Preservation and Reinvestment Initiative for Community Enhancement (PRICE) Competition

More than 22 million Americans currently live in manufactured housing.[1] Manufactured housing units account for approximately seven percent of occupied housing stock nationwide and fifteen percent in rural areas.[2] Manufactured housing is also the largest source of unsubsidized affordable housing in the country, making it a crucial piece of the nations affordable housing stock.[3] The median household income of manufactured housing unit owners is about half the median household income of site-built homeowners [4].Manufactured housing can be permanently affixed to the lot underneath or be affixed to a support and anchoring system that allows the home to be relocated more easily. Manufactured housing is subject to HUD certification requirements pursuant to the regulations set forth in 24 CFR part 3282 (Manufactured Home Procedural and Enforcement Regulation) and the Manufactured Home Construction and Safety Standards set forth in 24 CFR 3280 (see the definition of manufactured housing in 24 CFR 3280.2).There are many significant challenges that may impact housing stability for those that live in manufactured homes. Despite perceptions of manufactured housing as mobile, manufactured housing can be very expensive and complicated to move, and more than 90% of manufactured homes do not move after the initial installation.[5] This can present a significant challenge for owners of manufactured homes who do not own the lot underneath their unit (referred to as homesite renters for the purposes of this NOFO). For some manufactured homeowners that rent a lot in a manufactured housing community (MHC), there is the potential for landowners or investors to increase lot rents, forcing homesite renters to make a difficult decision: pay to move their home, pay the increased rent, or leave their valuable asset.Due to state titling laws, many prospective homeowners looking to purchase a manufactured home may have no option but to finance their home with personal property or chattel loans, which often have higher interest rates than typical real property mortgages even in situations where they may own the lot their home sits on. Many older manufactured homes require repairs or enhancements to make them livable and suitable to their environment, or they are sited in hazard prone areas. Meanwhile, nearly a third of households living in manufactured housing are headed by an elderly individual, and manufactured housing households have a higher prevalence of a significant disability.[6] These vulnerable populations need access to infrastructure and amenities that are often unavailable for residents of manufactured housing. The infrastructure serving manufactured housing communities is often self-operated, not built to high standards and has become increasingly stressed by deferred maintenance and extreme climate and weather events.[7]HUD is issuing the Preservation and Reinvestment Initiative for Community Enhancement (PRICE) competition NOFO to preserve long-term housing affordability for residents of manufactured housing or an MHC, to redevelop MHCs, and to primarily benefit low- and moderate-income (LMI) residents. This NOFO is authorized by the Consolidated Appropriations Act, 2023 (Public Law 117-328, approved December 29, 2022). Congress appropriated $225 million for competitive grants to preserve and revitalize manufactured housing and eligible manufactured housing communities and directed HUD to undertake a competition under title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301 et seq.). Of the $225 million available, $200 million is reserved for the main PRICE competition, of which at least $10 million is intended for Indian tribes or Tribally Designated Housing Entities and Tribal organizations designated by such Indian tribes (hereinafter referred to as Tribal Applicants), and $25 million is reserved for a pilot program to assist in the redevelopment of manufactured communities as replacement housing that is affordable. The minimum grant request for the main PRICE competition is $5 million for all applicants, except Tribal Applicants. Tribal Applicants may request a minimum of $500,000 for the main competition. The minimum grant request for the PRICE pilot is $5 million.HUD has six goals for this competition:Fairly and effectively award the PRICE grant funding and related technical assistance.Increase housing supply and affordability for LMI persons nationwide, including in urban, suburban, rural, and tribal areas.Preserve and revitalize existing manufactured housing and manufactured housing communities.Increase resilience to extreme weather, natural hazards, and disaster events, support energy efficiency, and protect the health and safety of manufactured housing residents.Promote homeownership opportunities and advance resident-controlled sustainable communities through new and revitalized units of manufactured housing that will remain affordable.Support accessibility modifications, repairs, and replacement of deteriorating manufactured housing units especially to increase accessibility and access for persons with disabilities, facilitate aging in place for older adults and increase access to affordable housing for low-income households.Successful proposals will:Demonstrate a compelling need for the preservation and revitalization of manufactured housing or MHCs;Evaluate how manufactured housing and MHCs contribute to the local affordable housing stock and what resources are needed to rehabilitate or replace existing units and MHCs;Prioritize equity and affirmatively further fair housing by demonstrating a commitment and ability to identify and remove barriers to: 1) expanding access to affordable housing in a manner that promotes desegregation, and 2) expanding access to affordable housing for protected class groups, for example, by addressing the lack of physically accessible manufactured homes in accordance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8, or by addressing policies preventing the rehabilitation of manufactured housing communities, deteriorating infrastructure, and lack of resources to support owners and residents of manufactured housing units.Engage a broad and inclusive stakeholder group, including residents of MHCs;Utilize strategies to reduce the impacts of environmental hazards and extreme weather;Increase community resilience, especially when reconstruction, relocation, or mitigation are involved; and,Ensure long-term housing availability, accessibility, and affordability for LMI households.Proposals may include the preservation and revitalization of manufactured housing units or MHCs at one or multiple sites and may span multiple jurisdictions. HUD seeks to preserve and revitalize manufactured housing units or communities in both urban and rural areas, as well as on Tribal lands and in disaster-prone communities. Eligible revitalization activities are broad and may include infrastructure or housing (and other eligible activities). HUD is instituting a requirement that all manufactured housing units receiving PRICE assistance must be maintained as affordable for a minimum period. Pursuant to title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301 et seq.), proposals may include, but are not limited to, the following eligible uses:Development or improvement of infrastructure that supports new or existing MHCs and/or manufactured housing units, including roads, sidewalks, water, and wastewater infrastructure including well and septic systems, and utility hookups;Environmental improvements such as remediation of contaminants in land servicing MHCs;Repair, rehabilitation, or replacement of existing manufactured housing units (pre-1976 units, which were referred to as mobile homes, may only be replaced. PRICE funds may not be used for their repair or rehabilitation);Planning activities around MHCs, including functional or implementation plans for land use or zoning changes to be more permissive of manufactured housing units or communities;Resident and community services, including relocation assistance (which may include moving manufactured housing units) and eviction prevention;Resilience activities, which include the reconstruction, repair, or replacement of manufactured housing and MHCs, as well as that for infrastructure serving MHCs, to enhance their safety and stability in the face of natural hazards such as, but not limited to, wildfires, earthquakes, tornados, extreme heat, and flooding, and to mitigate known hazards and the rising threat that extreme weather events present to manufactured housing due to climate change, except that for pre-1976 mobile homes, funds made available under resilience activities may be used only for replacement; or,Assisting manufactured housing renters or homesite renters with land and site acquisition.A portion of funds are reserved for PRICE pilot awards that may be used for the following:Redevelopment of MHCs as affordable replacement housing. Note that for each unit of single-family manufactured housing (including pre-1976 mobile homes) replaced under the project, up to four dwelling units of such affordable housing must be provided; or,Relocation assistance, buy-outs, or down payment assistance for residents.Manufactured Housing BackgroundManufactured homes are safe, quality housing and an affordable alternative often indistinguishable from site-built homes. Built in factories, the per square foot cost of producing a manufactured home is generally less than half the cost of constructing comparable site-built, single-family detached homes.[8] The lower production costs pass through to consumers as the purchase price and monthly costs of manufactured homes are generally less than half that of site-built homes. These lower costs provide an avenue to affordable homeownership options for LMI residents. With a large and growing shortage of affordable and physically accessible housing in the United States, manufactured housing can provide more rental and ownership options for LMI persons.The benefits and affordability of manufactured housing also apply to homes built on Tribal lands. About seventeen percent of households on Tribal land live in manufactured housing.[9] With approximately 68,000 new units needed to eliminate housing overcrowding in Tribal areas alone, more manufactured housing could help alleviate an acute housing shortage for the American Indian/Alaska Native population and assist to replace severely physically inadequate units.On June 22, 2023, HUD issued a Dear Tribal Leader letter soliciting Tribal feedback on manufacturing housing needs in Indian Country. Additionally, manufactured housing was also discussed at HUDs inaugural Tribal Intergovernmental Advisory Committee (TIAC) meeting in April 2023, and Tribal representatives provided HUD feedback and recommendations. HUD received over seventy-four comments from more than ten respondents during Tribal consultation. HUD thanks all the respondents that provided Tribal feedback. This NOFO was developed in accordance with HUDs Tribal consultation policy and incorporates feedback from Tribal leaders.A manufactured home is built to HUDs Manufactured Home Construction and Safety Standards (HUD Code, 24 CFR part 3280), which are federal standards for the design and construction of manufactured homes to assure quality, durability, safety, and affordability. HUD was authorized to establish this code by the National Manufactured Housing Construction and Safety Standards Act of 1974. Since then, Congress and HUD have advanced the manufactured housing regulatory framework (including rounds of improvements to the HUD Code for manufactured housing beginning in 1976, and minimum installation standards promulgated in 2007 (24 CFR part 3285) and continual updates including the more recently published updates to The Manufactured Home Construction and Safety Standards, 3rd set Final Rule (effective July 12, 2021)).Manufactured Housing StatisticsSite built homes average $167.87 per square foot while manufactured homes average $85.00 per square foot.[10]About 40 percent of manufactured homeowners rent the lot where their home is located. They typically rent individual plots of land, known as lots or pads, in MHCs owned and managed by a for-profit operator. Less commonly, borrowers may place the unit on someone elses land (such as that belonging to a family member) without making payment, rent the land from a non-profit or government entity, or own the land indirectly, such as participating in a resident-controlled cooperative.[11]Freddie Mac estimates that there are 1,065 resident owned communities, constituting 2.4% of the 45,600 MHCs estimated to be operating in the U.S.[12]The U.S. Census Bureau estimates that 112,882 manufactured housing units were shipped across the country in 2022 a number that has grown consistently since the market collapse in 2009.[13]New manufactured homes can be built to replace both aging manufactured homes as well as site-built housing stock. More than half of the overall U.S. housing stock is more than 42 years old and a quarter is more than 62 years old.[14]Manufactured housing has the potential to be an even more significant source of unsubsidized affordable housing than it is today. The Biden-Harris Administrations Housing Supply Action Plan promotes the development of more attractive or low-cost financing for manufactured homes to increase the U.S. affordable housing supply.[15][1] Urban Institute. Retrieved from 22 Million Renters and Owners of Manufactured Homes Are Mostly Left Out of Pandemic Assistance Urban Institute on September 15, 2023.[2] Urban Institute. Retrieved from 22 Million Renters and Owners of Manufactured Homes Are Mostly Left Out of Pandemic Assistance Urban Institute on September 15, 2023.[3] Consumer Financial Protection Bureau. Retrieved from https://files.consumerfinance.gov/f/documents/cfpb_manufactured-housing-finance-new-insights-hmda_report_2021-05.pdf on September 15, 2023.[4] Fannie Mae. Retrieved from Manufactured Housing and Manufactured Homes Landscape Fannie Mae on October 5, 2023.[5] Mobile Home Living. Retrieved from 4 Things To Consider Before Moving A Manufactured Home Mobile Home Living on July 17, 2023.[6] Consumer Financial Protection Bureau. Retrieved from Data Spotlight: Profiles of older adults living in mobile homes Consumer Financial Protection Bureau (consumerfinance.gov) on September 8, 2023.[7] American Planning Association. Retrieved from Potential of Manufactured Housing and Resident-Owned Communities (planning.org) on September 15, 2023.[8] Urban Institute. Retrieved from How Manufactured Housing Can Fill Affordable Housing Gaps Housing Matters (urban.org) on September 15, 2023.[9] The Center for Indian Country Development (CICD) at the Federal Reserve Bank of Minneapolis. Retrieved from The Tribal Leaders Handbook on Homeownership on July 17, 2023.[10] Manufactured Housing Institute. Retrieved from About Manufactured Homes - MHI (manufacturedhousing.org) on October 19, 2023.[11] Enterprise Community Partners. Retrieved from Supporting Manufactured Home Communities Enterprise Community Partners on July 17, 2023.[12] Freddie Mac. Retrieved from Freddie Mac: Manufactured Housing Residents Face Challenges in Establishing Resident-Owned Communities Freddie Mac (gcs-web.com) on July 17, 2023.[13] The Census Bureau. Retrieved from https://www2.census.gov/programs-surveys/mhs/tables/time-series/annual_shipmentstostates.xlsx on October 19, 2023.[14] Urban Institute. Retrieved from The Role of Manufactured Housing (urban.org) on July 17, 2023.[15] The White House. Retrieved from President Biden Announces New Actions to Ease the Burden of Housing Costs The White House on July 17, 2023.