Financing mobile homes as an investment

[Jeff Macdonald]

Hey folks!

In my home area, there is sizable number of affordable mobile (manufactured) homes on foundation (post 1977). As an investor, these properties seem out of reach due to the lack of traditional financing. I have not heard of any lender that provides mortgages (or lower interest loans) on manufactured homes as investments. Any suggestions? Thanks.

[John Arendsen]

If you're looking to invest in a rent/lease MHC just be sure you clear your intentions with the Manager/Owner before you move forward. Many if not most MHP owners will not allow  sub leasing. So  unless you're going to be the primary resident it may not be the best investment option for you.

However, if you're looking at MH's in resident owned MHC's i.e. condo conversions, sub divisions, planned unit developments (PUD's) or on a private lot or parcel then you just need to contact the HOA and find out what their sub letting policies are. Many HOA's do not allow sub leasing and definitely not vacation type rentals. So be very careful going down that road as well.

However, of the two scenarios above and as a North San Diego Coastal RE investor who invests heavily in stick built (site built), rent/lease and resident owned MHP's I can tell you from first had experienced that it is a very viable investment if you're in the path of progress. 

Unfortunately there aren't too many MHC's in that path but instead in blighted and/or undesirable geographical and socio/economic areas where you don't get the demographics that make it an overwhelming investment opportunity but moreover a better choice for low income affordable housing.

Now to answer your question about financing. There are some financing opportunities for MH's that were built after June 15, 1976 but they are few and far between compared to available financing for resident owned HUD Manufactured Homes (built after June 15, 1976). You can find low interest long term conventional financing if you are the primary resident or if you're purchasing a 2nd (vacation) home on resident owned land.

However, its a little tougher for investors to find many conventional lenders willing to loan on MH's unless you're willing to put a lot of skin in the game as the saying goes. All that stated once again I'm not painting the entire MH industry with a broad brush. I'm just talking about my particular farm. But you will no doubt find a lot of very good answers from some very well informed and seasoned PRO's on this site. Good luck!