Manufactured housing communities (MHC) and RV parks are commercial real estate asset classes with distinct financing requirements. Neither fits neatly into standard residential or conventional commercial loan programs. Investors and operators seeking financing need to understand which lenders are active in these segments and what underwriting standards to expect.
Fannie Mae and Freddie Mac MHC Programs
- ✦Fannie Mae offers a dedicated manufactured housing community loan product through its multifamily platform
- ✦Freddie Mac also provides MHC financing through its multifamily division
- ✦Minimum community size for agency execution: typically 50 or more pads
- ✦DSCR requirement: 1.25x or higher on stabilized income
- ✦Stabilized occupancy: 85% or better typically required for agency-priced execution
Portfolio and CMBS Options
For smaller manufactured housing communities or RV parks below agency minimums, portfolio lenders and life insurance companies are the primary capital source. CMBS execution is available for larger stabilized MHCs but uncommon for RV parks due to seasonal income volatility. DSCR requirements from portfolio lenders range from 1.20x to 1.35x. LTV caps are generally 65% to 75% depending on community quality and operator experience.
What Underwriters Evaluate
- ✦Ratio of park-owned homes to tenant-owned homes: more tenant-owned homes is better for the lender
- ✦Utilities structure: whether utilities are included in pad rent or billed separately to tenants
- ✦Lease terms: month-to-month pad leases create income volatility versus annual lease structures
- ✦Amenity quality: clubhouse, laundry, and community features support occupancy and cap rate
- ✦Seasonal concentration: a community driven by a single seasonal tenant group adds income risk
Aria can walk through DSCR calculations and lender options for manufactured housing communities and specialty commercial real estate. Ask at vicariointel.com.
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