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How Big is Small Cap Multifamily?

A closer look at the multifamily housing inventory in the United States and the size of the small cap investment opportunity.

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Multifamily Forecast: Investors Moving to Secondary Markets

The apartment sector has remained the darling of the commercial real estate for the past six years. This doesn’t appear to be changing anytime soon, as 2016 is expected to set a new record for multifamily mortgage origination volume. While multifamily’s position as top dog remains uncontested, savvy investors are altering their strategy for sourcing Read the full article…

GENERAL: 800.ARBOR.10

FREDDIE MAC®

Manufactured Housing Community Loan

With flexible financing, competitive pricing, certainty and speed of execution, the manufactured housing community (MHC) loans provide an affordable housing option for underserved populations, particularly in rural and non-metro areas across the country, where MHCs are an important, and sometimes only, source of affordable housing.

Eligible Property Types Existing, stabilized, high quality, and professionally managed manufactured housing communities (MHC s)s), w ith or without age restrictions, excluding Seniors Housing Loans.
Eligible Borrowers
  • A key principal should have two or more years of experience in operating MHCs and should own one other MHC property.
  • The borrower may be a limited partnership, corporation, limited liability company, or a tenancy in common (TIC) with 10 or fewer tenants in common. General partnerships, limited liability partnerships, REITs and certain trusts may also be acceptable in limited circumstances, subject to additional requirements.
  • A borrower must be a Single Purpose Entity (SPE). On loans less than $5 million, a borrower other than a TIC may be a Single Asset Entity instead.
  • If the borrower is a TIC, each TIC must be a SPE.
Terms Up to 5 –, 7 –, and 10 year terms; longer term loans considered on a case by case basis.
Amount 1 million or larger.
Maximum Amortization 30 years.
Interest Rate Fixed or floating rate options are available.
Interest Only Partial term and full term interest only available.
Prepayment Provisions Refer to the Fixed-Rate Loan and Floating-Rate Loan Term Sheets for additional information.
Recourse Requirements Non recourse except for standard carve out provisions.
Supplemental Financing Available, subject to the Supplemental Loan offe ring requirements.
Tax and Insurance Escrows Required.
Replacement Reserve Escrows Minimum $50/site/year and $250/borrower owned manufactured home/year (if included in the collateral).
Application Fee Greater of $2,000 or 0.1% of loan amount.
Early Rate and Spread Lock Options Early rate lock and spread lock options available, typically ranging from 60 days to 120 days, including early rate lock and Index Lock options.
Refinance Test No Refinance Test is necessary if the loan has an amortizing deb t coverage ratio (DCR) of 1.40x or greater and a loan to value (LTV) ratio of 65% or less; all partial term interest only loans must pass the Refinance Test.
Additional Considerations
  • The property must have a minimum of five paid sites.
  • The percentage of homes owned by the borrower, borrower affiliate, or third party investor cannot exceed 25% in aggregate.
  • Homes must conform to the requirements of the Federal Manufactured Home Construction and Safety Standards Act of 1974 (HUD Code Standards).
  • Private wells and septic systems are allowed with considerations
  • Leases cannot contain options to purchase pad site or borrower owned manufactured homes.
  • Retail sales or financing by borrowing entity of any manufactured home is not allowed.
  • RV campgrounds and broken condominiums are excluded.
MHC Tenant Protections Discounted pricing and up to a $10,000 rebate for third party reports available to borrowers who agree to include the following MHC Tenant Protections in all homeowner leases wi thin 12 months after loan origination:

  • One year renewable lease term, unless there is a good cause for non renewal.
  • 30 day written notice of rent increases.
  • Five day grace period for rent payments and the right to cure defaults on rent payments.
  • Right to sell the manufactured home to a buyer that qualifies as a new tenant in the community, without having to first re locate it out of the community.
  • Right to sell the manufactured home in place within 30 days after eviction by the community owne r.
  • Right to sublease, or assign the pad site lease, for the unexpired term to the new buyer of the tenant’s manufactured home without any reasonable restraint, so long as the new buyer qualifies as a new tenant within the community.
  • Right to post “Fo r Sale” signs that comply with community rules and regulations.
  • Right to receive at least 60 days’ notice of planned sale or closure of the community.

Note: Any MHC Tenant Protection that violates applicable laws will automatically void and will not af fect the enforceability of any other provisions of the lease.

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