Manufactured Home Park Resident Group Restructures Park Ownership
The Thunderbird Village Residents Association (TVRA), Tumwater, WA, have completed the restructuring and refinancing of their resident-owed corporation, which owns Thunderbird Village MHC, a 115-site, 5-star, “55 & older” manufactured home park located at 706 East Dennis Street, Tumwater, Washington. The park includes a 3100 sq. ft. clubhouse, gazebo and two RV storage areas. A greenbelt surrounds the park perimeter, maintaining the privacy and residential character of the community. The park contains primarily doublewide homes with detached, two-car garages.
TVRA was formed in 1999 to purchase the property. The purchase was completed in early 2000, when 43 residents each purchased a membership in the corporation for $47,300. This equity, combined with local bank short-term debt and a seller carry note, enabled the group to purchase the property for $5.2 million (about $45,000 per site).
After two years of successful operations, TVRA contacted PMC Financial Services to develop a restructuring and refinancing plan, with five (5) goals:
- Replace the existing short term financing, which included first, second and third mortgages, and stabilize the park debt,
- Lower the membership price,
- Increase the membership in TVRA,
- Stabilize the members monthly payment, and,
- Lower the monthly payment in the future.
The TVRA Board approved the plan in April 2003 and 120 days later the PMC Financial plan was completed, with the closing of a new $4.3 million (80% Loan To Value) first mortgage and the addition of new members bringing the total association ownership to 62. The loan was originated with an interest rate of 5.93%, with a 25-year amortization and 10-year term.
PMC and TVRA originally approached HUD for financing under the FHA 207m program. However, 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.
Concurrent with the completion of the new financing, the Association was restructured, resulting in a membership price reduction to $35,000 and a return of capital to the original members of $12,300. Monthly member payments have been stabilized at $215, in an area where market rents in land lease manufactured home parks are in excess of $480 per month.
For additional information, contact Deane Sargent, PMC Financial Services, 650-375-8043