MHP financing challenges

[John Brinkos]

Under contract on two MHP package. One is >80% occupied with TOH. The other is >50% occupied with <10% TOH. We are having challenges finding a lender that will blanket the two or even accept the second park. Does anyone have any contacts that might help us? Thank BP!

[Frank Rolfe]

Bundling properties often creates more difficulty than it helps including:

1) Most lenders have a preferred property type (or even geography) and when you bundle two with different stats (like high occupancy and low occupancy) it results in them being uncomfortable with one of them, hurting their terms on the one they liked.

2) When you bundle parks together, it can cause problems if you then want to sell one, as you have to often break apart the loan and the defeasance cost (on conduit) is massive.

That being said, all that matters is the actual situation and the lender at hand. We use loan brokers on virtually all of our acquisitions and refinancings as they know the lenders that are the most attracted to MH at any given moment (whether it's bank debt, conduit, or agency). They can tell you from experience and current market conditions if you should bundle or not. Our favorite loan brokers (now called "capital consultants") include MJ Vukovich at Bellweather and the DiMarco brothers at Security Mortgage Group. You can simply call them and bounce the deal off them at no cost. That's what we do.