Part I: Minimum Property Standards for One- and ... - HUD User

Part 1

Minimum Property Standards

for One- and Two- Family Dwellings

Part 1 of a Study of the HUD

Minimum Property Standards for One- and Two- Family Dwellings

and Technical Suitability of Products Programs

Prepared for the U.S. Department of Housing and Urban Development

Office of Policy Development and Research

by the

National Institute of Building Sciences

March 2003

Acknowledgments

The principal investigator for this study was William Brenner of the National Institute of Building Sciences. Background research was performed by Building Technology Inc. and Steven Spector. The Institute is grateful for the help and guidance of William Freeborne and David Engel of HUD's Affordable Housing Research and Technology Division; Elizabeth Cocke, Rick Mendlen, Vincent Tang, and Jason McJury of HUD's Office of Manufactured Housing Programs; and retired HUD employees Mark

Holman, Robert Fuller, Sam Hakopian, and Leslie Breden.

The Institute thanks the following reviewers for their thoughtful comments and insights: Liza Bowles, Newport Partners LLC; Ron Burton, BOMA International; David Conover; Rosemarie Geier Grant, State Farm Insurance Companies; Paul Heilstedt, BOCA International; Ron Nickson, National Multi Housing Council; Ed Sutton, National Association of Home Builders; and Gene Zeller, City of Long Beach, California.

The National Institute of Building Sciences appreciates the opportunity to study these long-standing HUD programs and hopes the findings and recommendations herein will be helpful in addressing the needs the programs have traditionally served.

Disclaimer

The study's findings are solely those of the National Institute of Building Sciences and do not reflect the views of the U.S. Department of Housing and Urban Development, the study's participants, or its reviewers. The Institute has made every effort to verify the accuracy of the study's content, but no guarantee of the accuracy or completeness of the information is either offered or implied.

Prepared under Contract C-OPC-21204 between the U.S. Department of Housing and Urban Development and the National Institute of Building Sciences

TABLE OF CONTENTS

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. History of the MPS Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The 1920s and 1930s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The 1940s and Early 1950s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1958 to 1980: Expansion of the MPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1980 to present: Decline of the MPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3. Current Compliance with MPS Appendix K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4. Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

6. Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

7. Recommendations Considered but Rejected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Appendix A, Detailed MPS Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Appendix B, 1981 HUD "Issue Paper on the Minimum Property Standards" . . . . . . . . . . . . . . . . . . . . . 31

Appendix C, MPS Appendix K of HUD Handbook 4910.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Appendix D, Mortgagee Letter 2001-27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Appendix E, Form HUD-92541, "Builder's Certification of Plans, Specifications, and Site" . . . . . . . . 45

Appendix F, Parts of the U.S. Code Containing the Phrase "Minium Property Standards" . . . . . . . . . . 48

Appendix G, Sections of the Code of Federal Regulations Containing the Phrase "Minium Property

Standards" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Appendix H, Section 801, Builder's Certification as to Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Appendix I, Study Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Appendix J, Bibliography/Related HUD Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Appendix L, Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

1. Introduction

This is a study of the one- and two-family dwelling portion of the HUD Minimum Property Standards (MPS) program, a well known and once venerated building regulatory program associated with the approval of HUD-insured mortgage loans. The one- and two-family dwelling portion of the MPS is used for qualifying "high-ratio" loans for new homes (loans for 90 percent or more of a home's value), and, nationwide, it applies to about one half of one percent of all home mortgages. The MPS has its roots in the National Housing Act of 1934, the law that created HUD's predecessor, the Federal Housing Administration, and the nation's first government-backed mortgage insurance program. An examination of the multifamily housing portion of the MPS was not included in this study. Information for the study was gathered by reviewing the statutory, regulatory, and administrative documents and procedures governing the MPS and by interviewing present and retired MPS staff from HUD's Washington, D.C., headquarters, personnel from HUD's four regional Home Ownership Centers, and representatives from the home building and building products industries. The study took approximately eighteen months and was concluded early in 2003. A related study of the Technical Suitability of Products (TSP) Program was conducted simultaneously. The TSP program, mandated by the Housing and Urban Development Act of 1965, provides acceptance criteria for nonstandard materials, components, and systems used in HUD-insured housing and covered by the MPS program.

1

2. History of the MPS Program1

The 1920s and 1930s

In 1922, twelve years before passage of the landmark National Housing Act of 1934, the Department of Commerce's Bureau of Standards issued a new publication called Recommended Minimum Requirements for Small Dwelling Construction. It was prepared by the Bureau's Building Code Committee and was based on extensive hearings held the previous year by the Senate Committee on Reconstruction and Production. The Committee found that

The building codes of the country have not been developed upon scientific data but rather on compromise; they are not uniform in practice and in many instances involve an additional cost to construction without assuring more useful or more durable buildings.

Federal interest in housing regulation continued throughout the 1920s and intensified during the early years of the Depression. In 1931, civic leaders from across the country attended the President's Conference on Home Building and Home Ownership in Washington, D.C. The same year, the Bureau of Standards reestablished its Building Code Committee (which included the remaining four of its original seven members) to revise and update the Recommended Minimum Requirements for Small Dwelling Construction. The second edition, issued in 1932, contained 25 pages of general construction requirements and 77 pages of acceptable practices. Its foreword, written by then-Secretary of Commerce, R. P. Lamont, thanked the Committee and noted that

The prominent part played by the earlier edition of your committee's recommended small-dwelling requirements has already done much to bring about progressive changes. Your work has thereby helped to reduce costs and assure better quality of construction. These, your latest recommendations, should greatly assist local code committees in framing and revising codes and encouraging uniformity in their requirements.

It was at this nascent stage of a national effort to develop sound local housing codes and standards that the National Housing Act was enacted in 1934. The following year, the newly established Federal Housing Administration (FHA) published the earliest version of what much later became the HUD Minimum Property Standards. Titled Circular 2, Property Standards: Requirements for Mortgage Insurance under Title II of the National Housing Act, the 16-page publication focused primarily on neighborhood design and planning. Almost four pages were devoted to providing broad requirements for construction and equipment, such as "All parts of buildings shall be designed and constructed to safely support their own weight and that portion of the dead and live loads which they may carry."

1 A detailed chronology of the history of the MPS is included in Appendix A.

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