Manufactured Housing Policy: Improving on the Margin

Affordability remains a clear policy priority, but manufactured housing – the most affordable ownership option – has often been underrepresented in the broader debate. Even so, the policy backdrop continues to get incrementally better on two fronts: (1) state-level zoning reform that reduces discriminatory local barriers and (2) imminent federal HUD Code modernization.
 
State-Level Zoning Reform: Progress, but Early States Were Small
Over the past several years, ten states have passed legislation intended to prevent restricted access for manufactured housing relative to site-built single-family homes. The initial wave of reforms, however, skewed toward smaller shipment states. The seven states with earlier reforms aggregate to roughly 5% of national manufactured housing shipments – helpful directionally, but limiting near-term volume impact.
 
Using Indiana, Oregon, and Maine (the larger shipment states in that initial cohort) as a case study, shipment trends have been mixed:

• Indiana’s 2021 bill was modest, and 2022–2025 shipments are tracking a -3.5% CAGR, ~60 bps worse than the national market.
• Oregon’s 2023 shift to near-equal treatment is associated with an expected ~11% CAGR, ~300 bps better than the broader market.
• Maine’s mid-2024 reform coincides with shipments tracking ~20% year over year versus a flat overall market, though the sample is small.

We continue to view discriminatory local regulation as a key structural headwind (alongside financing constraints and lingering stigma). In that context, “mixed” results are not surprising given short timeframes, small bases, and housing-cycle volatility.
 
2026 Is the Real Test: Texas and Kentucky Go Live
The more meaningful catalysts arrive in 2026, as reform reaches higher-volume states where the data should be more telling over time. Texas (~17% of national shipments and the largest manufactured housing state) implements SB 785 effective September 1, 2026. The bill does not mandate manufactured homes be allowed everywhere, but it requires cities (with limited exceptions) to allow new manufactured homes within at least one residential zoning district/classification (or create a dedicated manufactured housing district) without a hearing or special permit. Kentucky’s HB160 (effective July 1, 2026) is more straightforward, generally prohibiting local governments from treating new manufactured homes differently than single-family homes. Montana also passed legislation in May, though timing and implementation appear less clear.
 
Federal Update: House Passes “Housing for the 21st Century Act”
Federal momentum has also improved. The U.S. House of Representatives overwhelmingly passed the Housing for the 21st Century Act (390–9) in early February. The bill amends the federal definition of a “manufactured home” to allow construction without a permanent chassis – while still being treated on par with traditional manufactured housing for financing, sale, installation, and titling.
 
The bill now moves to the Senate. Notably, the ROAD to Housing Act of 2025 was the Senate’s bipartisan housing bill that it passed late last year and was included in the Senate’s version of the NDAA. However, it was ultimately excluded from the final NDAA signed by President Trump. This bill also contained a provision to remove the permanent chassis requirement, highlighting the widespread support for this initiative. We expect there to be a reconciliation process between the Senate and House bills, which could delay the ultimate approval process until later this year.
 
We view chassis removal as a meaningful long-term adoption catalyst: improved curb appeal, reduced “mobile home” stigma, and greater design/engineering flexibility (including multi-story production and potential urban infill applications). The trade-off is adoption lag – states must effectively opt in via parity certifications and may need to update laws and regulations within one year (or two years in biennial-legislature states such as Montana, Nevada, North Dakota, and Texas). We discussed some of the policy puts and takes with Mike Rutherford of Clayton Homes on our Homebuilding and Manufactured Housing Panel at our annual one-day virtual Base Camp conference.
 
Financing: Helpful Steps, Still Not the Main Unlock
The Housing for the 21^st Century Act also authorizes a pilot program to expand access to small-dollar mortgages below $100,000. While directionally constructive, FHFA data show a median price of $250,000 (3Q25) for purchase-only real-property manufactured homes (home and land), suggesting only a minority of loans fall under the threshold. We continue to view broader GSE support for chattel (“home-only”) loans as the larger, still-elusive financing unlock.