Mobile Home Parks Could See Shift to Resident Ownership Through New State Grant and Loan Scheme
A new initiative, known as the state loan program, has been introduced in Colorado that could significantly assist mobile home park resident groups who are striving to secure their long-term housing stability. This program aims to contribute to the multi-faceted efforts being undertaken locally, which attempt to address the complex housing issues in the area.
In the previous month, Governor Jared Polis unveiled the innovative Mobile Home Park Resident Empowerment Program. This initiative will disperse $28 million in loans throughout the state to enable resident ownership of parks, provided the park’s landlords are agreeable to sell.
The program will be managed by the Colorado Department of Local Affairs Division of Housing/Office of Housing Finance and Sustainability. According to a press release from the Governor’s Office on June 8, the Mobile Home Park Acquisition Fund will utilize the expertise of three loan administrators.
The fund was established as an outcome of Senate Bill 22-160. The bill set in place a revolving loan and grant program designed to offer assistance and financial support to mobile homeowners who aspire to collectively organize and purchase their mobile home parks. This legislation called upon the Division of Housing to liaise with two or three loan program administrators, which resulted in three organizations being selected:
Resident Owned Communities (ROC) USA Capital was allocated $12 million from the fund, which will provide long-term, low-cost loan capital to finance resident acquisition of mobile home parks; Impact Development Fund (IDF) was granted $11.75 million from the fund to implement through its Manufactured Home Community Finance program; and, Thistle ROC, a Colorado-based entity, was awarded $5 million from the fund to aid established resident-owned communities and others striving to become resident-owned over a five-year period, by providing technical assistance and rent stabilization grants.
The funds are designated to be used for making loans to homeowner collectives, along with granting support to facilitate the aim of resident ownership.
According to Jon Fox-Rubin, who spearheads the Housing Innovation Project for Carbondale-based MANAUS, this is a promising start, and the right stakeholders are participating to drive these efforts forward.
MANAUS, through the Roaring Fork Community Development Corporation (RFCDC) – a recently established division of the organization, cooperated specifically with the IDF to secure financing for the purchase of the 20-unit Three Mile Mobile Home Park near Glenwood Springs. The goal of this acquisition is to eventually transition the park to resident ownership.
To support this transition, the IDF directed the RFCDC to Common Good Management. This entity works exclusively with collectively-owned mobile home parks in Colorado, providing them with management services.
Fox-Rubin commends the IDF’s instrumental role in making this possible, citing their extensive experience and understanding of the unique aspects of mobile home park lending.
In addition to property acquisition loans, Thistle ROC has been tasked with the Technical Assistance Grant Program to distribute funds to nonprofit organizations like the RFCDC to aid acquisition initiatives. Additionally, a separate Stabilization Grant Program will dispense extra funds to eligible homeowner groups to maintain stable rents during the conversion phase.
Alison George, Division of Housing Director, stated in the June press release that mobile homes provide an affordable pathway for many Coloradans to have secure and stable homes. The possibility for homeowners to purchase the land underneath their homes can help safeguard this affordability, influencing future generations.
ROC USA Capital is a nationwide nonprofit organization that finances low-income resident corporations so they can buy and improve their parks and build equity. Since 2008, ROC has distributed over $300 million to 110 resident-owned manufactured home communities across 19 states, including Colorado.
Fox-Rubin, however, points out that like Thistle ROC’s regional efforts, many smaller mobile home parks in the Roaring Fork Valley do not qualify under the ROC model. The valley houses 54 mobile home parks, 31 of which have fewer than 30 mobile home spaces, with several having less than 10.
On the other hand, the state program, with a lending budget of $23.75 million, might not sufficiently support the resident homeowners of some of the larger parks in their bid for resident ownership.
“With the scale of these funds, that’s not substantial if you look at a 200- or 300-unit mobile home park,” Fox-Rubin said.
Recent mobile home park sales in the region reveal an average market price tag of around $100,000 per unit. Property values have only increased since then.
Nevertheless, Fox-Rubin posits that a combination of the new state loan and grant programs, coupled with the ongoing efforts of various nonprofit organizations, could open up fresh opportunities for mobile home parks, regardless of size.
“Community banks aren’t going to be competitive enough right now to be affordable for the residents of these parks,” he said. “But if you have IDF as the lead lender, with government backing and the community lenders can be secondary, it starts to become possible.”