Overview of Mobile Home Park Lenders

Blue Point Commercial Mortgage

Usually will only loan for properties and borrowers within a certain geographic area in their “footprint”. Loans are funded and serviced by the lender from deposit account reserves or interbank credit sources. Most financing for mobile home and RV parks come from local lenders. Many are chartered to only loan to community residents but some will accept outside investors. Terms are typically: 5 year fixed rates of 5%, LTVs of 70% to 75%, amortizations of 20 to 25 years. Personal guarantees are expected with global personal income ratios evaluated. Overall 680 minimum scores and clean credit history is needed with net worth equal to or exceeding the loan amount and liquid cash reserves of 10% after purchase and real estate investment experience is required.

CMBS Lenders (Nonrecourse)
Conduit loans can be the best type of financing if nonrecourse is required. Our CMBS lender can go down to $1.2Mil loan amounts and offer flexibility for issues such as lower occupancy, less desirable locations, high percent of older and/or park owned homes, etc. CMBS lenders require $35k upfront deposits for 3rd party reports (appraisal, environmental, engineering and survey as well legal and underwriting fees). These costs are industry standard to qualify the loan for inclusion into a portfolio of mortgages that will be securitized and sold as bonds. Terms are very attractive with 75% LTV, 10 year fixed rates at about 5% currently on 30 year amortizations. Underwriting is rigorous but overall more flexible than many other types of financing. But the loans carry “defeasance” prepay penalties and should be used primarily for parks you intend to hold for a 10+ year term.

Government Agency Lenders

For higher quality parks only “Agencies” (Fannie Mae or Freddie Mac) can provide some of the most desirable loan terms and nonrecourse debt. Parks usually need to have half double-wides, paved, curbed streets with ample off-street parking, no more that 5% park owned homes, 90% + occupancy , city services and be near major metro areas. Loans have yield maintenance prepay penalties which are similar to defeasance but will consider step-down prepays for a cost to rates. Typical rates are low 4%s on 5 year and mid 4%s on 7 year fixed loans with 10 year fixed rates near 5%. LTVs are commonly 75% with 30 year amortizations.

National Banks
A handful of national lenders can finance parks: mostly in larger metro areas, 3+ star, higher quality parks, limited tolerance to park owned homes, RVs, non-city services, etc. LTVs are 65-75%. Typical rates are 4.50% for 5 year fixed and 4.75% for 7 year fixed on 30 year amortizations. These types of lenders will mostly only finance parks of similar quality to Agency Lenders but with a bit more flexibility. A couple of national banks break the mold with super low rates, lower costs and better prepay penalties and can be the best alternative if they can do the deal.
For a Confidential Review, Call or Email David Harley
(415) 250-5300 ● dharley@bluepointcm.com
BRE 01334092
BluePoint Commercial Mortgage ● 655 Redwood Hwy, Ste. 311, Mill Valley, CA 94941● www.bluepointcm.com