How to Finance a Mobile Home Park: 10 Common Options

Learning how to finance a mobile home park can be a challenging task, especially with the many options available. These include seller financing, local banks and credit unions, national or regional banks, conduit lending, agency financing, HUD, loan brokers, and private lenders.

At MHP Sales Manager, we are marketing and sales experts focused specifically on the mobile home park industry, and we help park owners and operators fill their mobile home parks with proven solutions and a convenient pay-per-move-in model. In this guide, we’ve gathered a variety of options you can consider when financing a mobile home park.

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Financing Options

There are several options you can choose to secure funding for a mobile home park acquisition or expansion, each offering different advantages depending on your goals and financial profile.

1. Seller Financing

Seller financing, sometimes referred to as owner financing or a seller note, is a practical option if you have limited access to traditional financing options. The terms are often more flexible and negotiable, especially when working with sellers who want to finalize the transaction quickly. 

This approach can accommodate buyers with weaker credit, though you may encounter higher interest rates. In addition, not every seller is willing to provide this type of financing, and some may want to retain certain rights or controls until the loan is fully repaid.

2. Local Banks and Credit Unions

Local financial institutions tend to focus on properties within their immediate region. They are often more flexible when dealing with parks with a higher number of park-owned homes and typically offer lower loan fees, although interest rates can still be on the higher side. These lenders commonly use 15 to 20-year amortization periods, and the financing process may be more extensive.

Examples include: 

• One Florida Bank (Florida)
• Universal Bank (California)
• Tri Counties Bank (California)

Note that these institutions may or may not provide financing specifically for mobile home parks. However, they do provide financing for income-producing real estate.

3. National and Regional Banks

Larger banks can provide a wide range of loan terms, often between 10 and 30 years, along with competitive interest rates and higher loan amounts. Loan-to-value ratios typically fall between 65 and 80 percent. These lenders also bring experienced professionals who can help you navigate the process. All of this makes them a strong fit for sizable projects that require more structured financing. 

However, some will require a personal guarantee, which puts your personal assets on the line, while non-recourse options usually demand higher down payments and stricter criteria. The approval process can be more time-consuming, and the service may feel less personalized compared to smaller, local banks.

Examples include:

• Wells Fargo
• Axos Bank
• Sunwest Bank

4. Conduit Lending

Conduit loans, often used for large-scale investments, combine multiple loans and convert them into securities for investors. These loans offer more competitive interest rates and are typically non-recourse, reducing your personal liability. 

However, conduit loans tend to involve more complex requirements and are generally best suited for projects that exceed one to two million dollars, making them less practical for smaller acquisitions or inexperienced investors.

5. Agency Financing

Agency financing offers several attractive benefits, including non-recourse loan structures, competitive interest rates, and flexible fixed-rate terms. These loans are issued by government-sponsored entities and are commonly used for mobile home parks located in less densely populated markets. 

To qualify, you must meet strict operational and physical standards, such as maintaining occupancy above 90 percent, correcting deferred maintenance, removing hitches from homes, and keeping park-owned units below 25 percent. 

The primary drawbacks are the rigorous eligibility requirements and longer approval timelines. Fannie Mae and Freddie Mac are among the most popular providers of agency financing.

6. HUD (U.S. Department of Housing and Urban Development)

HUD financing stands out for its generous terms, including long periods of up to 40 years, competitive interest rates, and loan-to-value ratios that can reach as high as 97 percent. These loans are especially beneficial for parks that contribute to affordable housing. 

The application process, however, is highly complex and can take six months to a year or longer to complete. Strict qualification criteria also make HUD loans difficult to secure, limiting accessibility for many park owners.

7. Loan Brokers

Working with a loan broker can provide the benefit of time savings by giving you access to multiple lenders through a single point of contact. Brokers act as intermediaries between you and lenders, and some financing sources only operate through broker relationships. 

While this convenience can be valuable, brokers charge fees and may have incentives to recommend certain lenders. They are not obligated to secure the lowest-cost option, so terms may not always be optimal. For this reason, it is important to carefully evaluate brokers and compare offers against direct lender quotes whenever possible.

8. Master Lease With Option

A master lease with option offers a lower-risk option to gain control of a mobile home park without immediately purchasing it. This strategy allows you to operate the property while retaining the option to buy at a predetermined price during the lease term. It is typically used for poorly performing parks that cannot qualify for traditional financing.

For example, you might agree to pay the owner a flat $6,000 each month for full control of the park, with the option to purchase it for $700,000 at any time before the lease term expires.

9. Wrap-Around Mortgage

A wrap-around mortgage can allow you to acquire a mobile home park quickly and with easier qualification compared to traditional loans. In this structure, the new loan “wraps” around the existing mortgage, and you make payments to the seller, who continues paying their original lender. This option involves a lot of risk and is often used when the seller cannot pay off their current loan.

10. Private Lenders

Private lenders provide fast, flexible financing solutions that can accommodate unconventional park setups or borrowers with unique circumstances. These lenders often offer customizable loan structures, variable down payment requirements, and quicker closings than traditional banks. The tradeoff is cost, as rates are typically higher.

What Do Lenders Consider Before Approving Financing

When you apply for mobile home park financing, lenders review several key factors to assess risk and determine loan terms.

• Income Potential: Consistent occupancy levels and steady cash flow show lenders that the park can reliably support loan payments.
• Location and Market: Parks in high-demand areas and close to important locations are more attractive because they tend to draw and retain residents easily.
• Financial Profile: Strong credit, manageable debt levels, and proven ownership or operational experience improve lender confidence.
• Condition and Compliance: Inspections are commonly required, and a well-maintained, compliant park signals lower long-term risk.
• Market Trends: Economic conditions affect lending standards, with stronger markets allowing more flexibility and downturns leading to stricter requirements.
• Collateral Requirements: Lenders often require security such as the property itself, personal guarantees, or additional safeguards.

Considerations Before Choosing a Financing Option

Selecting the right financing approach starts with understanding your financial position and the specific characteristics of the mobile home park.

• Your Credit Score: Strong credit profiles generally give you access to more loan programs and better overall terms.
• Down Payment: Your available capital helps determine whether a traditional bank loan is realistic or if alternative financing makes more sense. You should also account for closing costs and related fees.
• Risk: You need to clearly define how much risk you are comfortable taking before choosing a lender or moving forward with a specific property.
• Park Background: Factors such as location, required capital improvements, insurance considerations, and overall condition all influence which financing options are viable and if you should request financing for the park in the first place.
• Loan Terms and Rates: The length and structure of the loan should align with your investment strategy and cash flow goals.
• Collateral Requirements: Some lenders require additional security, including personal guarantees or other assets, which can affect your decision.
• Approval Times: Timelines vary widely by lender, so understanding how quickly financing can close may impact your ability to secure a deal.

Common Challenges When Securing Financing

Financing a mobile home park comes with unique obstacles. These include:

Local Regulations

Zoning restrictions or redevelopment limits can hinder expansion, and strict HUD or state-level standards for manufactured homes may increase compliance costs, impacting profitability and perceived property value.

Limited Lender Pool

Not all lenders are comfortable with mobile home parks as an asset class. While growing investor interest is expanding options, finding competitive rates can take longer and may sometimes lead to less favorable deals.

Perception Issues

Some lenders continue to view mobile home parks as higher-risk investments, so securing financing often requires working with lenders who understand the specific dynamics of mobile home communities.

Too Many Park-Owned Homes

A high number of park-owned homes can increase maintenance and management responsibilities, signaling a higher risk to lenders. Many prefer parks with a greater proportion of tenant-owned homes.

Tips to Secure Financing

Securing financing for a mobile home park starts with preparation and clarity. We recommend approaching lenders with confidence by organizing your information and presenting a strong case.

• Keep the Required Documentation Updated: You should keep all essential documents current and easy to access, including financial statements, recent tax returns, and a thorough property inspection report, while also reviewing specific lender requirements in advance so nothing is missing.
• Improve Your Credit Score: Your credit profile plays a major role in financing approval, so strengthening your credit score helps you qualify for better loan terms and demonstrates reliability to lenders.
• Prepare a Clear Summary of the Deal: You should create a concise overview of the opportunity that highlights the property location, market strengths, existing relationships, and exactly how much capital you need to move forward.
• Anticipate Lender Questions: You want to proactively address potential lender concerns by presenting a written proposal that outlines repayment sources, cash flow projections, budgets, and a clear explanation of how the funds will be used.

Sell or Lease Your Park-Owned Homes With MHP Sales Manager

At MHP Sales Manager, we help you sell or lease your park-owned homes using a zero-risk approach. With our pay-per-move-in model, you only invest when a qualified resident moves in, while we handle the initial advertising costs to attract qualified prospects. We automate lead qualification and manage leads for you, allowing you to focus on higher-value decisions and close deals more efficiently.

Book a 15-minute call today.