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Foundations and the Mobilehome Park Conversion Process
Manufactured Home Loans in Condo Park Communities

Park communities represent the most popular setting for manufactured homes. Many parks are rental and leasehold, but more popular among purchasers are resident-owned parks. The reason is for loan and collateral 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 but condo parks are now eligible if the park has 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.

Because of the financing trend, many residents are anxious to convert their parks from rental to resident-owned. OnTheLevel has 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) http://www.gibbslaw.com/ and Land-Home Financial Services.  

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.