Park communities represent the most popular setting for manufactured homes. For loan purposes, lenders generally require that the owner of the home also own the land upon which the home sits. Until recently the park also had to be classified as a owner-owned Subdivision or a Planned Unit Development in order for manufactured homes to qualify for FHA-insured loans.

Many mobilehome parks and manufactured home communities began as land lease developments but as residents desired a greater control over their living situation and costs associated with their residences, many parks converted to resident ownership. Most of these used the process of the condominium conversion. Unfortunately, because of the classification, this property type was ineligible for FHA-insured loans including Reverse Mortgages or HECM. Fortunately, the Housing and Economic Recovery Act of 2008 (HERA) granted authority to add individual manufactured housing units located in condominium projects to HUD for FHA insurance but the process from Congressional authority to actual loan processing is still unraveling. (more…)