WASHINGTON — President Barack Obama has signed a housing reform bill that will open the door for welfare recipients to use federal rent vouchers to purchase manufactured homes and become homeowners.

Currently, low-income families can use their Department of Housing and Urban Development Section 8 vouchers to rent a manufactured home.

But the bill signed by Obama on Friday allows vouchers to be used to make mortgage payments and to pay property taxes and insurance on manufactured homes.

"A Section 8 voucher holder will now have the option to use their federal housing assistance to cover the full annual cost of purchasing a manufactured home. This change provides families the opportunity to become homeowners, rather than only being allowed to use Section 8 vouchers for rent payments," said Lesli Gooch, senior vice president and chief lobbyist for the Manufactured Housing Institute.

Gooch noted that passage of the legislation is an important step in helping low-income families achieve homeownership.

The next step is to "work with public housing agencies and HUD to make families aware of this option and to work with lenders, including state housing finance agencies and the Rural Housing Service, to make sure borrowers are able to secure the mortgage with the financial help of the voucher," she said in an interview.

The Rural Housing Service currently finances the purchase of manufactured homes if the loan is secured by land. Leases also are permitted if the term of the lease is for 99 years.

"However, USDA is conducting a pilot in Vermont, New Hampshire and Oregon that allows borrowers to lease land for two years longer than the mortgage term," according to an RHS spokesman.

The average price of a new manufactured home is $65,000 and vouchers can be used to help cover the cost of buying and owning it.

The Housing Opportunity through Modernization bill, sponsored by Reps. Blaine Luetkemeyer, R-Mo., and Emanuel Cleaver, D-Mo., also authorizes the U.S. Department of Agriculture to streamline the Rural Housing Service by developing a direct endorsement program similar to the Federal Housing Administration program.

In recent years, RHS staffing has been dramatically reduced. Yet every RHS-guaranteed loan must be approved by staff, and borrowers are now experiencing significant delays in loan approval, according to the National Association of Realtors.

Both the Veterans Affairs loan guarantee and the FHA mortgage insurance program utilize a direct endorsement approach, which allows private lenders to approve loans. It will "create great efficiencies for the Rural Housing Service and for homebuyers," former NAR president Chris Polychron told Congress last year.

The law also includes major reforms to the Federal Housing Administration condominium program. It streamlines FHA's certification requirements for condo projects, allows more commercial space in agency-approved condo buildings and relaxes current owner-occupancy requirements.

"Realtors have reason to celebrate today as legislation easing restrictions on FHA financing for condominiums is finally signed into law. This is a long-awaited victory for NAR and for homebuyers for whom condos are an important and affordable option," NAR president Tom Salomone said in a statement.

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