Manufactured Housing Community loans are extremely popular in CMBS. Manufactured Housing Communities (MHCs) are developments in which the landlord leases land “lots” to tenants who then buy or build a manufactured home on the lot. The tenant pays monthly rent to the landlord for the lot. Sometimes MHCs are erroneously referred to as Mobile Home Parks. Homes built after 1976 should technically not be referred to as Mobile Homes as homes constructed after 1976 are constructed to meet the Federal Manufactured Home Construction and Safety Standard Act enacted that year. The federal standards regulate manufactured housing design and construction, strength and durability, transportability, fire resistance, energy efficiency and quality. The code also sets performance standards for the heating, plumbing, air-conditioning, thermal and electrical systems.
The popularity of MHC loans in CMBS has created some flexibility on the types of MHC loans that can be approved. Historically, MHCs needed to have some percentage of “double-wide” homes. Double-wide home are twice the size of single-wide homes. Lately, CMBS loans can be closed with 100% single-wide homes. In addition, the CMBS market did not like to see “park-owned” homes. These are homes that were typically foreclosed by the landlord and unable to be resold, so the landlord owns the home and rents it. Park-owned homes are now okay in CMBS.
The latest trend in CMBS is RV concentration. Historically, RV occupancy in MHCs was undesirable. Now, RVs are welcome in MHC CMBS loans. For your next loan quote on an MHC deal with an RV component, contact Dennis Suh at firstname.lastname@example.org or Gary Unkel at email@example.com.