One major requirement in achieving success for Nonprofit corporations purchasing manufactured home parks is the various sources of financing available.

Generally, nonprofit corporations rely on a number of different sources for the financing of their affordable housing projects.  Mobilehome parks are somewhat different because the traditional sources of financing (tax credits, etc.) are not available. 

Thus, nonprofit corporations need to be creative in solving the financing needs of their project and in solving such needs in the time provided from the seller.

Most of the money to buy the park comes in the form of a first mortgage loan.  Other financing comes in the form of grants, low interest loans and other benevolent funds.  The larger the first mortgage loan the smaller the amount of grants, loans, etc., which generally are very difficult to arrange.

We include in this section Term Sheets with the details of several loan programs that have worked for nonprofit corporations recently.  Every park is different, so compiling a package of financing to fund the project can be very complex.

CONDUIT LOANS

Conduit loans are made by private lenders who place the loans with investors.  This market has been very difficult lately but is improving. 

Term Sheet Conduit

FHA 207M LOANS

FHA loans are made by a private lender but are guaranteed by HUD/FHA under various multifamily housing programs.  If your project qualifies, the key to this loan is negotiating enough time with the seller to obtain the FHA guarantee. 

Term Sheet 207

FHA 221(d)(4) LOANS

FHA 221 D 4 loans are made for projects that include BOTH the PARK and the MH HOMES, where the combination of site AND home are to be rented to residents.  Loans are made by a private lender but are guaranteed by HUD/FHA under various multifamily housing programs.  If your project qualifies, the key to this loan is negotiating enough time with the seller to obtain the FHA guarantee. 

Term Sheet 221 D 4

FEDERAL & MUNICIPAL FUNDING

Many nonprofits use funding from the Federal Government or from local (state, county or municipal) entities to accomplish their purchase. Such moneys are very limited, hard to get, and will typically not cover all the financing needs.  In addition, all the sources of money have to coordinate together in order to be successful and sometimes they fail.  Finally, such funds come with strings that restrict the activities of borrowers.