HUD TAKES ACTION AGAINST FLEETWOOD HOMES OF CALIFORNIA

WASHINGTON – The U.S. Department of Housing and Urban Development has taken action against a major builder of manufactured homes by requiring it to recertify its Woodland, California plant. In a settlement announced today, Fleetwood Homes of California has agreed to a HUD-monitored recertification process for its Woodland plant. The company must also provide notification and correction of defects to its consumers, and pay a civil money penalty.

“HUD took this action because Fleetwood Homes of California was consistently building manufactured homes with defects that posed durability and safety risks for their owners – in one case, those defects were potentially life-threatening,” said Assistant Secretary for Housing-Federal Housing Commissioner Brian D. Montgomery. “Manufacturers who regularly fail to comply with HUD’s standards need to understand that their plant certifications are at risk. Fleetwood Homes of California is paying a civil penalty, and will pay a significant additional amount in the future if it doesn’t improve its performance.”

This is the first settlement in which a manufacturer has agreed to a new certification of a plant and to future penalty payments if it fails to maintain agreed upon performance benchmarks. Under the agreement, Fleetwood Homes of California will pay a $75,000 civil penalty to HUD, and post a $125,000 bond as an incentive to improve performance at the Woodland plant.

HUD regulates the manufactured housing industry by developing and enforcing the Federal Manufactured Housing Construction and Safety Standards. Manufactured homes are homes built as dwelling units of at least 400 square feet in size with a permanent chassis to assure the initial and continued transportability of the home.

All manufactured homes sold in the United States must display a HUD compliance label and a manufacturer can only apply these labels if the plant is certified. During the recertification process, Fleetwood Homes of California will be able to apply HUD compliance labels to new homes at the Woodland plant, but only under HUD’s direct supervision.

HUD will supervise quality control in the plant until the standards for certification are met. A new certification of the Woodland plant will not be accepted by HUD until Fleetwood Homes of California can demonstrate that it has instituted a sustainable quality assurance program at the plant to ensure that it is capable of consistently producing manufactured homes that comply with federal construction and safety standards.

For a one year period following acceptance of the new certification, HUD will conduct quarterly monitoring inspections of the Woodland plant to determine whether Fleetwood Homes of California continues to meet performance benchmarks detailed in the agreement. Failure of Fleetwood Homes of California to meet these benchmarks during any two of these quarterly inspections will result in a payment to the federal government of $125,000.

Since 2005, HUD audits have identified at least 77 types of defects in homes built at the Woodland plant, many of which HUD considers to be serious. In the settlement agreement, Fleetwood Homes of California agrees to notify affected classes of homeowners and make appropriate corrections in their homes.

The Manufactured Housing Construction and Safety Standards Act of 1974, as amended by the Manufactured Housing Improvement Act of 2000, was enacted to protect consumers through enforcement of construction and safety standards designed to ensure the quality, durability, safety and affordability of manufactured homes. Under the Act, it is illegal to sell or lease a manufactured home that does not comply with the Act or the federal construction and safety standards.

HUD’s Manufactured Housing Program issues, monitors, and enforces Federal manufactured home construction and safety standards. HUD has authority to inspect factories and obtain records needed to enforce the standards. Under HUD’s regulations, each manufacturing plant must demonstrate that it is capable of producing homes in conformance with the federal standards, and that its quality control procedures will ensure that such conformance continues, in order to obtain a plant certification.

Read the Settlement Agreement and the Agreement Exhibits announced today.

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HUD is the nation’s housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

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U.S. Department of Housing and Urban Development (HUD) is the nation’s housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation’s fair housing laws.

Contact:

Brian Sullivan
(202) 708-0685

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