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by Edward 'Eddie' Hicks

Edward 'Eddie' Hicks photoThe Manufactured Housing Industry needs to…
• improve the image of our homes and communities with the general public to overcome many years of belief that our homes depreciate, are cheaply built, are prone to failure in high winds and earthquakes, that our community residents are sub-standard citizens, and that our communities hurt neighbors home values.

The Manufactured Housing Industry needs to…
• adapt our factory built homes with innovative new designs and concepts,
• offer more realistic home financing options,
• and build new communities to appeal to a broader base of home buyers: primarily those with financial resources that are substantially better than those we are currently serving, yet still lower than those required for the purchase of a single family detached home or attached apartment unit.

The Manufactured Housing Industry needs to…
• attract new investors to land lease community developments that provide a competitive return on investment, at minimum risk of capital and/or credit ,which communities are viable in a broad range of markets with fair-to-good area employment and demographic characteristics.

If this sounds a little like the well-known secret of the equity markets: buy low and sell high, it's not. We have all of the above-listed survival tools currently at our fingertips. We just haven't learned how to put them all together. Cooks know it's not just the ingredients, but how they are all put together that makes the recipe work.

Substantial improvements to the FHA 207m loan guarantee program with its 40-year, combined construction and permanent non-recourse loan programs for LLCommunities. It has the potential to provide for community owners to improve their properties to increase the number of vacant homesites that are being leased.

For more information on the program details, go to: www.fha207m.com/.

Right now (June 2011) we are getting some minimal support from MHI with the HUD staff on potential improvement to this much maligned, but little-known loan guarantee program. If they listen to us, and have a real interest in supporting out industry, we should see some positive changes soon which will greatly help with property re-financing and rehabilitation.

A brief list of current FHA207m program issues that are being considered by the HUD headquarters staff for implementation are as follows:

1. The manufactured housing industry is being required to process the applications using MAP (Multifamily Accelerated Processing) procedures. This means the lender (Mortgagee) does the underwriting using procedures which were designed for apartments, hospitals, nursing homes, etc. The program manual specifies TAP (Traditional Application Processing) in which the HUD staff does the underwriting.

2. The MAP program doesn't take into account the fact that homes must be sold and financed to establish a viable market condition. So the required market studies don't always reflect that critical information.

3. MH LLCommunities must sell a home or lease to own or rent for a site to be leased. Therefore the available home financing programs are important to the potential success or failure of a proposed project.

4. The FHA Title I financing program was just revised in 2008 as a part of HERA, and was just implemented by FHA in July 2010, and GNMA removed their moratorium in August of 2010. The various HUD staffs don't seem to know anything about the program revisions, or how they will positively affect FHA207m loan applications.

5. The manual hasn't been modified since June 1976, and as such prohibits seniors only communities unless the residents are age 65+. They have not recognized newer laws that provide for 80% of the homes to be occupied by at least one resident which is 55+.

6. The FHA207m underwriting doesn't require any specific percentage of a project for improvement under the substantial rehabilitation financing aspect of the program. But since some of the other FHA programs require a minimum of 15%, the staff has insisted the FHA207m program also comply.

7. There are many markets in which single family homes and apartments may have relatively high vacancies, but manufactured home communities may be doing much better. HUD staff seems to pin their approvals on the overall housing market conditions, and doesn't seem to be interested in the successes of existing m/h LLCommunities, which are a completely different type of housing and doesn't necessarily mirror other housing types in a given market area.

8. Filling a manufactured home LLCommunity takes considerably more time than apartments, because of the need to sell a home and have it installed. Some staffs have only allowed underwriting based on an absorption period of a few months, which is typical for apartments. Manufactured Home LLCommunities necessarily need more time because of the need for a sale, construction of the home at the factory, and subsequent transport and installation on the homesite.

9. In many market areas, there are virtually no more home retailers (so-called street dealers), and the only way a Sponsor/Community Owner can get homes sold and installed in their communities is to also be the home retailer. There are restrictions in the existing regulations, which allow a retailer to have only two model homes on display and allow any area retailer to install homes, whether or not they meet the community home physical standards.

10. Community centers attract residents and are very popular, but are difficult to include in the first phase of a multi-phase development, because the capital costs are being amortized over too few a number of homesites. Thus many community developers eliminate them, making the communities less desirable.

11. Some lenders have proposed providing long term, real property type financing for the installed HUD code homes, but for their protection, need to encumber the real property with a "notice of contract" to protect their investment. HUD's financing agreement specifically prohibits any property liens other than the HUD insured first mortgage. Providing long term, low interest financing should be a goal of the industry. FNMA tried a pilot program about 12 years ago, but it failed because of the FHA financing agreement limitations.

12. While the processing times are limited by the regulations after the "invitation to submit" is received by a Sponsor as the result of the pre-application meeting, the staff can take their time in getting to the invitation, after the meeting has been held and the requested third party reports viewed. This makes the application process agonizingly slow.

13. At least one of the HUD offices I have spoken with has openly said, "We don't want to do any trailer park loans. We are busy with other more meaningful projects in our area. You can submit a request for a pre-application meeting, and we will have to meet with you, but I am going to tell you right now no matter what you present, we aren't going to approve your project." Raw, unadorned prejudice!

A few years ago, WMF Huntoon Paige (Prudential) staff and I met with the HUD staff and a MHI representative in Washington to discuss some of these issues, and we got nowhere. Not even a kiss-off letter as I recall.

No doubt if some changes were made to the program, it could immediately be used for the refinancing and rehabilitation of existing communities to provide for badly needed improvements. And, eventually as the overall market improves, there would be some more attention to new developments, which are sorely needed in some market areas.

There may be an upcoming seminar series similar to the one that was held in Louisville a few months ago, based on continuing interest. If you are interested, please let me know and I will come up with a list of proposed cities.

###

Edward 'Eddie' Hicks is a licensed RE Broker and Mortgage Broker in the Tampa, FL area. He has over 45 years experience as a manufactured housing retailer, manufacturer and developer. In recent years, he has assisted investors in acquiring or developing investment grade manufactured housing land lease communities. He is a specialist in the FHA 207m loan program for private lender financing of qualifying communities with HUD loan guarantees. Contact him at (813) 661-5901, www.mobilehomepark.com, www.factorybuilthome.com or This e-mail address is being protected from spambots. You need JavaScript enabled to view it . For more information about the loans addressed in this article: www.fha207m.com.

Daily Business News Briefs

Town Council may Vote to Close MHC Immediately

Town Council may Vote to Close MHC Immediately

The 32 residents of M & W Mobile Home Park in Alta Vista, West Virginia may have to vacate the community if the town council upholds its ruling to deny renewal of the permit to operate. Neither the community owner nor the residents were aware the council was holding a meeting concerning the future of […]...

01 Aug 2014

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Shoreline Modular Home set on Ten-Foot Pilings

Shoreline Modular Home set on Ten-Foot Pilings

Following damage from Tropical Storm Irene in 2011 and Superstorm Sandy in 2012, Peter and Lorraine Grader decided to replace their 74 year-old house in Groton, Connecticut with a modular home set on 10-foot pilings, out of the flood zone and constructed to better withstand severe storms. According to theday.com, the four modules that comprise...

01 Aug 2014

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Homeownership Rate Continues its Decline

Homeownership Rate Continues its Decline

According to kansas.com, the U. S. Census Bureau reports the overall homeownership rate dropped to 64.7 percent in Q2 of 2014 from 66.9 percent in the same quarter five years ago. For those under 35, the Millennial generation, homeownership has dropped from 39 percent in the second quarter of 2010 to 35.9 percent for Q2 […]...

31 Jul 2014

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Lippert Inks Contract for School Bus Windows

Lippert Inks Contract for School Bus Windows

Elkhart, Indiana-based Lippert Components, Inc. (LCI) has signed a multi-year contract to supply custom school bus windows to Blue Bird Corporation, a long-time manufacturer of school buses, according to stonline.com. Phil Horlock, President and CEO of Blue Bird, says, “Through significant collaboration, we’ve developed a best-in-class window com...

31 Jul 2014

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Bank of America Paying for Countrywide’s Mortgage Fraud

Bank of America Paying for Countrywide’s Mortgage Fraud

The Bank of America (BAC) has been ordered to pay nearly $1.3 billion for mortgage fraud committed by Countrywide before B of A bought out the mortgage broker during the financial crisis. The loans were initially made through a lending program called the “High Speed Swim Lane,” involving little or no income verification, and Countrywide […]...

31 Jul 2014

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Nobility Shines, AMG and Cavco Fall; Dow Drops over 300 Points

Nobility Shines, AMG and Cavco Fall; Dow Drops over 300 Points

In the worst trading day in three months on the stock market, the Dow Jones Industrial Average plummeted -304 points, -1.80 percent, to end the day at 16,576.36, while the Nasdaq dropped -93.13 points, -2.09 percent, to close at 4,369.77. Similarly, the S&P 500 fell -38.41 points, -1.95 percent, to end at 1,931.66 as CNNMoney […]...

31 Jul 2014

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Home Price Indices Indicate Moderation

Home Price Indices Indicate Moderation

The latest S&P/Case-Shiller Home Price Indices for May indicates a slowdown from a year ago. The ten-city composite gained 9.4% year-over-year and the 20-City 9.3%, down significantly from the +10.9% and +10.8% returns that were reported last month. In May the 10-and 20-City Composites notched gains of 1.1 percent, and all 20 cities posted...

31 Jul 2014

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Sun to Acquire MHC Portfolio of Green Courte

Sun to Acquire MHC Portfolio of Green Courte

MHProNews has learned from James Ayotte at the Florida Manufactured Housing Association (FMHA) that Sun Communities, Inc. (NYSE:SUI) has agreed to acquire a portfolio (the “ALL portfolio”) of 59 manufactured home communities from Green Courte Partners, LLC (GCP) comprising over 19,000 homesites for approximately $1.32 billion, including the ass...

31 Jul 2014

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Town Will Allow Rvs to Temporarily Site in MHCs

Town Will Allow Rvs to Temporarily Site in MHCs

A proposal to allow recreational vehicles to occupy manufactured home sites in land lease communities until a manufactured home is delivered passed the Coaldale, Alberta, Canada Town Council, according to sunnysouthnews.com. Town officials will include in the ordinance that only the owner of the home site can place an RV there, only one RV per...

31 Jul 2014

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Oliver Technologies Opens Facility South of Fort Worth

Oliver Technologies Opens Facility South of Fort Worth

MHProNews has learned that Oliver Technologies Inc. (OTI), which provides components for the manufactured housing (MH) industry has moved into the former Southwestern ColorGraphics building in Keene, Texas, just south of Fort Worth. Headquartered in Hohenwald, Tennessee, OTI develops, manufactures and distributes foundation products for MH...

30 Jul 2014

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Skyline Rises nearly 5 Percent; Nasdaq Nudges Up, Dow Slips

Skyline Rises nearly 5 Percent; Nasdaq Nudges Up, Dow Slips

The Federal Reserve plans to trim its bond-buying program by $10 billion to $25 billion, down from a peak of $85 billion, as planned, but will keep interest rates low, according to what CNNMoney tells MHProNews. The news trimmed losses on the stock market, spurring the Nasdaq to end in positive territory as it gained […]...

30 Jul 2014

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Featured Articles and Reports - August 2014 Vol. 5 No. 11

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Enhanced Manufactured and Modular Home Marketing and Sales Results

Enhanced Manufactured and Modular Home Marketing and Sales Results

by L. A. “Tony” Kovach American companies spend 2 billion a year on training. So why don't more manufactured and modular home (MH) retailers and communities invest properly in sales training? Read more

MARKETING

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COMMUNITY MANAGEMENT & FAIR HOUSING (LEGAL)

Architects Have a Duty of Care to Future Buyers of Condominiums for Neglig…

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by Bill Dahlin, Esq. On July 3, 2014, the California Supreme Court decided the case entitled Beacon Residential Community Association v. Skidmore, Owings & Merrill. Read more

COMMUNITY MANAGEMENT & FAIR HOUSING (LEGAL)

A New Strategy for Community Owners

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by Steven Lefler Our society has labeled housing for as long as I can remember. I grew up believing “Site Built Homes” typically register in people minds to be “better built,”... Read more

COMMUNITY MANAGEMENT & FAIR HOUSING (LEGAL)

The Impact of a 1.3 Billion Dollar Manufactured Home Communities Acquisitio…

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by L. A. 'Tony' Kovach We've been reporting off and on for the past few months about rumors and tips that suggested that a deal in the $500 million to the... Read more

COMMUNITY MANAGEMENT & FAIR HOUSING (LEGAL)

July, 1960 Popular Mechanics highlights Evolution of the Travel Trailer

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By Paul Bradley In a 1960 article titled, “Trailers Join the Country Club,” Popular Mechanics described the evolution of the travel trailer this way: “All this started years ago when people with... Read more

COMMUNITY MANAGEMENT & FAIR HOUSING (LEGAL)

CFPB Proposes New HMDA Requirements: Changes Exemption Threshold and Incre…

CFPB Proposes New HMDA Requirements:  Changes Exemption Threshold and Increases Required Disclosures

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FINANCING

The Lessons of Valdez - Some things are out of Whack!

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GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

2015 Louisville and Tunica Manufactured Housing Trade Show Updates

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GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

An Opportune Moment

An Opportune Moment

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GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

A Cup of Coffee with… Tim Connor

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GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

A Second Cup of Coffee with...Bill Matchneer

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GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

A Cup of Coffee with… Paul Bradley

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1) Who, What and Where: (Your name, and your role/job title at organization or firm and where you are based.) Paul Bradley, President, ROC USA, LLC, Concord, NH. Read more

GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

Tech Talk! Don't You Hate - Viagra, Cialis or Zyrtec links - appearing on y…

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by L. A. “Tony” Kovach It is often NOT what you think! Not many self-respecting webmaster wants to plug certain drugs or other products on their website. Read more

GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

Wind Speed and Add-Ons to Manufactured Housing – Response to the NBC News …

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GENERAL MANUFACTURED HOUSING INDUSTRY TOPICS

Strategic planning vs. strategic doing

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MANAGEMENT

ZigOn Employment Security

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by Zig Ziglar We frequently hear that "people refuse to change because change is stressful." I would like to suggest that not to change is even more stressful because the world... Read more

PERSONAL REFLECTIONS, MOTIVATION and INSPIRATION

Who is your competition?

Who is your competition?

by Tim Connor, CSP There is a tendency for many salespeople to see their competition as only those businesses selling a similar product, service or idea. In other words, salespeople selling... Read more

SALES

Upcoming Events

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MHLIVINGNEWS.COM FEATURED HOME OF THE WEEK

Classifieds

Press Releases

Steve Lefler - Modular Lifestyles and Ne…

Steve Lefler - Modular Lifestyles and Newport Pacific – Successfully Gaining Acceptance for Super Energy Saving, Green Manufactured Homes

Learn more at the article linked here, or by calling Steve Lefler, Vice President of Modular Lifestyles, Inc., a division of Newport Pacific Family of Companies at Ph. (888) 437-4587. Email steve@modularlifestyles.com. Steve is a Dual DRE and HCD Salesperson. Advanced Green Building Professional. CEC Solar Wind Retailer/Installer. http://www.modularlifestyles.com ##

the MHMSM Team 01 Aug 2014 Corporate Press Releases

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Sun Communities, Inc. to Acquire America…

Sun Communities, Inc. to Acquire American Land Lease Manufactured Housing Portfolio from Green Courte Partners for $1.32 Billion

Increases Sun Communities' portfolio to 245 communities totaling nearly 90,000 sites in 29 states with a combined enterprise value of approximately $5.1 billion Southfield, MI, July 30, 2014 - Sun Communities, Inc. (NYSE: SUI) (the "Company") today announced that it has entered into an agreement to acquire a portfolio (the "ALL portfolio") from Green Courte Partners, LLC ("GCP") sponsored funds. The ALL portfolio consists of 59 manufactured home communities, including those acquired from American Land Lease, Inc. by GCP in 2009. The communities comprise over 19,000 sites in eleven states, including nearly 11,000 sites located in Florida. Over 14,000 sites, or 73%, of the ALL portfolio are age-restricted.  In connection with this transaction, the Company will assume GCP's right to acquire an additional manufactured home community pursuant to a binding purchase...

the MHMSM Team 31 Jul 2014 Corporate Press Releases

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Mountainside Financial launches Dodd-Fra…

Mountainside Financial launches Dodd-Frank compliant non-MLO, MLO SUN Manufactured/Mobile Home Direct Loans and Refinancing

Using online articles, banner ads and video, Mountainside Financial is announcing the launch of the evolution of their direct lending platform promotion. As a division of San Antonio Credit Union (SACU), Mountainside has a unique 14 year history of making direct to consumer loans on manufactured and mobile homes. Direct loans are often done in "partnership" with brokers, communities, Realtors ®, other housing professionals and manufactured home retailers who refer consumers to them. Anthony Ducharme, Direct Channel Manager for Mountainside, explained how they created their new SUN System with Manufactured Home Professionals in mind who needed a compliant process to navigate SAFE Act and Dodd-Frank regulations enforced by the Consumer Financial Protection Bureau (CFPB). "If you've been originating your own loans, talk to us. If you want to have a legally complaint...

the MHMSM Team 08 Jul 2014 Corporate Press Releases

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Call for Nominations for the RV/MH Hall …

Call for Nominations for the RV/MH Hall of Fame Class of 2015

ELKHART, Ind., -- The RV/MH Hall of Fame Selection Committee has issued a call for nominations for the Class of 2015. Darryl Searer, Hall president, said, "The Hall welcomes nominations from all RV and manufactured housing sectors -- manufacturers, dealers, campgrounds, housing communities, suppliers, user groups, trade media, associations, etc -- for the class of 2015 and beyond. "The nomination guidelines and forms available online atwww.rvmhhalloffame.org/pages/nominations.cfm." According to the guidelines, anyone can nominate a person to the Hall of Fame that meets the eligibility requirements. The only people who may not be considered are those who currently serve on the Hall's Selection Committee. To be eligible the nominee must be, or have been, an active participant in any segment of the recreation vehicle, campground or manufactured housing industries for a minimum of 25 years....

the MHMSM Team 08 Jul 2014 Corporate Press Releases

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Southwest Region Manufactured Home Commu…

Southwest Region Manufactured Home Communities Showing Rent and Occupancy Growth, Outpacing National Average, According to JLT & Associates’ 14-Year Market Summary Report

Grand Rapids, Michigan – JLT & Associates (JLT), the nation’s #1 market research company for the manufactured housing industry, today announced a 14-year summary report of its manufactured home community rent surveys for 6 Southwest markets. Recognized as the industry standard for manufactured home community market analysis for over 20 years, JLT Rent Surveys provide detailed research and information on communities located in 72 markets throughout the United States, including the latest rent trends and statistics, marketing programs and a variety of other useful management insights. The most recent JLT Rent Surveys for the Southwest region cover 261 manufactured home communities encompassing 69,728 homesites in Albuquerque, Greater Kansas City, Greater Phoenix, Las Vegas, Tucson and Salt Lake City. This summary report is based on rent and occupancy trends from 2000 to 2014. Findings...

the MHMSM Team 01 Jul 2014 Corporate Press Releases

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RV/MH Hall of Fame 2014 Induction Dinner…

RV/MH Hall of Fame 2014 Induction Dinner Reservations Outpace Last Year's Event

ELKHART, Ind. -- The RV/MH Hall of Fame's Induction Dinner Committee Chairman Mark Wasson (BlueLinx Corporation), reports reservations for the induction dinner honoring the Class of 2014 are running significantly ahead of last year's reservations.   Wasson said, "As of June 19, more than 175 friends and family of the inductees have registered which is more than double the number of registrations for the Class of 2013 induction ceremony by the same date." This year's RV/MH Hall of Fame's annual Induction Dinner will be held on August 4, 2014, at the Hall of Fame's Event Center in Elkhart, Indiana, according to Darryl Searer, president, RV/MH Hall of Fame (Hall). According to Wasson, this year's program begins with a private cocktail party in Champion Hall from 4:00 p.m to 5:30 p.m honoring all the past inductees, board members...

the MHMSM Team 20 Jun 2014 Corporate Press Releases

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