How to Finance a Mobile Home Park

Question

Hi,

I am interested in investing in MHP in upstate NY. Want to ensure I develop a relationship with a financial institution who would lend on MHP and understand their terms. What are institutions typical LTV and terms for someone who is looking to buy a park?

Vontay Callahan · Answer

Donald — lenders will finance mobile home parks, but the terms vary a lot depending on occupancy, utilities, and whether the homes are park‑owned or tenant‑owned.

For most banks and commercial lenders, you’ll typically see:
• 65–75% LTV on stabilized parks
• Higher leverage (up to ~80% LTC) on value‑add bridge loans
• 30‑year amortization on stabilized deals
• Private utilities are OK as long as they’re functional and documented

The biggest thing is finding a lender who actually understands MHPs — many traditional banks don’t like the asset class unless it’s stabilized with solid financials.

If you’re looking to build a relationship, regional banks, credit unions, and commercial bridge lenders tend to be the most flexible.

If you want, share the basics (lot count, occupancy, utilities, in‑place income) and I can give you a clearer idea of what terms you’d realistically qualify for.

Pierre Guirguis · Answer

I asked a lender about a MHP deal recently and got some useful info on the financing side.

For park-owned homes (POH), most lenders will come in around 70% LTV. The appraisal piece is where it gets nuanced though - they'll typically look at combined land and home value, but it depends heavily on how the appraiser treats personal property vs. real property. A lot of lenders won't touch the homes at all, only land and infrastructure.

From what I've seen working with lenders on these deals, community banks and credit unions in the local market tend to be the most flexible on MHP. Expect a 1.20-1.25x DSCR minimum across the board. Lot-rent-only parks are also cleaner to underwrite than POH-heavy ones, and stabilized parks with strong occupancy history can push to 75-80% LTV.

Robert C. · Answer

Agree with many of the others.MHPs are a weird asset class, a few debt brokers work in the space and are good resources for "what's the market"Expect to put 25%+ down, learn zoning (often legal non-conforming), utilities, and the difference between park and tenant owned homes.   Parks generally need 50+ homes with municipal utilities and mostly tenant owned homes to be eligible for agency financing, which drives up the value on the larger properties.

Bill B. · Answer

They’re going to want…

You to have skin in the game 20-25% of purchase price.

Experience operating or at least investing in the property type a partner with assets and experience, or more skin/assets. They don’t want to own a MHP, not even a little. They want to lend out money to make money.

Imagine it from their side. You’re a lender and I come up to you.

Hey. I’d like to buy a Farm. No, I don’t have much of a downpayment and I don’t know anything about farming or have any experience, but this looks like, a deal and I want to be a farm owner.  Why hasn’t someone who knows more about farming bought it already? I dunno, I guess I’m just smarter than them.

This isn’t a hey, don’t do that, or that’s a dumb idea reply. This is truly a you don’t know what you don’t know situation. The skin where 2 months after you buy it there’s a $100k repair needed, or a $300k repair. Talk to the local city, do they like MHPs in their area? Talk to local operators, how much are they working on it and what’s their return? You might find SFR are easier and more lucrative. Or you might find you’re the only young person with energy willing to buy MHPs and hit a goldmine. Good luck either way.

Roger D Jones · Answer

I heard Bond Street Capital will loan on parks but I know nothing about them.  Just read it somewhere.

How to Finance a Mobile Home Park

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