For those community owners who are thinking about using the FHA 207m loan guarantee program for re-financing their communities, to take advantage of today’s low interest rates, and longer term (up to 40 year amortization) non-recourse financing from a private lender.

How To Get An FHA Guaranteed Loan For Acquisition and Rehabilitation or Development of a MH Community
E-Book Version   by Edward Hicks

First, make sure the community needs some rehabilitation. Rehab may consist of capital improvements which improve the community for the residents in terms of services, utilities, safety, convenience, security, etc. They may also consist of improvements which allow the community to be more marketable. Although some deferred maintenance may be included in the rehab, it is not suggested they be the primary items, unless the community is in a severely degraded condition so as to be dangerous or unsafe for the residents.

Examples of rehabilitation which are generally encouraged are:

  • Eliminating on-site utilities such as wells, water treatment, and wastewater treatment facilities, by hooking up to municipal or approved private exterior systems
  • Upgrade or replacing or repair water, sewer, and gas distribution lines.
  • Upgrading electrical service to 200 amp
  • Adding security systems withing the community including an access control system.
  • Repair or newly implemented storm water management systems 
  • Upgrade or repair of community amenities such as the community center 
  • Mandated zoning and/or land use regulated improvements, such as installation of fire hydrants.
  • Rerouting traffic patterns in the community to create less traffic or otherwise improve traffic safety.
  • Providing residents with parking spaces on their home sites.
  • Additional of additional parking for visitors in traffic/parking congested communities 
  • Addition of amenities such as a community center, where it can be shown that the community operates at a disadvantage with other area communities which have them.

Examples of rehabilitation which are not usually allowed are:

  • Upgrading landscaping, unless required by zoning and land use regulations for screening
  • Other cosmetic improvements to the community common areas. 

There is no absolute “rule” about the amount of rehabilitation which is required to qualify, but it is a good idea to get at least 10% to 15% of the estimated value of the community after the rehab into your list of improvements. 

Second, estimate the total funding allowed:

  • Existing debt or 90% of the appraised value of a new acquisition plus 90% of the costs of the rehabilitation. Maximum loan is 90% of the appraised value after rehabilitation. 


  • 100% of costs, fees, market reports, appraisals, inspections, audits, and some legal fees up to the loan maximums. 


  • Verify loan maximums don’t exceed the statutory limits as modified by the High Cost Percentage modifiers. These are found on pages 34 to 37 of the book. An update to these may be found the HUD websites. 

Third, assure the community is located in a compliant zoning or land use area, and there are no environmental issues. Loans may not be approved for communities located in: 

  • flood zones or areas with poor soil types 


  • locations which are deemed to be archeologically sensitive 


  • areas of high noise, where levels are above 65db without buffering 


  • airport landing or departure flight paths at lower altitudes 


  • near hazmat transportation routes, such as railways 


  • environmentally sensitive areas. 

If all looks good, use the 92013 Form provided in the book, make an estimate of the loan size, equity required, and closing costs. 

And if all else fails, call me and I may be able to help.

How To Get An FHA Guaranteed Loan For Acquisition and Rehabilitation or Development of a MH Community
E-Book Version   by Edward Hicks

Edward “Eddie” Hicks has been active in the manufactured housing industry since 1963. He is not only a Licensed Real-Estate Broker but also a Licensed Mortgage Broker. These combined backgrounds have contributed to his great success as a buyer’s agent for investors seeking Manufactured Home Community properties. Mr. Hicks is a member of the Development Council of the Manufactured Housing Institute. Don’t miss his popular “ASK EDDIE” contributions to the industry publication “The Journal of Manufactured Housing”.