Manufactured Home Park Resident Group Purchases Oregon Park
The residents of Springlake Park, Scappoose, OR, have completed the purchase of their park through their newly created resident cooperative corporation, Springlake Community, Inc. (SCI). This is the first resident coop moble home park purchase in Oregon.
Springlake is a 147-site, 5-star, “55 & Older” manufactured home park located about 20 miles northwest of Portland at 51359 SE Springlake Loop, Scappoose, OR. The moble home park includes a 3500 sq. ft. clubhouse, two small lakes, and RV storage with electrical outlets.
Springlake was built in several phases from 1986 to 1998 and contains primarily doublewide homes with attached, two-car garages. The property has 23 sites that had never been occupied.
SCI was formed in 2003 to purchase the property. The purchase was completed in September 2003, when 83 residents each purchased a membership in the corporation for $15,000. 36 residents funded their membership out of personal funds. PMC Financial Services made loans to the other 47 participants through PMC’s membership purchase program. This program provided 95% loans of $14,250 and was available to all residents. SCI also provided down payment assistance loans, if needed.
This equity, combined with a $5.83 million conduit first mortgage loan, enabled the group to purchase the property for $6.6 million (about $44,900 per site or $53,200 per occupied site). The Oregon Department of Housing and Community Services (HCS) provided critical initial pre-development funding through a $100,000 loan to the resident group.
The residents and PMC developed an organizational and financing plan. There were three (3) goals: 1) have a membership group of at least 60% of the occupied sites, 2) have a total average monthly payment (including loan payments) after acquisition of not more than 120% of the prior site rent payment, and, 3) have a down payment, for those residents borrowing the membership price, of less than two months site rent.
The goals were achieved with 67% participation, member payments 19% over the average site rent of $395, and a downpayment of 95% of the target amount. Member payments are expected to decline in the future as the vacant sites are leased.
The SCI Board approved the plan in April 2003 and signed a Purchase & Sale Agreement with the owner in late April. About 4 & 1/2 months later, the transaction closed. The first mortgage loan was originated with an interest rate of 5.83%, with a 25-year amortization and 10-year term.
Both HUD and Fannie Mae declined to finance the park. HUD took the position that they will not finance “55 & Older” parks, despite the fact that the “55 & Older” requirements were created by the HUD Fair Housing office and implemented by the Housing For Older Persons (HOPA) Act. Fannie Mae took the position that they will not finance resident-owned parks.