Understanding Mobile Home Park Loans
Mobile home park loans provide financing for manufactured housing communities, mobile home parks, and land-lease residential properties.
These communities may include tenant-owned homes, park-owned homes, vacant pads, recreational amenities, utility systems, and additional land available for expansion.
Loan proceeds may be used to
- Purchase an existing mobile home park
- Refinance current debt
- Access accumulated equity
- Add new pads or homes
- Improve roads and common areas
- Upgrade water, sewer, or electrical systems
- Complete deferred maintenance
- Increase occupancy
- Reposition an underperforming community
- Develop a new manufactured housing property
What Funding Sources May Review
Lenders may review the total number of pads, current occupancy, tenant payment history, lot rents, park-owned home income, utility responsibilities, operating expenses, property condition, location, management experience, and net operating income.
The distinction between tenant-owned and park-owned homes can affect underwriting. Communities with primarily tenant-owned homes may have different operating characteristics from parks that own and rent a substantial number of individual homes.
Important Program Considerations
Infrastructure is another important consideration. Private water systems, septic systems, roads, electrical service, and other utilities may require inspections, reserves, or capital improvements.
A stabilized community may qualify for permanent financing, while a park with low occupancy, significant infrastructure needs, or an expansion plan may require bridge or construction capital.
Information to Prepare
To begin a review, provide the property location, acreage, total pads, occupied pads, number of park-owned homes, monthly lot rents, annual income, operating expenses, current value or purchase price, requested loan amount, existing debt, improvement plans, and proposed exit strategy.