Bank Financing

What kind of bank financing are you guys currently seeing out there for purchasing parks? Rates, amm period, % down, fixed periods?

Is no one getting conventional bank financing these days to buy parks? All seller financing? Curious to see what anyone has been able to secure from a local or regional bank to buy parks.

Wide range depending on your location, size, etc, but I am hearing LTVs of 60 -70%, maybe a 15 year am, and rates ranging from 6- 7%, fixed for 3- 5 years. The bigger problem is just getting banks to approve the deal. If you get through that hoop, the rates can be attractive. These are VERY rough estimates - best to check with a few banks to get some actual numbers.



Thats pretty much what I’m seeing as well. Was reading a post here on this blog titled “Starting Over - MHP or SFH At This Time” where Frank replied to the person that started the topic. Frank mentioned getting a loan with 20% down at 7% interest. Has anyone had experience dealing with a local bank and getting these kind of terms?

I have both local and national funding on my parks. The local funding is a MUCH better rate. I was 20% down, under 7%, 30 year am, due in 20.

A couple of things- they look to see if you have any history in operating a MHP. I suspect this trend is going up- because I get about a call a week from people asking if I will partner with them, or manage their park, and in some of these cases they let me know the bank is requesting / requiring a experienced operator or partner in the deal.

Thank you for sharing that Jim. That’s very helpful!

I just talked to Pierce Redmond at Security Mortgage Group to make sure that I was not crazy. He said that the average bank loan today would be 25% down, 5 to 7 year term, 25 year ammo., roughly 5% to 6 1/2%. If you’re not getting those type of terms, you should give them a call. Of course, this is based on many factors such as geography, how well the park shows, etc., and is based on a loan amount of at least $500,000. On smaller bank loans, we have been getting loans at 20% down with decent regularity. Of course, seller carry is still the best, if you can get it (assuming the term is long).

I have accounts at many banks, savings and loan institutions and credit unions. That way when I use to need to borrow money I had plenty of options. I still have all the accounts but haven’t borrowed any money since the crash but before that they would be bidding to get my loans.

I would be getting in good with the savings and loan banks as well as the credit unions because they were normally my best resources in the end because they offered attractive rates.

I’m looking to get a loan on the smaller scale like around 150k

Where should I go to get this deal done? 22unit all owner occupied city water and sewer.

Thanks for your help

A local bank – a bank that is right in the heart of that town. They know the town and are comfortable with it. Nobody else will go through the learning curve on a loan of that size.

I used a broker obtained from this site to help me close my first park. The bank requied an equity position of about 30%.

Based on some of the loan commitments I was reading about I’m no longer mad at my local banker. 85% of appraisal, 5.5%, 15 yr am with 5 yr balloon.

Who did you guys use?

Anyone in particular you would like to share?

I recently refinanced a park - 5.3%, 5yr ARM, 20 year amortization. I know refi is different than purchase but the key factor for them being competitive with the rate was that I paid down my first loan (a 3 year ARM) instead of pocketing the money. That showed the park could perform and I wasn’t desparate for the funds.

Frank was referring to Seller Financing not bank financing.

You should try a small local bank. I’ve had good success with them.

Mine does “Character” lending. Evergreen Bank in the Western Suburbs of Chicago.

This is a very valid point. The rates described is what I am getting as well.

Wonder if rates change if you are looking in your community where you have relationships or nationwide at a small bank. Maybe only approval rate changes.

we just refied a park at 5%, 5 yr lock, 20 yr am at 75% ----- BUT, the effen (can I say that here) appraiser appraised it at a 20% cap rate (half of what it should have appraised for).

we still made out ok - we don’t owe much on it (thank goodness) and we went from an 8.25% loan to a 5% - and shorter am. PAyments stayed the same - and we allocated the surplus cash to lower other debt associated with the park.