California Anticipates More Banks to Provide Loans for Manufactured Homes in Communities

by Dave Shanklin

Is there evidence of new stability for the MH chattel finance industry?

After years of a roller-coaster ride of lending instability, the storm clouds seem to be parting for the MH chattel finance industry.

A major banking chain has been contacting dealers in CA, testing the waters about possibly re-entering the MH chattel finance industry.

This lender is Wells Fargo.

If this does transpire, it will be a significant breakthrough for our industry in this state.

Other news that is official: one of my three lenders has lined up "several" banks and a major credit union to finance their loans. This lender, Triad, does the underwriting and loan servicing, but they have other lenders lined up to take title and wire the funds at closing.

They announced a "large" credit union in Oregon is one of their new lenders, and a handful of banks in the Midwest are also coming on board. One of these banks announced the intent to pump $4 million per month into their MH chattel portfolio, and supposedly their competitors are considering doing the same.

This is perhaps one of the largest commitments to MH financing since the loss of Origen a few years ago. The contraction of that Detroit-based lender left a sizable hole in our industry, but it seems we are finally recovering.

The identities of these other lenders are unknown to the originators and agents at this time. We won't know their names until after we get loan approvals and instructions for titling.

Even bigger news from the same lender: FHA loans for MH's in communities are no longer a rumor. My loan rep informed me recently that they have FHA-insured loan products for MH chattels in several states, but not yet in CA. I am less skeptical because it is now a reality in nearby states.

Offering FHA loans, assuming the underwriting will be traditional FHA underwriting, will be a HUGE development. Stay tuned…

In my previous articles, you read about a high-priced park in Marin County. A real estate agent recently "double-ended" an early pre-HUD Code 1970's "double-wide" in Marin Valley Mobile Country Club. The price was $299,000. It was an all-cash sale, which substantially raises the bar in this park for re-sales. MVMCC sits partially on a hill with views of the San Pablo Bay and Mount Diablo. And it's a "chattel park" with very low space rent averaging $500.

If you're looking for affordable housing in Malibu, look into the three MHC's in this ocean sanctuary. Some of the highest prices for manufactured homes in the world can be found in Paradise Cove. This community has a privately-owned beach that is open only to the residents of the MHC. Space rent varies from $1,500 to $2,500/month for the homes closest to the beach.

A recent quick check of the MLS shows 23 "mobile homes" for sale in Malibu priced $500,000 and up, with some listed at nearly $1.5 million. I believe the record in Malibu is $2.9 million. This record was set by a movie star who bought the home because he is an avid surfer.

It should be noted that in CA, the MLS uses the term "mobile homes" when referring to MH chattels in parks. In CA, when it comes to homes in communities, we of see the use of terms "manufactured" and "mobile" interchangeably. Technically, this should depend on the age of the home, with homes built before June 15, 1976 being pre-HUD code "mobile homes" and homes built on or after June 15, 1976 being Manufactured Housing or Manufactured Homes.##