While affordability is the essential benefit of manufactured home communities, the costs to acquire parks and to upgrade or replace homes can be substantial. This makes the availability of debt financing a critical element of these projects. But not all lenders are comfortable with this type of lending – a reality that complicates the revitalization of these properties. This session will feature presenters who are supportive lenders to the nonprofit community and who approach the issue from several perspectives, including strategies to enable resident ownership.
Chris Thompson, Director of Strategic Housing, Virginia Housing
Chris Thompson is the Director of Strategic Housing at Virginia Housing. He leads a team charged with developing and managing relationships with the Commonwealth’s Housing Services Delivery Network. Mr. Thompson coordinates the design and delivery of trainings intended to strengthen the ability of local officials, land use planners, planning entities, and housing developers to better address local affordable housing and neighborhood revitalization issues. He also identifies strategic opportunities to provide technical assistance to individuals and organizations seeking to undertake transformational revitalization projects. Prior to joining VHDA he served as Deputy Director for Housing at the Virginia Department of Housing and Community Development (DHCD).
Jen Hopkins, Director of Single Family Housing, NH Community Loan Fund
Jennifer Hopkins is Director of Single Family Housing for the New Hampshire Community Loan Fund where she runs the Welcome Home Loan program financing fair, fixed-rate mortgage loans for manufactured homes in ROCs and on their own land. This program was recognized with the CFED Future of Economic Opportunity Award as well as the national NEXT Award for Opportunity Finance, a prestigious honor in the field of community development finance. Hopkins leads the Community Loan Fund’s single family housing team in ongoing program innovation, evaluation, and impact. She was selected as a 2016-2017 Homeownership Fellow by New Hampshire Housing Finance Authority. She also serves on the Board of Directors of ROC USA. Before joining the Community Loan Fund, she was a lawyer and foundation program officer where she oversaw a grant making portfolio supporting social change makers in economic justice, housing and community economic development.
Bill Van Vliet, Executive Director, Network for Oregon Affordable Housing (NOAH)
William Van Vliet joined NOAH as a Loan Officer in 1998 and was appointed Executive Director in 2000. He oversees the overall operation, credit quality, and capitalization of NOAH, in addition to serving as an expert and leader in affordable housing policy and finance. Van Vliet’s 20 years of experience in housing finance and his strong credit and management background, together with his skill as an advocate, provide him with the required skills to lead NOAH. Since becoming Executive Director in 2000, NOAH’s overall lending capacity has nearly tripled, from $57 million in 2000 to over $168 million in 2011. He is also an active member of the Oregon Housing Alliance and the Preservation (OHAP) Steering Committee. Van Vliet is an advocate for affordable housing issues in numerous forums, frequently testifying before the state legislature and related committees, and has been instrumental in developing housing policy at state and local levels.
Mary O’Hara, Director, ROC USA Network
Prior to joining ROC USA® Network as its founding Director, Mary spent 15 years providing a wide range of community investment and development consulting services as a principal in Burlington Associates in Community Development, LLC, a national consulting cooperative. Mary has 25 years of experience in the field of community development lending and community reinvestment. She has served in leadership positions at the Massachusetts Urban Reinvestment Advisory Group, Boston Community Capital, and the Institute for Community Economics. Mary holds a bachelor’s degree in government and human services from Cornell University, School of Human Ecology. In 2014, Mary graduated from Achieving Excellence in Community Development, a joint 18-month Executive Education program with NeighborWorks® America and Harvard University.
Moderator: Bill Greenleaf, Senior Vice President, Virginia Community Capital
Bill is the real estate lending manager at VCC and also runs the clean energy lending program. He has worked at VCC for five years.
To Chris Thompson: What is the price point on the Danville, VA homes and how does that compare to other homes in the city? Are there building code or financing challenges with the shipping container home?
I can check locally to get a better price range but I believe the sales price will be around $155,000. One of the big challenges in Danville is the lack of any new construction; most homes are older housing stock and require a bit of rehab, so this is providing a turnkey, new housing solution. The picture I showed of the shipping container home is on a permanent foundation in an existing neighborhood and has been sold to a first-time homebuyer. The great thing about this home is that it is considered modular construction and therefore meets state building codes, so no, there were not any challenges from a land-use or financing perspective. In fact the homeowner qualified for a mortgage from us so we were really excited to be able to help finance the purchase.
To Mary O’Hara: What has been the biggest barrier to working in other states? Is it that co-ops are a new model or is it something else?
Identifying and finding local non-profits who are interested in being a local affiliate for ROC USA. Finding a non-profit that can take on market development, real estate transaction, and co-op training and technical assistance.
To Mary O’Hara: Do you (ROC USA) finance the 100% acquisition cost?
ROC USA provides a 110% loan for the acquisition and any capital improvements that need to be done.
To Jen Hopkins: (1) Can you describe the size / quality home that you finance for $65,000? Is this through a partnership with a single manufacturer? (2) Do you sell the homeowner loans that you make in the secondary market or hold them? What’s the source of your capital for these loans?
The $65,000 for a brand new home that I am using isn’t average. It depends on location and what you want to put in it. Most homes are built at the federal code (energy efficiency) quality. Every home we lend on as a mortgage lender, we are getting an appraisal on the home. Fannie Mae and the financing authority do originate the loans but it’s a small number a year. The majority of the loans we originate and are placed in our profile, they are a good asset as lenders. Our capital comes from the community.
To Mary O’Hara: Is there a minimum number of units needed to make a ROC robust?
Sustainability of resident-owned communities—they haven’t had a resident-owned community sell their community back onto the open market close or default on their loans. ROC USA Capital is currently refinancing some of the ROCs in other states—some are refinancing with local lenders and some with ROC USA Capital. ROC USA Capital is looking for communities that are primarily 25 homes or more. But they have financed smaller parks. Communities that are mostly rental are not normally good co-ops. ROC USA’s point of view is that people have equity in their homes and want to make it a good investment.
To Bill Van Vliet: What is a current example of an interest rate on a performing park with just lot rents? Also, do you lend outside of Oregon?
They are only an Oregon based entity. The interest rate of the loan fluctuates, the rate in their portfolio is 2-5%. It is just a pad rent to service these loans. This helps the residents afford to live there and to improve the infrastructure of the parks. Oregon has a tax credit that allows the organization to provide loans with lower rates.
To Mary O’Hara: What are the most important elements to successful governance of a ROC? What are the greatest obstacles?
Respect for the document and the model. ROC has standardized their template documents to help boards and members walk through the process to become skilled in governing the corporation, at the same time they’re operating a multi-million dollar asset. They are like business consultants. Bylaws, articles, policies, codes of ethics are available to ROC affiliates as they set up.
What are the financial benefits, if any, to CLT (Community Land Trust) ownership of parks?
It’s often more difficult due to the additional layer of complexity. But it is certainly a legitimate model.