Manufactured
              Housing

 New Hampshire

The Developer:

An Interview with Paul Bradley

Paul Bradley is manager of the New Hampshire Community Loan Fund's Manufactured Housing Park Program.

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The program started with a group of 14 home owners up in Meredith. The very benevolent park owners, an elderly husband and wife, needed to sell their park because he was being admitted to a nursing home and they needed to liquidate assets.

(Left) Paul Bradley with the Bank's First Vice President John Eller and Senior Vice President David P. Parish.

The park's owners had been very friendly with the home owners. The wife was interested in something unique — a lifetime lease for the single-family home she and her husband occupied. They had talked to the tenants and several of the home owners had gone to a local bank in an attempt to buy the park and become the new landlords. The banks told them a variety of things: One, you don't have a down payment, and two, you don't have any experience running a mobile-home park.

People were pretty dejected. Then the sister of one of the home owners mentioned this to a friend who was in a graduate program at New Hampshire College. She said, "Why don't you buy it as a co-operative?"

So she went up and met with the residents and they started to think about what it would be like to form a co-op and buy the property. This initiative became linked to the Loan Fund via Michael Swack, a professor at New Hampshire College who had begun organizing a community loan fund in New Hampshire. They hired Juliana Eades as part-time executive director to get the loan fund planned and started.

In early 1983, she began the initial business-planning and startup work for the loan fund. Eventually this Meredith Center co-operative was able to negotiate a purchase-and-sales agreement and was able to close on the park with a first mortgage of $43,000 from the New Hampshire Community Loan Fund. This was the Loan Fund's first borrower.

The plan also generated the first loan to the Loan Fund from the Sisters of Mercy, a Catholic order of nuns, which loaned the Fund $43,000. The Loan Fund then turned around and loaned this to the co-operative to buy the park.

Members of the Birches co-operative meet in Wolfboro, New Hampshire.

That experience led Julie Eades into manufactured housing — not as a strategy for securing affordable housing per se, but really as a strategy to save parks from closing down. The park in Meredith in the early '80s would have been ripe for condo development. So the home owners, by banding together, had taken control of the property and preserved it as a manufactured-housing park for the long term. In fact, they're still there today — a debt-free co-operative with rents of just $100 per month. They're still very successful.

The success in Meredith led Julie to another group down in Millford, the Sohegan Manufactured Housing co-op, which started out as a group of 57 home owners who had received an eviction notice from a developer who had bought the property and wanted to do an upscale condo development.

The developer had basically given the tenants 30 days to vacate. They fought and negotiated and worked and stretched it out and eventually got him to a point where he was so frustrated that he decided he would take a price for the park if they could close by December 31, 1986.

They and the state housing finance authority were able to pull together the financing to make the deal happen to create the second co-op. That was followed by a third, the Greenville Estates co-op.

A New Hampshire Community Loan Fund poster for its manufactured-housing-park program.

At that point, people began to recognize this as a legitimate strategy for preserving affordable housing and saving home owners from eviction due to park closures. Beginning in 1985, the Loan Fund and MOTA (Mobile Home Owners and Tenants Association) lobbied for some progressive state laws, including a 60-day-notice law to give tenants the opportunity to buy their parks.

The law was passed in 1988, after three years of lobbying. It gives tenants in mobile-home parks the opportunity to match offers from outside investors and thereby take ownership of their parks.

The law was an endorsement by the state legislature that resident ownership of manufactured-housing parks was the preferred ownership structure if the home owners so chose. And, indeed, most home owners do choose to buy their parks.

This has led to a routine system of co-operatives financing and acquiring their parks for the benefit of the home owners of the park.

The Loan Fund has been directly involved with 42 of the more than 50 co-operatives in the state. We provide ongoing management, training, and technical assistance for the entire system of co-operatives. Our goal is not only to help co-ops develop their parks, but also to provide a system of long-term training and technical assistance for co-ops. The Freedom Hill Co-op was the state's fiftieth co-operative. Two more have closed since then and one more will close in March of 2002.

Bank Involvement
The first bank that financed a manufactured-housing park was United Savers Bank in 1987. The bank financed the South Ware Mobile Home Park Co-op, a 39-unit park acquired by the tenants in March of 1987. It was the state's fourth co-operative park.

After that, the state's banks began actively financing manufacturing-housing-park co-operatives. The Loan Fund led the way with financing the first. The state Housing Finance Authority played a substantial role in financing the second and third parks and has subsequently financed a number of them.

But now we're really in a routine system of financing co-operatives with a bank first mortgage of 75 or 80 percent loan-to-value ratio and a Loan Fund second mortgage of 20 or 25 percent loan-to-value ratio, with some level of resident-equity down payment.

So the Housing Finance Authority and the Loan Fund led the way by showing it was possible and how it was done, then the private banks stepped in to provide commercial financing.

A Turning Point
In the early 1990s, the sea change that occurred that was so important for manufactured-housing-park co-ops was the Federal Home Loan Bank of Boston's decision to offer an Amortizing advance. The Bank had traditionally offered an interest-only advance.

One of its member banks, Vermont National Bank, had asked for an amortizing program specifically for a manufactured-housing-park co-op, and the Federal Home Loan Bank creatively found a way to do it. This is the key resource at this point for financing co-ops.

Banks are able to draw from the Federal Home Loan Bank fixed-rate Community Development advances so they can offer fixed-rate, long-term financing for co-ops. That's pretty much the way it's done routinely now.