ALEXANDRIA, Va.-NCUA reconsidered its previous legal opinion andhas stated that federal credit unions may make loans secured bymanufactured homes for the same maturities as residential realestate loans if they meet the requirements. Rosemary Hardiman ofthe Hardiman & Hardiman law firm in Springfield, Va., raisedthe issue at the behest of San Antonio Federal Credit Union. In thelegal opinion letter (03-0934), NCUA Associate General CounselSheila Albin stated that federal credit unions generally can notmake loans exceeding 12 years with certain exceptions (residentialreal estate, second mortgages, home improvement, and mobile homes).“Specifically, the [FCU] Act provides that loans for residentialreal estate and mobile homes will have maturities of 30 and 15years respectively but grants the NCUA Board the authority to set alonger maturity term. Id.,” she wrote. “NCUA's loan regulationprovides loan maturities for residential real estate loans andmobile homes respectively of 40 and 20 years.” However, she addedthat NCUA no longer equates mobile homes with manufactured homesbecause of the relative permanency of a manufactured home on theproperty and treatment by the Internal Revenue Code. “We believechanges in the housing industry support distinguishing amanufactured home permanently affixed to the ground from a mobilehome for purposes of our lending regulation,” Albin wrote. “Yourletter discusses significant changes in the manufactured housingindustry within the last several years, including enhancements toquality and standards for construction.” In fact, nearly 30% of allnew home construction is in manufactured homes, according to theFederal Home Loan Mortgage Corporation, she pointed out. NCUA'srequirement for real estate loans is that it be titled as realproperty and, in the instance where the land the home is located isleased, the credit union should obtain an agreement with thelandowner. Additionally, the term of the lease should be at leastas long as the term of the loan. Albin also recommended thatfederal credit unions evaluate any additional risks and safety andsoundness issues related to long-term loans on manufacturedhousing. “I think this really indicates that we are trying torespond as times change,” said NCUA Board Member Deborah Matz, whostrongly supported the change in the interpretation. She added thatshe has been “a strong advocate for credit unions to help peopleget into their first homes.” Matz said that San Antonio FederalCredit Union is in an area where some of their members could becomefirst-time homeowners if they could obtain affordable financing fora manufactured home; some residents place manufactured homes onrelative's property to save money. She explained that the averagemanufactured home is around $51,000. “It will both help people intheir area and it's good for business,” Matz said. San AntonioFederal Credit Union ($1.6 billion in assets) CEO Jeff Farver wasunavailable for comment as of deadline. [email protected]