Where Can You Find Hypothecation Loans?

[Danielle Hicks]

I work for a manufactured home lender and we're looking for more funding as we expand. I was speaking with someone in the finance space and they suggested a hypothecation loan. After looking in to it, it seems like a better option than selling our notes. Unfortunately, I can't find much information on where to get a hypothecation loan. Any recommendations or insight on that? We have hundreds of notes to back the loan, and it's a solid business model. 

The other option is just a traditional loan, but the issue we're having is the term lengths. Our loans go for a maximum of ten years, and we haven't found a lender that offers ten year loans. If anyone has recommendations on business lenders who have long terms, I'd love to hear them. 

[Don Konipol]

Quote from @Danielle Hicks:

I work for a manufactured home lender and we're looking for more funding as we expand. I was speaking with someone in the finance space and they suggested a hypothecation loan. After looking in to it, it seems like a better option than selling our notes. Unfortunately, I can't find much information on where to get a hypothecation loan. Any recommendations or insight on that? We have hundreds of notes to back the loan, and it's a solid business model. 

The other option is just a traditional loan, but the issue we're having is the term lengths. Our loans go for a maximum of ten years, and we haven't found a lender that offers ten year loans. If anyone has recommendations on business lenders who have long terms, I'd love to hear them. 

Since loans on mobile homes are not secured by real property, they’re not mortgage loans, but are chattel loans. Real estate home loans can be safely secured for 30 years, as the value of the land  itself should rise enough to offset the 2-3% annual depreciation of the improvements.  Even a marginally maintained home should rise in value over 30 years.  Ever see what a 30 year old mobile home looks like and is worth?  I’ve nothing against the mobile home industry, I’ve owned and financed a number of MHP.  But reality is mobile homes are a fast depreciating asset; most homes built on a pier and beam or slab foundation are an appreciating asset.