Manufactured Home Financing Wheeling WV
Financing the Rehabilitation of Your Community
| Financing the Rehabilitation of Your Community|
Tue 04/10/07 06:38:52 am
by Ed Hicks
An excellent, low cost way to finance an existing community is using the provisions of the little known loan guarantee program is now available for qualified communities. It may be used for the acquisition and rehabilitation, rehabilitation, or rehabilitation and expansion of your manufactured housing land lease (MH-LLC) community or may also be used for entirely new MH-LLC community development. Don’t let the FHA government program name fool you. Loans are not funded by the government, but by private lenders who may assist developers in obtaining FHA backed mortgage insurance. Administered by the multi family section of the HUD staff in various cities around the projects may be individually approved for low interest, long term loans which are funded by private lenders with a guarantee from FHA. Processing must be done by one of approximately 110 qualified lenders, after first confirming market and economic feasibility. The funding may include any existing, and non recorded debt, and up to 90% of approved costs. These costs may include: land at market value, most hard on-site infrastructure costs, plus engineering & survey costs, interest, taxes, and insurance during the construction period plus loan costs and fees. The construction loan can be for up to 3 years, but most are generally approved for 2 years, and the permanent loan is for up to 40 years. The loans are processed by the HUD staff under the Traditional Application Processing procedures as presented by an approved lender. After a preliminary application meeting is held with the HUD staff and the lender in which the proposed project business plan and the market and economic feasibility reports are reviewed, HUD may issue an invitation to submit an Application For Firm Commitment. Submission of all engineering drawings along with an environmental study, preliminary cost and appraisal evaluation, and a fee of $3.00 per $1,000 of the loan amount starts the Firm Commitment approval process. The statutory period for approval is 60 days, but it may be shorter. For proposed projects in which there will be new vacant homesites, the HUD staff is going to require the developer to specify the method of financing for home sales to individual new homeowners. Where current “off the shelf” chattel mortgage financing programs are used, at today’s relatively high interest rates, and credit scores, it must be shown the combination of monthly lot rents and home payments are not burdensome on the buyers, and are competitive with local apartment rents for homes of similar sizes. For example, in a market where a 3/2 900-1,000.apartment rents for about $755 per month, a new community or one which is being expanded with new homesite rents at $275 per month, would suggest a monthlyhome payment of not more than $480 per month for...