is an active area of
                                                                    innovation.     Some chassis designs are pro­
                                                                    prietary and not available from all plants.
                                                                          Some other issues you will have to ad-
     Permanent   foundation   with reinforced   perimeter   ualls   dress with basement foundations include in-

20                                                                                  Selecting and Working with a Manufacturer
stallation of the basement stairs, and insula­     a garage and roof facade. One of the two
tion of the basement wall (assuming the base­      sections of that house is on the right-hand
ment is to be conditioned space). These            side of the picture, while the approximate
items typically will be subject to local code      location of the second section is outlined in
regulation and approval.                           black in this photograph. Both the garage
     You will definitely need to talk to the       and the remainder of the roof structure con­
manufacturer about chassis design options          necting the garage to the two sections of the
and the types of permanent foundations they        home are site-built.
recommend.       Manufacturers   are only re­
quired to provide documentation of one in­
stallation method in their owners’ manuals,
but most can offer additional foundation
design options, including drawings and con­
struction details, that may meet your needs.

What About Site-Built Additions
and Improvements?
       HUD-Code designs that compete in the
 market with conventional site-built homes,             The roof facade changes the street ap
 even entry-level homes, will often need to        pearance of the home markedly, but it only
                                                   extends back for part of the length of the
 include site-built garages, porches or decks.
 You need to decide what kinds of site-built       unit. This can be seen in the next photo,
                                                   showing a double-section home with a very
 improvements you will plan to offer and dis­
                                                   similar design as viewed from a different
 cuss this with the factory to see how they
 can help. Of course, while you can build a
                                                        Identifying and planning for add-ens as
 free-standing garage without involving the
 factory at all, an attached garage would be       the unit is designed is critical. It ensures
                                                   that the factory-built unit is not compro­
 less expensive and more marketable. But at­
 taching a garage risks imposing additional        mised by the added construction, facilitates
                                                   the work, and helps minimize the possibility
 loads on the HUD-Code unit that it may not
                                                   of disputes about whether work performed
 have been designed for. The cost of an at­
                                                   on site invalidated the manufacturer’s war­
 tached garage would also be minimized if the
                                                   ranty. Your designer will need to work with
unit is delivered with drywall on the outside
of an end wall that serves as one wall of the
garage; the other three garage walls and the
roof can be built on site. It is also possible
to include floor framing for a deck or porch
that is to be finished after the unit is placed,
and the manufacturer can ship matching
roofing and siding with the unit.
      Some types of site-built improvements
will be relatively straightforward to design
and construct.      At the other extreme are
elaborate systems that are more expensive          the plant engineer to develop these options.
and change the look of the home substan­           Ultimately you may need drawings with an
tially. For example, one of the homes shown        engineer’s stamp showing how the site-built
in Chapter 1 is a double-section home with         elements are to be constructed, attached and

Selecting and Working with n Manufacturer                                                          21
       supported in order to receive regulatory ap­      some of the potential        cost advantages.
       provals. Of course you will also need to          While this is an active area of interest and
      balance the cost of add-ons against your           two-story HUD-Code homes have been pro­
       pricing targets for the project.                  duced both in “stackable” and vertically
             From a regulatory standpoint, there are     oriented modules, such products are only
       two ways to deal with improvements con­           available from a few leading edge manufac­
      structed at the site and attached to the home.     turing facilities at this time. Builders who
       In some circumstances it may be possible to       have used two-story product have relied on
      have the work included as part of the HUD          specialized architectural and/or engineering
       approval for the unit under what is known         consultants working on their behalf with
       as an “Alternative Construction”      (AC) let­   the producer’s engineering staff, and have
      ter. This letter grants permission for a unit      also had to work closely with local code
      to leave the factory without being in full com­    authorities to address items not covered in
      pliance with the HUD-Code.         It can cover    the HUD-Code.
      some kinds of finishing work at the site while           Limited experience to date indicates
      preserving the pre-emptive effect of the           that square foot costs of two-story units
      HUD-Code.       You will have to work closely      tend to be much higher than for other
     with the factory if site improvements are to        HUD-Code homes due to factors such as
      be covered under an AC letter. The second          complexities in production and low levels
     way, which is probably more common, is to           of output, so applications to date have been
     seek some form of alteration permit cover­          limited to small-sized lots where adding a
      ing the work from state or local government.       story may be the only practical way to add
     This may require engineering review by the          square footage. Of course other plants may
     state, which may bring the manufacturer and         set up for this purpose and two-story de-
      its regulators into the picture. It does not       signs may become more widely available in
     require HUD approval or an AC letter, but           the future, but thus far unique design, pro­
     it does bring the work within the purview of        duction and distribution arrangements be-
     the state or local inspector. States that have      tween individual manufacturers and build­
     programs regulating the installation of HUD-        ers have been necessary to bring two-story
     Code units should also have procedures for          designs to market.
     dealing with typical unit improvements per-
                                                         What Are Important 

     formed on site. Retailers are sometimes re­
                                                         Contractual Issues to be Addressed? 

     quired to notify the state if alterations are
     being performed in connection with instal­               Once you have selected a manufacturer
     lation. Localities in other states. may also        and worked out a satisfactory design you
     have procedures for this situation. Whether         will need to make some kind of business
     or not this type of work is regulated, you          arrangement with the factory. There are
     should use good practice for design and con­        numerous issues that can be and often
     struction of any elements built on site.            should be covered in an agreement between
                                                         your firm and the manufacturer.         The
     What About     Two-Story    Units?                  appropriate degree of detail depends in part
          If a builder considers designs with two        on the volume of production called for in
     stories above grade to be essential for the         your plans.
     target market then HUD-Code homes prob­                  Some of the more important topics to
     ably are not yet the answer, at least not un­       be addressed as part of a contract include:
     less the builder is willing to work exten­          l   What home designs or models, with
     sively with the manufacturer and sacrifice          what specifications, are covered by the agree-

22                                                                     Selecting and Working with   n Manufacturer
ment? What factory will produce them? 
             Will the manufacturer       agree not to sell
What project will they be located in? 
             homes to other projects in the area?
l    What is the factory pricing for the mod­
      l     What      are the     terms     of    the
els and for factory options? Can this pric­
        manufacturer’s warranty on the home, and
ing be changed over the course of the agree­
       how will the builder relate to the manufac­
ment, and, if so, when and how can it 
             turer with respect to warranty claims?
                                           Which warranty items are pass-throughs!
l    What quantities of what materials (sid­
       Does the manufacturer offer an extended
ing, roofing, carpeting, flooring, paint, etc.) 
will be shipped loose with the unit? 
              l     Can the manufacturer provide a fur­
l    Will the manufacturer provide or ap­
          nished model home for use in the project?
prove engineered drawings for permanent 
           l     What happens when the manufacturer
foundations and site-built improvements? 
          changes specifications for products, mate-
l     What is the procedure for placing and 
       rials, fixtures, appliances etc. in the home
confirming an order with the plant? When 
          over time, so that newly produced units
and how can the order be modified once it 
         differ from the model homes being used to
is placed? 
                                        sell the units? How can the manufacturer
 . What production times will the manu­
            keep the builder informed and how can
facturer commit to once an order is received? 
     both parties avoid frustrating      legitimate
l    What are the terms of payment for a 
          buyer expectations as the product evolves?
home that is ordered and produced? Is a 
           l     What kinds of rebates, promotional
deposit required at the time of ordering? 
         allowances, cooperative advertising, market­
What form of funds are acceptable for 
             ing materials or other assistance will the
                                          manufacturer make available to the builder,
l    Who is responsible for any state or 
          and on what conditions? Will the manu­
local sales tax on the home? 
                      facturer quote “net” pricing rather than
l     How many units will the builder com­
         participation in rebates?
mit to purchase over what period of time? 
         l     How will the parties represent their
What happens if sales are lower than 
              working relationship      to home buyers or
l     Who owns the designs of models that 
         l     When does the agreement expire, what
are jointly developed? Under what terms 
           is the procedure for early termination, and
can the manufacturer sell them to other 
           what are the penalties for the terminating
builders? Under what terms can the builder 
        party? How will disputes be resolved?
use them with other manufacturers? 

l     Once a home is ordered, produced and 
             These are obviously not the only issues,
available for shipment, how soon must the 
         and there is no “right” or “wrong” form of
builder be prepared to accept delivery? 
           contract or set of provisions. The ultimate
l    Who arranges or contracts for transpor­
       contents of an agreement will depend on the
tation, pays freight, and bears the risk of 
       needs, wants and bargaining power of both
loss or damage in transit? 
                        parties. It is important, however, that the
l    Will the manufacturer provide instal­
         contract be legally enforceable, and it is
lation? If not, will the manufacturer train 
       highly recommended that your legal coun­
the builder’s crews in proper installation 
        sel play an active role in drafting the con-
                                       tract or reviewing its provisions to help make
l    Will the builder agree not to sell homes 
     sure you understand them and they meet
from other manufacturers into the project? 
        your needs.

Selecting and Working with a Manufacturer                                                             23
Zoning and Land-use Regulation 

      Local zoning regulations play a critical     the opportunities     for using HUD-Code
part in planning for the use of manufactured       homes in some cases. There can be signifi­
housing. You may have a site, a market, a          cant variation from one state to another, but
house design and even a business plan, but         there are often common features and re­
the bottom line is that without zoning ap          gional patterns in the applicable systems as
provals, you have no project. While home           well. These systems also have evolved over
builders are generally familiar with the zon­      time as new state laws are passed, and as cases
ing and land use planning systems in juris­        in the state and federal courts have occasion-
dictions where they do business, the local         ally set boundaries on the range of require­
system must also be reviewed and understood        ments or prohibitions that can legally be en-
specifically as it relates to the use of manu­     forced by local authorities. This evolution
factured housing. This should take place           will inevitably continue into the future.
very early in the planning of any project in­            Many states and localities have a long
volving manufactured housing.                      tradition of limiting the placement of mo­
      It is very important to recognize that       bile homes and manufactured housing to
HUD-Code homes are usually not a solution          designated areas, dating back to require­
for a tight market in land and building lots,      ments from the 1930’s that all travel trailers
or for land use controls that generally restrict   and mobile homes be located in trailer courts
opportunities for new home construction.           or mobile home parks. The effect was to
In fact, in many cases manufactured homes          rule out the opportunity to place individual
will face land use restrictions going beyond       units on land zoned for general residential
those applying to conventional site-built or       development, or in some cases even on agri­
modular homes. These restrictions may pre­         cultural or other rural land. At the same
clude the use of single-section homes or           time it was often difficult to have land re-
homes not on permanent foundations, and            zoned for use as a multi-unit park or land-
may impose size and aesthetic requirements         lease community, and some communities
that need to be planned for.                       passed rules effectively prohibiting park de­
                                                   velopment. Although these approaches to
How Does Zoning Work for                           regulation were frequently challenged and
Manufactured Housing?                              occasionally struck down as violative of sub­
      Zoning requirements      generally flow      stantive due process or for other reasons,
from the police power of the state to pre          most courts upheld such laws as rationally
mote public health, safety and welfare             related to various legitimate public purposes
through the regulation of all types of land        such as preservation of property values, spe­
use. They are written and enforced at the          cial health and safety concerns and risks, and
local level (city, county, township, munici­       the need for orderly provision of public ser­
pality, borough, parish, etc.), usually under      vices to a population that was widely per­
state enabling legislation or state constitu­      ceived as more transient than other commu­
tional authority.                                  nity residents.
      Manufactured housing and the mobile
homes that preceded them have historically         What Are the Recent Trends in Zoning
been classified as a separate type of land use,    Manufactured      Homes?
distinct from other single-family housing,              The restrictive approach to zoning has
and the treatment of such units under local        been legislatively reconsidered in many places
zoning systems has often proven more restric­      with the advent and increasing production
tive than the treatment of site-built homes.       of multi-section homes and the imposition
While this is changing, it continues to limit      of improved construction standards through

Zoning and Land-use Regulation                                                                       25
                       the HUD-Code. The result has been a trend               tured homes unless they comply with the
                       in the 1980’s and 1990’s for states to limit            local building code.
                       the authority of local governments either to                 There have been only a few zoning cases
                       exclude all manufactured housing, or to con-            focused on pre-emption under the HUD-
                       fine all such homes to designated parks                 Code. No cases have reached the U.S. Su­
                       through zoning. Some amended state zon­                 preme Court. Lower federal courts have re-
                       ing laws require that manufactured housing              lied on pre-emption to strike down local
                       meeting certain appearance, size, installation          Florida and Colorado requirements that ex­
                       and/or age criteria be permitted in most or             cluded HUD-Code homes unless they met
                       all single family districts. Others specifically        the Standard Building Code, or the Uniform
                       recognize and regulate manufactured hous­               Building Code. Other federal caseshave up-
                       ing subdivisions or overlay districts as a new          held local zoning requirements for a mini-
                       type of use subject to unit and development             mum 4: 12 roof pitch, and for residential-type
                       criteria that may differ from other single-fam­         siding and roofing on manufactured homes,
                       ily housing. These changes have opened the              as aesthetic requirements that were not pre­
                       door to broader use of manufactured hous­               empted by the HUD-Code. In addition, the
                       ing outside of traditional parks or land-lease          federal preemption was held not to invali­
                       communities and thereby expanded poten­                 date a Texas city’s prohibition of all manu­
                       tial markets.                                           factured homes from areas other than mo­
                                                                               bile home parks.

                                                                               What About Restrictive Covenants?
                                                                                     Recorded covenants or deed restrictions
                                                                               may also restrict or rule out the use of manu­
                                                                               factured housing on vacant residential lots
                                                                               in existing subdivisions, or sometimes else-
                                                                               where. Many of the newer state laws that
                                                                               limit exclusion through local zoning include
                                                                               language stating that the creation and en­
                                                                               forcement of valid covenants running with
                                                                               the land is not prohibited.     However, there
                                                                               are exceptions such as California where such
                                                                               covenants may not be enforceable. In addi­
                                                                               tion, where the language in a particular re­
                                     TABLE 2
                                                                               strictive covenant is unclear or ambiguous, a
     States Adopting   Revised Zoning Standards   for Manufactured   Housing
                                     1987-1999                                 court may construe it not to apply in a spe­
                                                                               cific case.
                       How Does the HUD-Code Impact
                       Local Zoning Rules?                                     How Do Different State Laws Regulate
                            While the construction and safety stan­            the Zoning of Manufactured Homes?
                       dards in the HUD-Code specifically pre-empt                 Any builder who is considering the use
                       inconsistent local standards or the applica­            of manufactured housing should investigate
                       tion of local building codes, they do not ad-           and understand the applicable zoning and
                       dress zoning or pre-empt local systems of land          land-use requirements in the jurisdiction
                       use regulation, except to the extent that the           where the project is located. You are prob­
                       zoning criteria specifically exclude manufac­           ably familiar with the local office in charge

26                                                                                                    Zoning and Land-useRegulation
of zoning in the area where you build,                            the United States as it relates to siting manu­
which should be able to provide you with                          factured homes in areas zoned for residen­
the relevant law or ordinance and any regu­                       tial construction.    Appendix B presents
lations. But you may be less familiar with                        more details on individual state laws as of
the state law environment under which lo­                         mid-1999. Some prominent or significant
cal systems are created and to which they                         cases from the state and federal courts are
must conform. The map that follows gives                          listed in the Appendix as well.
an overview of the legal environment across

                                                          FIGURE 8
                               State Laws Regulating   Local Zoning of Manufactured   Housing

The various classifications in the map repre­                    apply to all single-family housing in the
sent different approaches to and degrees of                      same zoning district.
inclusion.                                                        l   A third category of state law prohibits
l    The most inclusionary       statutes state                  jurisdiction-wide    bans on manufactured
that manufactured housing can be installed                       housing, but leaves flexibility to designate
as a matter of right on land zoned for single-                   specific areas within each jurisdiction where
family homes, often reciting particular                          manufactured homes will be permitted and
requirements for unit width or minimum                           fashion criteria for application to manufac­
number of sections, permanent foundation,                        tured housing which need not apply to all
roof pitch, age or date of manufacture, etc.                     homes.
l    A second and very similar approach is                        l   A fourth category of state law prohib­
to prohibit exclusion of certain units (e.g.                     its exclusion from specified parts of the
those over 22 feet wide), or prohibit exclu­                     jurisdiction, i.e. agricultural areas (Virginia)
sion of manufactured       housing generally,                    or within       urban growth       boundaries
except on the basis of zoning criteria that                      (Oregon).

Zoning and Lnndwe Regulation                                                                                        27
      l    A fifth category offers some level of pro­   defined. Or localities that prohibit mobile
     cedural protection but does not mandate            homes in certain zoning districts, regard-
     inclusion or equality of treatment.                less of date of manufacture, may actually
      l    Finally, there are still many states with-   classify multi-section HUD-Code units as
     out any mandatory or significant state leg­        “modulars” for zoning purposes so the pro­
     islation specifically addressing the subject       hibition would not apply to a double-sec­
     (shown in white).                                  tion home.
           In addition to state laws, there are a            Many states have other statutes and case
     variety of state and federal court cases that      law relating to zoning of land-lease park corn­
     have upheld or struck down specific laws           munities that are not specifically addressed
     and thereby help to give some idea about           in this discussion or in Appendix B, but
     the range of options legally available to com­     would need to be considered as part of any
     munities that implement zoning programs.           project requiring the zoning or rezoning of
     More information at the state level appears        land for use as a park or multi-unit develop­
     in the maps and annotations of Appendix            ment under common ownership. The on-
     B. Given the rapid pace of change in state         going operation of a land-lease community
     legislation it is important to note that there     is also subject to licensing and additional
     can be significant time lags between adop          regulatory requirements        in most areas.
     tion of a new state law and revision of zon­       Finally, remember that information in this
     ing systems at the local level. If you believe     Guide is only a summary and is subject to
     the local zoning system is inconsistent with       change. You are well advised to seek profes­
     state law, you may want to raise the matter        sional assistance familiar with local practices
     with the county attorney’s office.                 in connection with planning and executing
                                                        specific projects.
           The foregoing map together with the
     more detailed information in Appendix B            What if I Need a Rezoning?
     provides a starting point for investigation of          Where the current zoning of a parcel
     a specific project. If you live in a state where   you own or are interested in buying does
     there is no state statute or case law specifi­     not permit use of manufactured homes, you
     cally addressing zoning of manufactured            may want to pursue a rezoning in the same
     homes, you should probably assume that             way you might need to for site-built homes.
     local zoning systems have broad power to           Rezoning of land is both a political issue
     fashion various prohibitions        or require­    and an exercise in proper land use controls.
     ments specifically directed at manufactured        The time and expense of justifying and pre­
     housing. Of course this does not mean that         senting a case for rezoning or approving a
     the local systems will actually be highly re­      project for manufactured        housing fre­
     strictive. The final result will depend on         quently are more burdensome than for con­
     the specific law that is actually adopted in       ventional housing subdivisions, can add
     a given jurisdiction, the specific project that    substantially to cost, and may discourage
      is proposed to be constructed or zoned,           development.     You need to take these fac­
      and the specific requirements that the courts     tors into account as you negotiate the pur­
     will uphold. And a situation that seems            chase of land or think about timetables for
     straightforward     may turn out to be more        any project you are considering.
     complicated upon close examination.          For         Builders that find themselves seeking a
      example, statutes that restrict placement of      rezoning to use manufactured homes, par­
      mobile homes may turn out to apply only           ticularly for subdivision or land-lease com­
      to units built before the HUD-Code, de-           munity development, need to be prepared
      pending how the term “mobile home” is             to answer the following types of questions:

28                                                                             Zoning and Land-use Regulation
  9 Will the new housing place a burden on            * Although providing affordable housing is a
schoolsand pay a proportionate share of educa­      good idea, why provide it in my back yard?
tion costs?                                               Preparing to answer these questions,
  l  Will the development Tesult in new traffic     whether to staff at the zoning office or to
and congestedlocal streetr?                         elected officials as part of a public hearing,
  l  What    will be the impact of the project on    is critical. You will need detailed documen­
communiq servicesand will taxes be sufficient to    tation about your project plans, which may
bear the cost!                                      have to be supplemented by engineering
     In addition, many of the following issues      studies, statistical data and other informa­
relate specifically to manufactured housing         tion. You may need to work cooperatively
and have a social undertone that make them          with surrounding landowners or others in
particularly     onerous for manufactured           the community to address their concerns and
housing developments:                               minimize opposition. The time it takes to
 l   What will be the character of the residents    get a staff recommendation for approval of
and will they be an asset or harmful to the com­    the project prior to any hearing is well spent.
munity?                                             Attempts to secure a rezoning are best
 l   How similar is the look of manufactured        pursued with the aid of local experts who
housing to site-built housing and will it be com­   know the law and political climate in the
patible with local architecture?                    community as well as the technical issues
 l   What will be the impact of manufactured        that must be addressed as part of the
housing on surrounding land values?                 community design.

Zoning and Lmd-use Regulation                                                                         29
 Installation, Foundations and Siteebuilt Improvements 

     The HUD-Code does not regulate the                local code officials based on local require­
installation of manufactured homes at the              ments. You should pay close attention to
site nor does it specify the how the individual        this subject andtake pains to do a proper
sections are to be joined and set-up at the            job. Installation   and set-up of manufac­
site. When the HUD-Code was written,                   tured homes at the site have been said to
almost all placements were single section              generate    the majority     of consumer
units, so regulations regarding joining and            complaints about manufactured housing.
the finishing or customization required at
the site were generally non-existent. Home             Are There Other Requirements
manufacturers       are required to provide            I Should Know About?
installation    instructions   as part of the
                                                             Although    the HUD-Code       pre-empts
owner’s manual provided with the home,
                                                        local regulation     of manufactured      home
and this is a topic you will need to explore
                                                        structures regarding matters within           its
in depth with the producer.
                                                        scope, state and local jurisdictions       have
                                                        authority to regulate development of sites
How is Installation          Regulated?                 for new manufactured home communities.
       State and local building code officials         Aside from obtaining proper zoning, devel­
  inspect and approve the installation of a             opers .and builders will be required to
  home on a foundation. The manufacturer’s              secure the same permits from local, state
  installation instructions are generally con­          and federal agencies that they require from
 sidered authoritative       for this purpose,          conventional builders.
  although some locations may have adopted                   All community engineering and archi­
 their own standards for installation. Any              tectural plans will have to be approved where
 conflicts between the two sources must be             required by local community planning staffs
 investigated and reconciled in order to                and the fire department, before permits for
 avoid future disputes between manufac­                construction are issued. Many local commu­
 turer, builder, installer and purchaser,              nities have a tree ordinance that requires a
       The regulation of installation depends          permit before cutting any trees. Permits for
 to some extent on the type of foundation              soil and erosion control may be under the
 system used. Information about state-level            jurisdiction    of a local, county, or state
 installation programs should be available             government.
 from the State Administrative Agencies listed               The State Board of Health or a compa­
 in Appendix C. These programs usually                 rable agency will often review the develop
 focus on homes placed on non-permanent                ment plan to see that it conforms to state
foundations.     About half the states have            regulations before issuing a permit. That
adopted installation standards and some 28             department, or a State Department of Envi­
states have adopted some kind of program               ronmental Regulation (DER), may require
for regulating installations      of this type.        the issuance of a separate permit for the
Twenty of these programs include licensing             water supply and distribution system. The
of installers as well as education and train­          DER may also require permits to meet other
ing programs. The degree of enforcement                requirements, particularly those relating to
is reported to be variable. Nevertheless, you          sewer facilities or septic systems. The state
should expect the installation            to be        may also oversee the U.S. Army Corps of En­
inspected, as well as any site-built alterations       gineers’ requirements in regard to wetlands.
or improvements.          The regulation     and            As with conventional        construction,
inspection of permanent foundations may                homes located within the loo-year flood
differ, and will usually be carried out by             plain may be required to be installed on

ImtaUutiom,   Foundations and Site-built Improvemenu                                                        31
     elevated foundations and to comply with            Installations  on non-permanent      founda­
     related requirements in communities par­           tions usually occur with manufactured
     ticipating in the National Flood Insurance         homes in land-lease communities and on
     Program (the vast majority of jurisdictions        many owners’ lots in rural areas. Such
     around the United States).                         homes are usually financed as personal prop
                                                        erty with shorter-term chattel mortgages.
     What Steps Are Involved in                         Home installations on permanent founda­
     Installation of the Home?                          tions, on the other hand, may be consid­
            As previously noted, manufacturers are      ered real property eligible for a 3O-year con­
     required by the HUD-Code to provide an             ventional mortgage. Such homes are found
      owners manual including installation        in­   in fee simple manufactured housing subdi­
     structions along with the home, and the            visions, on individual lots, or occasionally
     builder should obviously review the owners         in land-lease communities.
     manual thoroughly.                                  Preparation of the Home Site
           An illustrated generic guidebook for in­            The home site should be graded as nec­
     stallers of manufactured homes, Manufac­           essary to slope away from the footprint of
     tured Home installation Training Manual, was       the home and allow proper drainage. All
     published by HUD in 1999. That guide cov­          utilities should be in place and ready for con­
     ers all aspects of installation on typical pier    nection prior to placement. Utility locations
     foundations, and identifies many areas where       should be coordinated with the terminations
     things can go wrong. It should be reviewed         in the manufactured unit. In a land-lease
     by builders who will be responsible for per-       community a pedestal will be provided for
     forming or plan to contract for installation       electrical service and, depending upon the
     work. Note that if your own crews will be          locality, either an electrician or a licensed
     performing installation work, you may need         manufactured home installer will be required
     to be specifically licensed, certified and/or      to connect the home wiring to the pedestal.
     bonded as a manufactured home installer.           Soils in the site should be sufficiently dry
     The contractor performing installation is          and stable to support the weight of the trans-
     also responsible for providing an “installa­       port vehicle. Sites with steep slopes, unstable
     tion warranty” to the purchaser that may           soils or high groundwater levels will impact
     cover defects in foundation design or con­         foundation design.
     struction, the joining of units, the connec­
     tion of utilities, and related finishing work.      Transportation of the Home
           Generally speaking, the installation of           Procedures for transport of the home
     manufactured homes proceeds in four basic          will differ according to whether the devel­
     steps:                                             oper or builder deals directly with the manu­
     l  preparation of the home site for                facturer or purchases homes from a retailer.
        installation                                    Developers or builders dealing directly with
     l  transport of the home from the factory to       the manufacturer      may receive the home
        the home site                                   F.O.B. from the factory. Generally, when
     l  set-up of the home on the foundation,           the home leaves the factory, ownership will
        finish work and connection of utilities,        pass to the developer or builder, but this is
        and                                             subject to agreement between the parties. If
     l   addition of on-site accessories.               the unit is financed, proof of ownership in
           Installation  varies depending upon          the form of a Manufacturer’s Statement of
     whether a home is to be installed with non-        Origin (MSO) is sent to the lender that fi­
     permanent or a permanent foundation.               nances the home. If the developer or builder

32                                                             h.mdlations,   Foundations and Site-built Jmpnxmnenu
buys the home for cash, the MS0 will go                The various editions of the CAB0 One and
directly to the developer or builder. The               Two Family Dwelling Code (now published
transporter should specialize in transporta­           by the International Code Council as the
tion of manufactured homes. The builder                  1998 ICC One and Two Family Dwelling Code)
should inspect homes prior to shipment                  include an appendix chapter with provi­
from the factory, if possible, to ensure that          sions covering permanent installations of
everything in the home is in accordance with            manufactured homes.
the sales order.                                             Anchorage provided in a permanent
     In situations where retailers deal with            foundation must be of sufficient rated ca­
developers or builders, retailers or the lend­          pacity to resist uplift or overturning due to
ing institutions that finance the retailers’           wind, as well as lateral displacement due to
inventory will have assumed ownership of               seismic forces. The footing must be of con­
homes after they leave the factory. Develop­            crete, possibly with reinforcing steel, sized
ers or builders should make inspections of              large enough to avoid soil settlement and not
homes before they are transported from re-             exceed the soil bearing capacity. The base
tail centers to developers or builders’ lots.          of the footing must be below the frost line.
Retailers will commonly include the cost of            The footing must enclose a basement or
transportation     in retail prices of homes           crawl space with a bearing or non-bearing
within a fixed distance (e.g., 100 miles) from         wall to separate the space beneath the home
the retail center.                                     from backfill, vermin, and water.
     The transporter is generally responsible                The supports in a permanent founda­
for providing a “transportation     warranty”          tion are the points where gravity loads and
against damage sustained during transpor­              other forces experienced by the home are
tation.                                                transferred through the foundation and to
                                                       the soil. Single section or muti-section units
 Home Installation and Set-UD:                         are usually supported by piers spaced along
 Permanent Foundations                                 their chassis beams, by exterior longitudinal
     Foundations that are designed for safety          walls, or both. Multi-section units may have
and long term performance are considered               additional pier supports along continuous
permanent. According to the HUD Perma­                 marriage walls. Pier spacing is based on the
nent Foundation Guide for Manufactured Hous­           weight of the unit, the anticipated loads, the
ing:                                                   size of the pier and the bearing capacity of
       Permanent foundations must be constructed       the soil, all according to the manufacturer’s
      of durable materials; i.e., concrete, mortared   installation instructions. Marriage walls may
      masonry, or treated wood - and be site-built.    have openings with posts at the ends of each
      [A permanent foundation] shall have attach­
      ment points to an anchor and stabilize the
                                                       opening and piers under these post loca­
      manufactured home to transfer loads,             tions. Other permanent foundation designs
      herein defined, to the underlying soil or        are possible, as discussed in Chapter 3. You
      rock. The permanent foundation shall be          should look to the manufacturer to provide
      structurally developed according to this         you with documentation of acceptable types
      document or be structurally designed by a
      licensed engineer for ... vertical and lateral
                                                       of permanent foundation systems for any
      stability.                                       given unit.
      Permanent foundations     differ from            Nonpermanent Foundations
other types of foundations for manufactured                The majority of manufactured homes
homes in that they are engineered for a par­           are installed on foundations    classified as
ticular house design, according to sitespe­            non-permanent.     The most common ap
cific wind, seismic, and soil conditions.              preach involves placing a series of piers un­

h.dkztions,   Foundations and Site-built Improvemenu                                                    33
     derneath the chassis I-beams at intervals         with the operating procedures established
     specified by the manufacturer in the instal­      by the producer. In situations where a
     lation instructions for the unit. Depend­         unique structure or a permanent founda­
     ing upon soil conditions or local regula­         tion is to be installed, the manufacturer may
     tions, the piers will rest on a base of treated   provide the builder or its own set-up crew
     wood, concrete or other durable material.         with engineered drawings and an instruc­
     The piers themselves consist of two or three      tion sheet on how to construct and install
     8”~ 8”~ 16” concrete blocks stacked to­           the foundation. If a manufacturer uses its
     gether. Steel stands preconstructed to vary­      own set-up crew for installation, it can bet­
     ing heights are often used in western or          ter control the installation     and monitor
     southwestern states. Specially designed steel     quality, providing immediate feedback if
     piers may be necessary in areas subject to        something does not go right. Set up can
     seismic activity.                                 involve attaching roof shingles, eaves, shut­
           Steel augurs or some other type of earth    ters, siding on end walls, finishing ,drywall
     anchors are also used in the installation,        at the marriage walls, and related work.
     spaced according to the manufacturer’s in­             In more elaborate installations       de-
     structions, where potential exists for high       signed to be similar in appearance to a site-
     winds. One end of the anchor is screwed           built home, the home is shipped with a
     into the soil, either manually or mechani­        hinged roof, which is put into place at
     cally. A poured concrete slab can provide a       setup. Such roofs with engineered roof
     base for supports and anchors, but this pro­      trusses hinged in place can produce a roof
     cedure adds cost. An alternative method is        with up to a 9/12 pitch. A hinged roof can
     to pour a number of round concrete piers,         produce a second story room that is about
     on which the supports will rest. The diam­        half the size of the home footprint.
     eter and depth of the piers depend on the
     floor plan and the frost line. At a minimum,      What Kinds of Issues Must Installers
     in areas with a low frost line such piers are     Deal With?
      18 inches deep. A non-structural skirting is
     usually installed from the top of the footing         Some of the issues that must routinely
     to the bottom of the external walls to cover      be dealt with by the installer include:
     the supports and enclose the underfloor            l   sizing footings and piers based on soil
     area.                                             at the site and other factors
                                                        . moving each section from the street to
     Set-Up at the Site
                                                       the lot and dealing with impediments such
            Set up at the site includes removing       as trees, curbs, overhead wires and soft soils
     such transportation materials as the hitch,
                                                        l   positioning     each section above the
     taillights, cables, springs, axles and wheels
                                                       foundation and lowering it into place
     from the home, positioning the unit in the
                                                        . aligning sections and leveling the floors
     exact location, and leveling it for installa­
     tion on the piers, which are positioned on        after the unit is placed on the foundation
     their wood or concrete bases. The indi­             . correcting any racking and ensuring
     vidual sections of a multi-section unit must      proper window and door operation
     be fitted together and secured, and utilities       . installing      structural   connections
     must be connected between the sections.           between the home and the foundation,
     In accordance with local regulations, either      between the floor sections, and at the roof
     the setup crew or a utility crew may hook         ridge
     up the utilities for service.                       . installing sealants or gaskets to weath­
            The amount of work at the site can vary    erproof the connection between sections

34                                                            Imtallatiom,   Foundations and Site-built lmpwments
 * lifting and structural completion of a                What About the Construction         of
tilt-up roof, using a crane if necessary                 Accessory Features?
 . ensuring adequate clearance underneath                      A number of accessory features that can
the unit (typically at least 12” below I-beams            be put in place during set up add cost along
and 18” elsewhere)                                       with consumer appeal. These include un­
 . installation      of any flues and vent                covered or covered porches, decks, bay win­
terminations through the roof                             dows, garages and roof dormers. A porch as
 . utility service hookups including gas,                 large as eight feet can be built in the factory
electricity, water, sewer and telephone                   and shipped as part of a section. Many
 . crossovers between sections for natural                porches and decks, however, continue to be
gas supply, HVAC ductwork,           electrical          site-built. Most manufacturers also indicate
supply, water and sewer                                  that it is less expensive to build an attached
 . installing trim or other finish to cover              garage on-site than in a factory, but there is
the interior marriage line between sections              experience both ways. Some items that can-
 l    patching flooring, carpeting, roofing              not be shipped are either panelized in the
                                                         factory for setup on-site, or are entirely site-
and siding between the sections
 . repairing                                             built. Permits must be secured under state
                  drywall   cracks or other
                                                         or local codes for site-built porches and ga­
incidental     damage sustained         during
                                                         rages as well as many other types of work that
                                                         go beyond basic unit installation.
 . air conditioner installation.
                                                               The builder who performs or arranges
      Major problems arising in installation             for the accessory construction must provide
that result from problems with the unit as               a warranty that covers whatever elements are
built in the factory (i.e. inability to achieve a        built on site. This complements the warran­
level installation even though the foundation            ties provided by the manufacturer and the
is level) should ordinarily be handed back to            installer.
the manufacturer for advice. A factory rep­                    Other issues associated with design, con­
resentative may be necessary to correct cer­             struction and approval of accessory elements
tain problems. It is important           for the         are discussed in Chapter 3 on working with
installer to avoid taking steps that would               the manufacturer, since these activities run
void the manufacturer’s warranty without                 more smoothly and cost less if the builder
prior authorization.                                     and manufacturer plan for them in advance.

Zmtalhtions,   Fowndations   and Site-built lmprowmenu                                                      35
Consumer Financing

      Consumer financing for manufactured         the more flexible programs available from
homes has unique features that distinguish        private sources.
it from the types of mortgage financing that           This chapter begins with a discussion
site builders know and understand. The fi­        of real property or real estate financing,
nancing procedures for most manufactured          since it is expected that most site builders
housing sold today are holdovers from the         will be drawn towards fee-simple transac­
origin of a manufactured home as a mobile         tions for homes that can qualify for mort­
vehicle or trailer. Historically such homes       gages. The remainder of the chapter dis­
have been financed as personal property,          cusses the personal property financing sys­
with a retail installment loan contract or        tem that continues to be widespread in the
chattel loan secured by an interest in the        manufactured housing sector.
financed goods. Increasingly,       however,
                                                  How Does Real Estate Financing        Work
manufactured homes are being financed
                                                  for Manufactured Homes?
together with land as real property.
                                                        When a manufactured home is attached
     The legal distinctions between real prop­
                                                  to the underlying      land by a permanent
erty and personal property represent an
                                                  foundation, and the home and the land are
abstraction inherited from the common law
                                                  treated as a single real estate package under
and further evolved under state law in all
                                                  state law, they are eligible for financing with
50 states. Real property has traditionally
                                                  a conventional 30-year real estate mortgage.
included land and all that is permanently
                                                  The market for real estate loans includes
affixed to the land. Personal property in­
                                                  government programs run by FHA, VA and
cludes everything that is subject to owner-
                                                  RECD (formerly the Farmers Home Admin­
ship but is not real property. Legal rights
                                                  istration) and applicable to all single family
and remedies concerning real property have
                                                  housing, as well as conventional mortgages
traditionally   been enforced differently in
                                                  eligible for purchase and securitization by
court than rights and remedies concerning
                                                  Fannie Mae (formerly the Federal National
personal property. Security interests in real
                                                  Mortgage Association)         and the Federal
property typically take the form of a mort­
                                                  Home Loan Mortgage Corporation (Freddie
gage or deed of trust that is enforced
                                                  Mac). There is also a very active market in
through foreclosure. Security interests in
                                                  asset-backed securities consisting of pools
personal property are regulated under the
                                                  of mortgage loans on manufactured homes.
Uniform       Commercial        Code and are
                                                  This section discusses the government-run
enforced through repossession. Real prop­
                                                  programs first, followed by the other mort­
erty is usually taxed differently than personal
                                                  gage lending options.
property as well, and tax revenues may be
divided differently between state and local       Government Real Prop~ty Financing
governments.                                           Manufactured homes that are classified
      Both government-sponsored and private       and owned as real property are eligible for
programs are available for personal property      mortgage financing under several govern­
financing or real property financing. In          ment-run programs. Major features of these
reality the government-sponsored programs         programs are summarized in Table 4. FHA-
are rarely used, and a wide variety of private    insured mortgage loans are available to any
sector programs dominate financing. How-          purchaser under the “Title 2” program,
ever, the government programs are discussed       while eligibility for VA-guaranteed mortgage
at some length in this chapter because they       loans is based on military service. RECD
are well documented       and because their       loans are limited to low-income rural pur­
requirements provide insights into many of        chasers.

       Financing                                                                                    37
             FHA Title 2              VA                           RECD (Farmers 
       kind of “conventional” mortgage loans that
                                                                                         have become standard throughout the site-
                                                                                         built sector. This eligibility hinges on two
                                                                                         factors: first, the specific criteria for “con-
                                                                                         forming” mortgages eligible for purchase by
                                                                                         the two largest secondary market makers,
                                                                                         Fannie Mae and Freddie Mac (neither orga­
                                                                                         nization purchases personal property loans
             Home and site. Home     Home penanentiy               Home and site. 

             must be at least 400    affixed to a site 
                                 on manufactured homes), and second, the
             square feet and must    owned by the 

             coooi!y with HUD-       veteran. 
                                          willingness of individual lenders to originate
                                                                                         such loans with the expectation of resale (just
                                                                                         because a loan is theoretically eligible for sale
                                                                                         on the secondary market does not require a
             Same as for other       See Sec. 36.4204              Loans may be up to
             FHA single-family       for loan limits; no           full appraised        lender to make the loan). Builders who an­
             insured properties.     down payment but              value. except 10
                                     see Sec. 36.4312 for          percent down          ticipate using conventional mortgage loans
                                     allowable fees.               payment is
                                                                   required in some      for customer financing are well advised to
                                                                                         confirm the availability of such loans from
                                                                                         the local financing institutions they will be
                                                                                         dealing with. It is also recommended to
                                                                   On a site-built
                                                                                         confirm that borrowers will be able to ob­
              On a site-built        On a stte-buitt
             permanent               permanent                     permanent
                                                                                         tain private mortgage insurance when re­
             foundation              foundation.
             complying with HUD                                                          quired to meet secondary lender criteria.
              Minimum Property
             Standards. A                                                                      Conventional      mortgages are relatively
              perimeter enclosure                                                        uncommon on manufactured homes since
             of suitable material
              is required.                                                               most purchases are still financed with per­
              Finished grade
             below the home                                                              sonal property loans, but they may become
             shall not be below
             the loo-year                                                                more important as a source of market rate
                                                                                         loans. A 1996 survey of lenders revealed that
                                                                                         30 percent were currently active in the sec­
                                                                                         ondary market for manufactured home loans
                                                                                         in 1996 and, although most still keep their
                                                                                         loans, almost half of their loans were sold in
                                                                                         the secondary market. Current criteria from
     Other   There are additional    Eligibility   is limited to   The program is
             criteria for mortgage   veterans      with loan       desianed for low      Fannie Mae and Freddie Mac for conform­
             loans on existing       guaranty      entitlement     and moderate-
             manufactured            available     for use.        income buyers.        ing loans on manufactured homes are in
             homes. Pra-HUD-                                       Borrowers must not
             Code units are not                                    exceed specified      Table 5 to your right. More information can
             eligible.                                             income limits or be
                                                                   able to obtain        be obtained from the sellers and servicers
                                                                   credit from other
                                                                   sources.   New        guides published by each organization.
                                                                   rental housing also
                                                                   can be covered.             Conventional lending has proven itself
                                                                                         to be the cornerstone of a healthy site-built
                                TABLE 3
                    Summary of FHA, VA and RECD
                                                                                         housing market, and the criteria set by
                      Real Property Loan Programs                                         Fannie Mae and Freddie Mac are widely
                        for Manufactured Homes                                           observed in the industry. However, the un­
                                                                                         derwriting criteria used by those organiza­
                    Conventional Mortgage Lending                                         tions are less forgiving of sub-par buyer credit
                         Manufactured homes also can techni­                              histories than FHA criteria, or finance com­
                    cally be eligible for financing with the same                         pany criteria for personal property loans.

38                                                                                                                        Comoner   Financing
It remains to be seen whether Fannie Mae          Topic                    Fannie   Mae                            Freddie   Mac 

and Freddie Mac will play a significant role
in the financing market for manufactured
Asset-Backed Securities
      A large private-sector      market has
emerged to provide capital for loans on
manufactured homes even when the loans             Construction            Must comply with the HUD-Code 

                                                   Standards          I                                                                                 I

do not conform to Fannie Mae or Freddie
Mac criteria. This begins when institutions
specializing in financing manufactured hous­
ing (such as Green Tree Financial,
GreenPoint Financial, Associates Housing Fi­
nance, Chase Financial and CIT) originate          Classification 	        The land and home must be purchased in a single transaction,      must be
                                                                           classified as real property under state law, and must be subjected to a
mortgage loans on manufactured homes.                                      recorded mortgage or deed of trust in favor of the lender.

The loans are pooled into asset-backed secu­
rities (ABS) that are rated for quality by a
                                                   Coverage 	              Includes home, land, kitchen and laundry appliances,      and carpeting.
rating agency and then sold to investors in                                Cannot include furniture or any type of insurance.                           I
offerings underwritten by Wall Street bra
kerage firms. There are various reasons the
underlying loans might be deemed noncon­
                                                                           Standard qualification    ratios (28    Standard qualiimtion   ratios (26
forming. Some of the loans are for single-                                 percent front-end, 36 percent           percent front-end, 36 percent
                                                                           back-end).    Appraisals must
section homes, while others may involve bor­                               address marketability    and
                                                                           comparability   with other
rowers with unusually high debt-to-income                                  manufactured    and site-built
ratios. Since private mortgage insurance
firms have reportedly been reluctant to write
coverage on manufactured home loans, mort­
gages with loan-to-value ratios greater than
80 percent but no PM1 may also find their
way into ABS pools. Borrowers with low
credit scores who would simply not be eli­
gible for conventional mortgages may also
find themselves in this market. Mortgages                                                    TABLE 4
                                                     Summary              of Secondary Market Criteria  for Conforming                   Mortgages
that are packaged and sold as ABS pools gen­                                          on Manufactured  Homes
erally carry an interest rate of about 200 ba­
sis points higher than conforming loans,
depending on the quality of the overall pool
                                                 Can I Use Real Property Financing
of loans.
                                                 in a Land-Lease Community?
      The ABS market also includes hybrid
loans in which land owned by a purchaser is            Builders considering the sale of manu­
mortgaged and cross-collateralized as secu­      factured homes on leased land face a poten­
rity for a personal property loan used to buy    tially important financing constraint in some
a manufactured home. The interest rate on        states. Under current rules, in order to be
such a loan is usually higher than on a mort­    eligible for an FHA-insured mortgage or a
gage covering home and land, but signifi­        conforming conventional mortgage, a manu­
cantly lower than on a personal property         factured home on leased land must meet spe­
loan.                                            cific criteria. For this discussion the most

Chnrumer Financing                                                                                                                                     39
                 important requirement is that the home             This status typically lowers the owner’s tax
                 be technically classified as “real property”       burden, but it also severely limits access to
                 or an “improvement”        affixed to real prop    market-rate mortgage financing of purchases.
                 erty under applicable state or local law.                Figure 9, at bottom left, shows states
                 This means FHA or conforming mortgages             filled in withblack whenever obtaining FHA
                 cannot be written on manufactured homes            or conventional       30-year mortgages for
                 located on leased land in certain states, be-      manufactured homes on leased land (i.e.,
                 cause the homes can never constitute “real         land not owned by the owner of the home)
                 property.”    This limitation is enforced by       may be difficult because all such homes are
                 requiring a title opinion stating that the         taxed or otherwise classified as personal
                 home and land constitute real property as          property under state law. The underlying
                 a condition of originating the mortgage.           requirement      is designed to protect the
                      The financing constraint arises because       lender by ensuring that the mortgage is only
                 manufactured homes by their very nature be-        applied to real property, regardless of how
                 gin as personal property. They are assembled       it is constructed or owned. However, the
                 and owned by the manufacturer who ulti­            effect is to rule out FHA and conventional
                 mately transfers title to a retailer or pur­       mortgages for manufactured         homes on
                 chaser, similar to the title to a motor vehicle.   leased land in those states. Financing op­
                 While a few states deem essentially all manu­      tions are thereby limited to personal prop
                 factured homes to be real property, and many       erty loans that typically have lower loan
                 other states deem them to be real property         ceilings, shorter terms and higher interest
                 or permit a formal conversion or transfor­         rates than real property mortgages.
                 mation to real property once they are per­
                 manently affixed to land that is owned by          What About Personal
                 the home owner, there are also states where        Property Financing?
                 manufactured homes on leased land are not
                                                                         Personal property loans have been the
                 permitted to be recognized as real property.
                                                                    mainstay of manufactured housing finance
                                                                    for many years. There are conventional pri­
                                                                    vate sources as well as publicly sponsored
                                                                    programs that originate personal property
                                                                    loans for purchasing manufactured homes,
                                                                    and the loans frequently are securitized
                                                                    through the ABS sector, sometimes in pools
                                                                    that include mixtures of real property, per­
                                                                    sonal property and “hybrid” loans. Personal
                                                                    property loans are typically much smaller in
                                                                    amount than mortgage loans, but are quick
                                                                    and easy to originate from the many finance
                                                                    companies that specialize in this sector.
                                                                    Loan amounts are usually calculated from
                                                                    wholesale invoice prices without the need
                                                                    for an appraisal, and a title search is not nec­
                                                                    essary. Moreover, the loans are readily avail-
                                                                    able to many borrowers with sub-par credit
     States Classifying   Manufactured   Homes   on Leased Land     histories that would rule out a conforming
                          as Personal Property
                                                                     mortgage loan. Since personal property

40                                                                                                  Gmsumer Financing
loans are not governed by the federal Real       With the increasing popularity of larger
Estate Settlement Procedures Act, retailers      multi-section manufactured homes, some
can and frequently do earn commissions,          of which are sold with land, lenders have
rebates or other payments on loan origina­       extended the term of some loans to as long
tions, credit life insurance, property insur­    as 2.5 years. As such multi-section homes
ance, and other services arranged for at the     become more elaborate and costly, how-
time the loan is closed.                         ever, they become increasingly difficult to
                                                 finance with chattel loans because the high
Conventional Personal Property Financing         interest rates make financing of such homes
     Most financial institutions and many        very expensive or impossible without ex­
states do not ordinarily consider manufac­       ceeding overall limits on size of the loan.
tured homes placed on non-permanent foun­              Many retail dealers who sell new manu­
dations or on leased land as real property.      factured homes execute installment contracts
The absence of a permanent foundation in­        on personal property loans for the lender by
dicates they are not legally “attached” to the   qualifying the buyer and agreeing to receive
land, which may be necessary for an improve­     interest payments for the term of the loan.
ment to become a part of the real estate, and    About 75 percent of loans for manufactured
as previously discussed, state law simply may    home financing used this indirect method
not provide any way for a home on leased         of financing. The lender often has recourse
land to be classified as real property. While    against the retailer in the event of a borrower
Freddie Mac will repurchase loans on homes       default.
with permanent foundations and long-term               The maximum loan amount on a con­
leases not subordinated to any mortgage, so      ventional personal property loan is usually
long as they are classified as real property,     125 percent of the wholesale invoice price,
the fact remains that such homes are most        including cost of transportation to the re-
often financed as personal property with a       tailer and any extras that the retailer might
chattel loan.                                    provide such as air conditioning        or other
     Interest rates on personal property         appliances. The manufacturer’s         certified
loans are typically anywhere from three to       invoice, in effect, substitutes for an appraisal
five percentage points higher than conven­       in a conventional mortgage. Maximum size
tional mortgage loans for site-built homes.      of the loan depends on the financial insti­
This spread reflects the smaller average size    tution. The buyer usually must pay ten per-
and higher cost of servicing the individual      cent down plus additional expenses not eli­
loans, as well as the likelihood that manu­      gible for financing such as prepaid interest
factured homes ordinarily attract lower in-      at settlement, taxes, and filing fees. Banks
come buyers who are greater credit risks.        will also finance installation, up to a limit
     At the level of the individual consumer     of around $1,400 for a single-section home
chattel loans are less complicated to process    and $3,200 for a multisection home. If the
and much quicker to close than conventional      cost of installation     exceeds this amount,
mortgage loans. Credit checks are limited,       the retailers may need to absorb it as part
no title search is required and there is no      of their expenses.
deed to record in the land records. Terms
are usually 15 years, much shorter than con­     Government Sponsored Personal Property
ventional mortgage loans, in keeping with        Loan Program.5
the small average value of chattel loans which        FHA- and VA-sponsored personal prop­
rarely exceed about $60,000 in face value.       erty loans were first initiated for manufac-

Consumer Financing                                                                                  41
                                                FHA Title   I Loan           VA Personal    Property        access to funding for home buyers. The
.    ---       l--.-                                                                                        FHA program (referred to as “Title I”) is
                                                                                                            generally available, while the VA personal
     Program      Type 	                        Insures lender against       Guarantees    lender against
                                                borrower default up to 90    loss up to the lesser of 40    property loan program is limited to eligible
                                                percent of loan.             e;F;;;bpf   the loan or
                                                                                                                  FHA and VA loans are securitized
                                                                                                            through bonds issued by the Government
                                                                                                            National Mortgage Association            (Ginnie
                                                                                                            Mae). Federal programs represent a poten­
                                                                                                            tially important source of financing but loans
                                                                                                            from finance companies or banks are much
                                                                                                            more common and the government-spon­
                                                                                                            sored personal property loans have never
                                                                                                            become as popular as the FHA and VA mort­
     Term of Loan                               20 years for home loan       20 years: single-wide
                                                                                                            gage programs for site-built housing. The
                                                25 years for multi-section
                                                home and site
                                                                             home or home/lot
                                                                             15 years: lot only
                                                                                                            volume of FHA Title I loans, for example,
                                                15 years for site alone      23 years: double-wide
                                                                             home alone
                                                                                                            reached a peak of almost 50,000 in 1983,
                                                                             25 “ears: double-wide
                                                                                                            then steadily declined to only about 3,000
                                                                                                            in 1996. The volume of VA lending is even
                                                                                                            smaller. The chief reasons cited for this low
                                                                                                            utilization have been the large administra­
     Borrower          Eligibility 	            Borrower must be the         Borrower must have a
                                                                                                            tive burden and resulting delays in loan ap­
                                                owner of the home. If the    statutory home loan
                                                home is realty it must be    guaranty entitlement,
                                                                                                            provals, as well as the difficulty of obtaining
                                                                             vpically based on service
                                                                             I” the U.S. Army, Navy,
                                                                                                            payment in cases of default. Site builders
                                                                             Marines, Air Force or
                                                                             Coast Guard.
                                                                                                            who are more experienced with government-
                                                                                                            backed loans may not be deterred by such
                                                                                                            obstacles; moreover, the explicit rules and
                                                                                                            procedures of these government-sponsored
                                                                                                            loans are said to parallel the proprietary stan­
                                                                                                            dard operating procedures of private lend­
                                                                                                            ers. Consequently, the procedural require­
                                                                             compliance with zoning,
                                                                             served by water, sewer
                                                                                                            ments of these loans are explained in more
                                                                             and roads, and acceptable
                                                                             from a health, safety and
                                                                                                            detail below.
                                                                             environmental  standpoint.           Several key features of the HUD FHA
                                                                                                            Title I insurance program for manufactured
                                                                                                            home loans and the corresponding VA loan
                                                                                                            guarantee program are summarized in Table
                                                                                                            6 below, as applicable to loans for new
                                                      TABLE 5
           Summary                     of FHA   and VA Personal Property      Loan    Programs
                                                                                                            homes. Builder/developers          interested in
                                                                                                            using the FHA Title I program can get more
                                                                                                            information     from HUD-approved          Title I
                                          tured housing in the early 1970’s. Like other                     lenders or the FHA Title I staff at HUD.
                                          federal mortgage programs, the idea is to                         More information about regulations for the
                                          reduce the risk to lenders through insure                         VA program is available from VA lenders or
                                          ante or a guarantee, and thereby expand                           the VA staff.

42                                                                                                                                           Consumer Financing
 Example Projects

      The next Table summarizes information
 about fourteen different example projects
 around the United States, each of which in­
 volves the innovative use of manufactured
 homes. Each row entry in the Table presents
 the following information documenting a
 specific project in a standardized format, dis­
 played at right.
     A key to the references appears at the
 end of the Table.

Example Projects                                   43
44   Example Projects
     List of HUD-Code Manufacturing                        Facilities by State and City, 1999
     Alabama                                           Colorado
     Cavalier Homes              Addison          AL   Chamuion/Summit
     Southern Energy Homes       Addison          AL    Cres; Homes                   Berthoud        co
     Southern Lifestyle                                Golden West Homes              Fort Morgan     CO
       Homes, Inc.               Addison          AL
     Crimson Homes               Bear Creek       AL   Delaware
     Chandeleur Homes            Boaz             AL   PawneeHomes, Inc.              Greenwood       DE
     Homes of Legend, Inc.       Boaz             AL
     Brilliant Homes             Brilliant        AL    Florida
     Southern Homes Co.          Double Springs   AL    Fleetwood Homes of FL         Auburndale      FL
db   Autumn Homes, Inc.          Douglas               ‘*Homes of Merit of FL         Bartow          FL
     Redman Homes, Inc.          Eastaboga        AL    Nobility Homes, Inc.          Belleview       FL
     Brilliant/Carriage Homes    Guin             AL    Homes of Merit of FL          Lake City       FL
     Champion/Advantage          Guin             AL    Chariot Eagle, Inc.           Ocala           FL
     Champion/Gateway            Guin             AL    Liberty Homes, Inc.           Ocala           FL
     Indes House, Inc.           Hackleburg       AL    Nobility Homes, Inc.          Ocala           FL
     River Birch Homes, Inc.     Hackleburg       AL    Skyline Corp.                 Ocala           FL
     Crimson Industries, Inc.    Haleyville       AL    Palm Harbor Homes, Inc.       Plant City      FL
     RiverchaseHomes             Haleyville       AL    Redman Homes, Inc.            Plant City      FL
     Buccaneer Homes of AL       Hamilton         AL    Jacobsen Homes                Safety Harbor   FL
       Homes, Inc.               Hamilton         AL   Georeia
     Patriot Homes/Southridge    Hamilton         AL   Sunstate/Peach State Homes     Adel            GA
     Brilliant/Silhouette        Lynn             AL   Bellcrest/Adrian               Adrian          GA
     Sunshine Homes, Inc.        Red Bay          AL   Fleetwood Homes of GA          Alma            GA
     Franklin Homes, Inc.        Russellville     AL   General Manufactured
     Spiral Industries, Inc.     Russellville     AL    Housing Inc.                  Baxley          GA
     Pinnacle Homes/Patriot      Sulligent        AL   Fleetwood Homes of GA          Broxton         GA
     LibertyjWaverlee Homes      Tuscumbia        AL   Homestead Homes                Cordele         GA
     Buccaneer Homes             Winfield         AL   Fleetwood Homes of GA          Douglas         GA
     Arkansas                                          Horton Homes                   Eatonton        GA
     Spirit Homes/Central        Conway           AR   Fleetwood/Valuhomes            Fitzgerald      GA
     Arizona                                           Pioneer Housing System, Inc.   Fitzgerald      GA
     Palm Harbor Homes, Inc.     Boaz             AZ   Palm Harbor Homes              Lagrange        GA
     Schult Homes                Buckeye          AZ   Southland Housing Systems      McRae           GA
     Palm Harbor Homes, Inc.     Casa Grande      AZ   Bellcrest Homes                Millen          GA
     Redman Homes, Inc.          Chandler         AZ   Destiny Industries             Moultrie        GA
     Clayton Homes               El Mirage        AZ   Sweetwater Homes, Inc.         Ocilla          GA
     Fleetwood Homes of                                Fleetwood Homes of GA          Pearson         GA
      Arizona                    Glendale         AZ   Redman Homes, Inc.             Richland        GA
     Cavco Industries, Inc.      Goodyear         AZ   Craftmade Homes                Sylvester       GA
     Cavco Industries, Inc.      Phoenix          AZ   Grand Manor Homes              Thomasville     GA
     Chariot Eagle West, Inc.    Phoenix          AZ   Clayton Homes/Waycross
     Palm Harbor Homes, Inc.     Tempe            AZ    Homes                         Waycross        GA
     California                                        General Manufactured
     Western/Silvercrest Homes   Corona           CA    Housing Inc.                  Waycross     GA
     Champion Home Builders      Lindsay          CA   Fleetwood/Spring Hill          Willacoochee GA
     Hallmark-Southwest Corp.    Loma Linda       CA
     Golden West/Homes by                              Idaho
       Oakwood                   Perris           CA   American Homestar              Boise           ID
     Fleetwood Homes of CA       Riverside        CA   Nashua Homes of Idaho          Boise           ID
     The Karsten Company         Sacramento       CA   Kit Mfg. Co.                   Caldwell        ID
     Skyline Corp.               San Jacinto      CA   Fleetwood Homes of ID          Nampa           ID
     Fleetwood Homes of CA       Woodland         CA   Champion Homes/Tamarack        Weiser          ID
     Skyline Corp./Buddy         Woodland         CA   Redman Home Builders           Weiser          ID
     Western Homes/Silvercrest   Woodland         CA

     Appendix                                                                                              4.5

     Hi-Tech Housing, Inc. 
        Bristol        IN     Fuqua Homes, Inc. 
             Boonville        MO
     Skyline Corp./Hillcrest 
      Bristol        IN     Patriot/Heritage American 
     Sikeston         MO
     Fall Creek Housing 
           Elkhart        IN
     Patriot Homes 
                Elkhart        IN     MississiDDi 

     Skyline Homes Elkhart 
        Elkhart        IN     Pinnacle Homes 
                Amory             MS
     Schult Homes 
                 Etna Green     IN     Belmont Homes 
                 Belmont           MS
     Fleetwood Homes 
              Garrett        IN     Spiral Industry, Inc. 
         Burnsville        MS
          Goshen         IN     Belmont/Delta Homes 
           Clarksdale        MS
     Skyline Homes Goshen 
         Goshen         IN     Redman Homes, Inc. 
            Gulfport          MS
     Skyline/Sunset Ridge Homes 
   Howe           IN     Free State Mobile Homes 
       Laurel            MS
     Dutch Housing 
                Lagrange       IN     Fleetwood Homes of MS 
         Lexington         MS
     Four SeasonsHousing 
          Middlebury     IN     American Homestar 
             Vicksburg         MS
     Patriot Homes 
                Middlebury     IN     Cappaert Manufactured 

     Schult Homes 
                 Middlebury     IN      Housing 
     The New Holly Park 
           Middlebury     IN
     Fairmont Homes, Inc. 
         Nappanee       IN     North Carolina 

     Shamrock Homes 
               Plymouth       IN     Palm Harbor/Masterpiece 
       Albemarle         NC
     Champion Home Builders 
       Ridgeville     IN     Southern Energy 
               Albemarle         NC
     Rochester Homes 
              Rochester      IN     Gold Medal Homes, Inc. 
        Cherryville       NC
     Patriot Homes/Lincoln Park 
   Shipshewana    IN     R-Anell Custom Homes 
          Denver            NC
     Commodore Corp. 
              Syracuse       IN     Clayton Homes, Inc. 
           Henderson         NC
     Liberty Homes, Inc. 
          Syracuse       IN     Heartland Homes/Am. 

     Redman Homes, Inc. 
           Topeka         IN      Homestar 
                     Henderson         NC
     Hart Housing Group 
           Wakarusa       IN     Crestline Homes 
               Laurinburg        NC
                                                          Champion Homes 
                Lillington        NC
                                             Fleetwood Homes 
               Lumberton         NC
     Skyline Corp. 
                Arkansas City KS      Redman Homes, Inc. 
            Maxton            NC
     Skyline Corp. 
                Halstead      KS      Skyline CorpJHomette 
          Mocksville        NC
     Schult Homes 
                 Plainville    KS      Fleetwood Homes of NC 
         Mooresville       NC
     Liberty Homes 
                Yoder         KS      Brigadier Homes of NC 
         Nashville         NC
                                                          Clayton/Oxford Homes, Inc. 
    Oxford            NC
                                           Fleetwood Homes of NC 
         Pembroke          NC
     Fleetwood Enterprises 
        Benton         KY     Homes by Oakwood 
              Pinebluff         NC
     Bluegrass Housing/Champion 
   Flemingsburg   KY     Clayton/Fisher Homes 
          Richfield         NC
                                                          Homes by Oakwood 
              Richfield         NC
                                          Mansion Homes, Inc. 
           Robbins           NC
     Skyline Corp. 
               Bossier City    LA     Homes by Oakwood 
              Rockwell          NC
     Pioneer Housing Systems of LA Leesville       LA     Fleetwood Homes of NC 
         Roxboro           NC
                                                          Redman Homes, Inc. 
            Sanford           NC
     Marvland                                             Palm Harbor/Villa Park East 
   Siler City        NC
     Pawnee Homes                   Salisbury      MD     Liberty Homes, Inc. 
           Statesville       NC

     Maine                                                Nebraska 

     Burlington Homes of Maine      Oxford         ME     Chief/Bonnavilla 
              Aurora            NE
     Oxford Homes                   Oxford         ME     Atlantic Homes 
                Central City      NE
                                                          American Homestar/Magnolia 
    Gering            NE
                                           Champion Home Builders 
        York              NE
     Dutch Housing, Inc.            White Pigeon MI 
              York              NE

                                          New Mexico 

     Friendship Homes of MN         Montevideo     MN 
   Karsten Company of NM 
         Albuquerque NM
     The Homark Co.                 Red Lake Falls MN 
   Cavco Industries of NM 
        Belen       NM
     Schult Homes                   Redwood Falls MN 

     Highland Manufacturing 

      Co., Inc.                     Worthington    MN 

46                                                                                                    Appendix A
New York 
                                              South Dakota 

Champion Homes/Titan 
             Sangerfield     NY   Medallion Homes                   Watertown       SD 

Empire Homes 
                     Valatie         NY

                                                   Clayton/Appalachia Homes          Andersonville   TN 

Manufactured Housing 
                                  Clayton Homes/Ardmore             Ardmore         TN 

                     Bryan           OH   Norris, Inc.                      Bean Station    TN 

Palm Harbor/Villa Park East 
      Sabina          OH   Fleetwood Homes of TN             Gallatin        TN 

Skyline Corp. 
                    Sugarcreek      OH   Champion Homes/Atlantic           Henry           TN 

                                                        Clayton Homes/Halls Division      Knoxville       TN 

                                              Fleetwood Homes 
                 Lafayette       TN
Elliott Homes/Duncan 
             Duncan          OK   Clayton Homes/Maynardville 
      Maynardville    TN
Elliott Homes, Inc. 
              Madill          OK   Giles Industries of Tazewell 
    New Tazewell    TN
Elliott Mobile Homes 
             Waurika         OK   Homes by Oaksvood 
               Pulaski         TN
                                                        Clayton Homes/Rutledge 
          Rutledge        TN
                                                Clayton Homes/Savannah 
          Savannah        TN
Golden West Homes 
            Albany              OR   Fleetwood Homes of TN 
           Westmoreland    TN
Fuqua Homes, Inc. 
            Bend                OR   Clayton Homes/White Pine 
        White Pine      TN
Schult/Marlette Homes 
        Hermiston           OR
Skyline Corp./Homette 
        McMinnville         OR   Texas 

Palm Harbor Homes 
            Millersburg         OR   Redman Homes 
                   Athens           TX
Homebuilders Northwest, Inc. 
 Salem               OR   Palm Harbor Homes, Inc. 
        Austin           TX
Liberty Homes, Inc. 
          Sheridan            OR   Fleetwood Homes of TX 
          Belton           TX
Redman Homes, Inc. 
           Silverton           OR   Signal Homes, Inc. 
             Big Spring       TX
American Homestar 
            Stayton             OR   Clayton Homes 
                  Bonham           TX
Fleetwood Homes of OR 
        Woodburn            OR   Crest Ridge Homes 
              Breckenridge     TX
Western Homes/Silvercrest 
    Woodburn            OR   Palm Harbor/Masterpiece 
        Buda             TX
                                                        American Homestar of 

                     Burleson         TX
Commodore Corp. 
                  Clarion         PA   Palm Harbor Homes 
              Burleson         TX
Champion Homes/Atlantic 
          Claysburg       PA   Redman Homes, Inc. 
             Burleson         l-x
Fleetwood Homes of PA 
            Elizabethtown   PA   Homes by Oakwood 
               Ennis            lx
Redman Homes, Inc. 
               Ephrata         PA   American Homestar/Oak 

Skyline Homes, Inc. 
              Ephrata         PA    Creek 
                         Fort Worth       TX
Castle Housing of PA 
             Knox            PA   Cavalier Town and Country 
      Fort Worth       TX
Liberty Homes, Inc. 
              Leola           PA   Palm Harbor/Masterpiece. 
       Fort Worth       TX
Skyline Corp./Hillcrest 
          Leola           PA   Southern Energy Homes of TX      Fort Worth       l-x
Schult/Marlette Homes 
            Lewistown       PA   Saturn Housing/Schult            Gainesville      lx
Ritz-Craft Corp. 
                 Mifflinburg     PA   Cavalier Town and Country        Graham           l-x
Schult/Crest Homes 
               Milton          PA   Silver Creek Homes               Henrietta        TX
                                   Homes by Oakwood                 Hillsboro        TX
                           Pine Grove    PA     Great Texas Homes                Houston          TX
Pine Grove Mfg. Homes, Inc. 
      Pine Grove    PA     Homes by Oakwood                 Killeen          TX
Astro Mfgr. 
                      Shippensville PA     American Homestar of
Colony Factory Crafted Homes 
     Shippensville PA      Lancaster                       Lancaster      l-x
New Era Building Systems, Inc. 
   Strattanville PA     Cavalier Town and Country        Mineral Wells TX
                                                        Schult Homes, Inc.               Navasota       TX
South Carolina 
                                        Cavco Industries LLC             Seguin         l-x
Mascot Homes 
                     Gramling        SC   Clayton Homes                    Sulphur SpringsTX
General/Lamar Housing 
            Lamar           SC   Clayton Homes of Waco TX         Waco           TX
                                                        Fleetwood Homes of TX            Waco           TX
                                                        Patriot Homes of Texas           Waco           TX
                                                        Fleetwood Homes of TX            Wichita Falls TX

Appendix A
     Vireinia                                    Wisconsin 

     Virginia Homes, Inc.     Boydton       VA   Liberty Homes, Inc.             Dorchester     WI 

     Commodore Corp.          Danville      VA   Skyline Corp./Homette           Lancaster      WI 

     Fleetwood Homes of VA    Rocky Mount   VA

     Vermont                                     Kent Homes                      Bouctouche     NB 

     Skyline Corp.            Fair Haven    VT   Maple Leaf Homes                Fredericton    NB 

                                                 SRI Homes/Winfield              Kelowna        BC 

     Washington                                  Moduline/New Horizon Homes      Medicine Hat   AB 

     Moduline International   Chehalis      WA   Moduline Industries (Canada)    Penticton      BC 

     Valley Manufactured                         Prestige Homes                  Sussex         NB 

      Housing, Inc.           Sunnyside     WA
     Fleetwood Homes of WA    Woodland      WA   Mexico 

                                                 Rice Manufacturing/B    and R   Matamoros 

48                                                                                       Appendix A
Market Information               and Zoning Laws by State

     This Appendix gives detailed state-level           The third section of each nage identi­
information to assist in performing a mar­         fies some of the important casel&-from the
ket assessment and in reviewing the appli­         state courts or federal courts in the region.
cable laws that govern local zoning of manu­       The cases included are those that have ei­
factured housing. Data is presented on sepa­       ther upheld or overturned local zoning rules
rate pages for different regions of the U.S.       against constitutional or statutory challenges.
     The first section of each page presents       The case law is most important where it in­
basic state-level market data for the region       terprets the currently applicable statute, as
in a table showing (1) the total stock of con­     well as in states where there is no applicable
ventional housing and mobile/HUD-Code              statute.
housing units in the state as of 1990, and (2)          This Appendix cannot not be relied on
 1998 site-built housing starts, multi-section     as the sole source of information about com­
HUD-Code shipments to the state, and               munity zoning, since it only deals with state
single-section HUD-Code shipments to the           law. Individual communities will have their
state.                                             own systems for establishing and enforcing
     The second section of each page gives         zoning, and these can vary widely within the
relevant language from state law that governs      state. The state laws and cases are impor­
local zoning rules for HUD-Code homes,             tant because they suggest the general climate
with an emphasis on the degree to which            within the state, they show the evolution of
such homes can be placed on or prohibited          the zoning approaches applied to mobile and
from land that is specifically zoned for single-   manufactured homes, and they set con­
family residential use. Most, but not all,         straints on systems that can be legally
states have laws of this type.                     adopted and enforced at the local level.

Appendix B                                                                                           49
New England States

Market Data:                                                                                             Case Law:

     STATE                  Detached Housing                        Market Activity,
                                                                                                         MA:   Supreme Judicial Court of Massachusetts, Town of
                                                                                                               Manchesterv. Phillips, 180 N.E. 2d 333 (1962). Town
                               Stock,       1990                                                 I
                                                                                                               zoning by-law excluding mobile homes from single
                                                                                                               residence district     prohibited  a mobile home,
                                                                                                               whether or not the unit is equipped with wheels or
                                                                                                               mounted on permanent foundation.

                                                                                                         NH:   Supreme Court ofNew Hampshire, Town ofPl&tw
                                                                                                               v. N&au,     493 A.2d 1158 (1985). Town zoning
                                                                                                               ordinance permitting manufactured housing only
1 Maine                     376.600     1      54.600   1   4.700    I       690 I         720       1
                                                                                                               on individually owned lots in residential zones was
                                                                                                               consistent with state law prohibiting total exclusion
                                                                                                               from the municipality.
     New Hampshire          297,600     1      35,300   1   4,600    1       620       1   370       1
                                                                                                         u     Supreme Court of Rhode Island, Morin v. Zoning
                                                                                                               Board of Review, 232 A.2d 393 (1967). Former
                                                                                                               mobile home which was placed on a block founda­
                                                                                                               tion, had wheels removed, and was connected to
                                                                                                               utility services, was not a “trailer” or “mobile home”
                                                                                                               prohibited by town zoning ordinance.

               State Zoning Laws:
               MAINE: Municipalities shall permit manufactured homes on indi­
               vidual lots in a number of locations where single-family dwellings
               are allowed, subject to the same requirements as single-family dwell­
               ings, except that the homes may not be required to be greater than
               14 feet in width. Design criteria may include a roof with a pitch of
               at least 2:12 which is covered with asphalt or fiberglass composition
               shingles or other materials but not corrugated metal roofing, a per-
               manent foundation, and residenti&ype          exterior siding. Less re-
               strictive controls shall be permitted.   Title 30-A, Sections 4358.1
               and 4358.2 (1995).

               NEW HAMPSHIRE:          Municipalities shall afford reasonable oppor­
               tunities for the sitine of manufactured housine and shall not ex-
               clude such housing completely from the munic\paliry.         No zoning
               ordinance shall prohibit the owner-occupant       of a residence dam-
               aged by fire or other disaster from placing a manufactured home on
               the lot and residing therein while the residence is being rebuilt but
               not more than 12 months. Section 674:32 (1983, 1993).

               VERMONT:       No relevant          state zoning statute identified.

               MASSACHUSETTS:         No zoning ordinance or by-law shall prohibit
               the owner-occupant of a residence destroyed by fire or other natural
               holocaust from placing a manufactured home on the site of such
               residence and residing in such home for up to 12 months while the
               residence is being rebuilt. Chapter 4OA, Section 3.

               CONNECTICUT:           A zoning commission shall not adopt regula­
               tions imoosine conditions      and reauirements    on manufactured
               homes at’least 22 feet wide and built’in accordance with the HUD-
               Code, or on lots containing such manufactured homes, which are
               substantially different from requirements imposed on single-family
               dwellings and lots, and shall not adopt regulations imposing condie
               tions and requirements on developments to be occupied by manu­
               factured homes at least 22 feet wide and built in accordance with
               the HUD-Code which are substantially different from requirements
               imposed on multifamily dwellings and lots, cluster developments or
               planned unit developments.      Title 8, Chapter 124, Section 8-2(a)

               RHODE ISLAND: Any time a residential building is rendered un­
               inhabitable bv a casualtv such as fire or flood. the owner shall be
               allowed to temporarily park a mobile and/or manufactured home
               or homes on the land for use and occupancy for a period up to 12
               months, or until the building is rehabilitated and fit for occupancy.
               Section 45-24-37.

50                                                                                                                                                        Appendix B
Middle Atlantic States

Case Law:                                                       Market Data:
       Supreme Court of New Jersey, Southern Burlington           STATE                   Detached Housing                     Market     Acthrity,
       County N.A.A.C.P. v. Mt. Laurel Township, 456 A.2d                                     Stock, 1990                               1998
       390 (1983) [“Mount Laurel II”]. Municipal land
       use regulations must provide opportunity to meet
       the municipality’s fair share of the regional need
       for low and moderate income housing. Absolute
       bans of mobile homes are no longer permissible
       on grounds of adverse effect on real estate values.
       Total exclusion must be justified by the same doe
       trines that would justify total exclusion of apart­
       ments, townhouses or single-family        residences.
       Subjective sensibilities of present residents are not
       a sufficient basis for total exclusion of manufac­
       tured housing.                                             TOTAL                 7,208,700   1   487,700   1   65,900    1        7,520    1   3,530
       Superior Court of New Jersey, Chancery Division,
       Cumberland County, Luczynski, Zoning Official, v.
       Tempk 497 A.2d 211 (1985). Local zoning ordi­
       nance restricting manufactured homes to duly li­
       censed parks without considering size, appearance
       or safety had no reasonable basis under the police
       power and was therefore unconstitutional.
       Court of Appeals of New York, Peoplev. Clute, 278
                                                                State Zoning Laws:
       N.Y.S.Zd 231 (1966). A town zoning ordinance             PENNSYLVANIA:      No relevant state zoning statute identified.
       requiring trailers to be located in trailer parks pro­
       hibited placing a mobile home on a permanent             NEW YORK:     No relevant state zoning statute identified.
       foundation in a single-family residence district, and
       was not unconstitutional.                                NEW IERSEY: Municipal agencies shall not by regulation exclude
       Supreme Court of Pennsylvania, Geiger v. Township        or restrict manufactured homes not less than 22 feet wide on per­
       of North Whitehall 507 A.2d 361 (1986). Discrimi­        manent foundations, on land owned by the home owner, unless
       nation against a single-section unit, while permit­      those regulations apply equally to all buildings and structures of
       ting multi-section units, was arbitrary, capricious      similar use. Section 40:55D-104 (1983).
       and unconstitutional.
       Commonwealth Court of Pennsylvania, Appeal of
       Shore, 496 A.2d 876 (1985). Township zoning or­
       dinance which totally excluded mobile home parks,
       based on a finding that the Township was not a
       logical area for development and population growth,
       was not invalid.
PA:    Commonwealth Court of Pennsylvania, Borough of
       Maluem v. Jackson 529 A.2d 96 (1987). Where borq
       ough zoning ordinance totally excludes mobile
       home parks the burden is on the borough to estab
       lish that the prohibition promotes general welfare;
       need for expensive homes to increase local tax base
       could not justify excluding mobile home parks.

Appendix B                                                                                                                                                    51
South Atlantic States

Market Data:                                                                                            Case Law:
 STATE                         Detached Housing                      Market     Activity,               U.S. Court of Appeals, 11th Circuit:     Grant v. County of
                                   Stock, 1990                                1998                            Seminok, 817 F.2d 731 (1987).    Florida exclusion of
                                                                                                              single-section MH upheld.
                                                                                                        U.S. Court of Appeals, 11th Circuit: Scwlock v. City of Lynn
                                                                                                               Haven, 858 F.2d 1521 (1988). Florida city building
                                                                                                               code requirement struck down because preempted
                                                                                                               by HUD-Code.
                                                                                                        U.S. Court of Appeals, 11th Circuit:    Georgia MHA v.
                                                                                                              S&ding County, 148 F.3d 1304 (1997). County son­
                                                                                                              ing ordinance requiring minimum 4:12 roof pitch
                                                                                                              for manufactured homes is not preempted by HUD-
                                                                                                              Code and is not unconstitutional.
                                                                                                        U.S. District Court, W.D. North Carolina, CMH Mfg. Inc.
                                                                                                               v. Catawbn County, 994 F.Supp 697 (1998). County
                                                                                                               zoning ordinance requiring manufactured homes to
                                898.600   1   240,700   1
                                                                                                               have residential-type siding and roofing is not pre­
 South Carolina                                             24,400    1   12.810            7,160   1
                                                                                                               empted by HUD-Code and is not UnconstiNtional.
                                                                                                        GA: 	 Supreme Court of Georgia, Cannon v. Coweta County,
                                                                                                               389 S.E.Zd 329 (1990). County   zoning ordinance
                                                                                                               excluding manufactured homes from locations other
                                                                                                               than manufactured    home parks held unconstitu­
                                                                                                        SC: 	 Supreme     Court  of South Carolina,   Scranton v.
                                                                                                               Willoughby, 412 S.E.Zd 424 (1991). On a motion for
                  State Zoning Laws:                                                                           summary judgment, exclusionary ordinance is pre­
                                                                                                               sumed valid without evidence to the contrary.
                  DELAWARE:      Every owner of a farm of less than 50 acres shall be
                  permitted to have 1 mobile home located on the farm and every                         m	    Supreme Court of Appeals of West Virginia, Toum
                  owner of a farm of 50 acres or more shall be permitted to have 2                            of Stonewood v. Bell, 270 S.E.2d 787 (1980). Mu­
                  mobile homes located on said farm, such mobile homes to be used                             nicipal zoning ordinances restricting   placement
                  and inhabited by any persons so permitted by the owner. Title 9,                            of mobile homes to designated areas within towns
                  Chapter 34, Subchapter 1, Section 313.                                                      not shown to be arbitrary, unreasonable      or un­
                  MARYLAND:        No relevant state zoning statute identified.
                  WEST VIRGINIA:          Every municipality shall have power and au­
                  thority ... to prohibit with or without zoning the location of occu­
                  pied house trailers or mobile homes in certain residential areas.
                  W.Va.Code Section 8-12-5.
                  VIRGINIA:      Localities with zoning ordinances shall permit the place­
                  ment of manufactured houses with permanent foundations on indi­
                  vidual lots in all agricultural, horticultural   and forest zoning dis­
                  tricts, subject to development standards equivalent to those for site-
                  built homes in the same district. Section 15.2-2290 (1995).
                  NORTH CAROLINA:          Cities may not adopt or enforce zoning regu­
                  lations which exclude manufactured homes from the entire iurisdic­
                  tion, but may adopt and enforce appearance and dimensional crite­
                  ria for manufactured homes. Cities may also designate manufac­
                  tured home overlay districts within residential districts, consisting
                  of a defined area within which additional requirements or standards
                  are placed upon manufactured homes. G.S. 16OA-383.1 (1987).
                  SOUTH     CAROLINA:         No relevant state zoning statute identified.
                  GEORG1A:      No relevant state zoning statute identified.
                  FLORIDA:      Local jurisdictions     may review and regulate architec­
                  tural and aesthetic requirements for mobile homes (including HUD-
                  Code homes), but any such requirements imposed on the mobile
                  home structure itself may pertain only to roofing and siding materi­
                  als. Local requirements and regulations for HUD-Code manufac­
                  tured homes must be reasonable, uniformly applied and enforced
                  without distinctions as to whether such housing is manufactured,
                  located in a mobile home park or mobile home subdivision, or built
                  in a conventional     manner.     Title XXIII, Chapter 320, Section
                  320.8285(S) (1994).

52                                                                                                                                                        Appendix   B
East North Central States

Case Law:                                                          Market Data:
U.S. Court of Appeals, 7th Circuit:    Clark v. County of            STATE                     Detached Housing                  Market Actlvlty,
       Winnebago, 817 F.2d 407 (1987). Illinois county                                            Stock, 1990                         1990
       resquirement that mobile homes not be located                                                                                            I
       outside mobile home districts is presumed consti­
       tutional and was not shown to be so arbitrary as to
       violate due process under the U.S. constitution.
L	      Supreme Court of Illinois,        PeoQle of Village of
        Cahokia v. Wright, 311 N.E.Zd     153 (1974). Zoning
        ordinance prohibiting trailers    outside trailer parks
        and allowing trailer parks only   in specified districts
        was not to be shown arbitrary,    unreasonable or un­
L	      Illinois Court of Appeals, 5th District:    Bach pi.
        County of St.Ckzir, 576 N.E.Zd 1236 (1991). 14.
        foot minimum width requirement struck down as
        arbitrary, capricious and unconstitutional.
                                                                     TOTAL                   11,051,2w     666,400     167,000        25,450        11,440
M1:     Supreme Court of Michigan:      Robimon Township
        v. Knoll, 302 N.W.Zd 146 (1981). Per se exclu­
        sion of all mobile homes from all areas not
        designated as parks is unconstitutional,  but ex­          State Zoning Laws:
        clusion based on failure to satisfy reasonable
        standards designed to assure favorable compari­            WISCONSIN:       No relevant state zoning StaNte    identified.
        son to site-built housing is permissible.                  MICHIGAN:        Local government ordinances shall not be designed
                                                                   as exclusionary to mobile homes whether located inside or outside
                                                                   of parks, and shall not contain roof configuration standards or spe­
                                                                   cial use zoning requirements that apply only to, or exclude, mobile
                                                                   homes. Ordinances may include reasonable standards for mobile
                                                                   homes located outside of parks to ensure they compare aesthetically
                                                                   to site-built housing in the same residential zone. Section 125.2307
                                                                   OHIO:      Counties and zoning boards have no authority to prohibit
                                                                   ot restrict manufactured homes in any district or zone in which a
                                                                   single*family home is permitted, so long as the manufactured home
                                                                   is on a permanent foundation, measures at least 22 feet by 22 feet,
                                                                   has at least 900 square feet of living area, a minimum 3:12 roof
                                                                   pitch, conventional residential siding, a &inch minimum cave over-
                                                                   hang and appropriate guttering, and was manufactured after Janu­
                                                                   ary 1, 1995. Such manufactured homes may be required to comply
                                                                   with all zoning requirements that ate uniformly imposed on all single-
                                                                   family residences in the district, except requirements specifying mini-
                                                                   mum roofpitch and requirements inconsistent with the HUD-Code.
                                                                   Counties may prohibit mobile homes not complying with the HUD-
                                                                   Code from any residential district or zone. Senate Bill 142, Section
                                                                   303.212 (1999).
                                                                   INDIANA:      Local zoning plans and ordinances may subject manu­
                                                                   factured homes and other dwelling units to identical standards and
                                                                   requirements including but not limited to setback, yard area, park­
                                                                   ing, square footage and underfloor space enclosure requirements,
                                                                   but aesthetic requirements for the home under this section are lim­
                                                                   ited to roofing and siding materials. Standards and requirements
                                                                   may not totally preclude all manufactured homes constructed after
                                                                   January 1, 1981 and exceeding 23 feet in width and 950 square feet
                                                                   of occuoied soace from beine installed as oermanent residences on
                                                                   any lot &I which any other &e of dwell&unit     may be placed. 1.C.
                                                                   36-7-4-1106 (1982).
                                                                   ILLINOIS:    No relevant state zoning statute identified.

Appendix B                                                                                                                                               53
East South Central States

Market Data:                                                                                                   Case Law:
     STATE                    Detached Housing                      Market     Activity,                       MS:   Supreme Court of Mississippi: Carpenter v. City of
                                  Stock, 1990                                1996                                    Petal, 699 So.2d 928 (1997). Local urohibition  of
                                                                                                                     mobile homes in area zoned for a&cultural      use
                                                                                                                     overturned, based on denial of due process at vari-
                                                                                                                     ance hearing and unconstitutionality of the under-
                                                                         shipments             shipments             lying prohibition.
                                                                                                               m     Court of Appeals of Tennessee, Middle Section, at
                                                                                                                     Nashville: TennesseeMHJ v. Metro Nashville (1990).
                                                                                                                     A double-section HUD-Code unit is not a mobile
1 Kentucky                   1,011,100   1   165,300   1   16,600    1        5,570        1       6,060   1
                                                                                                                     home consructed as a single self-contained unit on
                                                                                                                     a single chassis as described in section 13-24-201 of
                                                                                                                     the Tennessee statutes,     and therefore cannot be
     Tennessee               1.357.300   1   166,400   1   30,100    1        6,160        1       6,220   1         excluded from a residential area under Tennessee
                                                                                                                     state law.

                 State Zoning Laws:
                 KENTUCKY:       No relevant state zoning statute identified.
                 TENNESSEE:        Regulation of zoning and land use planning shall
                 not exclude placement of residential dwellings with the same gene
                 era1 appearance as requited for site-built homes on land designated
                 for residential use solely because the dwelling is partially or com­
                 pletely constructed in a manufacturing facility. This does not apply
                 to mobile homes constructed as a single self-contained unit on a
                 single chassis. Sections 13-24-201 and 13-24202 (1980).
                 MISSISSIPPL Counties and municipalities may adopt and enforce
                 zoning requirements which establish reasonable appearance and di­
                 mensional criteria for factory manufactured moveable homes so long
                 as the requirements do not have the effect of prohibiting such homes
                 which otherwise meet applicable building code requirements from
                 being lawfully located in at least some part or portion of the county
                 or municipality.   Section 17-l-39 (1989).
                 ALABAMA:      No relevant state zoning statute           identified.

54                                                                                                                                                             Appendix B
West North          Central        States

Case Law:                                                    Market Data:
MO:    Supreme Court of Missouri, State ex rel. Wilkerson      STATE                       Detached     Housing                     Market     Actlvlty,
       v. 	Murray, 471 SW. 2d 460 (1971). Zoning ordi-                                         Stock,   1990                                 1998 

       nance prohibiting the occupancy of mobile homes 

       outside mobile home parks was not clearly arbitrary                                                                               Multi-              Single-

                                                                                          Single-          home,            SFD
       and unreasonable and was not unconstitutional                                                     trailer or
                                                                                                                                        section              section
                                                                                           family                        houslng      HUD-Code             HUD-Code
       under Missouri or U.S. Constirutions.                                             detached       HUD-Code           starts     shipments            shipments
&Q 	   Supreme Court of North Dakota, Gullickson v. Stark                                                    unit
       County Board of County Commissioners, 474 N.W. 2d
       890 (1991). Grant of a variance allowing a single-
       wide mobile home in a residential subdivision that
       was zoned to prohibit such structures was arbitrary
       and unreasonable absent a required showing that
       the land involved in the variance was uniquely af­
       fecred by the ordinance.

                                                               North Dakota

                                                             State Zoning Laws:
                                                             NORTH     DAKOTA:       No relevanr state zoning         statute   identified.
                                                             MINNESOTA:       County and municipal zoning ordinances must not
                                                             prohibit HUD-Code manufactured homes that also comply with all
                                                             other applicable zoning requirements. Sections 394.25, sub.3 (1979),
                                                             and 462.357, sub.1 (1987).
                                                             SOUTH     DAKOTA:       No relevant state zoning statute identified.
                                                             NEBRASKA:      Localities may not adopt or enforce zoning ordinances
                                                             that prohibit the siting of HUD-Code homes but may set require­
                                                             ments for foundation, utilities, setback and square footage and ad­
                                                             ditional standards for width, roof pitch, siding and roofing.
                                                             Lnwg, Cities and counties shall not adopt or enforce requirements
                                                             mandating width standards greater than 24 feet, roof pitch, or other
                                                             design standards for manufactured homes built to the HUD-Code.
                                                             Counries shall not mandate any width standards for single manu­
                                                             factured homes built to the HUD-Code and located on agricultural
                                                             land. Sections 335.30 and 414.28, as amended 1997
                                                             KANSAS: Cities and municipalities may not totally exclude manu­
                                                             factured homes from the jurisdiction,       and may not exclude manu­
                                                             factured homes at least 22 feet wide, with a pitched roof and resi­
                                                             dential-type siding and roofing, from single-family residential dis­
                                                             tricts, but can ser architectural and aestheticstandards for such homes
                                                             to ensure compatibility with site-built homes. Sections 12-742 and
                                                             12-763 (1991, effective January 1, 1992).
                                                             MISSOURI:        No relevant state zoning statute identified.

Appendix B
West South Central States

Market Data:                                                                       Case Law:
 STATE                Detached     Housing             Market      Activity,       j=+& 	   Supreme Court of Louisiana, SummerelI v. Phillips,
                          Stock.   1990                         ,998           I            282 So.Zd 450 (1973). Zoning ordinance which
                                                                                            created a new type of zoning district for mobile
                                                                                            homes but failed to include any objective standards
                                                                                            for establishing such districts was unconstitutional.
                                                                                   TX: 	    Supreme Court of Texas, City of Brookside Village v.
                                                                                            Comeau, 633 S.W.Zd 790 (1982). Regulation of
                                                                                            parks and restriction of location of mobile homes
                                                                                            to parks are constitutional.
                                                                                   U.S. District Court, E.D. Louisiana, Bourgeois v. Parish of.%.
                                                                                            Tammany, 628 F.Supp 159 (1986). Ordinance ex­
                                                                                            cluding mobile homes from A-2 residential zones
                                                                                            was arbitrary and unreasonable, and therefore was
                                                                                            an invalid exercise of the police power.
                                                                                   U.S. Court of Appeals, 5th Circuit,         TMHA v. City of
                                                                                            Nederland, 101 F.3d 1095 (1996). Requirement that
                                                                                            all manufactured homes be in parks was not un­
                                                                                            coo~itutional and was not preempted by the HUD-
         State Zoning Laws:
                                                                                   U.S. District Court, S.D. Texas, Houston Division, RvlHA
         ARKANSAS:      No relevant state zoning statute identified.                        v. City of Ln Porte, 974 F.Supp 602 (1996). Local
                                                                                            exclusion of HUD-Code manufactured homes from
         OKLAHOMA:         No relevant state zoning statute identified.                     certain residential districu is not pre-empted by fed­
                                                                                            eral law and does not violate due process, equal
         TEXAS: Incorporated cities may permit HUD-Code manufactured                        protection or the Commerce Clause of the U.S.
         homes as residential dwellings in areas determined appropriate by                  Constitution.
         the ciry, including subdivisions, PUDs, single lots and rental com­
         munities.    Such cities may prohibit installation of mobile homes
         (constructed before June 15, 1976) for use or occupancy within their
         corporate limits. Vernon’s Civil Statutes, Article 5221f, Section 4A
         LOUISIANA:      No relevant state zoning statute identified.

56                                                                                                                                     Appendix B
Mountain             States (Except Nevada)

Case Law:                                                      Market Data:
MT: Supreme           Court of Montana, Mart? u. Butt&&r         STATE                     Detached Housing                  Market     Activity,
         Bow Gouemment, 641 P.2d 426 (1982). Remanded                                          Stock. 1990                            1999           I
         for proceeding to determine whether exclusion of
         mobile homes and mobile home narks was uncon-
a        Colorado Court of Appeals, Division 1, CMHA V.
         Pueblo County, 857 P.2d 507 (1993). HUD-Code
         preempts inconsistent local construction and safety
U.S. District Court, D.Colorado, CMHA v. Pueblo County,
         946 F.Supp 1539 (1996). Local prohibitions       of
         manufactured housing from certain residential arv
         eas in Salida, CO and Silt, CO unless the units
         comply with the Uniform Building Code are pre-
         empted by the HUD-Code.
U.S. District Court, D.Colorado, CMHA V. City of Salidaer
         al., 977 F.Supp 1080 (1997). Local requirements
         that all manufactured housing in Fountain, CO and
         Frederick, CO be located in specified districts are
         not preempted by the HUD-Code, and do not vio-
         late due process or equal protection.

                                                               State Zoning Laws:
                                                               IDAHO:        Local governments must allow manufactured homes on
                                                               all land zoned for single-family residential use, but may require the
                                                               homes be multi-sectional, enclose at least 1,000 square feet, have a
                                                               foundation enclosed at the perimeter with the home not more than
                                                               12 inches above grade, have a minimum roof pitch of 3:12, have
                                                               residential-type siding and roofing, and have a garage or carport.
                                                               Section 676509A. effective July 1, 1996.
                                                               MONTANA:        In a proceeding for a permit or variance to allow a
                                                               manufactured home there is a rebuttable presumption that place­
                                                               ment of such a home will not adversely affect property values of
                                                               conventional housing so long as the manufactured home was built
                                                               after 1989, is placed on a permanent foundation, includes at least
                                                                1,000 square feet, and has a pitched roof, roofing and siding cus­
                                                               tomarily used on site-built homes. Sections 76-2-202 and 76-2-302.
                                                               WYOMING:       No relevant state zoning statute identified.
                                                               m          Municipalities and counties may not exclude manufactured
                                                               homes on permanent foundations from any zone or area in which a
                                                               single-family residence would be permitted, subject to all local zon­
                                                               ing, building code, and subdivision requirements applicable to single-
                                                               family residences. Sections 10-9-106.5 and 17-27-105.5 (1996).
                                                               COLORADO:        Counties and municipalities must not exclude manu­
                                                               factured homes that meet or exceed, on an equivalent performance
                                                               engineering basis, standards established by the local building code,
                                                               so long as the homes meet the HUD-Code, are at least 24 feet wide
                                                               and 36 feet long, are installed on an engineered permanent founda­
                                                               tion, and have brick, wood or cosmetically equivalent exterior sid­
                                                               ing and a pitched roof. Local requirements may address other re­
                                                               quirements for manufactured      homes, such as foundations,   floor
                                                               space, unit size, improvements, yards and setbacks, so long as the
                                                               same requirements apply to other housing in the district. C.R.S.
                                                               3@28-115(3) and 31-23.301(5), effective January 1, 1985.
                                                               ARIZONA:      No relevant state zoning statute identified.
                                                               NEW MEXICO:          Manufactured homes may not be excluded from
                                                               districts where site-built single~family housing is allowed, or subjected
                                                               to more stringent restrictions, so long as the manufactured home
                                                               meets the HUD-Code, has a heated area of at least 36 feet by 24 feet
                                                               and is installed as required by New Mexico law. However such homes
                                                               may be required to meet requirements other than original construc­
                                                               tion requirements applicable to site-built homes in the district, as
                                                               well as applicable historic or aesthetic standards. N.M.S.A. 3-21A-3

Appendix B                                                                                                                                          57
Pacific Skates and Nevada

Market Data:                                                                                           Case Law:
     STATE                      Detached Houslng                 Market     Activity,                  WA:   Supreme Court of Washington, Duckworth v. City
                                    Stock, 1990                           1998                               of Bonney Lake. 586 P.2d 860 (1978). Zoning code
                                                                                                             excluding mobile homes from single-family resi­
                                                                                                             dence areas but permitting them in another area
                                                                                                             was not shown to be arbitrary, invalid or unconsti­

     Nevada                   236,100    (   69,500   ( 24,400        1,960             I   170   I
     Washington              1,272,300   1 167,000    1 29,100    1   6,590             1   260   1

                  State Zoning Laws:
                  WASHINGTON:           Local prohibitions on siting manufactured homes
                  on individual lots are permitted, subject to a review by the city. State
                  law provides an optional reference to permit manufactured homes
                  if they are built to the HUD-Code, include at least two sections, and
                  have conventional siding and roofing with a minimum 3:lZ roof
                  pitch. R.C.W. 35.63.160 and 35A.63.145 (1988).
                  OREGON:        Cities and counties may not by charter prohibit manu­
                  factured homes from all residential zones, and must permit them
                  within urban growth boundaries on all land zoned for single-family
                  residential use. However, jurisdictions    may require manufactured
                  homes outside parks to be multisectional, at least 1000 square feet
                  in size, placed on an enclosed foundation not mote than 12 inches
                  above grade, with a roof pitch not less than 3:12, with compatible
                  siding and roofing and a thermal envelope meeting the state energy

                  code for single-family dwellings, and with a garage or carport. O.R.S.
                   197.307 (1981) and 197.314 (1993).
                  NEVADA: Zoning ordinances must define “single-family” residence
                  to include manufactured homes, and must also require that such
                  homes that will be placed outside a mobile home park park be not
                  more than 5 years old, have siding and roofing compatible with other
                  nearby homes, contain        more than one section and at least 1,200
                  square feet of living area, and have architectural masking of elevated
                  foundations.    Counties with populations below 25,000 are permit­
                  ted to adopt less restrictive standards. Senate Bill 323 (1999) amend­
                  ing N.R.S. Chapter 278 (1999, effective January 1, 2000).
                   CALIFORNIA:        Cities and counties shall allow the installation of
                  manufactured      homes   meeting the HUD-Code with foundations
                  meeting California requirements on lots zoned for conventional
                  single-family dwellings, subject to the same development standards
                  for setbacks, yards, parking, aesthetics and square footage, and sub­
                  ject to architectural standards for roof overhang, roofing material
                  and siding material. Manufactured homes mote than 10 years old
                  may be excluded from coverage under this section at the option of
                  the local legislative body. California Health and Safety Code, Sec­
                  tion 65852.3 (1980).

58                                                                                                                                                   Appendix B
State Administrative             Agencies


Mr. Jimmy Sloan, Administrator 
            Mr. Chris Stephens 

Manufactured Housing Commission 
           Assistant State Fire Marshal 

350 South Decatur Street 
                  Manufactured Housing Division 

Montgomery, AL 36104 
                      State Fire Marshal’s Office 

                              #2 Martin Luther King, Jr. Drive 

Alaska: none 
                              #620 West Tower 

                                            Atlanta, GA 30334 


Mr. N. Eric Borg, Director 

Department of Building and Fire Safety 
    Hawaii. none


Office of Manufactured Housing 

99 East Virginia, Suite #lOO 
              Grn       Rogers 

Phoenix, AZ 85004 
                         Division of Building Safety Bureau 

                              277 North Sixth Street, Suite #lo0 

                                 Statehouse Mall 

Mr. Whit Waller, Director 
                 Boise, ID 83702-7720 

Arkansas Manufactured Home Commission 

523 South Louisiana Street, Suite 500 
     Illinois. none


Lafayette Building 

Little Rock, AR 72201 
                     Mr. David Fletcher 

                              Codes Enforcement Division 

                               Department of Fire and Building Services 

Mobile Home Complaints Center 
             Indiana Government Center 

Department of Housing 
                     402 West Washington Street, Room W-246 

 and Community Development 
                Indianapolis, IN 462042739 

Division of Codes and Standards 

Manufactured Housing Section 

1800 Third Street, Suite 260 
              Mr. David Linkletter, State Fire Marshal 

Sacramento, CA 95814 
                      Iowa State Building Code Bureau 

                              Department of Public Safety 

                                 621 East 2nd Street 

Mr. Tom Hart 
                              Des Moines, IA 50309 

Director, Housing Division 

Department of Local Affairs 
               Kansas. none


1313 Sherman Street, #323 


Denver, CO 80203 

                                            Mr. Charles R. Wiley, Chief 


                                            Manufactured Housing Division 

Connecticut:     none 
                     Department of Housing, Building 

Delaware: none 
                             and Construction 

                                            1047 U.S. 127 South Building 

- lorida. 

Mr. John R. McDonald, Chief 
               Frankfort, KY 40601 

Bureau of Mobile Homes and R.V., 

   Division of Motor Vehicles
Neil Kirkman Building
2900 Apalachee Parkway, Room A-129
Tallahassee, FL 32399-0640

Appendix                                                                                 59

     Mr. Michael Commarosano 
                   Mr. James Phillips, Director 

     Administrative Director. 
                  Department of Manufactured       Housing, R.V. 

     Manufactured Housing Division 
              and Modular Units 

     State Fire Marshal’s Office 
               Public Service Commission 

     5150 Florida Boulevard 
                    P.O. Box 360 

     Baton Rouge, LA 70806 
                     Jefferson City, MO 65101 


                                    Montana:    none 

     Ms. Anne L. Head, Executive Director 

     Manufactured Housing Board 
                Mr. Mark Luttich, Program Manager 

     Department of Professional 
                Housing and Recreational Vehicle Program 

      and Financial Regulation 
                 Health and Human Services 

     35 State House Station 
                    Regulations and Licensing 

     Augusta, ME 04333 
                         301 Centennial Mall South 

                              Lincoln, NE 68509-5007 

     Massachusetts: none 

                                                 - evada-

     Mr. James Hanna, Director 
                 Ms. Renee Diamond, Administrator 

     Department of Housing 
                     Department of Business and Industry 

      and Community Development 
                Manufactured Housing Division 

     Maryland Codes Administration 
             2501 E. Sahara Avenue, Suite 204 

     100 Community Place 
                       Las Vegas, NV 89104 

     Crownsville, MD 21032-2023 

                              New Hamnshire: none 

                                 New Tersev: 

     Mr. Kevin DeGroat 
                         Mr. Paul Sachdeva, Manager 

     Bureau Deputy Director for Manufactured 
   Department of Housing and Development 

                                  Bureau of Code Services 

      Corporation, Securities, Land 
            3131 Princeton Pike - CN 816 

      Development Bureau 
                       Trenton, NJ 08625-0816 

     6546 Mercantile Way 

     Lansing, MI 48911-5911 

                                                 New Mexico: 


                                                 Mr. John Wilson, Director 

                                Manufactured Housing Division 

     Mr. Ray Karnuth, Director 
                 Regulation and Licensing Department 

     Minnesota Building Codes and Standards 
    725 St. Michael’s Drive 

                                  Santa Fe, NM 87505 

     408 Metro Stquare Building 

     St. Paul, MN 55101 

                                                 New York: 


                                                 Mr. Arnold Byrd, Administrator 

                              Department of State 

     Mr. Millard Mackey, Chief Deputy 
          Code Division, Room 1130 

     Manufactured Housing Division 
             41 State Street 

     State Fire Marshall’s Office 
              Albany, NY 12207-2839 

     455 N. Lamar Street, Room 410 

     Jackson, MS 39202 


60                                                                                            C
North Carolina: 
                             South Dakota: 

Mr. C. Patrick Walker 
                       Mr. Dick Bowman, Director 

Deputy Commissioner 
                         Commercial Inspection and Regulation 

Manufactured Building Division 

Department of Insurance 
                     Department of Commerce and Regulations 

410 N. Boylan Avenue 
                        118 West Capitol Avenue 

Raleigh, NC 27603 
                           Pierre, SD 57501-5070 


North Dakota:   none 

Ohio. none

                                            Mr. Tim Garrington 

                                              Director, Code Enforcement 

Oklahoma: none 
                              State Fire Marshal’s Office 

                                     500 James Robertson Parkway, Suite 301 

Mr. Albert Andres, Administrator 
            Nashville, TN 37243-1160 

Department of Consumer and Business 



Building Codes Division 
                     Mr. Hershal E. Blankenship 

P.O. Box 144700 
                             Director of Manufactured Housing 

1535 Edgewater Drive, N.W. 
                  TexasDepartment of Housing and Community 

Salem, OR 97310 


                                507 Sabine Street, 10th Floor 

                               Austin, TX 78701-3737 

Mr. John F. Boyer, Jr. 

Community Development and Housing Office 



Bureau of Housing and Infrastructure 

Division of Manufactured Housing 
            Mr. George Weiler, Manager 

Forum Building, #314 
                        Construction Trades Bureau 

Harrisburg, PA 17120 
                        Division of Occupational and Professional 


                                              Department of Commerce 

Rhode Island: 

                                              160 E. 300 South 

Mr. Joseph Cirillo, Commissioner 

                                              Salt Lake City, UT 84111 

Building Code Commission 


Department of Administration 

One Capitol Hill 
                            Vermont:   none 

Providence, RI 02908-5859 

                                Mr. Curtis McIver, Associate Director 

South Carolina: 
                             Manufactured Housing Office 

Mr. Gary Wiggins, Administrator 
             Department of Housing and 

Department of Labor, Licensing and Regula­
   Community Development 

                                        Jackson Center 

Building Codes and Related Services 
         501 N. Second Street 

110 Centerview Drive, Suite 102 
             Richmond, VA 23219-1321 

P.O. Box 11329 

Columbia, SC 29211-1329 


    C                                                                                       61

     Ms. Pat McLachlan, Program Manager 
      Mr. Gary Ekes 

     Office of Manufactured Housing 
          Program Manager, Manufactured    Homes 

     Dept. of Community Trade and Economic 
   Safety and Building Division 

                             201 East Washington Avenue 

     906 Columbia Street, S.W. 
               Madison, WI 53702-0006 

     Olympia, WA 98504-8300 

                            Wvomine:   none 

     West Virginia: 
                          All Other States: 

     Mr. Steven A. Allred, Commissioner 
      U.S. Department of Housing and 

     West Virginia Division of Labor 
         Urban Development 

     319 Building Three, Capitol Complex 
     Manufactured Housing and Standards Division 

     Charleston, WV 25305 
                    Room 9152 

                            451 Seventh Street, S.W. 

                                               Washington, D.C. 20410-8000 



62                                                                                   Appendix C
 Manufactured           Home Community                Developments

      This Appendix presents general informa­      allow manufactured housing developments
 tion about community planning and site            by right. Most manufactured housing dis­
 planning for manufactured housing. Plan­          tricts are intended for land-lease communi­
 ning for a manufactured home subdivision,         ties or developments that include units that
 whether it is a land lease community or fee       do not meet established standards compat­
 simple subdivision, involves placement of         ible with site-built residential districts. As
 homes on individual lots as well as the inte­     noted above, however, a rezoning is often re­
 gration of a group of lots into the plan for      quired to create a district, which can add a
 the whole site. The planning will be driven       substantial cost to development and may
 by applicable local development standards         actually discourage development.
 as well as technical considera!tions relating     Minimum Size of Development
 to efficient use of the land. Therefore, in-           To permit more flexibility, it is consid­
 formation in this Appendix may not apply          ered desirable that a low or minimum par­
 in any specific case.                             cel size be allowed for manufactured hous­
      The lot plan can be described in terms       ing developments. Regulations in more than
 of lot size, lot width and frontage, lot cover-   two-thirds of the surveyed communities per­
 age, unit setback and separation, and park­       mitted manufactured home developments
 ing. On the other hand, the site plan as a        smaller than ten acres, or had no require­
whole is more concerned with minimum size          ment for minimum size. This may be par­
 of development, density, perimeter require­       ticularly advantageous for developers or
 ments, landscaping, streets, sidewalks, and       builders that desire to provide infill devel­
common open space. A relationship exists           opment in suburban areas.
between characteristics of lots and the site
plan. For example, regulations regarding            Density
minimum lot size influence overall density,              Regulations in about half the commu­
while parking regulations on-site can influ­        nities surveyed place a density limit on manu­
ence the nature of parking off-site.               factured housing developments. Densities
Development Standards                               in the range of six to eight units per acre
      Several generalizations dealing specifi­     were common and desirable, but a density
cally with development standards can be            of eight units per acre was thought to be the
based on a survey of a geographic cross-sec­       maximum especially if allowance is made for
tion and demographic mix of 20 communi­            the development of common open space.
ties, sponsored by the American Planning           Those communities not providing a density
Association. The survey revealed that a little     limit usually required that the density of the
more than half of the communities                  development be consistent with the require­
establisheddevelopment standards that ap           ments of the district in which the develop­
                                                   ment is located. A density limit of eight units
ply only to manufactured housing land-lease
communities, leaving fee simple manufac­           per acre may be impossible to achieve if a
tured housing subdivisions subject to the          larger minimum lot size of 4,500 square feet
same subdivision regulations that governed         is specified or common open space is re­
site-built housing. Other communities pro­         quired.
mulgated two different sets of development         Lot Size
standards, one for land-lease communities               The regulations in most of the surveyed
and another for fee simple manufactured            communities specified minimum lot sizes,
housing subdivisions.                              in the range of 4,000 to 5,000 square feet,
     More than half of the surveyed commu­         although a minimum lot size of 3,500 square
nities enacted special zoning districts, which     feet was appropriate in certain instances.

Appendix D                                                                                           63
     Single section units can be placed on smaller,    ishes ifmore street width is available. The
     narrower lots than multi-sections. Larger lots    amount of required setback could vary de-
     are more suitable for subdivisions since they     pending on the type of parking. Almost all
     are more likely to be permitted in residen­       of the communities prescribe side and rear
     tial districts with larger homes.                 yard setbacks. These range from five to ten
     Lot Width or Frontage                             feet for side yard setback, while most pro-
          Regulations in three-quarters of the sur­    vide for a ten-foot rear setback. Some com­
     veyed communities prescribe minimum lot           munities allow one side yard to be eliminated
     widths that range from 20 to 85 feet. Most        for zero lot line placements of homes.
     of the communities, however, require a mini-      Common Open Spaceand Facilities
     mum lot width ranging between 40 and 50                Almost three-quarters of the surveyed
     feet, which iscompatible with minimum lot         communities mandate that manufactured
     sizes between 4,000 and 5,000 square feet.        housing developments contain common
     Lot Coverage                                      open space. Regulations prescribe common
          Regulations in about a third of the com­     open space requirements either as a share of
     munities surveyed have adopted maximum            net or gross area, or based on an amount of
     lot-coverage requirements. Most such re­          open space per dwelling unit. The propor­
     quirements range between 40 to 50 percent,        tion of common open space ranged from five
     which is compatible with lot sizes between        percent of net acreage to 20 percent of gross
     4,000 and 5,000 square feet.                      area, while the allocation common open
                                                       space per dwelling unit ranged from 100 to
      Unit Setbackand Separation
                                                       300 square feet per unit. Some regulations
          Developers must scrutinize the regula­
                                                       specify common open space requirements
     tions carefully because the set back is often
                                                       based on the number of lots in the develop­
     measured from an imaginary right-of-way pre-
                                                       ment. Other regulations state common open
     scribed by regulations. Some regulations may
                                                       space requirements in terms of a minimum
     require a right-of-way in a land lease devel­
                                                       absolute number of square feet, ranging from
     opment even though the local jurisdiction
                                                       4,500 to 7,500 square feet. Most communi­
     is not responsible for roads and utilities. The
                                                       ties apply improvement standards to com­
     setback is usually measured from the edge of
                                                       mon open space to ensure that it is usable.
     rhe pavement in the land lease community
                                                       These may include pools, recreation centers,
     and from the edge of the right-of-way in a
                                                       tennis or basketball courts.
     manufactured home fee-simple subdivision.
          Regulations in almost all of the 20 sur­     Perimeter equirements
     veyed communities prescribed minimum                   Nearly all surveyed communities require
     front, side, and rear setback requirements to     a buffer between the manufactured dwelling
     ensure units are not too close to the street,     units in the park and adjacent uses. Most
     some separation exists between units, and         communities prescribe a buffer area of be-
     creation of yard areas. In more than half of      tween 20 to 50 feet in width from the struc­
     the communities unit separation regulations       ture to the perimeter of the community, but
     apply only to land-lease communities. Most        standards can vary depending on the nature
     of the communities require separation be-         of adjacent uses. Regulations sometimes
     tween units of 10 to 20 feet and require a        specify options such as fencing or landscap­
     minimum 15 to 20 foot setback from the            ing to implement the barrier. Flexible regu­
     front lot line, with 20 feet the most common      lations would determine the needand the
     setback. A need for a setback to facilitate       type of buffer based on an analysis of the
     backing a car off a lot into a street dimin­      specific site location.

64                                                                                         Appendix D
Landscaping                                       so that they do not disrupt residents already
     In addition to landscaping of open           in place from earlier stages.
spacesand buffer areas, some of the surveyed            Taxes on land are likely to increase once
communities required landscaping through-         a community approves rezoning for a devel­
out the subdivision to enhance privacy and        opment because its income potential is
improve appearance. In one case, for ex-          higher than in its previous status as open
ample, the community prescribed the num­          land. Also, many communities require that
ber of trees based on a ratio to the number       once a plan for a property is approved for
of lots.                                          subdivision, infrastructure must be installed
Streets and Sidewalks                             within a specified period of time. To avoid
     Most of the surveyed communities pre-        paying taxes on idle land or constructing
scribe local access or minor streets between      unused infrastructure, the size of the parcel
20 and 24 feet wide with no on-street park­       in the initial purchase and subsequent phases
ing. The most common width was 20 feet.           should be carefully considered. For example,
Required widths increase to 27 to 30 feet         some suggest that market studies should jus­
with parking on one side of the street and to     tify a fill-rate of less than six years for large
32 to 42 feet with parking on both sides of       parcels providing 100 sites or more.
the street. For most communities, a three-        Dens@
foot minimum sidewalk width was adequate.               The majority of manufactured home
Parking                                           communities range in density from five to
     Regulations in most of the surveyed com­     seven homes per acre. A great variety of den­
munities require that developers provide two      sities are possible in various types of plats
parking spaces per dwelling unit in a manu­       using different lot sizes, street widths, and
factured home development. In most cases          common amenities.
these spaces have to be provided on the lot             A grid plan in which every lot the same
they serve, but some communities require          size and shape and the same distance from
that one of the parking spacesbe located off-     the street is the most economical subdivision
site. Other communities require parking be        because it is capable of providing the high­
pro-rated for guests, based on the number          est densities. The density of a manufactured
of dwelling units in the development. The         housing project can vary, however, within the
amount of parking spaces on or off the lot         traditional grid pattern adopted in the site
can be flexibly determined based on the size       plan. For example, a project of 40 acres with
of lots and the character of the community.        a basic grid plat can achieve gross densities
A development for older retired persons,for        as high as seven units per acre. This is ac­
example, may require less parking.                 complished assuming no common facilities
                                                   or open space and 20 percent of land in
Other Site 
                                       streets. Such a plat can provide a total of 281
Development Considerations 
                       units in 25 by 200-foot lots of 5,000 square
Minimum Size of Development 
                      feet. Some consider a lot size of 5,000 square
     The size of a project not only influences     feet no longer popular or practical with cur-
the traffic patterns and street design of a de­    rent larger and better multisection homes.
velopment, but it also impacts the type and        A less dense grid pattern of 65 by 110 foot
amount of common open space and recre­             lots of 7,150 square feet can achieve gross
ational facilities. In large projects, staging     densities of 4-l/2 units per acre, providing
of accessand egress in future phases of con­        108 lots, assuming that 56 percent of the land
struction should be designed and planned           is in streets and common open space.

Appendix D                                                                                            65
          The grid plan provides a dull, monoto­        on the lot or that require remote parking
     nous, crowded look reminiscent of the old          have not been appealing to homebuyers.
     “mobile home Park”. A “neighborhood”               Carports ten to 13 feet wide on the side of
     subdivision plat of 40 acres that includes a       the house are popular in the South, while
     slightly a curved main avenue that separates       some communities in the North provide
     various part of the subdivision can be about       parallel parking in front of the home. Typi­
     five percent more expensive than the grid          cally two parking spaces are provided on the
     plat. It is less economical in terms of sewer      site with off-site parking provided for guests.
     and water requirements, but can be designed
                                                        General Site Design Considerutiom
     to consume less area for roads. Acurvilinear
                                                             Several site development characteristics
     plat of the same size with curved streets and
                                                        that are important in planning site-built sub-
     culde-sacs can be about 16 percent more ex-
                                                        divisions also apply to the development of
     pensive than a neighborhood or grid plat,
                                                        manufactured home communities.          These
     because it is not as efficient in regard to cost
                                                        include topography, soils, vegetation, drain-
     and density.
                                                        age, utilities, easements, surrounding envi­
          A typical fee simple manufactured hous­       rons. This section focuses only on aspects
     ing subdivision of 40 acres, on the other          of these characteristics that are particularly
     hand, can easily achieve a density of four         important or are applied differently to manu­
     units per acre. In such casesit is possible to     factured housing.
     have 7,500-foot lots 50 by 150 feet, assum­
     ing no common space, with 31 percent of            Topopaphy
     land for 30-foot wide streets and a 60-foot             As with site-built housing, a slope on a
     right-of-way. This density is typically pre-       property of between zero and three percent
     scribed in ordinances, but 50-foot rights-of-      is of little consequence for manufactured
     way and lot sizes between 5,000 and 6,000          homes, but slopes between four and eight
     feet have been found acceptable in certain         percent begin to have an influence on how
     instances.                                         manufactured homes are sited. Grades of
                                                        more than ten percent can have a significant
     Streetsand Sidewalks                               influence on development costs.
          Average daily traffic, the amount of lot           In general, manufactured homes cannot
     frontage, the degree of on street parking, and     adapt as easily to changing or steep grades as
     the positioning of parking on the lot, are         conventional multifamily or single family
     factors that determine street width for a spe­     housing and the cost of grading can become
     cific site. Street widths in a land lease com­     a significant factor. In conventional hous­
     munity with no parking allowed on the street       ing, structures can become retaining walls
     are normally between 20 to 26 feet, and can        and grades can be crossed much more easily
     be expanded to 30 feet with parking on one         than with a manufactured home. On the
     side of the street and 36 feet with parking        other hand, manufactured homes without a
     on both sides of the street. Fee simple manu­      basement are more adaptable to land with
     factured home subdivisions are built to lo­        high ground water levels than conventional
     cal subdivision standards, generally requir­       housing with basements. The short dimen­
     ing a paved road 36 feet wide.                     sion of the manufactured home, rather than
     Parking                                            its long dimension, can more easily adjust
          Most residents prefer to park their cars      to sharp drops in grade. A five-foot drop
     close to their homes. Consequently, some           across a 50-foot front of a HUD-Code home
     lot concepts thatincrease open spacesby plac­      with its long side parallel to the contours can
     ing the parking in a less convenient location      be more easily accommodated than when

66                                                                                            Appendix D
contours are parallel to the short dimension       Water Systems
and the long side of the home bears the                 A municipality can operate and main­
brunt of the drop in grade.                        tain a water system for the manufactured
     In a conventional subdivision, grading        home community in accordance with its own
and drainage is normally accomplished              standards and provide adequate pressure
within the right-of-way. Also, conventional        andstorage to serve domestic needs and fire
foundation walls or crawlspaces walls can          protection.    If developers build a private
function as retaining walls depending upon         water supply for a manufactured home com­
how the home is placed on the site. This           munity, they will usually be required to have
may be difficult or impossible with manu­          a well(s), turbine pump and mechanical
factured homes.                                    equipment, a standby power source, and
                                                   pneumatic, elevated or ground water storage.
                                                   Private systems have greater flexibility in pipe
     It is claimed that manufactured homes
                                                   sizing than allowed by local ordinances, us­
in land lease communities       discharge less
                                                   ing two- or four-inch lines for domestic ser­
wastewater to treatment facilities, because
                                                   vice instead of the six- to eight-inch lines re­
they house a smaller average size of house-
                                                   quired by local jurisdictions.
hold, especially in retirement communities.
This claim is not generally recognized by regu     Storm Drainage and Storm Water Management
latory agencies, however, and both land lease            The requirements for storm drainage
communities and fee-simplemanufactured             and water management vary greatly by local
home subdivisions are usually held to the          area and the characteristics of the specific
same standards as site-built subdivisions.         site.
Average design flows per day range from 150
gallons to 400 gallons, based on a rule-of-        Utilities
thumb of 100 gallons per capita per day.                 The modern manufactured home com­
     In a land lease community, the smallest       munity has electrical service that is entirely
service line to a home is usually four inches      underground and the electric utility will usu­
in diameter and the smallest collector line is     ally design and install the primary and sec­
eight inches in diameter. Since the sewer          ondary distribution systems. In some cases,
collection system in a land lease community        however, the utility may require the devel­
is usually privately owned and maintained,         oper to install the secondary and even the
there is more flexibility in layout than in a      entire distribution system. Natural gas and
conventional subdivision.      Sewer lines are     propane, commonly used in the North, are
usually run in the back of the home where          not generally provided in the South. In the
they can serve the back third of two homes         interests of aesthetics, cable television is usu­
with short lateral runs, whereas conventional      ally installed underground        in most new
subdivision typically run the line in the street   manufactured      home communities,       some-
with longer lateral runs to individual homes.      times along with telephone lines.
     Most land lease communities use prefab­
ricated treatment plants rather than engi­         Offsite Improvements
neerdesigned plants. The use of septic tanks            Sometimes the developer is required to
and leach fields for effluent from manufac­        cooperate with the local jurisdiction or util­
tured homes usually occurs in low-density          ity in the extension of water, sewer, storm
rural areas and is not feasible in high-priced     sewer, or other utilities on the property and
urban land. Local jurisdictions typically re-      pay the costs of offsite improvements.     As
quire suitable soils and larger sites of a half-   with any type of housing, developers must
acre for such septic tanks and drainfields.        not only weigh the initial cost of such exten-

    D                                                                                                  67
     sions against the cost of developing their own    development costs and thereby reduce home
     systems, but also evaluate the operating costs    prices or rents, homes are usually placed per­
     of such systems, especially water supply or       pendicular to the street and lots are designed
     sewage systems.                                   to be long and narrow. Some manufactur­
                                                       ers have designed an architectural front en-
                                                       try facing the street, allowing the home to
     Lot Planning                                      be placed perpendicular to the street, and
     Lot Size                                          improving appearance at a lower cost. Simi­
          Manufactured home lots generally range       larly, putting the parking or garage at the rear
     from 4,500 to 6,000 square feet, with smaller     of the lot can reduce the required lot front-
     home sites of about 3,500 square feet where       age and development cost.
     special structural or zero lot-line techniques    Lot Coverage
     are used. Most manufactured homes in fee-              The purpose of lot coverage require­
     simple subdivisions have lots that average        ments is to reduce crowding and increase the
     between 7,500 and 15,000 square feet, al­         amount of open space on a lot. An open
     though attractive communities         with lots   space or patio on the lot can be developed
     smaller than 7,500 square feet have been de­      in variety of ways to reduce lot coverage.
     veloped using innovative products and de-         Various options in placement of screened
     signs.                                            porches, carports, and garages can create
     Lx Width or Frontage                              open space on the lot. The zero-lot line con­
          Lot frontage or width is important in­       cept provides the most open space, but may
     fluence on the cost of utility runs and can       not be economically feasible in some areas.
     significantly affect development. About 75        Unit Setback and Separation
     percent of the hard development costs of a             Northern or Midwestern communities,
     lot are reportedly accounted for by the           where space is needed for snow removal,
     amount of lot front footage. The lot width        usually have ten-foot side setbacks, with a
     required could vary with the way the unit is      distance of 20 to 25 feet between homes and
     placed on the lot, the lot size, building set-    a 25-foot setback, if parking is placed in front.
     back and the way parking is placed on the         In moderate climates typical of the South,
     lot.                                              setbacks of five to ten feet from the edge of
          Placing a multisection home parallel to      the pavement have been used. Although
     the street frontage provides an advantage in      setbacks for manufactured         homes in fee
     marketing because it has the potential to         simple subdivisions vary, ten-foot side set-
     simulate the appearance of a site-built home.     backs, 2@foot rear setbacks, and 25sfoot front
     Increasing the front footage, however, in-        setbacks from the right of way line are typi­
     creases the cost of development. To reduce        cal.

68                                                                                                D
      This Appendix lists a variety of resources      Conference of States on Building Codes and
available to builders that want to learn more         Standards (NCSBCS), located in Herndon, VA
about manufactured housing in general, as well        (telephone 703-437-0100), is actively involved in
as for those who wish to study specific aspects of    the HUD-Code program and can provide infor­
the market for HUD-Code homes in their busi­          mation about national and state-level regulatory
ness area.                                            issues relating to manufactured housing. The
      The Manufactured        Housing    Institute    NCSBCS web site is at www.ncsbcs.org.
(MHI), located at 2101 Wilson Boulevard, Suite
610, Arlington VA 22201 (telephone 703-558-           Periodicals, Newsletters and Magazines
0400), is the principal national trade association    Allen Letter. Monthly newsletter. PMN Publish­
for the manufactured housing industry. MHI                  ing, Indianapolis, IN.
offers numerous publications for sale or free of      Automated Builder. Monthly magazine. Ventura,
charge, sponsors research, performs lobbying, and           CA.
compiles and publishes a variety of statistics con­   Crittenden’s     Manufactured Housing Community
cerning the industry. The MHI web site is at                Report. Monthly newsletter. Crittenden Pub­
www.mfghome.org.                                            lishing, Inc., Novato CA.
      MHI has state-level affiliates in many states   Manufactured Home Merchandiser. Monthly maga­
around the U.S. Several of these affiliates main­           zine. RLD Group, Inc., Chicago IL.
tain their own Internet sites, which are sources      Urban Lund. Monthly magazine. ULI-The Ur­
of state-level information about manufacturing              ban Land Institute, Washington, D.C.
plants, retailers and communities located in their
territories. These sites include:                     Books and Reports
                                                      Albern, William F. and M.D. Morris, Ed., Fuc­
Alabama                           www.amhi.org              tory-Constructed Housing Deuelogments, Plan­
Arizona                          www.mhiaz.org              ning, Design and Construction. CRC Press,
California                         www.cmhi.org
                                                            Boca Raton, FL.
Colorado                 www.coloradohome.org
                                                      Allen, George, David Alley, and Edward Hicks
Illinois                          www.imha.org
                                                            with Joseph Owens, Development, Marketing
Indiana                 www.americas-home.com
                                                            and Operation of Manufactured Home Commu­
Kansas                   www.midwestpride.com
                                                            nities. John Wiley & Sons, Inc., New York,
Kentucky                www.kymanufhome.com
                                                            NY. 1994.
Louisiana                        www.lmha.com
Michigan                    www.michhome.org          Goldman Sachs & Co., U.S. Research: Manufac­
Minnesota                www.mnmfghome.com                  tured Housing. New York, NY, April 1997.
Montana                         www.mtmha.org         Manufactured       Housing Institute, Manufactured
Nevada                    www.nmhcongress.org               Home Financing in 1996. Arlington,        VA.
New Mexico                    www.nmmha.com                  1997.
New York                         www.nymha.org        Manufactured Housing Institute, Manufactured
North Carolina                  www.ncmhi.com               Home Financing in 1997. Arlington,        VA.
North Dakota                   www.ndmha.com                 1998.
Ohio                         www.omha-usa.org         7he Manufactured Housing Zoning Forum, Report.
Oklahoma                         www.mhao.com               Sponsored by U.S. Department of Housing
Oregon                           www.omha.com               and Urban Development, American Plan­
Pennsylvania                      www.pmha.org              ning Association and Manufactured Hous­
South Dakota                   www.sdmha.com                ing Institute.
Washingtson                    www.nwpride.org        Merrill Lynch & Co., The Manufactured Housing
      The Manufactured Housing Association for              and Recreational Vehicle Industries. May 1996.
Regulatory Reform (MHARR) is another indus­           National Commission on Manufactured Hous­
try trade association, located in Washington, D.C.          ing, Final Report. U.S. Government Print­
(telephone 202-783-4087).The         Housing and            ing Office, Washington, D.C., 1994.
Building Technology division of the National          Sanders, Welford, Manufactured Housing: Regula-

    E                                                                                                        69
          tion, Design       and
                      Innowations         DeveelopmentOp-   38 CFR Part 36: VA personal property and
          Cons. American Planning Association, Plan­            real property loan programs
          ning Advisory Service Report Number 478.          Federal National Mortgage Association, Selling
          Chicago, IL, July 1998.                               Guide
     U.S. Department of Housing and Urban Devel­            Federal Home Loan Mortgage Corporation,
          opment, Office of Policy Development and              Single-Family Se&r/Servicer Guide
          Research, Factory and Site-Built Housing: A       Note: The Code of Federal ReguIations (CFR) is ac­
          Comparative Analysis. 1998.                       cessibleon-line at www.gpo.gov/nanz/cj?.
     U.S. Department of Housing and Urban Devel­
          opment, Office of Policy Development and          Manufacturer Contacts
          Research,       Building      Innovation    for   American Homestar                208-890-5877
          Homeownership. 1998.                               Dave Whitson
     U.S. Department of Housing and Urban Devel­            Bluegrass Housing, Inc.           606-849-4119
          opment, Office of Policy Development and           Art Archibald
          Research, Innovaationsat the Cutting Edge- New    Buccaneer Homes of
          Ideas in Manufactured Housing. August 1999.        Alabama, Inc.                    205-921-3135
     U.S. Department of Housing and Urban Devel­             Dave Gilland
          opment, Office of Policy Development and          Burlington Homes of Maine        207-539-4406
          Research, Manufactured Home Installation           Tracy Millet, Jim Pereira
          Training Manual. April 1999.                      Cavalier Homes, Inc.              256-747-1575
     U.S. Department of Housing and Urban Devel­             Phillip Privett
          opment, Office of Policy Development and                                           248-340-9090
                                                            Champion Enterprises, Inc.
          Research, Manufactured Home ProducersGuide
                                                             Andy Scholz
           to Working in the Site-Built Market. 1999.
                                                            Chandeleur Homes, Inc.           256-593-9225
     U.S. Department of Housing and Urban DeveE
                                                              David Bridges
           opment, Office of Policy Development and
                                                            Chief Industries, Inc.,
           Research, Next Generation of Manufactured                                         402-694-5250
                                                            d/b/a Bonnavilla Homes
           Housing. Design Phase. April 1997.
                                                             Mike Newmann
     U.S. Department of Housing and Urban Devel­                                             423-380-3000
                                                            Clayton Homes, Inc.
           opment, Office of Policy Development and
                                                             Jim Miller
           Research, Permanent Foundation Guide for
                                                            Commodore Corporation             219-533-7100
           Manufactured Housing. September, 1996.
                                                              Bill Glick
     Vermeer, Kimberly and Josephine Louie, The
                                                            Crest Ridge Homes, Inc.           254-559-8211
           Future of Manufactured Housing, Joint Center
                                                              Bob McNatt
           for Housing Studies of Harvard University,
           Cambridge MA. January 1997.                      Crestline Homes                   910-276-0195
                                                              Mike Walters
     Regulations and Financing Requirements                 Dutch Housing, Inc.               219-463-7502
     7 CFR Part 1924: RHS rural housing loan pro-             Stacy Swihart, Jerry Brown
         gram regulations
                                                            Fall Creek Housing Corporation    219-523-1444
     7 CFR Part 3550: RHS direct single-family loan
                                                              Doug Lantz
         program regulations
                                                            Fleetwood Enterprises, Inc.       909-351-3500
     24 CFR Part 201: FHA financing rules for Title
                                                              Bob Jordan, Mallory Smith
         1 (personal property) loans
     24 CFR Part 203: FHA financing rules for Title         Fortune Homes, Inc.               616-483-7000
         2 (real property) loans                              Joe Kimell, Bob Miller
     24 CFR Part 3280: Manufactured Home Con­               Franklin Homes, Inc.              205-332-4510
         struction and Safety Standards                       D.L. “Bones” Creel, Bruce Falkner
     24 CFR Part 3282: Manufactured Home                    Grand Manor, Inc.                 912-228-0023
         Procedural and Enforcement Regulations               Jerry Milligan

70                                                                                                   A#endix   E
Hi-Tech Housing, Inc.            847-441-6612    Manufacturer Internet Sites
 Steve Schultz                                         Virtually all large manufacturers main­
Homes of Legend, Inc.           256-593-9630     tain Internet sites containing information for
 Kevin Sims                                      consumers, retailers and in some cases for
Kit Manufacturing Company       208-453-2500     investors. Mostoffer the ability to search for
 Wade Butler, Harold Breech                      plants or dealers by geographic location or
Manufactured Housing                             provide this information in the form of maps
 Enterprises, Inc.               419-636-4511    or lists. Some sites show floorplans and pic­
 Nathan Kimpel                                   tures of model homes. The web sites for
Moduline Industries, Inc.       360-748-8881     some of the largest publicly traded produc­
 Ron Stine                                       ers include copies of annual financial re-
New Era Building Systems,Inc. 814-764-5581       ports, which generally contain a great deal
 Ryan Bish                                       of information about the firm, its divisions,
Oakwood Homes Corporation       336-664-2400      its operations and its finances. Many divi­
R.D. Harvey, Sr.                                 sions of large firms have their own web sites,
   Destiny Division              912-985-6100
                                                 new sites are coming on line, and mergers,
    Donnie Edwards                                acquisitions and consolidations of the indus­
   Golden West Division          541-926-8631
                                                  try are constantly taking place, so this list
    Bruce Stoyer
                                                  may rapidly go out of date.
   Schult/Marlette Division      219-825-5881
    Dale Kase                                     American Homestar
Patriot Homes, Inc.              219-524-8600
                                                  Asrrohomes (Cavalier)
  Steve Reyenga
R-Anell Custom Homes, Inc.       704-483-5511
                                                  Bellcrest Homes, Inc.
Darrell Mullinix                                    www.bellcrest.com
   Gold Medal Homes, Inc.        704-445-9610
                                                  Belmont Homes (Cavalier)
    Buddy Clark, Jon Gandy                          wwwbelmont-homes.com
Redman Homes, Inc.               248-340-9090     Brigadier Homes of North Carolina (Cavalier)
  Andy Scholr                                       www.brigadier.com
Rochester Homes, Inc.            219-223-4321      Buccaneer Homes (Cavalier)
  Kenny Anderson                                    www.buccaneerhomes.com
Signal Homes, Inc.               915-263-2300      Burlington Homes
  Bud Ledingham                                      www.burlingtonhomes.com
Silvercrest Homes,                                 Cavalier Homes
  Western Homes Corp.            909-734-6610        www.cavhomesinc.com
  Craig Fleming, Darko Rapotez and                 Cavalier Homes of Alabama
  SteveTruslow                                       www.cavalier-homes.com
 Skyline Corporation              219-294-6521     Cavco Industries, Inc.
  Terry Decio                                        www.cavco.com
Taylor Made Homes, Inc./                           Clayton Homes
American Family Homes             417-845-3311       www.clayton.com
  Gin Carver                                       Champion Enterprises
Virginia Homes Mfg.                                  www.champent.com
  Corporation                     804-738-6107     Commodore Corporation
  Danny Herion                                       www.commodorehomes.com
 Wick Building Systems,Inc.                        Crestline Homes (Commodore)
  Butch Berg                     608-795-4281        www.crestlinehomes.com

    E                                                                                             71
     Fairmont Homes                        Skyline Corporation
      www.fairmonthomes.com                 www.skylinehomes.com
     Fall Creek Housing Corp.              Spirit Homes, Inc. (Cavalier)
      www.fallcreekhomes.com                www.spirithomes.com
     Fleetwood Enterprises                 Taylor Made Homes, Inc.
      www.fleetwood.com                     www.taylormadehomes,com
     Four Seasons Housing                  Town & Country Homes (Cavalier)
       www.fourseasonshousing.com           www.tcmh.com
     Fuqua Homes, Inc. [Oregon]            Titan Homes (Champion)
      www.fuquahomes.com                    www.titanhomes.net
     Fuqua Homes, Inc. [Missouri]          Wick Building Systems
      www.fuquahomes-mo.com                  www.wickmarshfield.com
     Hi-Tech Housing, Inc.
     Homestead Homes (Cavalier)            Financial/ln~estment  Institution Internet Sites
      www.hmstead.com                      GreenPoint Financial
     Horton Homes                           www.greenpoint.com
      www.hortonhomes.com                  Green Tree Financial
     Jacobsen Homes                         www.gtfc.com
      www.jachomes.com                     Associates Housing Finance, Inc.
     Kit Manufacturing                      www.theassociates.com
     Liberty Homes
                                           Professionul lndushy Consultants
     Mansion Homes                              The following is a selected list of firms
      www.mansionhomes.com                 that specialize in providing consulting ser­
     Marlette Homes, Inc. (Schult)         vices to address engineering, design, financ­
      www.marlettehomes.com                ing and/or marketing issues, both to land-
     New Era Building Systems              lease community developers and to builders
      www.new-era-homes.com                seeking to use manufactured housing.
     Nobility Homes, Inc.                  Mr. David Alley 

                                           Alley & Associates 

     Oakwood Homes                                                        Palm Harbor, FL 

     Palm Harbor Homes                     Mr. Steve Hullibarger 

       www.palmharbor.com                  The Home Team 

                                           916-965-5153                       Fair Oaks, CA 

     Patriot Homes
       www.patriothomes.com                Mr. Roderick Knoll 

     Pine Grove Manufactured Homes, Inc.   Manufactured Housing Resources,Inc. 

       www.pinegrovehomes.com              303-442-4402                         Boulder, CO 

     Redman Homes (Champion)               Mr. Joseph E. Link 

       www.redmanhomes-nw.com              MarketWise 

     Ritz-Craft Corporation, Inc.          410-750-7373                   Ellicott City, MD 

       www.ritz-craft.com                  Mr. Donald Westphal 

     Riverchase Homes (Cavalier)           Donald Westphal & Associates 

       www.riverchase-homes.com            248-651-5518                        Rochester, Ml 

     Rochester Homes, Inc.
                                           Mr. David Wolff 

                                           Real Estate Diagnostics, Inc. 

     Schult Homes (Oakwood)
                                           732-505-9552                       Toms River, NJ 

     Silvercrest (Champion)                Additional information about specialists in these 

       www.silvercrest.com                 and related areas is available from MHI. 

72                                                                                  Appendix
Visit PD&R’s Web Site
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Other services of HUD USER, PD&R’s Research Information Service, include listservs;
special interest, bimonthly publications (best practices, significant studies from other sources);
access to public use databases; hotline I-800-245-2691 for help accessing the information you need.

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