Fannie Mae Manufactured Housing Community Financing

Fannie Mae Loans for Manufactured Housing Communities and Mobile Home Parks

It can be somewhat challenging for investors looking to find an affordable source of financing for manufactured housing communities, but Fannie Mae’s Manufactured Housing Community Loan Program is an attractive answer to this problem. Fannie Mae Manufactured Housing Community Loans have a minimum loan amount of $3 million and offer fixed and variable-rate loan terms of up to 30 years. Additionally, they have an LTV allowance of up to 80% (75% for refinances), are non-recourse, and are fully assumable (with lender approval and a 1% fee). All of these perks add up to ensure that Fannie Mae Manufactured Housing Community Loans offer the versatility and flexibility that many manufactured housing community operators crave.

Sample Fannie Mae Terms For Manufactured Housing Community Loans

Size: $3 million minimum loan amount

Terms: 5-30 years

Use: Acquisition or refinance

Amortization: Up to 30 years, interest-only options may be available

Interest Rates: Fixed and variable-rate options available

MaximumLTV: 80%, 75% for cash-out refinancing

MinimumDSCR: 1.25x

Recourse: Loans are non-recourse with standard “bad boy” carve-outs

Prepayment Options: Yield maintenance or declining prepayment premiums

Occupancy Requirements: 90% physical occupancy, no more than 5% can be non-owner occupied

Eligible Borrowers: Borrowers typically need to be single asset U.S. entities. At least one principal should have experience owning and operating manufactured housing communities.

Eligible Properties:

  • Properties must have at least 50 pad sites
  • 50% or more of sites must be double-wide
  • 3-5 star property rating required
  • No more than 25% of homes can be owner-occupied
  • Density must not typically be beyond 12 homes per acre (for established communities), or 7 homes per acre (for new communities)
  • Leases 2 years or longer must not come with a purchase option

Advantages:

  • Competitive interest rates
  • Loans are non-recourse
  • 30- 180 day rate locks available (streamlined rate locks also available)
  • Supplemental financing permitted after 12 months
  • Commercial space is allowed

Disadvantages:

  • Requires third-party reports including an Appraisal, Property Condition Assessment, and a Phase I Environmental Assessment
  • Requires replacement reserves (minimum of $250/unit per year)
  • $12,500 application deposit and $3,000 processing fee required
  • 1% minimum origination fee also required
  • 2% good faith deposit required
  • Replacement reserves required ($50 minimum per pad site/year)