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Hoosier Rep. Donnelly Tackling Credit Issues

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April 27, 2009 by   Leave a Comment

(Editor’s Note: Joe Donnelly represents Indiana’s 2nd Congressional district. The following is a Letter to the Editor he wrote to the South Bend Tribune. The letter was published on Sunday, April 26).


I am writing in response to Brent Bardo’s letter to the Voice of the People on March 16. I appreciate Bardo’s interest and support of the manufactured housing industry. I share his belief that this is a vitally important industry to our district and I share his concern that more needs to be done to help during this economic crisis.

During my tenure as representative of the 2nd Congressional District, I have had the privilege to represent the recreational vehicle and manufactured housing capital of the world. As our nation has fallen upon tough economic times, the RV and manufactured housing industries have been hit especially hard.

Manufactured homes house almost 20 million Americans, which translates to many jobs for hardworking Hoosiers back home.
An issue that plagues most businesses – particularly small businesses – is the lack of available credit in the system. Both RV and manufactured housing manufacturers have suffered from the lack of credit to purchase inventory for their floorplans. This has had a ripple effect on manufacturers and suppliers. At the same time, the lack of consumer financing has hindered the ability of families to purchase these products. 

One of the ways that I have tried to alleviate some of the pain in both industries is by ensuring that RV and manufactured housing loans are eligible for Term Asset-Backed Lending Facility – TALF – loans. This is a new program designed to revitalize secondary loan markets and intended to jump-start primary lending markets. Originally, this program only included student, credit card, small business and auto loans as eligible forms of collateral. After working with several of my colleagues and the Federal Reserve, the scope of the program was changed to include RVs as part of the definition of an automobile and opened this form of financing up to all floorplan loans. Manufactured housing and RV manufacturer floorplan loans will be able to be securitized and purchased with TALF funds, which will hopefully loosen up credit.

Another way that I have advocated for the manufactured housing industry is the area of consumer lending. Typically, loans that are offered to families hoping to purchase a manufactured home on leased land have been significantly higher than other home loans. One way to obtain a lower loan rate is to purchase loan insurance. The Federal Housing Administration Title I loan program guarantees loans for manufactured homes that are placed on leased land, which enables lenders to provide a more affordable loan to consumers. Unfortunately, these loan guarantee limits have not been raised since 1992 and not kept pace with rising housing costs. That is why I introduced legislation to raise home-only loan limits from the current $48,600 to $69,678, enabling more families to purchase a home that fits their needs. I was pleased that this was signed into law last July.

It has been my privilege as a member of Congress to work on ways to help these important industries to thrive and get them back on track to regain their competitive edge.

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