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Residents:

If you are a resident concerned that your community might be sold and closed, and wondering what you can do about it, MHCP might be able to advise you on how to organize to purchase the community, or MHCP might be able to purchase the community and you would have a voice in how it was run. Read “Typical Features of an MHCP Purchase” to get an idea of the purchase process. If you want to discuss your options, give us a call: (206)324-0663.

Typical Features & Requirements for an MHCP Purchase
The Manufactured Housing Community Preservationists (MHCP) buy manufactured housing communities, renovate them as needed and operate them as subsidized low- and moderate-income housing.

A combination of city, county and state governments provides the grants and low-interest loans that supplement our private mortgage loans. Because the public funds reduce financing costs, MHCP can provide below market rents for qualifying households. The advantage to the seller is that they are cashed out. (There may also be tax advantages.) The advantage to residents is that the community is protected against change of use for 35-50 years, and rents will remain affordable.

However, public funders require the purchase to be done in a certain way, and their schedule of funding decisions determines the timing of the deal. In the past 10 years, MHCP has purchased 4 communities in King County utilizing the funds and processes described here. It is somewhat cumbersome, but once we enter into a contract, there is a high probability that we will complete the purchase. Some requirements for an MHCP purchase are:

Sales Price by Appraisal. MHCP cannot pay more than a price based upon an MAI appraisal. The appraisal must be completed before MHCP proceeds with other activities involved in the purchase. Since the price and financing are based on the appraisal, the seller should not expect price negotiations once a contract is signed.
Time for Due Diligence. MHCP will need 90 days to inspect the books and records and complete a physical inspection. Physical inspection requires several independent parties to enter the property and examine conditions.
Tenant Interviews. MHCP needs to contact tenants and ask them about their household size and financial situation. (Tenants do not have to agree to share this information.) Their information tells us 2 things: how much private financing the community can support, and how well the residents’ income picture supports MHCP’s requests for public funding.
Approval by Board & Attorney. MHCP is a non-profit corporation governed by a board of directors who must approve all contracts. Prior to approval, the contract must be reviewed and approved by MHCP’s attorney.
Time to Close. MHCP requires 9-12 months to close because of the varying application and decision schedules of the funding sources. However, if the seller agrees to a short-term contract or some other arrangement, MHCP can take possession of the community and then seek public funding to pay off the contract or float loans.