Multifamily Housing Drafting Table for Mortgagee Letter - Utilizing Section 223(f) for Manufactured Home Community Program

Summary

This ML will allow for providing permanent financing on transactions that might otherwise be  ineligible for financing. The eligible recipients are states, units of local government, resident-owned manufactured housing communities, cooperatives, non-profit entities including consortia of nonprofit entities, CDFIs, Indian Tribes, and other entities approved by the Secretary. The  program will permit applications for permanent financing processed under Section 223(f) for properties that are being refinanced or purchased. A partial waiver was required to allow for purchase transactions of cooperative manufacturing housing community utilizing the 223f program.

To provide permanent financing for the underserved MHC borrowers who would otherwise be ineligible for financing. This program will enable borrowers to refinance or purchase and complete some repairs to the parks. Providing this underserved market with the ability to finance will help preserve affordable housing stock . There have been concerning reports across the country of private investment firms purchasing manufactured home communities and subsequently raising rents and  fees to levels that make payment unattainable and displace low-income families. Considering these reports, HUD has determined that waiving the regulation to permit acquisition of cooperative manufactured housing parks will increase the options for existing residents to buy their manufactured home community when it comes up for sale. Currently the financing options in the industry are limited for purchase of cooperative manufactured home parks. At this stage of the country’s affordable housing crisis, now is a crucial time to support a secondary market for resident-owned community financing.

Please click on the PDF Document for the MORTGAGE LETTER - Utilizing 223(f) for MHC final February 2024, if applicable, you wish to review. Provide any comments you may have on the Response Worksheet. Then e-mail the response worksheets to hsng_MFH_Production_DraftingSuggestions@hud.gov.

Last updated: 2/29/2024