Mobile Home Park Financing

Ron Largent

Ron Largent

The Commercial and Parks Financing Group,  a subsidiary of Largent Financial,  is a specialized company that works in partnership with a number of banks, direct lenders, and mortgage brokers throughout the nation. Banks include the Bank of America, Wells Fargo, US Bank, and Union Bank….and the direct lenders and mortgage brokers that we work with are all fully licensed and legal in the states in which they work.

Below are some parameters for the Mobile Home Park lending platform, and these are general and may or may not apply to the specific MHP being considered.

Main Points:

We have a preference for 2, 3, 4, and 5 star parks!

  • Loan size of $500,000 to $10 million.
  • MHP loans can be 30 year loans with 30 year amortizations with fixed periods of 3, 5, 7, or 10 years.
  • 7 year money is a favorite for lenders– 4.6% right now is the interest for one lenders Park Prime-1 program.
  • Attractive step down prepay.
  • We lend nationally.
  • All-age parks are limited to approved major MSA’s and our approved secondary markets.
  • All Seniors parks will be considered case by case (with the exception of high and low desert, heavily forested, and mountainous locations).

Pricing is basically broken down into three categories/ platforms, and this is an example of what one of our lenders offers:

Park  1: 

For experienced borrowers: min FICO of 725, 5 years park management experience, min of 2 parks owned.

  • Park quality should be 2 star or greater.
  • Less than 20 sites per acre (or comparable to direct competitors).
  • Built in or after 1960.
  • Greater than 20% double wides.
  • Less than or equal to 7% vacancy (or comparable to direct competitors).
  • Loan amount of $1 million to $5 million.
  • Annual financial reporting required.
  • 1.20x min dscr on three years stabilized operations
  • Max 75% LTV purchase, 70% LTV refinancing.

Park 2:  

For experienced borrowers: min FICO of 700, 10 years park management experience, min of 3 parks owned.

  • Park quality should be 3 star or greater.
  • Less than 15 sites per acre (or comparable to direct competitors).
  • Built in or after 1970.
  • Greater than 40% double wides (or comparable to direct competitors).
  • Less than or equal to 5% vacancy.
  • Loan amount of $1 million to $5 million.
  • Annual financial reporting required.
  • 1.35x min dscr on three years stabilized operations
  • Max 65% LTV purchase or refinancing.

Standard:

Min FICO of 675, 5 years park management experience.

  • Park quality should be 2 or 3 star or greater.
  • Quality, double/ single composition comparable to direct competitors.
  • Built in or after 1950 (exceptions on case by case basis).
  • Loan amount of $500,000 to $5 million.
  • No annual financial reporting required.
  • 1.20x min dscr
  • Max 70% LTV purchase, 65% refinancing.

Each mobile home park is considered on its own performance, condition, location, history, and overall viability as a sound investment for the borrower and the lender. And, each borrower is considered on their overall credit worthiness and ability to manage the investment, including experience.