A bipartisan Senate effort is closing in on the biggest federal housing policy overhaul in a decade, with a key focus on modernizing outdated federal regulations that have long hindered affordable manufactured housing. If passed, the bill could slash construction costs, open up design flexibility, and unlock a new wave of factory-built homes, especially vital amid a national housing affordability crisis.
Steel Chassis Rule Challenged
A central provision of the Housing Supply Expansion Act of 2025, introduced by Sen. Katie Britt (R-Ala.) and unanimously supported by the Senate Banking Committee, would remove a decades-old requirement that all manufactured homes be built on a permanent steel chassis. Originally designed to allow mobility, the chassis now serves little purpose and adds unnecessary cost and complexity.
Sean Roberts, CEO of Villa Homes, said ending the requirement would allow “a little bit more room for innovation in what could be built, and less wasted steel, and lower cost. It’s arguably better for the environment, as well.”
Savings for Homebuyers
Eliminating the steel chassis could immediately cut about $10,000 from the cost of a manufactured home, already one of the most affordable housing options in America.
“On day one, chassis reform cuts $10,000 off a type of home that is already sold in the market in the hundreds of thousands,” said Alex Armlovich, policy analyst at the Niskanen Center. “There’s not a lot else that Congress can do in one fell swoop to cut 10% off the price of any home.”
A Struggling Sector
The manufactured housing industry, which once produced nearly 580,000 homes per year in the 1970s, now makes up less than 10% of new construction, with output down to around 100,000 homes annually. Experts trace this decline partly to restrictive regulations like the chassis mandate, which many believe was originally lobbied for by traditional homebuilders to stifle competition.
Factory Housing Gains Ground
Factory-built homes are gaining renewed interest as construction productivity stagnates. Unlike on-site builds, which are prone to delays, factory production is faster, standardized, and less expensive. Some homes are now constructed indoors while foundations are laid outside, streamlining the process.
Roberts likens manufactured homes to a consumer classic: “They’re the Toyota Camry of housing, affordable, high-performance, very good quality,” though, as he joked, “they’re probably not going to win any design awards.”
A Flexible Policy Shift
The proposed legislation doesn’t impose a national standard. Instead, it gives individual states the power to opt in by filing a certificate with the Department of Housing and Urban Development (HUD) within a year of passage. This flexibility allows states to tailor regulations while expanding home design possibilities.
“Enabling the option of building homes without a permanent chassis drives innovative design and leverages efficiencies which can lower costs for home buyers,” said Clayton, a major U.S. manufacturer of manufactured homes.
Freddie Mac Joins Push
Adding momentum to the effort, Freddie Mac recently expanded its CHOICEHome financing program to include modern single-section factory-built homes, offering conventional mortgage access with just 3% down. This makes it easier for Americans, especially first-time buyers, to afford homes in urban and rural areas alike.
“Modern single-section factory-built homes can offer high-quality alternatives at a lower price point,” said William J. Pulte, Chairman of Freddie Mac. “We are ready to purchase these loans now.”
A Fix, Not a Cure-All
Despite the bill’s potential, some experts urge caution against overhyping its impact. Mark Erlich, author and housing expert, said stigma, limited investment, and logistical challenges still plague the sector.
“We’ve got a housing crisis in this country, and this feels sort of like nibbling at the edges,” he said. Nonetheless, Erlich and others agree: removing the chassis rule is a big first bite.
