California Mobilehome Park Corporation Purchases Ninth Park
California Mobilehome Park Corporation (CalMHPC) has completed the acquisition of its ninth mobilehome park by purchasing from a private investment group the Santiago Sunrise MHP, Palm Springs, California.
Santiago Sunrise is a 174-site low and very low-income mobile home park located on East San Rafael Drive in North Palm Springs. The park was developed in 1987 and was acquired by the seller shortly thereafter. The park is considered a two/three star family park with approximately 50% singlewide homes, although all sites will accommodate doublewide homes. Amenities include a swimming pool, tot lot, laundry room and picnic area with barbecues. The design of the community is unique, with two central covered car-parking areas. The homes are located along meandering paths throughout the park.
The mobile home park was originally constructed on ground leased from the City of Palm Springs. As part of the acquisition process, CalMHPC purchased the land from the City. The City carried back subordinated debt on the park in exchange for CalMHPC meeting certain affordable housing requirements.
The project was financed by a $3,770,000 FHA insured first mortgage loan from Red Mortgage Capital, Inc., Columbus, Ohio, which was used as credit enhancement for a “AAA” rated, tax-exempt, GNMA backed, fixed rate bond issue. The FHA program used was 207m, which provided an FHA insured, 40-year, fully amortizing, fixed rate, non-recourse, prepayable first mortgage loan. Such a loan can be combined with a GNMA certificate to produce financing that is fully guaranteed by an agency of the Federal Government. Loans under the FHA 207m program can provide funding for up to 90% of the value of the park.
The combination of FHA first mortgage financing and City of Palm Springs subordinated debt enabled CalMHPC to acquire the park and land, provide for needed repairs, fund operating reserves and pay all costs and fees of the transaction with no out-of-pocket funds required.
PMC Financial Services is pleased to have acted as financial consultant to the lender on this project.