You've found a deal. The numbers work. Due diligence passed. Now you need to pay for it.
Mobile home park financing is different from residential mortgages. Banks view MHPs as higher risk, terms are less favorable, and options are fewer. This guide covers every financing path—from local banks to seller financing—and how to qualify.
So when you see a loan-to-value percentage advertised somewhere, don't reach for your calculator yet. Several limits sit on a loan at once, and the one you get is the smallest of them—so start with the property's documented income and a full list of the cash you'll have to bring. Let's walk through it.
Learn the terms that change the payment
Loan-to-value, or LTV, compares the loan with the value your lender accepts. Debt-service coverage, or DSCR, compares the income your lender counts with the loan payments you owe.
Amortization is the schedule that pays the loan down. Maturity is the day the rest of the balance comes due. Those are two different dates, and the gap matters: a loan can spread payments over 25 years but mature in five, leaving a balloon balance you'll repay or refinance.
Recourse describes when a lender can come after more than the property itself. A loan called nonrecourse can still carry guarantees, exceptions, and obligations that matter a great deal. Your move: have counsel read the documents and explain them to you in plain language.
None of these terms sits still while you change another. Stretching the amortization shrinks your monthly payment and leaves more principal owed at maturity. A comfortable opening payment doesn't make the refinance any easier.
Compare the main financing routes
Banks and credit unions
A lender who knows the area and knows you can look at a park that would never fit a standardized program. Ask about minimum size, infrastructure, park-owned homes, occupancy, your experience, liquidity, guarantees, and which reports they'll want.
Then ask for terms on the specific property you're evaluating. Another investor's rate and leverage make a poor stand-in for your own budget. Get a current indication from a named lender before you build around it.
Manufactured-housing-community programs
Fannie Mae's published MHC term sheet describes financing for existing, stabilized, professionally managed communities with at least 50 pad sites. It lists a maximum 80% LTV and minimum 1.25 DSCR, plus experience, property, and other requirements. Those are the outer edges of the program, not the loan you'll be handed. Qualifying and receiving the maximum are two different things. Fannie Mae MHC term sheet
The 40-site example in our analysis guide sits below that published minimum. For a deal that size, work from a lender's stated criteria instead of penciling in agency terms.
Program rules can shape how you operate, too. Fannie Mae publishes tenant site lease protections for its MHC financing. Go through them with your lender and counsel alongside the law that applies and the leases already in place. Tenant site lease protections
Other lenders and programs set their own bar. Ask for the current written criteria, and confirm which execution someone is proposing.
Seller financing
A seller may agree to take part of the price over time through a note. That opens up flexibility on timing and terms. It still deserves the same careful underwriting and paperwork as any other loan.
Go through interest, payments, maturity, security, priority, default provisions, guarantees, and any debt already on the property. If a senior lender is in the picture, get its approval for the structure. Seller financing doesn't erase your down payment, and it doesn't excuse you from the homework.
Bridge or rehabilitation financing
A short-term loan can carry a property while you finish repairs or steady the operations. Model the interest, the fees, the improvements it funds, the conditions for extending it, and the cash you'll need if the work runs long.
Underwrite the exit alongside the loan itself. Write down what a permanent lender would need to see, when you could realistically meet those conditions, and what your plan is if the refinance comes in smaller than you hoped.
SBA financing questions
Don't pencil in an SBA business-loan program for a conventional passive park investment. SBA's 504 program excludes passive or speculative activities and investment in rental real estate. Other programs come with their own eligibility rules tied to the business and its structure. Confirm any route with a participating lender before you count it as money you have. SBA 504 eligibility
Size a hypothetical loan two ways
Let's say a property costs $1.6 million and a lender will consider 70% LTV. The value-based ceiling comes to $1.12 million, assuming the lender accepts that value.
Now run it the other way. Say underwritten NOI is $120,000 and the lender wants 1.25 DSCR. In that simplified calculation, the income supports at most $96,000 in annual debt payments:
$120,000 ÷ 1.25 = $96,000.
The lender turns that payment allowance into a loan amount using the real rate and amortization. If the proposed $1.12 million loan needs more than $96,000 a year, income becomes the binding limit and the loan shrinks. Other underwriting limits can shrink it further.
These are illustrative inputs, not a lending offer. A lender may also start from its own NOI, after adjusting for vacancy, expenses, and reserves.
Count all the cash you must bring
At a $1.6 million price with a $1.12 million loan, the gap between price and loan is $480,000. That covers the purchase price and nothing else.
Now add transaction costs, lender charges, required escrows, immediate repairs, and working capital. In a hypothetical budget, say those come to another $120,000. Your total cash need is $600,000.
Then check the timing on each piece. Some costs hit before closing, and a loan may reimburse eligible work only after it's done and inspected. A budget that balances on paper can still leave you short of cash mid-project, so map the dates as carefully as the dollars.
Compare terms in one place
| Term | Why it matters |
|---|---|
| Loan amount and net proceeds | Fees or reserves can reduce usable cash |
| Rate and adjustment rules | Payments may change during the holding period |
| Amortization and maturity | A balloon can arrive before the investment plan is complete |
| Guarantees and recourse | Exposure can extend beyond the property |
| Prepayment terms | Selling or refinancing early may carry a cost |
| Repair and reserve requirements | Cash may be restricted or improvements required |
| Covenants and reporting | Ongoing compliance is part of operating the loan |
| Assumption and transfer rules | A sale or ownership change may need approval |
Compare the obligation, not the rate on the front page. Two questions belong in every call: which of these terms are still subject to underwriting, and when does the rate commitment expire?
Test the loan against a weaker year
Our park example produces $120,000 NOI. With assumed annual loan payments of $85,000 and a $10,000 capital reserve, cash flow before income taxes is $25,000.
Run the same year with operations going well. If NOI comes in 10% higher, at $132,000, the same $85,000 of payments and the same $10,000 reserve leave $37,000 of cash flow instead of $25,000, and the simplified DSCR rises from about 1.41 to about 1.55. Every extra dollar of NOI lands in your pocket. The payment and the reserve don't move with it.
Now push the income down. If NOI falls to $100,000, cash flow drops to $5,000, and the simplified DSCR slides from about 1.41 to about 1.18. That version of the year is the one that sizes your reserve and tells you how much payment you can carry without losing sleep.
Test the balance due at maturity, too, against a lower valuation and tougher lending terms. The exit-strategy guide explains why a refinance is a credit decision someone makes years from now, not an event you can pencil in today.
Frequently asked questions
How much down payment do I need for a mobile home park?
Work it out from a lender's property-specific loan amount, then add closing costs, repairs, reserves, and working capital. An advertised LTV tells you about one limit; it doesn't tell you the cash you'll write checks for.
Can I finance a small mobile home park?
Your options depend on you, the property, and the lender. Call banks and specialist lenders and ask about minimum size and their other criteria. A small park can fall outside a program even when its income looks healthy, so it's worth asking early.
Is a longer amortization always better?
It can lower your scheduled payments, and it may also leave a bigger balance at maturity and cost more interest overall. Compare the remaining balance, the maturity date, the prepayment terms, and how you'd handle a weaker refinance.
Can projected rent increases support the loan?
The lender decides what income it will count and what evidence it wants to see. Keep what you collect today separate from what you hope to collect later, and check the legal process, timing, costs, and demand behind any increase you're planning.
Whichever limit binds first is the one that decides your loan, and it's rarely the LTV on the brochure. Start calling lenders while you're still evaluating the park, not after you've signed for it. The terms you can get are part of the deal, so learn them early enough to walk away or push back.