New policy impact may ignite a manufactured housing blue-sky era

With a major policy win at hand, one of America’s most promising housing affordability solutions hidden in plain sight may get the close-up moment its stakeholders have fought for decades to earn.

The 21st Century ROAD to Housing Act – on a white-knuckle countdown to midnight before going into law as expected – includes a provision that would eliminate a 1974 mandate that required manufactured homes to be built on a permanent steel chassis. 

Removing the steel chassis could cut costs, and bend affordability curves favorably toward would-be homeowners. But industry stakeholders say the greater opportunity lies in the new measure’s enabling larger, more innovative designs that can reach new customers, penetrate new urban infill and close-in markets and gain broader acceptance among residents and local officials.

Manufactured housing, which costs 50% less per square foot than traditional site-built homes, according to the Manufactured Housing Institute, provides one of the most attainable forms of housing in the United States. There are 7.2 million occupied manufactured homes in the U.S., representing nearly 5.5% of the nation’s occupied housing stock.

However, the number of new manufactured home shipments is way down from its peak, five decades ago. In 2025, there were just over 100,000 new manufactured home shipments. In 1998, new shipments were about 373,000 homes, and in the early 1970s, that figure peaked at roughly 600,000 homes annually.

Outdated perceptions and provisions, such as the permanent chassis requirement, have thwarted the industry, but Lesli Gooch, CEO at the Manufactured Housing Institute, told HousingWire TBD that the sector’s producers have been improving and innovating manufactured home building envelopes and systems for years in a bid to overcome past stigmas and earn back some of that lost ground.

Removal of the chassis will accelerate that innovation, a necessary step towards broader acceptance and adoption. The chassis has become emblematic of chronic reputational challenges that have virtually relegated manufactured housing to rural outlying areas and trailer park communities. This rule change could be one of several safety, aesthetic and land-planning advances that encourage more local municipal stakeholders to welcome manufactured homes as an organic part of neighborhood housing stock.

“Instead of forcing everyone to accept us, let’s get to a point where they’re saying ‘yes, please come’ and ‘yeah, we need more of that’, Gooch said. 

Opportunities for new product types

Manufactured homes must comply with HUD code, which offers regulatory efficiency and structural quality and safety oversight. Unlike traditional site-built housing that may require approvals from multiple jurisdictions, manufactured homes go through a centralized HUD oversight process, with inspections and quality checks throughout factory production.

The removal of the permanent chassis requirement would complement earlier policy decisions from HUD that have gradually expanded manufactured housing options. These moves include a decision to enable more townhouse-style designs by permitting zero-lot-line allowances, and a 2024 rule to allow duplex homes and multifamily buildings with up to four units. 

More recently, HUD published a proposed rule to allow upper-level sections of multi-story manufactured housing to be transported and assembled without a permanent chassis. Industry insiders say that this rule would make building multi-story manufactured homes a viable new product and business opportunity. 

All of these changes open up channels for manufacturers to design a wider array of products. Removing the ground-floor chassis will add to that momentum. Manufacturers, for example, will have the ability to go vertical and build higher-density housing.

“When you remove the chassis, you’re going to get a lot more options for elevations and for size. They will be brought in by a crane, or there are other different ways of bringing those houses in. Our industry is innovative, and we’re excited about expanding that range,” Gooch said. 

Opportunities to dispel outdated misconceptions

The chassis removal, in addition to enabling a wider array of product types, will further eliminate the reputational and aesthetic lines that separate manufactured homes from traditional site-built housing, manufactured housing advocates say. 

“I think it will change the perception of people automatically associating them with being movable,” said Arica Young, Director, Housing Access and Affordability at the Lincoln Institute of Land Policy. 

That misconception, Young explained, extends to some lenders and bankers, many of whom still assume the homes can simply be transported away, even though that’s not how they function once installed. Eliminating the permanent chassis requirement could allow manufactured homes to be classified as real property, giving buyers access to traditional 30-year and government-backed mortgages instead of higher-cost chattel loans.

Removing the chassis will also allow for homes with more curb appeal, more easily blending into established communities. The design flexibility could mean that manufactured homes will begin to look far more similar to site-built homes from traditional homebuilders. 

“I think it also changes the look of the homes, frankly. It gives them a lower profile, it brings them even closer to looking like a site-built home without having to do additional touches in terms of architectural details to mask the fact that it’s raised a little bit higher. I think aesthetically it makes it easier for them to blend into existing communities,” Young said. “It kind of helps dispel some of the myths about what these homes are, and their actual ability to be moved.”

The end of the chassis mandate could also signal an inflection on improved performance of manufactured homes. 

“Removing the steel frame and placing the house on the foundation could allow for better and quieter heating and air conditioning systems while boosting aesthetic appeal,” said Sam Landy, President at UMH Properties. 

Given the potential, the innovation potential spurred by the chassis removal could help manufactured housing improve its image. Once more people see the aesthetic appeal and higher performance of newer manufactured homes, some old misconceptions could go by the wayside. While new manufactured housing communities are much higher-quality than the trailer park communities of old, this perception persists in the minds of some residents and lawmakers. 

Gooch pointed to CrossMod homes, which are built to HUD standards but designed to resemble site-built homes, as evidence that developers are already adopting more advanced manufactured housing products.

“There is some stigma against our traditional manufactured home. Zoning is a challenge. A lot of times, that elevation [required by the chassis] is really what keeps us out, even though they’re quality, brand-new homes that those entry-level buyers would embrace over the other options they have,” Gooch explained. “But by removing the chassis, you’re overcoming some of that stigma and those hurdles. People will say, ‘Oh, yeah, we want more of that in our neighborhood,’ or ‘That works.'”

Opportunities for new reach 

With the opportunity to build larger, higher-density homes with more aesthetic appeal, manufacturers could gain access to market opportunities that were previously out of reach. Building on HUD’s previous changes allowing townhome-style homes, duplexes and small multifamily properties, manufactured housing could expand into higher-cost markets, major metropolitan areas and infill sites in established suburban and urban communities.

“People are looking to manufactured housing for infill development in cities. You’re not going to need a chassis there at the end of the day. It’s going to be a fee simple project or a developed community that may have a homeowners association,” Young explained. “We’re already seeing a lot of infill projects that are happening right now with manufactured housing the way it is. I think it’s just going to open that up more.”

During a Q4 2025 earnings call last year, Cavco Industries’ President and CEO, William Boor, also noted the market opportunity that the chassis removal provides. 

“If you think about those kinds of opportunities, you start to see the opportunity for product innovation for urban and suburban markets, and that opens up a whole new market opportunity for this industry,” Boor said during the call. 

The opportunity extends beyond expanding manufactured housing’s geographic footprint. With the ability to build better and larger homes, manufacturers could also broaden their customer base and compete more directly with traditional homebuilders.

“Many families have more than three children. When you have two stories, our residents benefit from much more space, including having four bedrooms or even six bedrooms. This could really accommodate larger families, which are increasingly common,” Landy said. 

Then, of course, there are zoning regulations. While some municipalities continue to stigmatize manufactured housing, local lawmakers have increasingly loosened zoning laws to allow manufactured housing as the industry has innovated. Removing the chassis will only make it more accepted. 

“A lot of those zoning regulations are there because of biases against the old mobile homes. I think the more we can show that these homes are regular houses, the more it facilitates the removal of those barriers,” Young explained. 

Opportunities for affordability 

Many headlines place the cost-saving measures of removing the chassis between $5,000 and $10,000 per home. While that sounds promising, Young cautioned against broad claims about these cost savings, noting that estimates vary widely. She added that any savings would also depend on whether homes are purchased individually or in bulk, with developers buying dozens or hundreds of homes potentially seeing different economics. As a result, quantifying the savings and the extent to which consumers will benefit can be tricky.

Boor, in a Q4 2026 earnings call in May, framed the chassis removal as more of an innovation opportunity as opposed to a cost-cutting measure. 

“I haven’t really thought about chassis as much as a cost-driven thing as I think about it as an innovation-driven thing,” he said. 

Gooch argued that the biggest affordability impact of removing the chassis requirement is not necessarily the direct cost savings from eliminating the steel chassis. Instead, it lies in the ability to expand the supply of attainable homes for entry-level buyers to more communities and more customers. 

Manufactured housing already provides one of the most attainable paths to homeownership. Greater design flexibility and faster delivery could help address the shortage of homes available to the “missing middle, she argued. 

“We’re providing the American Dream with a brand new house, with all of the resilience and quality features that today’s consumers want, at price points within reach,” Gooch said. “We’re excited because we think that, with the chassis removal, it really opens up that opportunity for more individuals.”

Where the permanent chassis might remain

The big benefit of removing the permanent chassis requirement is that it is only optional. Manufacturers, in many cases, will still deliver homes with a permanent chassis.

Both Gooch and Landy argued that the most affordable manufactured homes will probably still be the single-section home on a chassis. 

Additionally, chassis-built homes will likely remain common for replacement homes in manufactured housing communities and in rural or land-lease markets, where minimizing costs and simplifying installation are key considerations.

How quickly can the industry adapt?

Young argued that the manufactured housing industry is already preparing for the changes that the chassis removal will bring. HUD is evaluating what updates to the building code would be needed, and engineers at larger manufacturers are doing the same. While the exact timeline is uncertain, new designs could likely be introduced within a year or two, if not sooner, because much of the groundwork is already underway.

Boor, on a recent earnings call, said that Cavco Industries’ factories are ready to immediately move forward with chassis-free designs when they are permitted to. 

“When you make a modular home, you’re generally making it to have a removable chassis. Our factories that do modular, from an engineering and factory perspective, are in a position to make HUD-code homes without a chassis as soon as that law gets changed, the wording gets changed and the definition, and as soon as states kind of conform to it,” he said. 

Gooch explained that the manufactured housing industry itself is ready to adapt to the policy change, but the timeline will largely depend on the regulatory process rather than the manufacturers themselves. HUD must first update the manufactured housing code through its advisory committee process, public comment period and final rulemaking, and states will also need to update laws governing manufactured housing. Once those steps are complete and HUD approves new home designs, manufacturers can begin producing homes that comply with the updated requirements.

Before manufacturers can move forward with new chassis-free designs, they will need to wait for the HUD code to be updated and for the regulatory framework to be established. Once that happens, they will submit their designs for review and approval by HUD-approved third-party inspection agencies. After the designs are approved, manufacturers can begin producing the homes, with those agencies continuing to oversee construction through factory inspections and quality assurance processes.

“This doesn’t just happen. There are steps, and as the industry trade association, we’ve been trying to do what we can to make those steps move as quickly as possible,” Gooch said. 

“I think the industry is ready,” she added.