HOMES Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7386 To ensure that federally backed financing for the construction, rehabilitation, or purchase of manufactured home communities is available only for communities whose owner has implemented minimum consumer protec- tions in the lease agreements with residents of all manufactured home communities owned by such owner, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 26, 2020 Ms. FINKENAUER (for herself, Mrs. AXNE, and Mr. LOEBSACK) introduced the following bill; which was referred to the Committee on Financial Services A BILL To ensure that federally backed financing for the construc- tion, rehabilitation, or purchase of manufactured home communities is available only for communities whose owner has implemented minimum consumer protections in the lease agreements with residents of all manufac- tured home communities owned by such owner, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7386 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Helping Owners Meet 2 Essential Standards Act of 2020’’ or the ‘‘HOMES Act 3 of 2020’’. 4 SEC. 2. REQUIREMENTS FOR COVERED LOAN PROGRAMS. 5 (a) REQUIREMENTS.—No loan shall be eligible for in- 6 surance by the Secretary of Housing and Urban Develop- 7 ment or purchase by an enterprise (as such term is defined 8 in section 1303 of the Housing and Community Develop- 9 ment Act of 1992 (12 U.S.C. 4502)), as applicable, under 10 a covered loan program (as such term is defined under 11 section 4 of this Act) unless— 12 (1) the borrower under the loan certifies to the 13 Secretary or the applicable enterprise that the bor- 14 rower will include, in any lease agreement for a pad 15 site, or a pad site and manufactured home, located 16 in any manufactured home community that the bor- 17 rower or an affiliate of the borrower owns, the min- 18 imum consumer protections specified in subsection 19 (b) of this section; and 20 (2) the borrower complies with regulations, 21 which shall be issued by the Secretary or the Direc- 22 tor of the Federal Housing Finance Agency, as ap- 23 plicable, that require the borrower to submit docu- 24 mentation to the Secretary or the applicable enter- 25 prise that is sufficient, as determined by the Sec- 26 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7386 IH retary or applicable enterprise, to ensure that the 1 borrower is complying with the certification pursu- 2 ant to paragraph (1), which shall include a copy of 3 the standard lease agreement used by the borrower 4 that includes such minimum protections. 5 (b) MINIMUM CONSUMER PROTECTIONS.—The min- 6 imum consumer protections specified in this subsection are 7 as follows: 8 (1) One-year lease terms that are renewable for 9 additional one-year terms unless there is good cause 10 for non-renewal. 11 (2) A right to receive 60-day advance written 12 notice of any increase in the rents for pad sites, or 13 pad sites and manufactured homes, located in the 14 community, including a written justification of the 15 increase with information on increases in the costs 16 of operating, maintaining, or improving the commu- 17 nity. 18 (3) A 5-day grace period for rent payments. 19 (4) A right to cure defaults on rent payments. 20 (5) A right for a tenant to sell a manufactured 21 home owned by the tenant without having to first re- 22 locate it out of the community. 23 (6) A right for a tenant to sell a manufactured 24 home owned by the tenant in place within a reason- 25 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7386 IH able time period, but not shorter than 45 days, after 1 eviction by the manufactured housing community 2 owner. 3 (7) A right for a tenant who owns a manufac- 4 tured home— 5 (A) to sublease or assign the pad site lease 6 for the unexpired term to a new buyer of the 7 tenant’s manufactured home unless the pro- 8 spective tenant fails to meet the community’s 9 reasonable and uniformly applied application 10 criteria; and 11 (B) in such a case of denial, a right to 12 written notice provided by the owner of the 13 community informing the tenant of the denial 14 and the prospective tenant of the denial and the 15 specific reason or reasons for denial. 16 (8) A right for a tenant who owns a manufac- 17 tured home to post ‘‘For Sale’’ signs. 18 (9) A right to receive 60-day advance written 19 notice of the planned sale or closure of the manufac- 20 tured housing community. 21 (10)(A) A right against termination of tenancy 22 except in cases in which a tenant engages in a mate- 23 rial noncompliance with the rental agreement, a ten- 24 ant commits a material violation of the manufac- 25 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 7386 IH tured home community reasonable rules or regula- 1 tions, or the community has a material, legitimate, 2 and uniformly applied business reason for termi- 3 nation that was included in the lease agreement as 4 grounds for termination. 5 (B) In such a case of termination, a right to 6 written notice provided by the owner of the commu- 7 nity informing the tenant of the termination and the 8 specific reason or reasons for termination. 9 Nothing in this subsection may be construed to annul, 10 alter, or affect any State or local law providing greater 11 protections to tenants of manufactured home communities 12 than the protections afforded under this subsection. 13 (c) PRICING INCENTIVES.—Any covered pricing in- 14 centive offered for loans issued after the date of the enact- 15 ment of this Act shall reward implementation of resident 16 protections that are more protective than those specified 17 in subsection (b). Any covered pricing incentive that does 18 not comply with this requirement may not be offered for 19 any loan issued after the date of the enactment of this 20 Act. 21 SEC. 3. MANUFACTURED HOME COMPANY LENDING STAND- 22 ARDS COMMISSION. 23 (a) ESTABLISHMENT.—There is established a com- 24 mission to be known as the Manufactured Home Company 25 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 7386 IH Lending Standards Commission (in this section referred 1 to as the ‘‘Commission’’). 2 (b) DUTIES.— 3 (1) PROPOSED STANDARDS.—Not later than 4 the expiration of the 12-month period beginning on 5 the date of the enactment of this Act, the Commis- 6 sion shall submit to the Congress, the Secretary of 7 Housing and Urban Development, and the Director 8 of the Federal Housing Finance Agency a report 9 that sets forth proposed consumer protection stand- 10 ards for the covered loan programs that— 11 (A) are in addition to and provide greater 12 protection than the requirements under section 13 2(b); and 14 (B) could be used as a basis for estab- 15 lishing covered pricing incentives under the cov- 16 ered loan programs that comply with section 17 2(c). 18 (2) STANDARD FOR DETERMINATIONS.—Any 19 determination by the Commission to approve a con- 20 sumer protection in the proposed standards required 21 under paragraph (1) shall be made by a vote of a 22 simple majority of the members of the Commission. 23 (c) MEMBERSHIP.— 24 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 7386 IH (1) NUMBER AND APPOINTMENT.—The Com- 1 mission shall be composed of 10 members, as fol- 2 lows: 3 (A) The Secretary of Housing and Urban 4 Development (or the Secretary’s designee). 5 (B) The Director of the Federal Housing 6 Finance Agency (or the Director’s designee). 7 (C) Two each shall be appointed by the 8 Speaker of the House of Representatives, the 9 minority leader of the House of Representa- 10 tives, the majority leader of the Senate, and the 11 minority leader of the Senate. Of the two mem- 12 bers appointed by each such officer— 13 (i) one shall be employed at the time 14 of appointment as a professor or academic 15 researcher with demonstrated background 16 in housing and consumer protection issues, 17 especially as they relate to manufactured 18 housing; and 19 (ii) one shall be a current or former 20 member of Congress. 21 (2) CHAIRPERSON AND CO-CHAIRPERSON.— 22 (A) CHAIRPERSON.—The chairperson of 23 the Commission shall be designated by the 24 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 7386 IH President from among the members of the 1 Commission. 2 (B) CO-CHAIRPERSON.—The co-chairper- 3 son shall be selected as follows: 4 (i) DESIGNATION BY SPEAKER OF 5 THE HOUSE.—If, on the date of appoint- 6 ment, the Speaker of the House is of a dif- 7 ferent political party than the President, 8 the Speaker of the House shall designate 9 the co-chairperson from among the mem- 10 bers of the Commission. 11 (ii) DESIGNATION BY MINORITY LEAD- 12 ER OF THE HOUSE.—If, on the date of ap- 13 pointment, the Speaker of the House is of 14 the same political party as the President, 15 the minority leader of the House shall des- 16 ignate the co-chairperson from among the 17 members of the Commission. 18 (3) TIMING OF APPOINTMENTS.—Appointments 19 to the Commission shall be made not later than 45 20 days after the date of the enactment of this Act. 21 (4) TERMS; VACANCIES.—Each member shall be 22 appointed for the life of the Commission. Any va- 23 cancy in the Commission shall not affect its powers 24 and shall be filled within 45 days of the vacancy in 25 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 7386 IH the manner in which the original appointment was 1 made. 2 (5) HEARINGS.—In carrying out its duties 3 under this section, the Commission is authorized to 4 hold such hearings and take testimony with respect 5 to matters to which it has a responsibility under this 6 section. The Chairperson, or any member authorized 7 by the Chairperson, may administer oaths or affir- 8 mations to witnesses appearing before the Commis- 9 sion. 10 (6) PROHIBITION OF COMPENSATION.—Mem- 11 bers of the Commission shall serve without pay. 12 (d) OPERATION AND POWERS.— 13 (1) MEETINGS.—The Commission shall meet 14 not later than 30 days after the date upon which a 15 majority of its members have been appointed and at 16 such times thereafter as the chairperson or co-chair- 17 person shall determine. Detailed minutes of each 18 meeting of the Commission, except for any closed 19 session, shall be kept and shall include a record of 20 the persons present and a complete and accurate de- 21 scription of matters discussed. 22 (2) RULES OF PROCEDURE.—The chairperson 23 and co-chairperson shall, with the approval of a ma- 24 jority of the members of the Commission, establish 25 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 7386 IH written rules of procedure for the Commission, 1 which shall include a quorum requirement to con- 2 duct the business of the Commission. 3 (3) HEARINGS.—The Commission shall hold no 4 fewer than 2 hearings on matters to carry out its 5 duties under subsection (b). The Commission may 6 take testimony and receive evidence as the Commis- 7 sion considers appropriate. Timely public notice of 8 each hearing, including the time, place, and agenda 9 of the meeting, shall be provided by any means de- 10 termined by the Commission to provide for wide 11 publicity. Timely notice of each regular meeting 12 shall be published in the Federal Register. Inter- 13 ested persons shall be permitted to submit written 14 statements regarding the matters on the agenda of 15 such hearings. 16 SEC. 4. DEFINITIONS. 17 For purposes of this Act, the following definitions 18 shall apply: 19 (1) AFFILIATE.—Except as provided by the 20 Secretary of Housing and Urban Development or the 21 Director of the Federal Housing Finance Agency, as 22 applicable, the term ‘‘affiliate’’ means, with respect 23 to a borrower referred to in section 2(a), any entity 24 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 7386 IH that controls, is controlled by, or is under common 1 control with, the borrower. 2 (2) COVERED LOAN PROGRAM.—The term ‘‘cov- 3 ered loan program’’ means any of the following pro- 4 grams: 5 (A) The program under section 207 of the 6 National Housing Act (12 U.S.C. 1713) for in- 7 surance of loans for financing for the construc- 8 tion or substantial rehabilitation of manufac- 9 tured home parks. 10 (B) The program of the Federal National 11 Mortgage Association for multifamily loans for 12 manufactured housing communities. 13 (C) The program of the Federal Home 14 Loan Mortgage Corporation for loans for manu- 15 factured housing communities. 16 (3) COVERED PRICING INCENTIVE.—The term 17 ‘‘covered pricing incentive’’ means any pricing dis- 18 count available to borrowers under any of the cov- 19 ered loan programs that rewards the borrower’s im- 20 plementation of one or more specific resident protec- 21 tions and is designed to ensure that the benefits of 22 a covered loan program are provided at a lower cost 23 for manufactured home communities based on the 24 extent to which residents of a manufactured home 25 VerDate Sep 11 2014 02:51 Jul 25, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7386.IH H7386 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 7386 IH community are better protected from predatory rent 1 increases and management practices. 2 (4) MANUFACTURED HOME.—The term ‘‘manu- 3 factured home’’ has the meaning given such term in 4 section 603(6) of the National Manufactured Hous- 5 ing Construction Safety and Standards Act of 1976, 6 except that such term shall include any structure de- 7 scribed in such section without regard to whether 8 such structure complies with any standards under 9 such Act and without regard to the date of the man- 10 ufacture of such structure. 11 (5) MANUFACTURED HOME COMMUNITY.—The 12 term ‘‘man [Text truncated for display. 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