4 Tough Questions; the NFPA, NEC, GAO & U

Pithy Blog # 256 Copyright 2013 28 July 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America’


Pithy Responses to ‘Four Tough Questions’ Continue….


Here’s Why the NATIONAL FIRE PREVENTION AGENCY Should Have Land Lease Lifestyle Community Representation & Participation During NATIONAL ELECTRIC CODE Proceedings


Manufactured Housing Association for Regulatory Reform Meets with the GOVERNMENT ACCOUNTABILITY OFFICE in Behalf of YOU & the Entire Manufactured Housing Industry…


Preview of Year 2014. Maybe Landfall by then, for Manufactured Housing’s PERFECT STORM (It Is Indeed On the Horizon), &
Certainly a New Era, one way or another, for Land Lease Lifestyle Community Owners/operators, of all sizes, Nationwide!



Pithy Responses to ‘Four Tough Questions’ Continue…

“George. To successfully build a lasting home or an organization, one must have a strong foundation, in accords with one’s landscape or market. The recent commentaries to your (blog) questions are well – crafted and thought – provoking. I propose this group of intelligent, industry – experienced, successful men and women ‘start from the beginning’ with: Who are we? What do we want to be? How will we achieve agreed upon goals? How much will we spend to be successful? Where and when will we do this? Perhaps our contemporary model should be akin to what we experienced in the late 1960s and early 70s, before acquiescing to a national building code that – in the minds of some – has contributed to our eventual suicide as an industry.” NB (lightly edited. GFA)

Well, I promised in my reply to this blog flogger (reader), I’d throw this challenge out to ‘any and all takers’ in the manufactured housing industry and land lease lifestyle community realty asset class. What I read in the previous paragraph was a plea for National Dialogue Relative to Issues that plague us today; everything from the woeful lack of trade communication (e.g. ‘Why is there no manufactured housing – specific finance language in the GSE reform legislation’, and now, the Protecting American Taxpayers and homeowners Act or PATH legislation?’) to the increasing presence of ‘big business’ cliques on manufactured housing’s national advocacy scene.

There’re historic precedents such strategic coming – together of various MHIndustry segments. The first National State of the Asset Class caucus occurred 27 February 2008, when more than 100 (then) manufactured home community owners/operators convened in Tampa, FL., and identified five foci to guide their collective future; foci, that two years later, was crafted by Randy Rowe of Greene Courte Partners, into a Five Part Market Share Recovery Plan for the entire MHIndustry.

And the following year, on 27 February 2009, more than 100 HUD – Code home manufacturers and (then) MHCommunity owners/operators, from throughout the U.S. convened for a second NSAC caucus, at the RV/MH Heritage Foundation’s Hall of Fame facility in Elkhart, IN. Results? Agreement on the need for specially – designed lines of new HUD – Code homes, to eventually be labeled as Community Series Homes or CSH Models (i.e. singlesection & smaller multisection homes with durability – enhancing features), for siting in MHCommunities nationwide.

Well, it’s been half a decade since anyone has stepped forward, from either the manufacturing/distribution or real estate development/investment segments of the MHIndustry, to ‘collectively and strategically plan how to break out of the five year new home shipment nadir of only 50,000+/- units shipped per year.’ Perhaps the suggestion and passion expressed in the opening paragraph will motivate one or more national MHIndustry leaders, salaried or elected, to take the first step to this end. Know when the perfect time might be to do this? At the annual meeting of the Manufactured Housing Institute (‘MHI’) the end of September and beginning of October, in Carlsbad, CA. Anyone out there listening? Anyone out there willing to lead? Nathan? John? Dick? Danny?

NOW, let’s turn our attention to the ‘Fourth Tough Question’, to wit: “Does the HUD – Code manufactured housing industry Really Want to See the Return of ‘easy access to chattel capital’….? Well, this one spawned two really interesting responses, and they’re posted here in their edited entirety. The first is from a veteran land lease lifestyle community owner/operator who routinely buys new HUD – Code homes to sell on – site, and finance said transactions within his properties.

“Chattel lending seems to have evolved into two distinct categories. The first occurs where loans stand on their own, via independent third party lenders like the Big Four + One (now, Big Four + Five) = 21st Mortgage Corporation, Triad Financial Services, Inc., CU Factory Built Lending, and U.S. Bank – Manufactured Housing Finance; and recent debut of Green Hill Financial. These firms know default – related costs will be high, so create very restrictive (i.e. high credit scores) and expensive (i.e. high interest rates) chattel mortgage programs. The second, and newest category, involves what’s advertised as a cooperative efforts between LLLCommunity owners and lenders, e.g. the 21st Mortgage Corporation’s two year old C.A.S.H. Program, Cavco’s (new in 2013) 360 Program, and a unique home finance program offered by Legacy Homes, domiciled in Texas. While most LLLCommunity owners feel these programs are certainly a step in the right direction, they’re presently too one – sided, making lenders appear to be taking advantage of the property owners, with chattel loan terms as high as 12 – 20 percent.” SR

Then, from another equally successful and veteran manufactured housing industry businessman, this contrarian conundrum:

“SURE THEY DO! The problem is, it’s not going to happen! Why? Sources of capital well understand the problems related to financing manufactured housing – and they’re reacting accordingly. For example; when Wall Street financiers call, they ask ‘on target questions’ regarding the challenges and weaknesses of financing manufactured housing. And once they confirm what they suspect is the case, they’re gone!

Furthermore; banks and credit unions routinely hear their respective regulators quote national directives critical of manufactured housing lending. So, even though chattel lending, on this type housing, can be the most profitable consumer loan they originate, it is from their perspective, fraught with peril.

Another example. Recently received notice from a regional lender pulling out of chattel lending on manufactured housing. Why? Because land lease lifestyle community owners resist forming meaningful relationships, and express lack of willingness to assume part of the loan risk – by eliminating some of the home seller’s ability to take advantage of the lender if or when chattel loans go bad.

What the manufactured housing industry wants, it isn’t going to get! What they can get, they don’t like! Specifically, they don’t like being forced to engage in regulated and professionally – operated seller finance operations; so, many independent (street) MHRetailers and LLLCommunity owners avoid the business opportunities staring them in the face. So, until the players ‘grow up’ and face facts, as they exist today, and embrace performing like mature (finance) professionals, not much is going to change on the chattel loan lending front!” KR

End of Story. And if we’re not careful, ‘End of an Industry’; or, certainly one that’ll not return to the oft cited ideal performance level of 250,000 new HUD – Code manufactured homes shipped per year.


Here’s Why the NATIONAL FIRE PREVENTION AGENCY Should Have Land Lease Lifestyle Community Representation & Participation During NATIONAL ELECTRIC CODE Proceedings.

While NFPA and NEC might be familiar entity and code abbreviations to some segments of the HUD – Code manufactured housing industry, I’d wager few, if any of you reading these lines, have any idea that ARTICLE # 550 of the National Electric Code, clearly labeled as ‘Mobile homes, Manufactured Homes, and Mobile Home Parks’ even exists, and WHY it should be important to you. *1

First the (kinda) good news. Though both national manufactured housing advocacy bodies have ignored suggestions, over the years, to petition to participate in behalf of mobile homes, manufactured homes, & mobile home parks seat on the NFPA – created NEC Code Making Panel, there is one RV/MH supplier who has kept the manufactured housing industry informed of proposed changes to the NEC that might detrimentally affect it, and the LLLCommunity asset class. In this latter instance, think electrical pedestals, and electrical hook up of manufactured homes within and outside this property type. *2

The not so good news. “This Summer (2013), the NFPA board will give final approval to the 2014 edition of the NEC.” Do we, as an industry and realty asset class know of changes therein that might or will affect our type housing and installation of electrical components thereto pertaining? Nope! Should we, as an industry and realty asset class be aware, beforehand, of any changes to the National Electric Code that might, or will, affect our type housing and installation of electrical components? Yes! Talk about leaving ourselves open to be blindsided by a code – writing agency, particularly the land lease lifestyle community segment of the manufactured housing industry.

Frankly, I understand maybe why the manufacturing/distribution segment of the manufactured housing industry eschews participation here. After all, they’re pretty much sheltered from local – if not all building codes, by the federally preemptive nature of the HUD – Code, and existence of the MHCC or Manufactured Housing Consensus Committee. What is not ‘sheltered’, however, is what happens after new HUD – Code homes leave the factories and are installed, permanently or temporarily, on scattered building sites conveyed fee simple, or on a rental homesites within LLLCommunities. Right now we, as LLLCommunity owners/operators, are completely ‘unprotected’ from arbitrary electric code – making, except for the presence of one industry – friendly person on the NFPA board’s Code Making Panel, capable of recommending proposed changes, good and bad, to the NEC.

Are YOU happy with the foregoing happenstance or status quo? I’m not. And while not presently in a position to influence or effect a soon change thereto, it’s certainly on my agenda to bring the matter to a head during the months ahead. If YOU feel similarly, let me know via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or via email: gfa7156@aol.com

In the meantime, ‘Thanks Wade!’ By the way, he’ll be present at the 22nd Networking Roundtable, 18 – 20 September, in Bloomingdale, IL., If you’d like to learn more about this game of Russian roulette we’re playing with the NEC these days, talk to him there.

End Notes.

1. ARTICLE 550.1 Scope of Article. “The provisions of this article cover the electrical conductors and equipment installed within or on mobile and manufactured homes, the conductors that connect mobile and manufactured homes to a supply of electricity, and the installation of electrical wiring, luminaires, equipment, and appurtenances related to electrical installations within a mobile home park up to the mobile home service – entrance conductors or, if none, the mobile home service equipment.”

2. ARTICLE 550.4(B) General Requirements. “In Other Than Mobile Home Parks. Mobile homes installed in other than mobile home parks shall comply with the provisions of this article.”


Manufactured Housing Association for Regulatory Reform Meets with the GOVERNMENT ACCOUNTABILITY OFFICE in Behalf of YOU and the Entire Manufactured Housing Industry…

Remember a few months ago (March), when This Blog ‘broke the story’, describing how a team of federal government interviewers was traveling the U.S., meeting with HUD – Code home manufacturers, and others, asking:

“What effect would it have on your business if HUD was no longer the federal regulator tasked with overseeing the manufactured housing industry?”

Well, that matter came to a head recently, when “A group of MHARR member – company chief executives (comprised of the current MHARR Chairman – John Bostick – and two past chairmen) met in Washington, D.C. , with officials of the Government Accountability Office or GAO, tasked with conducting an investigation of the HUD manufactured housing program, at the request of Congress.” This, and following passages, quoted from a story in the July 2013 edition of the Journal.

Result? A clear and timely look at how the Manufactured Housing Association for Regulatory Reform looks after our manufactured housing business interests, whether we’re (That’s YOU & ME) members of their trade advocacy body or not: “During a nearly two – hour session at GAO headquarters, the MHARR – member executives spelled – out, in no uncertain terms, the absolute necessity of the federal manufactured housing program in ensuring both the affordability and availability of manufactured housing, for Americans – and especially lower and moderate – income families. The group also addressed and put to rest questions previously posed by GAO, which raised concerns that it could be considering recommendations either to eliminate or significantly downgrade the federal manufactured housing program.”

Furthermore, the MHARR team “…provided the GAO investigative team with specific examples of HUD’s resistance to, and non- implementation of, major provisions of the Manufactured Housing Improvement Act of 2000 (a.k.a ‘MHIA @ 2000’), methodically explaining the ramifications of each, while walking GAO officials through the importance, relevance, and inter – dependence of the full and proper implementation of all those reforms.” (Lightly edited. GFA)

All that needs to be said at this point, is ‘Be Grateful the MHARR is in Washington, D.C., Looking After the Political & Regulatory Interests of Manufactured Housing &, when possible, the Post Production Segments of the Industry!” GFA


Preview of Year 2014. Maybe Landfall by then, for Manufactured Housing’s PERFECT STORM (It Is Indeed On the Horizon), & Certainly a New Era, one way or another, for Land Lease Lifestyle Community Owners/operators, of all sizes, Nationwide!

Geesh! I’d really like to tell you more, but can’t. Why? Well, in the first instance, I’d be violating confidences of individuals still in their decision – making process; and frankly, consequences of such a PERFECT STORM, where manufactured housing is concerned, are at the same time, unpredictable – and as such, could wind up being either a Middle Ages – like hiatus, OR ‘not really bad at all’, depending on who, if anyone, steps into the gap and how they perform. Perplexed? At this point in time, I am too.

In the second instance, a New Era for Land Lease Lifestyle Community owners/operators is unfolding according to plan. The first steps have already occurred; with the program being refined this month and next. During the hectic Fall meeting schedule…

LLLCommunity owners/operators will see their perennial need for effective national advocacy, ongoing statistical research, timely print & online communication, superb peer networking & realty deal – making, as well as professional property management training & certification addressed, consolidated, and improved!

Suggest you copy or clip the lines immediately before this sentence, carry them with you this Fall, challenging present and future industry/asset class leaders, salaried and elected alike, to deliver this Six Part Agenda, ushering in a New Era for LLLCommunity Owners/operators, of all sizes!

Hectic Fall Meeting Schedule? By way of review, here’s where we (*) can meet & talk:

• 5 August @ RV/MH Hall of Fame Induction Banquet (*) in Elkhart, IN. (574) 293-2344. Craig Bollman & Theresa Desfosses will be among ten inducted. And new Fairmont Home, out in front of the facility will be almost ready for touring!

• 18 – 20 September @ 22nd International Networking Roundtable (*) in Bloomingdale, IL. (317) 346-7156. ‘Celebrating 20 Years of Camaraderie!’ 100 registrants already; so if a LLLCommunity owner/operator, don’t risk missing it!

• 29 September – 1 October @ MHI’s annual meeting(*) in Carlsbad, CA. (703) 558-0678. National Communities Council division (*) will also meet during the same time frame. This will be first time NCC has met since October 2012.

• 8 – 10 October @ 3rd annual SECO Symposium in Forsythe, GA. ((865) 385-9675. Only regional event planned & hosted entirely by LLLCommunity owners/operators, with emphasis on seller – financing of homes; & several homes on display. For more information, talk with Spencer Roane, MHM®

• 10 & 11 October @ MHC or Arizona meeting (*) in Tucson, AZ. (480) 345-4202 Very special program being planned. Call & ask Susan for details!

• 15 – 17 October @ WMA’s annual convention & expo in Reno, NV. (916) 448-7002

• 15 – 19 October @ Institute of Real Estate Management’s Leadership Conference in Scottsdale, AZ. (312) 329-6000

• 16 – 18 October @ National Communities Council division’s Leadership Forum (*) in Chicago, IL. (703) 558-0666

• 23 & 24 October @ New York Housing Association’s annual meeting at Turning Stone Resort in New York. (518) 867-3242

• 5 & 6 November @ London Computer’s annual Rent Manager Conference (*) on Marco Island, FL. Primarily for Rent Manager users.

• 5 – 8 November @ Urban Land Institute’s Fall Meeting in Chicago, IL. Manufactured Housing Communities Council will also meet during this time frame.


George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Leave a comment

Name .
Message .

Please note, comments must be approved before they are published