A residential development of lots, or pad sites, where manufactured homes sit, along with the roads, utilities and amenities that serve them.
Fannie Mae’s Multifamily Guide defines an MH Community as a residential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads and other infrastructure. In the usual setup the residents own their homes and rent the lot. The community owner’s income is lot rent, and the collateral is the land and infrastructure.
That is why lenders ask how many homes the park itself owns. Park-owned homes bring in more rent but wear out, and a lender may count only lot rent when it sizes the loan. Freddie Mac’s term sheet requires at least five pad sites, limits homes owned by a borrower affiliate or outside investor to 25 percent in total, and does not allow the borrowing entity to sell or finance homes.
Banks and credit unions also lend on communities and set their own terms. Expect questions about occupancy by lot, who owns each home, whether water and sewer are public or private, and the condition of roads and utility lines.
How it shows up in the data here
No separate count on this site. Regulation C treats a manufactured home community as a multifamily dwelling for reporting, so a HMDA loan on one can sit inside a lender's multifamily figures without a label. Bank call reports give no property type detail. Ask a lender directly whether it lends on communities.
Go further
- Multifamily lenders: Lenders with multifamily loans on the public record.
- Multifamily loan comps: Recent loans reported as multifamily in HMDA.
- DSCR calculator: Cash flow over debt service. Type the cash flow and the loan terms, see the ratio and the cushion before it falls to 1.00x.
- Debt yield calculator: Cash flow over the loan. The one ratio that ignores the rate, the amortization and the cap rate.
- Multifamily loan checklist for 5+ unit properties: A larger apartment loan can go to five kinds of lender. They want much the same package. They differ on recourse, term, prepayment, speed and what they ask of the sponsor.
- How to read HMDA data for multifamily and investor loans: HMDA is the one public file that lists individual apartment and rental-house loans by lender, amount, county and year. It covers loans on dwellings only, and not every lender reports.
Related terms
- Multifamily (5+ units): Residential rental property with five or more units. Banks, credit unions and HMDA all draw the line between four units and five.
- Agency lender: A lender authorized to make apartment loans that Fannie Mae or Freddie Mac then buys or backs, under those companies' rules instead of the lender's own.
- Rent roll: A list of every unit or space in a property showing the tenant, the rent, the lease dates and what is vacant, as of a stated date.
- Replacement reserves: Money set aside, or an expense assumed by the lender, for periodic replacement of capital items such as roofs, heating and cooling systems and parking lots.
- Optigo: Freddie Mac's name for its multifamily loan products and for the network of lenders it buys those apartment loans from.
- DUS (Delegated Underwriting and Servicing): Fannie Mae's multifamily program, in which authorized lenders underwrite, close and service apartment loans under Fannie Mae's guide and keep a share of any loss.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.