How to convert park owned to tenant owed with Dodd Frank and the Safe Act

Since tenant owned parks are the way to go, how does one go about purchasing a park owned community, in Fl, and converting to tenant owned with the current Dodd Frank restrictions? Should I even be considering such a conversion as my first park? Most of the park owned I’m looking at are 15 lots or less. Upon review, it seems as the park owned might be a better deal initially with value add after converting to tenant owned? Thoughts, comments and experience would be appreciated!



It is very unprofitable and difficult to place the homes in the hands of someone who will take care of them and pay you for the privilege. And if they can’t pay you all at once, you had better be careful you are not taking advantage of them or you will get fouled up by SAFE and Dodd-Frank. If you keep the right to take the home back, but promise to turn the ownership over to someone later, if they pay you along the way, that is a mortgage and you are in danger of being held accountable to all sorts of mortgage laws.

It’s a problem for the industry and there are a lot of sidestepping ways to deal with it but one way is just as you suggest, rent until the economic value is lowered from the POH to a point you are satisfied to just give the home away. The key is not to promise anything to anyone before that point.

Or, you could do it right and sell with mortgages, and get a MLO license. I am looking into today. It looks like it is a 20 hour course plus 8 hours a year of CE required.


Your best option is to simply list the homes for sale at fair market value and find buyers that can afford to pay cash or are in a position to qualify for a chattel loan. Highly unlikely existing tenants will qualify. If the community is appealing you will attract qualified buyers but not if it is a “trailer park”. If it is a lower quality community you may simply be stuck having POHs since the existing tenants would likely never make for responsible home owners. The homes will likely fall into disrepair in the hands of those tenant owners.
Bottom line is if you wish to switch from POHs to tenant owned you want to upgrade. This will avoid any issues with the DF act.
Tenant owned homes, higher quality tenants…win/win.


I’d be very curious to hear some stats on people that have actually had issues with this, the size of their portfolio, and the states they operate in (and had a problem). I believe @Brandon operates mostly in California where it would seem you’re almost guaranteed to have an issue, but in many other states I feel like it’s a coin flip at best. I have many rent credit agreements in place in the midwest, and have inherited some questionable CFDs from previous owners, and thankfully have yet to run into any problems.

I think Brandon actually operates in multiple states across the country not in Cali

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Only Texas for now. Two near Houston and two in San Angelo.

Here’s a little update though, in the past it was my wife who was MLO, but now I will get my own MLO license and have an employee get one too. I’m just exploring how to do that today.

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I just came across this business for seller financing to make a sale compliant. The fee is $329 for the service. If you run the credit it is $15 less. They don’t do any servicing, just compliance. (

Check out their blog, I think this service might work.

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Anyone using their service? Any updates Brandon on getting your license?

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Yes, I took an online course and passed a test and now I am a licensed MLO qualified to issue mortgages. And my assistant as well.


Hi Brandon,

I used to do Lonnie deals back in the day and would like to have more information about the MLO that you recently acquired. Could be have a phone conversation about your experiences?

@Brandon Where did you find the info to get this completed? And is this specific to each state in which you will be issuing mortgages? Thanks,

See this link and take it from there.



Thanks for your input. I contacted the Dept. of Revenue in the state where my park is located and it looks like becoming a licensed MLO is an option for me. A couple follow up questions:

  1. How time intensive are the servicing and compliance requirements for these loans, generally speaking?
  2. Outside of full autonomy over approving tenants for financing and the interest income from the loans, are there any other advantages to being licensed versus relying on a third party company to provide financing on mobile home sales in your park?


Generally speaking, servicing is no more headache than collecting the rent.

Compliance will depend on your state regulator. Make sure you understand the system for regulation in your state, which may vary depending on what kind of lending you are doing. There are dollar limits and lots of rules that you must follow, but they are mostly not a big deal and/or part of your setup costs (e.g., getting all the required disclosures as part of your paperwork package).

Benefits over 3rd party financing:
(1) You said it – autonomy over approvals. Your target market may not qualify for a loan.
(2) You set the finance charge (which can make things affordable for your tenant) and/or you can make the deal fit the situation at hand.
(3) You keep the finance charge.
(4) You can modify the loans without a third party in the middle. Say the home needs [any major repair] after [a number] of years and tenant can’t afford it. You can adjust the loan and front the money. Or say your tenant is about to lose the home because they can’t afford it. You can extend the loan and lower the monthly.
(5) You have so much more flexibility and control without a third party in the middle hassling you or your tenant. It is just simpler. For example, if your tenant is going to lose the home, you can decide when/how to encourage a (relatively) painless default if it’s just not feasible to work out.
(6) 3rd party lending may (e.g. 21st Mortgage will) want you (park owner) to guarantee the loan, so you’re effectively lending not just the money for the sale (which is what you’re getting back) but also the overhead of the loan origination process. And you are left holding the bag if the tenant defaults anyway.
(7) The tenant doesn’t have to pay the overhead of your 3rd party for origination, servicing, etc.
(8) There may be some insurance benefit.
(9) You will be hard pressed to find 3rd party lending in the first place.


Thanks again. I really appreciate your input on this topic as well as the information you provide on this forum as a whole.

If you are in the process of selling a home and retain title, remember that for most legal purposes it is still treated as a rental home. Your forms, business practices, and insurance coverage should all reflect this.

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