The ROAD to Housing Act: what it changes for manufactured and modular housing, and what it does not

The 21st Century ROAD to Housing Act became law on July 11, 2026, as Public Law 119-101. It passed the Senate 85 to 5 and the House by a similarly wide margin, after nearly a year of negotiation between the Senate Banking Committee's ROAD to Housing Act and the House Financial Services Committee's Housing for the 21st Century Act. It brings together more than 60 bills across 12 titles.

For anyone developing manufactured housing communities, modular or townhome communities, or workforce housing, the headline is real: the permanent chassis requirement is gone, and federal policy now openly favors objective standards and faster approvals. The fine print matters just as much. The law appropriates no new money, much of it runs through HUD rulemaking with deadlines in 2027 and later, and local zoning remains local.

1. Manufactured homes no longer need a permanent chassis

Since 1974, the federal definition of a manufactured home required a permanent steel chassis, the frame that allows a home to be towed, even after it sits on a permanent foundation. Section 301 changes the definition to cover homes built with or without a permanent chassis.

Industry estimates cited by HUD put the cost of the chassis at roughly $4,800 to $6,700 per unit across production, transport and installation. The larger effect is likely to be on design and acceptance rather than price: homes that sit lower, multistory and attached designs, and placement on foundations that look and perform like site-built construction. The chassis is one of the most common reasons manufactured homes have been treated differently in zoning and in lending.

The chassis becomes optional, not prohibited. Single-section homes on a chassis are likely to remain the most affordable product, and they will stay common for replacements, rural sites and land-lease communities.

2. What still has to happen before chassis-free homes are routine

• HUD must issue revised construction and safety standards, including a distinct label for homes with and without a chassis. HUD's October 2026 Next Generation Manufactured Housing Action Plan commits to foundation, anchoring and installation requirements for chassis-free homes, and to resources on design, transport, zoning, appraisal, lending and insurance.
• States must certify to HUD that their laws treat homes with and without a chassis the same, by July 11, 2027, or within two years where legislatures meet every other year. Titling, taxation and real-property treatment are state matters.
• Manufacturers, third-party design approval agencies, installers, appraisers and lenders all have to adapt. One industry observer expects new designs within a year or two, though timing depends on HUD, the states and plan approval.
• A separate HUD rule proposed in June 2026 would let upper-floor sections of multistory homes be built and shipped without a chassis. HUD estimated savings of about $6,000 per multistory unit. The statute now goes further.

3. HUD now sets manufactured housing energy standards

The law makes HUD the authority on manufactured home energy efficiency. HUD must adopt minimum standards by July 11, 2027, and update them at least every three years. Standards developed by any other federal agency have legal effect only if HUD adopts them, and the Department of Energy has said it will not enforce its 2022 manufactured housing standards.

The current HUD Code energy provisions date to 1994, and the Manufactured Housing Consensus Committee is already working through updates. Owners should expect home specifications, and possibly home prices, to change over the next two years, and should confirm with their manufacturer which standard a given order is built to.

4. Modular construction financing gets federal attention

Modular builders incur most of a home's cost in the factory before it reaches the site, while construction loans are typically drawn as work is completed on site. Section 302 directs HUD to review FHA construction financing for barriers to modular construction and report by July 11, 2027, then begin a rulemaking within 120 days on an alternative draw schedule for modular and manufactured home construction loans. It also allows a study of a standardized code for modular homes.

This is a review and a rulemaking, not an immediate change. Modular projects should still plan financing around how their lender actually disburses, and confirm it before the factory order is placed.

5. Financing for manufactured homes and communities

• FHA Title I loan limits for manufactured homes and property improvements increase, with annual indexing, a single maximum term of up to 30 years, more flexibility on lease terms for homes in communities, and accessory dwelling units as an eligible use. HUD adjusts the limits annually by notice rather than by regulation.
• HUD must report on the cost-effectiveness of off-site construction, manufactured and modular, by July 11, 2027.
• The PRICE program, which funds infrastructure, repair and home replacement in manufactured housing communities, is authorized for seven years, subject to appropriations.

6. Zoning, approvals and environmental review

The law does not override local zoning. It uses guidance, grants and funding formulas to encourage localities to permit more housing:

• HUD will publish voluntary zoning and land-use frameworks, with drafts due by July 2028 and final guidelines by July 2029. MHI notes that manufactured housing is specifically included.
• A competitive Innovation Fund, authorized at $200 million a year from fiscal 2027 through 2031, offers grants of $250,000 to $10 million to localities that show measurable growth in housing supply.
• Grants support pre-reviewed designs, often called pattern books, for low- and mid-rise housing of up to 25 units, with at least 10 percent reserved for rural areas.
• Beginning with fiscal 2029 allocations, part of some localities' CDBG funding is tied to housing production, with reductions for jurisdictions that lag.
• HUD must expand NEPA exemptions and categorical exclusions for housing, including infill and smaller new construction, through rulemaking that applies to funds appropriated after the new rules take effect.

Brownstein Hyatt Farber Schreck describes the zoning reforms as largely nonbinding. MHI puts it plainly: a federal law does not automatically change a local zoning ordinance. What changes is the conversation with a planning commission, and the incentives a jurisdiction has to say yes.

7. Other provisions owners should know

• FHA multifamily statutory loan limits roughly triple to quadruple and are indexed to a multifamily construction cost measure.
• Large institutional investors holding 350 or more single-family homes are barred from buying additional single-family homes for 15 years, starting about 180 days after enactment. Manufactured homes are excluded from the definition. Exceptions include homes built or renovated for sale and homes built under a build-to-rent program and kept as rentals. The exceptions have conditions, so build-to-rent sponsors should review them with counsel.
• CDBG funds may now be used for new affordable housing construction, up to 20 percent of a grantee's allocation.

What it means for a project today

The law improves the direction of travel for factory-built housing. It does not change the work of getting a specific project approved, financed and delivered. Before committing capital, we would validate:

• Does the state's law, and the local ordinance, still define or restrict manufactured homes by the chassis? Has the state started its certification to HUD?
• Does local zoning allow HUD Code homes wherever comparable site-built homes are allowed? Is the jurisdiction pursuing Innovation Fund dollars, pattern books or faster permitting, and does it face CDBG pressure to produce?
• Which product fits the project: chassis or chassis-free, single- or multi-section, single- or multistory, HUD Code or state modular? What foundation, installation and inspection requirements will apply?
• Will the homes be treated as real or personal property, and how will that affect appraisal, end-loan financing and taxes?
• Which energy standard will the homes be built to, and how could a 2027 update change price and lead time?
• If the project uses FHA financing, which provisions are already in effect and which still wait on a mortgagee letter or rule?

Federal policy has moved toward objective standards and faster, more predictable approvals. Projects still get approved one jurisdiction at a time, and the owners who benefit first will be the ones who know exactly which rules apply to their site.

General information, not legal, engineering or investment advice. Approval requirements vary by jurisdiction.