• Virgil Nethercott

Top Four Things to Consider When Financing Your MHC

Real estate investment has always been considered a relatively safe investment option. Apart from when the housing bubble burst in 2008, there aren’t many significant dips in the housing market. For this reason, people love to invest in real estate.

There are a lot of real estate options and housing solutions. The least sought after investment among them has always been mobile home communities, but not anymore.

The housing market has stabilized, and property prices have been going up for a while now. The current median price of a single-family home across most states is too high for most middle-class families. The American dream of owning a house is becoming harder and harder to realize.

Due to these rising prices, more and more people are considering mobile homes (or manufactured homes). These homes are an incredibly affordable way of owning a house.

Many families used to avoid mobile homes as a housing solution, despite their affordability. However, state of the art manufactured homes, and well maintained and well run mobile home communities are now attracting many families.

Consequently, many investors are looking to invest in mobile home communities. They see it as profitable real estate ventures and early entry into a relatively untapped market.

If you are looking to invest in a mobile home community (MHC), there are a few things to consider for the right loan program to fund your investment.

Mobile Home Owner Percentage

If you are planning on acquiring an MHC along with most of its mobile homes, you might not be eligible for most loan programs. Almost all MHC loan programs require 75% to 80% tenant ownership. Meaning if there are 20 mobile home lots in the park that you are considering, more than 15 homes should be tenant owned homes.

Right Class/Star

Make sure the community you are planning falls in the lender’s requirement for the loan you plan to take out for your MHC investment. The class or star rating of an MHC is given based on the quality of the park. If the park has paved roads, excellent landscape, amenities, larger mobile homes, higher tenant ownership, and municipal water and sewer facilities (among other things), it would be considered Class A, B, or 4, 5 stars MHC.

Many lenders require mobile homes to conform to the HUD code.

Minimum Number of Pads and Pad Density

The pad or lot is the area where a mobile home stands. Most loans have a minimum pad requirement like your park has to have a minimum of 20 pads to qualify for a particular loan program. Similarly, pad density, meaning the number of pads/lots per square mile or acre, may also be part of the requirement. Make sure your park conforms to that.

Other Requirements

Location, distance from metropolitans, distance from amenities, and overall population are also important. As they can be part of your loan prerequisites. You also have to consider loan amortization, loan-to-value ratio, and DSCR. Apart from that, like any other loan, these loan programs will have fixed-rate options (Fannie Mae MHC loan program for 30 years). These loan programs will require a decent credit score and will have variable loan sizes.


Investing in mobile home communities is still an excellent investment niche. Not many conventional lending institutions have formalized loan programs for MHCs.

Still, there are a lot of options available for investors. With some research and deliberation, you are sure to find the right loan program for your MHC investment.

If you need personalized financing advice for your MHC investment, feel free to contact me at office@virgilbrooks.com or by calling my office at (208) 932-2821.

-Virgil Nethercott, CCIM

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