A New ROAD for Factory-Built Homes: States Must Act in Coming Year

The 21st Century ROAD to Housing Act, which was passed with broad bipartisan support and became law on July 11, removes a long-standing federal requirement that all manufactured homes remain, after installation, on the permanent steel chassis used for transportation from the factory. This rule had been in place since the 1970s, when the Department of Housing and Urban Development (HUD) first began regulating manufactured homes. Once the chassis is removed and the house is installed on a permanent foundation, modern manufactured homes can fit seamlessly into existing neighborhoods.

In a complementary action, HUD has proposed eliminating chassis requirements for upper floors as well, which could facilitate multistory construction. Allowing the chassis to be removed will enable manufacturered home builders to design a wider variety of homes, including two-story and four-unit buildings.

Removing the permanent-chassis requirement could expand the supply of lower-cost, modest-sized homes. Manufactured homes can be built faster than site-built homes at about half the cost per square foot, on average. Under federal standards, modern manufactured homes are good quality, often energy efficient, and can be visibly indistinguishable from site-built single-family homes. Removing the chassis could further reduce costs and help home builders better meet buyers’ needs.

But realizing these benefits requires state action. By July 11, 2027, states must certify that they treat all manufactured homes—with and without a permanent steel chassis—consistently in titling, financing, and taxation, among other aspects. In other words, if a state law or policy applies to manufactured homes with an intact chassis, it must apply equally to manufactured homes where a chassis has been removed. The ROAD Act requires state legislatures to remove requirements for a permanent chassis from state law. If a state fails to update its laws and regulations by the deadline, builders in that state will be ineligible to build, sell, or install manufactured homes without a chassis.

Beyond the changes required by the ROAD Act, it would also be an ideal time for policymakers to reexamine other aspects of their state’s manufactured housing laws to ensure that policies aren’t preventing the use of manufactured housing or access to low-cost financing. Many state policies are out of date—treating manufactured homes more like the trailers of the past than the quality homes they are today. One of the most important elements to review would be state titling laws, making sure that they do not make it difficult—or impossible—for owners of manufactured homes to obtain a mortgage. (See “State Titling Policies Determine Which Manufactured Home Owners Have Access to a Mortgage.”)

Researchers from The Pew Charitable Trusts reviewed manufactured housing laws in all 50 states and found that nearly all states still need to update their statutes to comply with the new federal chassis requirement before July 11, 2027—or July 11, 2028, for legislatures that meet biennially. States that do not remove their chassis requirements for manufactured homes will not be eligible to allow companies and individuals to build, sell, or install manufactured homes without a permanent chassis.

As of Oct. 1, only California, Indiana, North Carolina, Minnesota, Tennessee, and Texas had taken steps to update their definitions. California’s bill also mandates a study of the state’s current titling policy (which the ROAD Act does not require). However, even in these few states, additional review may be necessary to ensure alignment among all policies that define manufactured homes.

Modern manufactured homes without a chassis could fill an important gap in the U.S. housing supply: new, affordable homes that fit into towns, suburbs, and cities where site-built homes take too long or are prohibitively expensive to build.

But without updated definitions and aligned policies, this gap in housing supply remains unfilled. 

The federal requirement for all manufactured homes to have a permanent steel chassis dates back to a very different era, when they were moved more frequently. Today, approximately 95% of manufactured homes are used as long-term residences and are never moved after installation. A chassis limits where and how homes can be built. New models can be transported on a removable chassis and then installed on a permanent foundation, afterward looking, in many cases, as if they were built on-site. This approach eliminates the rationale for the exclusionary zoning regulations that exist in many municipalities around the country and prevent the installation of manufactured homes in many neighborhoods. In addition, the change gives developers and buyers more flexibility in design and makes it more feasible to build homes closer to the ground and on narrow lots, or to build multistory and multifamily designs (up to four units).

Federal reform opened the door to modern manufactured homes without permanent chassis; states must now modernize their laws so those homes can be used. States could also use this opportunity to ensure that their other laws allow manufactured homes to be installed, titled, and financed more like conventional single-family homes. Timely action can turn federal reform into a larger supply of smaller homes that are priced within reach of moderate-income Americans.

Rachel Siegel is a senior officer and Liz Clifford is a senior associate with The Pew Charitable Trusts’ housing policy initiative.