Manufactured Housing Community Sustainability Act of 2026

This Act may be cited as the “Manufactured Housing Community Sustainability Act of 2026”.

Congress finds that—

(1) more than 22,000,000 people live in HUD-code manufactured homes;

(2) there are approximately 6,700,000 occupied manufactured homes in the United States, representing about 6 percent of the Nation’s housing stock, 9 percent of the single-family housing stock, and more than 12 percent of all new single-family homes sold in 2021;

(3) owners of manufactured homes are disproportionately low-income households, and in 2020, the median annual household income for living in manufactured housing was $35,000;

(4) over one-quarter of manufactured homeowners earn less than $20,000 annually, and two-thirds earn less than $50,000 annually;

(5) more than half of all manufactured homes are located in rural areas around the country, and manufactured homes make up 13 percent of all occupied homes in rural and small-town communities;

(6) the average sales price of a new manufactured home (excluding land) in 2019 was $81,700, and as of December 2023, that average sales price had increased to $121,300, an increase of 48.5 percent over the preceding 5 years;

(7) despite this sharp increase, the average manufactured home costs roughly half the price per square foot of the average site-built home;

(8) manufactured home communities provide critical affordable housing, but receive very little Federal, State, or local funds to subsidize the cost of manufactured homes;

(9) an estimated 43,000 manufactured home communities, also referred to as “mobile home parks”, exist throughout the United States;

(10) owners of manufactured homes in such communities may own the home, but they do not own the land under the home, which leaves the homeowners vulnerable to rent increases, disinvestment, changes in land use, and community closure;

(11) an eviction or closure of a manufactured home community is very disruptive and can be financially devastating to a homeowner who may be unable to pay the thousands of dollars it takes to move the manufactured home or find a new location for the manufactured home;

(12) manufactured housing where the consumer does not own the land generally does not promote wealth-building via homeownership;

(13) for more than a decade, in an effort to preserve a crucial source of affordable housing and aid low-income homeowners, a national network of housing providers has helped residents purchase and own the land under the manufactured home community, and manage the manufactured home community as limited equity cooperatives;

(14) nationwide, there are more than 1,000 cooperative manufactured home communities, of which more than 360, located in more than 20 States, are permanently preserved as affordable communities through limited equity cooperative or nonprofit ownership;

(15) members of manufactured home community cooperatives continue to own such homes individually, own an equal share of the land beneath the entire manufactured home community, participate in the governing of the community, and elect a board of directors who make major decisions within the manufactured home community by a democratic vote;

(16) site fee increases in limited equity resident-owned communities average just 0.9 percent per year, compared to 5.9 percent per year in commercially owned communities;

(17) in New Hampshire, more than 40 percent of manufactured home communities are owned by residents;

(18) resident-owned cooperatives and nonprofit owned communities have also flourished in Colorado, Vermont, Massachusetts, Montana, Rhode Island, Washington, Oregon, and Minnesota;

(19) nationwide, only 2.4 percent of all manufactured home communities are resident or nonprofit-owned;

(20) 19 States have adopted some protection when a community is sold, and 8 States have strong notification and resident purchase opportunities, which provide homeowners in those States an opportunity to purchase the manufactured home community when it is put up for sale; and

(21) in order to preserve manufactured home communities and help low-income homeowners live securely, safely, and build wealth through homeownership in the future, a Federal tax benefit should be established to induce manufactured home community owners to sell such properties to the residents when those residents or a nonprofit commits to preserving the community long-term.

(a) In general.— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following new section:

“45BB. Manufactured home community sale to residents or nonprofit entity.—

(a) Allowance of credit.— For purposes of section 38, the manufactured home community sale credit determined under this section for any taxable year is an amount equal to 75 percent of the qualified gain received by the taxpayer during the taxable year.

(b) Definitions.— For purposes of this section—

(1) Qualified gain.— The term qualified gain means gain from the sale or exchange of real property to a qualified manufactured home community cooperative or corporation if—

(A) the real property is acquired for use as a manufactured home community,

(B) the seller (or any related person) owned the property for the entire 2-year period ending on the day before the sale or exchange, and

(C) the property is transferred subject to a binding covenant that the property will be used as a manufactured home community for not less than 50 years (or, in the case of a manufactured home community located in a State the laws of which restrict such covenant to a lesser term, the maximum permissible term allowed under such State laws).

(2) Manufactured home community.— The term manufactured home community means a community comprised primarily of manufactured homes used solely for residential purposes and owned by a manufactured home community cooperative or corporation.

(3) Qualified manufactured home community cooperative or corporation.—

(A) In general.— The term qualified manufactured home community cooperative or corporation means a cooperative or a nonprofit corporation established pursuant to the laws of the State in which the property used as a manufactured home community is located, and which—

(i) in the case of a community owned by a nonprofit corporation whose membership interests are sold on a nonappreciating basis, has only 1 class of membership and such class consists solely of residents, and

(ii) in the case of a community owned by a cooperative, has not more than 2 classes of membership, and such classes consist solely of residents and a tax-exempt organization.

(B) Governance.— An entity shall not be treated as a qualified manufactured home community cooperative or corporation unless governance of the entity is carried out by members elected to a board of directors with voting structured equitably among all members.

(C) Member.— The term member means—

(i) an individual who—

(I) has attained the age of 18,

(II) is entitled to be a member by reason of—

(aa) the membership interest of the individual to execute an occupancy agreement with the manufactured home community cooperative nonprofit with respect to a site in the manufactured home community in order to establish a manufactured home which is owned by the individual, or

(bb) permission from the manufactured community cooperative or corporation, the member’s trust, or other entity, and

(III) is a resident of the manufactured home community, and

(ii) a tax-exempt organization.

(4) Membership interest.— The term membership interest means—

(A) an ownership interest in a manufactured home community cooperative or corporation, or

(B) a membership interest in a manufactured home community nonprofit corporation.

(5) Manufactured home.— The term manufactured home means a structure which is transportable in one or more sections, which—

(A) in traveling mode, is 8 body feet or more in width and 40 body feet or more in length, or, when erected on site, is 320 square feet or more,

(B) is built on a permanent chassis and designed to be used as a dwelling (with or without a permanent foundation when connected to required utilities) and includes plumbing, heating, and electrical heating systems, and

(C) in the case of a structure manufactured after June 15, 1976, is certified as meeting the Manufactured Home Construction and Safety Standards issued under the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5401 et seq.) by the Department of Housing and Urban Development and displays a label of such certification on the exterior of each transportable section.

(c) Special rules.—

(1) Related person.— For purposes of subsection (b)(1)(B), a person is related to the seller if—

(A) such person bears a relationship to the seller as specified in section 267(b) or 707(b)(1), or

(B) such person and the seller are engaged in trades or businesses under common control within the meanings of subsections (a) and (b) of section 52.

(2) Election by both seller and buyer.— The credit is allowable under this section only if—

(A) both the seller and the purchaser of the real property execute an affidavit representing that the sale meets the requirements of subsection (b)(1), and the purchaser acknowledges liability for the recapture of the credit under subsection (d) in case of any violation described in such subsection,

(B) the purchaser of the real property records the affidavit, and

(C) the affidavit is referenced in the deed to the real property.

(3) Requirement.— The seller shall include a copy of the affidavit representing the sale with the return of tax.

(d) Tax upon violation of covenant.— There is imposed a tax on the buyer for a violation of the covenant specified in subsection (b)(1)(C). The amount of such tax shall be 20 percent of the net proceeds after settlement for the sale or exchange of the real property referred to in subsection (b)(1). For purposes of section 501(a), the tax imposed by this subsection shall not be treated as a tax imposed by this subtitle.

(e) Regulations.— The Secretary shall issue such regulations or other guidance as may be necessary to carry out this section, including the recapture under subsection (d).”.

(b) Credit allowed as part of general business credit.— Section 38(b) of the Internal Revenue Code of 1986 is amended—

(1) by striking “plus” at the end of paragraph (40);

(2) by striking the period at the end of paragraph (41) and inserting “, plus”; and

(3) by adding at the end the following new paragraph:

“(42) the manufactured home community sale credit determined under section 45BB(a).”.

(c) Conforming amendments.—

(1) Subsection (c) of section 196 of the Internal Revenue Code of 1986 is amended—

(A) by striking “and” at the end of paragraph (13);

(B) by striking the period at the end of paragraph (14) and inserting “, and”; and

(C) by adding at the end the following new paragraph:

“(15) the manufactured home community sale credit determined under section 45BB(a).”.

(2) The table of sections for subpart D of part IV of subchapter A of chapter 1 of such the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

(d) Effective date.— The amendments made by this section shall apply to taxable years beginning after December 31, 2026.