Financing for a home in a park

DAN VAN BENTHUYSEN

March 7, 2008

Mobile homes were once sold only through car dealers, and there are still dealerships in the Midwest and West that sell them. Lance George, a senior research associate at the Washington, D.C.- based advocacy group Housing Assistance Council, says that just as the manufacturing model for mobile homes evolved out of the auto market, the financing evolved out of the car loan.

And because the land on which a mobile home sits is often rented, the home, like a car, may tend to depreciate. That's why it's harder to find lenders for a mobile home than a conventional home. It also may be why housing groups have backed away from encouraging mobile home construction.

Still, studies show that mobile homes cost about 40 percent of what stick-built homes cost, says Jonathan Pinard, president of the Empire State Mortgage Bankers Association.

Suffolk National Bank is among the few banks locally that offers loans for manufactured homes. Debbie Simonetti, a vice president of the Riverhead-based bank, says it has made mobile-home loans for decades because "years ago that's what was here in Riverhead, and we know these parks and their management."

The Riverhead-Calverton area has seven mobile home parks, most restricting occupancy to those 55 and older. Simonetti points out the bank will not make a loan unless the home is in one of the parks. In the last year, Suffolk National lent about $5 million on Long Island for purchase of manufactured homes, less than 10 percent of its total residential lending.

Simonetti takes issue with George's contention that mobile homes depreciate like cars and notes that in some areas of Long Island, such as Bohemia, values of manufactured homes have held steady or increased. "A few years ago we were getting appraisals in the $150,000 range that are now coming in at $250,000," Simonetti says.

But, like George, Simonetti says the auto legacy is present. Mobile homes have a VIN (vehicle identification number) just like a car. And they come with axles. Among the requirements for a Suffolk National loan: "There cannot be any trailer hitch," she says, and the buyer must put down at least 25 percent. Also, the term must be less than what the bank's appraiser estimates to be the home's life span. But Simonetti says the bank will extend loans for homes built as long ago as 1973.