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Executive Summary
Report
Solutions and Recommendations
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NEW
HAMPSHIRE COMMUNITY LOAN FUND
Paul Bradley is the vice president
of the New Hampshire Community Loan Fund. The Loan Fund has provided loans
and technical assistance for resident buy-outs of investor-owned manufactured
home parks for the last 18 years. There are now 57 resident-owned cooperative
parks representing close to 2,700 sites in New Hampshire.
While resident ownership of the park has substantially stabilized and
improved these communities, sub-prime lenders continue to control 85 percent
of the market for financing homes in cooperative parks. One in five mortgagors
pays in excess of 14 percent interest on their home loan. The Loan Fund
is presently launching a mortgage loan program for homeowners and buyers
in resident-owned parks to demonstrate an emerging market for safe and
secure lending in these communities. Ultimately, the Loan Fund hopes to
draw conventional, single-family lenders and lending practices into manufactured
housing finance through its market-based demonstration.
The Loan Fund's Manufactured Housing Park Program is also now seeking
to develop new affordable homeownership opportunities for lower income
families. The Fund is currently securing approvals to develop a new 45-site
manufactured housing community in the town of Barrington. Bradley noted
that the fund "hopes to start construction in the spring 2003 with
costs of homes from $60,000 to $100,000 at 900 to 1,400 square feet for
both single- and double-wide. By contrast, the median sales price for
new site built homes in the seacoast region is $240,000."
The primary goal is affordable home ownership, not only through the initial
sales price, but including long-term operating costs for the homes and
community. "Our goal is to use EnergyStar rated homes for the entire
development," Bradley noted. The loan fund worked through HUD's PATH
program to design the specifications for the homes, and with other groups
to minimize the environmental impact of the community development.
The Loan Fund will sell the new community to the new homeowners, organized
as a cooperative. Financing for the homes will be sought from conventional,
single-family lenders since the development will meet Freddie Mac's new
leasehold guidelines.
"Ultimately, manufactured housing communities (i.e. parks), when
reduced to its skeleton, is a strong affordable housing asset - they're
high-density, cluster developments of single-family detached homes,"
Bradley remarked. "Unfortunately, a lot of what's been layered on
that starting point was not in the best interest of homeowners, but it
can be and we're going to show it."
Lessons learned:
- A holistic approach is
required to address all of the issues surrounding manufactured homes.
Solving just one problem - such as tenancy - leaves others, such as
sub-prime loans.
- Developments that include
a financing component and create secure tenancy can create homeowner-ship
opportunities at a significantly lower cost to families.
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