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America’s Community Bankers said that it supports the objectives of proposed improvements in the Federal Housing Administration’s home improvement and manufactured home loan insurance programs, but expressed serious concerns over certain aspects of the proposal.

ACB said some of the changes could put the Title I program beyond the affordability of many borrowers, especially the proposed doubling of the insurance premium for property improvement and manufactured home loans.

“Rather than an across-the-board increase in the insurance charge, we would like to suggest that the performance standards HUD intends to develop be used as the basis for establishing the insurance charge for each lender,” ACB said in comments to the Department of Housing and Urban Development, the FHA’s parent agency.

“Lenders whose loans perform well would be rewarded and others would have an additional incentive for quality underwriting and collections,” ACB said.

ACB also objected to excessive restrictions on the disbursements of loan proceeds and increased liquidity and net worth requirements that could eliminate some lenders from the program, limiting consumer choice and flexibility.

A copy of the comment letter is linked.