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Mobile Home Park Loans

Long term Loan - $1,750,000 on a Mobile Home Park in Washington

Tags: mobile home park financing, MHP loans, Manufactured Housing Community loans
Wednesday, Oct 31, 2018
by Angela Kesselman

The Madison Group (TMG), a leading source of mobile home park financing nationwide, arranged the $1,750,000 refinance of a mobile home park in Tacoma, Wash.  The borrowers’ goals were to refinance a note which was due and secure long-term financing. TMG arranged a 10-year fixed rate loan at 4.95% and a 25-year amortization at 70% LTV. 

The well maintained park consists of 40 double-wide pads, one manager’s unit, two RV pads and one duplex. It is 100 per cent occupied and in a good location with high rents. All units are tenant owned.  The property is operated as a senior park for tenants 55 years old and older. The same management has been in place for 20 years

TMG needed to overcome a number of challenges in order to secure the financing. Most significantly, the property was originally financed on a seller note because the mobile home park needed a new sewer system.  The system was completed and TMG was able to finance the new permanent loan with lower sewer expenses because of the new system.  Additionally a portion of the property was located in a flood zone and the county recently imposed strict flood guidelines posing more risk for a lender. Lastly the borrowing entity consisted of five tenants in common, complicating the paperwork. 

In order to succeed, TMG worked with a local credit union that understands mobile home parks and is comfortable with the market for this type of park.  The credit union was willing to resolve the flood issue and work with the multiple borrowing entities to complete an excellent long-term loan for the owners. 

All of the concerns that were initially addressed were satisfied,” said Angela Kesselman, TMG’s associate director of Finance.  “We were even able to have the prepayment penalty waived and the loan assumable to a new buyer to accommodate one of the aging owners.  We found the perfect fit,” she said.

The financing was arranged by Angela Kesselman at The Madison Group

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