Housing Bill Removes Permanent Chassis Rule for Manufactured Homes, Demanding State Compliance on Financing Parity Within One Year

The Housing Supply Expansion Act of 2025 is taking a big swing at how we define manufactured housing, and it’s going to force every state to update their rulebooks fast. The core change is simple but powerful: it scraps the federal requirement that a manufactured home must be built “on a permanent chassis” (Section 603(6)). Essentially, this opens the door for new types of factory-built homes—like modular or potentially even tiny homes—to be classified under federal manufactured housing standards, potentially boosting housing supply.

The Chassis Requirement: Why This Matters

For decades, that “permanent chassis” rule was the line in the sand. If a home didn't have one, it was treated differently by local zoning, lenders, and insurance companies, often making it harder to finance than a traditional stick-built house. By removing this requirement, the bill aims to standardize these homes under the existing federal safety rules, making them easier to finance, insure, and install. Think of it this way: if you’re a contractor looking to build affordable, high-quality factory-built housing, this change could drastically simplify the regulatory environment and make your product more accessible to buyers who need a mortgage.

States Get a Homework Assignment—With a Strict Deadline

This is where things get interesting, and potentially messy for state governments. The bill mandates that every state must certify to the Secretary of Housing and Urban Development (HUD) within one year (or two years if their legislature meets biennially) that their state laws treat manufactured homes with and without a permanent chassis the same way. This “parity” must apply across the board: financing, insurance, taxes, installation, and sales rules (SEC. 2). For instance, a state can’t allow a bank to offer a 30-year conventional mortgage on a home with a chassis but only a high-interest personal loan on the same home without one.

The Real-World Penalty for Missing the Deadline

If a state misses this one-year deadline, the consequences are immediate and severe: they must prohibit the manufacture, installation, or sale of any new manufactured home lacking a permanent chassis until they comply. This is a massive hammer wielded by the federal government. If your state government drags its feet, it could instantly limit housing options for people looking for these newly defined homes. For a consumer in a state like Texas, which may be relying on these new housing options to ease inventory shortages, non-compliance could mean those homes simply can’t be sold there, even if they meet all federal safety standards.

Federal Oversight and Future Complications

Beyond the state mandates, HUD is tasked with coordinating with other federal agencies to ensure they all treat these newly defined homes consistently. They also have to publish a public list of compliant states, putting the pressure on state legislatures. While the goal is laudable—to open up the housing market and standardize treatment—the tight deadline and the threat of a sales ban put significant pressure on state regulators who will have to rapidly untangle and rewrite complex state regulations covering everything from property taxes to insurance codes. The definition of “parity” across all those areas is broad, and how HUD interprets a state’s compliance will likely determine the success, or failure, of this expansion.