Manufactured Housing Thermal Requirements

DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Part 1924

RIN 0575-AC11

Manufactured Housing Thermal Requirements

AGENCIES: Rural Housing Service, Rural Business-Cooperative Service,

Rural Utilities Service, Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Housing Service (RHS), a part of the former Farmers

Home Administration (FmHA), and now an agency within the Rural

Development mission area of the U.S. Department of Agriculture, is

amending its regulations regarding the thermal requirements for

manufactured homes. The intended effect is to make the references to

thermal requirements for manufactured homes consistent with

requirements for the U.S. Department of Housing and Urban Development

(HUD) zones that correspond to the RHS climatic zones. This will reduce

the burden on the manufactured housing industry, RHS field personnel,

and most importantly RHS customers.

EFFECTIVE DATE: October 4, 1999.

FOR FURTHER INFORMATION CONTACT: Samuel J. Hodges III, Architect,

Program Support Staff, Rural Housing Service, U.S. Department of

Agriculture, Stop 0761, Washington, DC 20250-0761, Telephone: (202)

720-9653.

SUPPLEMENTARY INFORMATION:

Classification

This rule has been determined to be significant and was reviewed by

the Office of Management and Budget under Executive Order 12866.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1940,

subpart G, ``Environmental Program.'' It is the determination of the

issuing agency that this action does not constitute a major Federal

action significantly affecting the quality of the human environment,

and in accordance with the National Environmental Policy Act of 1969,

Pub. L. 91-190, an Environmental Impact Statement is not required.

Intergovernmental Consultation

This action affects the following programs as listed in the Catalog

of Federal Domestic Assistance:

10.405 Farm Labor Housing Loans and Grants

10.410 Very Low to Moderate Income Housing Loans

10.415 Rural Rental Housing Loans

All of the affected programs, except 10.410 Very Low to Moderate

Income Housing Loans, are subject to the provisions of Executive Order

12372 that requires intergovernmental consultation with State and local

officials prior to making individual loans.

Civil Justice Reform

The final rule has been reviewed under Executive Order 12998, Civil

Justice Reform. In accordance with this rule:

(1) Unless otherwise specifically provided all state and local laws

and regulations that are in conflict with this rule will be preempted;

(2) no retroactive effect will be given to this rule except as

specifically prescribed in the rule: and (3) administrative proceedings

of the National Appeals Division (7 CFR part 11) must be exhausted

before bringing suit.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act (44 U.S.C. 3507),

the information collection requirements included in this rule have been

approved through 7 CFR part 3550. The assigned OMB number is 0575-0172.

This rule does not impose any new information collection or

recordkeeping requirements from those approved by the Office of

Management and Budget.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA),

establishes requirements for Federal agencies to assess the effects of

their regulatory actions on State, local, and tribal governments and

the private sector. Under section 202 of the UMRA, RHS generally must

prepare a written statement, including a cost-benefit analysis, for

proposed and final rules with ``Federal mandates'' that may result in

expenditures to State, local, and tribal governments, in the aggregate,

or to the private sector, of $100 million or more in any one year. When

such a statement is needed for a rule, section 205 of the UMRA

generally requires RHS to identify and consider a reasonable number of

regulatory alternatives and adopt the least costly, more cost-effective

or least burdensome

[[Page 48084]]

alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) for State, local, and tribal

governments or the private sector. Thus today's rule is not subject to

the requirements of sections 202 and 205 of the UMRA.

Background

Subsection 502(e)(1) of the Housing Act of 1949, 42 U.S.C.

1472(e)(1), establishes standards for manufactured homes which will be

financed with RHS single family housing loans under section 502 of the

Housing Act of 1949. Subsection 502(e)(1)(C) provides that manufactured

homes must meet the energy conservation requirements applicable to

other non-manufactured housing financed by RHS single family housing

loans until the agency established energy conserving requirements under

section 502(e)(2). The purpose of this regulation is to establish

energy conserving requirements specifically designed for manufactured

homes pursuant to section 502(e)(2).

The section 502(e) criteria for energy conserving requirements for

RHS financed manufactured housing require that the requirements: ``(A)

reduce the operating costs for a borrower by maximizing the energy

savings and be cost-effective over the life of the manufactured home or

the term of the loan, whichever is shorter, taking into account

variations in climate, types of energy used, the cost to modify the

home to meet such requirements, and the estimated value of the energy

saved over the term of the mortgage; and (B) be established so that the

increase in the annual loan payment resulting from the added energy

conserving requirements in excess of those required by the standards

prescribed under title VI of the Housing and Community Development Act

of 1974 [42 U.S.C. 5401 et seq.] shall not exceed the projected savings

in annual energy costs.''

The agency is adopting the energy conserving standards established

by HUD under title VI of the Housing and Community Development Act of

1974 and, as hereinafter discussed, has determined that these zoned

standards maximize energy savings and are cost-effective to the

borrower. Under this final rule manufactured homes will no longer be

required to meet the RHS thermal requirements applicable to non-

manufactured single family housing financed by RHS. Exhibit D of 7 CFR

part 1924, subpart A, adopts the HUD thermal design zone requirements

for the Federal Manufactured Home Construction and Safety Standards

(FMHCSS) that correspond to the RHS climatic zones.

The existing RHS requirements for a manufactured unit are: (1) The

unit must meet the FMHCSS, and (2) the unit must meet the same RHS

thermal requirements as are applicable to other, non-manufactured

single family housing, financed by RHS prior to the National Energy

Policy Act of 1992. Since HUD increased its energy requirements for

manufactured homes (58 FR 54975, Oct. 25, 1993, effective Oct. 25,

1994), RHS has compared these new requirements with the RHS thermal

requirements to evaluate the differences.

Our analysis indicates that the thermal performance of a unit built

to the HUD requirements is roughly comparable to the thermal

performance of a unit built to the requirements of the corresponding

RHS climatic zones. The table below lists the HUD zones that are

roughly comparable to the RHS climatic zones.

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HUD zones

RHS climate zone (degree-days) (state

boundary)

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0-1000..................................................... 1

1001-2500.................................................. 2

2501-4500.................................................. 2

4501-6000.................................................. 3

>6000...................................................... 3

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The HUD increases in the thermal requirements of the building

envelope are substantial. However, HUD's requirements are not based on

climatic region; instead, they are based on state boundary. As an

example, in the State of California there are 5 RHS climatic zones;

whereas, HUD has identified the entire state as a single zone (HUD Zone

2). In California, the HUD-code home would be acceptable to RHS in

climatic zones with 4500 or less heating degree days. However, in

colder climates of California, the HUD Zone 2 unit would not be

adequate. The HUD Zone 3 requirements are roughly comparable to the RHS

requirements for climatic zones with 4501 or more heating degree days.

Similar comparisons can be made in other states.

On this basis, in order to simplify requirements we are amending

our current energy requirements for manufactured housing to adopt the

design requirements for the HUD zones that correspond to the RHS

climatic zones.

These are the benefits to the manufactured housing industry, RHS,

and most importantly, RHS customers:

1. Manufacturers will no longer have to conform with the energy

requirements of two Federal agencies. As required by federal law,

manufacturers will continue to follow the FMHCSS for non-thermal

requirements.

2. Manufacturers will not have to retain qualified consultants to

certify that designs conform with the existing RHS thermal

requirements.

3. Manufacturers will no longer have to substantiate design

conformance to RHS thermal standards.

4. Loan processing will be expedited since less paperwork will have

to be reviewed by RHS loan approval officials.

5. RHS will reduce its regulatory requirements.

6. This will simplify on-site inspection by the RHS Community

Development Managers (CDM). Since each local office already knows their

climatic zone, and since HUD requires the thermal zone for which a unit

is built to be posted on a sticker in the unit, a CDM could quickly

determine if a unit is acceptable by simply inspecting the HUD required

sticker. RHS's current requirement for a separate certification sticker

would be deleted.

7. The RHS customer will have a wider selection of manufactured

homes to chose from.

8. The energy efficiency of the manufactured home will be roughly

the same and in some cases exceed existing RHS thermal requirements.

9. The elimination of a separate energy efficiency requirement

applicable only to RHS manufactured homes will make lending

institutions more willing to make loans to guarantee RHS customers for

manufactured homes.

Discussion of Comments

On October 6, 1998 RHS published a proposed rule in the Federal

Register, 63 FR 53616. The five comments received were from persons

representing organizations that are directly affected by the rule. The

commenters included a housing developer and rural development

consultant, an engineer with a manufactured housing producer and

representatives from federal agencies involved in financing

manufactured homes.

All commenters approved or supported the adoption of the FMHCSS

thermal design zone requirements that correspond to RHS climatic zones.

The positive comments on the proposed rule included such statements as

it ``is a positive measure'', ``reduce paper work'', ``improves loan

processing'', ``streamlines lending procedure for manufactured housing

in rural areas'', ``eliminates the need for manufacturers

[[Page 48085]]

and RHS staff becoming familiar with different standards'', ``will

reduce the cost of housing for low and moderate income applicants'',

``will give loan applicants a greater range of choices of housing

design, style and size for their family needs'', ``improves the

agencies relationship with the manufactured housing industry and

lending community'' and ``improves the services to the customer.'' The

Agency has not changed the basic structure or content of the proposed

rule.

Finally, one commenter suggested that a requirement be added to

Rural Development (RD) Form 1924-25, ``Plan Certification'', that would

require the dealer-contractor to certify the unit meet the FMHCSS

thermal design zone requirements that correspond to RHS climatic zones.

The FMHCSS requires that the manufacturer permanently affix a ``Heating

Certificate'' that certifies the design zone that the manufactured home

complies with. This Heating Certificate is affixed to an interior

surface of the home that is readily visible to the Agency staff and the

homeowner. It is the Agency's position that the determination as to

which FMHCSS thermal design zone requirement corresponds to the

appropriate RHS climatic zones is best covered early in the loan making

process and will be addressed at or before the pre-construction

conference. Therefore, the Agency has not changed RD Form 1924-25.

List of Subjects in 7 CFR part 1924

Agriculture, Construction and repair, Construction management,

Energy conservation, Housing, Loan programs--Agriculture, Low and

moderate income housing.

Therefore, chapter XVIII, title 7, Code of Federal Regulations is

amended as follows:

PART 1924--CONSTRUCTION AND REPAIR

1. The authority citation for part 1924 continues to read as

follows:

Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.

Subpart A--Planning and Performing Construction And Other

Development

2. Exhibit D of subpart A to part 1924 is amended by adding

paragraph IV. G to read as follows:

Exhibit D to Subpart A--Thermal Performance Construction Standards

* * * * *

IV. Minimum Requirements

* * * * *

G. New Manufactured Housing

The Uo Value Zone indicated on the ``Heating Certificate'' for

comfort heating shall be equal to or greater than the HUD Zone listed

in the following table:

------------------------------------------------------------------------

FMHCSS (HUD

RHS climate zones (winter degree days) code) Uo

value zones

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0-1000..................................................... 1

1001-2500.................................................. 2

2501-4500.................................................. 2

4501-6000.................................................. 3

> 6000..................................................... 3

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Example: If a manufactured home is to be located in a geographic

area having between 2501 and 4500 RHS winter degree days, the Agency

will accept a Uo value Zone 2 unit or Zone 3 unit constructed to the

HUD FMHCSS.

If a central air conditioning system is provided by the home

manufacturer, a ``Comfort Cooling Certificate'' must be permanently

affixed to an interior surface of the unit that is readily visible.

This certificate may be combined with the heating certificate on the

data plate.

* * * * *

Dated: August 26, 1999.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 99-22902 Filed 9-1-99; 8:45 am]

BILLING CODE 3410-XV-P