S. 964 — Property Improvement and Manufactured Housing Loan Modernization Act of 2025

This section revises the Federal Housing Administration (FHA) Title I loan insurance program, which insures approved lenders against losses on loans and credit extensions for single-family home alterations, repairs, improvements (including manufactured homes), manufactured home purchases, lot development, and historic structure preservation. (As background, the program supports homeowners and manufactured home buyers by enabling access to credit from private lenders with FHA insurance backing.) Specifically, the section (1) expands eligible purposes under subsection (a) to include construction of additional or accessory dwelling units, as defined by the Secretary of Housing and Urban Development (HUD); (2) in subsection (b)(1), revises maximum insurable principal amounts to $75,000 for single-family alterations, repairs, and improvements (new subparagraph (A)); $150,000, with $37,500 for refinancing (from $60,000 and $12,000, respectively, in subparagraph (B)); $106,405 for single-section manufactured home purchases and $195,322 for multi-section (new subparagraph (C)); $149,782 for single-section manufactured home and lot and $238,699 for multi-section manufactured home and lot (new subparagraph (D)); $43,377 for lot development (from $23,226 in subparagraph (E)); and such amount as HUD prescribes for accessory dwelling unit construction (new subparagraph (H)); (3) authorizes HUD to periodically reset these limits (subparagraphs (A) through (H)) based on justification and methodology set forth in advance by regulation; (4) sets maximum loan maturities at up to 30 years, as determined by HUD (subsection (b)(3)); (5) requires HUD to annually index loan limits in subsection (b)(1) using one or more methods based on appropriate data (new subsection (b)(9)); and (6) simplifies lease requirements for certain loans (subsection (b)(11)). Finally, the section directs HUD to develop or select indexing methods within one year of enactment, with the prior method applying on an interim basis. (Thus, these changes increase maximum loan sizes, add ADU financing, enhance program flexibility, and tie limits to inflation or other data, potentially expanding access to insured credit for home improvements and manufactured housing.)

This section directs the Secretary of Housing and Urban Development to conduct a study on the cost effectiveness of factory-built housing (i.e., manufactured homes constructed under the National Manufactured Housing Construction and Safety Standards Act of 1974 and modular homes as defined in 12 U.S.C. 5517(c)) and submit a report to Congress that includes (1) an analysis of cost reductions from centralized manufacturing compared to unit transportation expenses; (2) advantages in precision and reduced materials waste; (3) expected replacement and maintenance costs over the first 40 years; and (4) opportunities for use beyond single-family housing, such as accessory dwelling units, two- to four-unit housing, and large multifamily housing.