RESIDENT OWNED Manufactured Home Park Communities

Real Estate Broker/Owner with CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments 521400, 1501015, 01795582

RESIDENT OWNED Manufactured Home Park Communities & Park Conversions

Part 3



Manufactured Home Park Communities remain the most popular setting for manufactured homes. Although many parks are rental and leasehold, for loan and collateral purposes, lenders generally require that the owner of the home also own the land upon which the home sits.


This is known a land-home transaction. Until recently the park also had to be classified as a Subdivision or a Planned Unit Development (PUD) in order for manufactured homes to qualify for FHA-insured loans. Good news because condominium-classified parks are now eligible if the park has also been HUD-approved.


To see if a park is on the HUD approved list, click here. All other requisite conditions for any manufactured home loan must also be met. Some condo parks that are currently HUD approved in California are:

  1. Casitas del Amigos - San Marcos

  2. Casitas del Sol - San Marcos

  3. Champagne Village - Escondido

  4. Chumash Village - San Luis Obispo

  5. Escondido Views - Escondido

  6. Foothills of San Marcos - San Marcos

  7. Lake Jennings Estates - Lakeside

  8. La Moree Estates - San Marcos

  9. Madrid Manor - San Marcos

  10. Mountain Shadows - Escondido

  11. Rancho Carlsbad - Carlsbad

  12. Rancho Escondido - Escondido

  13. Rancho Monserate - Fallbrook

  14. San Marcos View Estates - San Marcos

  15. Sierra Vista - Vista

  16. Shorecliffs - San Clemente

  17. Solamar Estates - Carlsbad

  18. Skys Haven - Desert Hot Springs

  19. Twin Oaks - San Marcos

  20. Quails Run - Paso Robles



Because of the financing trend, many residents are anxious to convert their parks from rental to resident-owned. OnTheLevel has years of experience working with non-profit entities, attorneys, lenders, building departments and escrows to expedite this complicated process which involves simultaneous closings, installation of permanent foundations, recordation of documents and engineer's certifications.




In fact,OnTheLevel was a key player in the conversion of Windward Village, Long Beach in January 2010 along with the non-profit association, TAG (The Associates Group for Affordable Housing) and Land-Home Financial Services.



We also worked with Wells Fargo, Land Home Financial Group and The Loften Law Group on a very recent Park/Condo Conversion at the Knollwood Village in Santa Maria, California in 2012 & 2013.



For those CONDO Parks that wish to apply to HUD for approval, the following must be met:

  1. All condominium legal documents

  2. Recorded plat map indicating legal description

  3. Recorded CC&Rs

  4. Signed and adopted by-laws

  5. Articles of incorporation filed with the state

  6. Recorded condominium site plan

  7. Plan or evidence of transfer of control

  8. Proposed or actual budget

  9. Reserve study

  10. Management agreement

  11. Equal Employment Opportunity Certificate (HUD 92010)

  12. Affirmative Fair Housing Marketing Plan or Voluntary Affirmative Marketing Agreement (VAMA)

  13. FEMA flood map

  14. Estimated construction completion date (if new or expanding project)

  15. Outstanding or pending litigation analysis

  16. Pending special assessment analysis


OnTheLevel is constantly updated on the latest information and will be able to assist borrowers and realtors understand the approval timeline.


Frequently Asked Questions:

Q. Does our condo park and association need to become approved by FHA or HUD before FHA reverse mortgages can be insured?


A. Yes. The HUD Mortgagee Letter issued new guidelines for manufactured housing that included eligibility for manufactured homes in condominium projects. According to the letter “all manufactured housing project approval requests must be processed by the Home Ownership Center (HOC) that has geographical authority over the property to be insured.”


Q. Why should our HOA consider getting HUD approval?


A. Without approval, individual homeowners in your park cannot obtain any FHA-insured loans which include Reverse Mortgages. Especially now, in the current mortgage crisis, FHA guaranteed loans are the principal means to qualify for and afford a low cost, low interest home loan. FHA loans can be used for home purchase (both forward and reverse). These loans may also be used by your current homeowners for the purchase of new manufactured homes to replace old units that do not qualify for FHA loans. In the current economy many homeowners are struggling to make ends meet.


Q. Does FHA/HUD require our HOA to carry the homeowner’s insurance policy on the individual units in our park?


A. No. The individual homeowner is responsible to carry his or her own insurance policy. In cases where the condominium homeowners association carries a blanket policy for the common areas that also covers the risk for individual units, that insurance would be acceptable (assuming adequate coverage).


Q. What is the reserve account requirement for FHA approval?


A. A current reserve study must be submitted with the application that shows that the reserve account is separate from the association’s operating account and that it is at least 60% funded.


Q. Can individual homeowners submit applications for reverse mortgages through a lender before the condominium approval is issued by HUD?


A. No. Individual reverse mortgage application case numbers may not be assigned until the condominium is placed on the approved list. Individual homeowner application dates must occur after the date the condominium is placed on the approved list.




Q. What are the foundation guidelines that must be met?


A. The standard foundation requirements of all other FHA-insured loans must apply which means an engineer's certification is required on every foundation.



For any Manufactured Home Community thinking about converting to a CONDO or a SUB DIVISION we hope you find this information useful. If you have any questions or suggestions on this topic please feel free to reach out to us anytime.



When The Cubic Foot vs The Square Foot Really Counts



Posted by

Why To Choose Us?

John DL Arendsen, Broker, General & Manufactured Home Contractor and Dealer 

TAG Real Estate Sales & Investments

TAG (The Arendsen Group) Real Estate Sales & Investments is a full service, one-stop, turnkey, family owned and operated real estate brokerage, General Contractor, Manufactured Home Contractor, Developer, Investor, Property Manager, Interior Design, Engineering, architectural, Landscape design, Expert Witness, Consulting, Curative Title and Troubleshooting company with over 100 years of combined experience in the San Diego real estate sales, construction, design & development arena.





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Comments (9)

Claudia S. Nelson
eXp Realty - Woodbridge, VA
Local Expert Making a Difference!

Interesting blog post. Thanks for sharing the information. 

Jan 05, 2014 01:30 AM
Claudia S. Nelson
eXp Realty - Woodbridge, VA
Local Expert Making a Difference!

Interesting blog post. Thanks for sharing the information. 

Jan 05, 2014 01:30 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Definitely informative on a situation I little to know info on.  Thanks.

Jan 05, 2014 01:34 AM
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi John - Interesting post. It is something entirely outside of our experience, and I have no idea if this concept has ever even been discussed in our market, but you have provided a great resource here.

Jan 05, 2014 01:34 AM
Trent Dalrymple (248) 854-0625
Texana Bank - Bloomfield Hills, MI
Allowing Mortgage Professionals to Lend Nationwide

Interesting post, never thought a park owner would want to let go of their cash cow by selling to the residents.  Thanks for the info.

Jan 05, 2014 05:13 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Trent, the real cash cow is the residents. Do the math.

Jan 05, 2014 04:15 PM
george turk
You wouldn't convert a "cash cow" unless you got some advantage. For instance, perhaps residents would pay a premium over the community's value on a cash flow-only basis--it usually costs more to own something than to rent it. Or, if you're in California, your rents are depressed by rent control, so you aren't the "cash cow" you could be. Recently, two things happened that will dampen conversions in Calif: a court decision basically ended condo conversions in the Coastal Zone, and a new law gives Cities veto power over your conversion. This means that you're forced to offer a fairer deal to residents than perhaps you would have in the past. Because of the time and hurdles of condo conversions--for instance, you don't want to be stuck with a bunch of lots here and there that didn't "convert," the few resident purchases in the past few years have been coops, not condos. In a co-op, the residents are basically just another investment group partnering to buy their park as a corporation, rather than buying their individual lot.
Jan 06, 2014 12:45 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Your're welcome Tim.

Dick, Resident owned communities are are a great resource for a RE Professional in that they can list and sell them just like a conventional site built home whereas a Manufactured Home salesperson and/or dealer cannot list and sell them unless they have a RE license.

That stated, however, a RE Professional can also lis and sell resales in any MH park/development regardless of whether it's a rent/lease or resident owned. The only thing a RE Professional cannot sell is a brand new home that's never been previously sold. That must be brokered by a licensed MH salesperson and/or dealer.


Jan 06, 2014 07:17 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Always good to hear from you Turk and thanks for commenting on my Active Rain blog. I'm aware of the recent changes and you are right it will definitely impact the condo conversion activity.

I must take issue with your statement  "the few resident purchases in the past few years have been coops, not condos". We've been working in two condo converions for the past two years that were just converted 2 to 3 years ago.

So far I've not seen any MHC owners suffer with empty lots. The conversions we've been involved with over the years, and there have been dozens, i.e. most if not all of the ones listed above, have never suffered from empty lots. 

It's really quite simple. The ones who don't wish to purchase just continue renting or leasing their space. The ones that do enables the MHC owner to realize a nice profit off of that space.

With respect to "co-ops" I'm not at all in favor of them for the residents sake. As you've stated it's just another way a group of investors or a non profit corporation can obtain ownership of a park/communtiy.

I see no real benefit to the individual residents/tenants stand point. They can't refi or take equity out of their home nor can they obtain a reverse mortgage. They're simply issued a stock certificate that they sell for the same amount they bought if for in most cases. I see no value in that at all.

Jan 06, 2014 07:28 AM