FREDDIE MAC OPTIGO®
Manufactured Housing Resident Owned Community Loan (MHROC)
CUSTOMIZED LOANS FOR MANUFACTURED HOUSING COMMUNITIES OWNED BY RESIDENTS
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ELIGIBLE PROPERTY TYPES
Existing, stabilized, high-quality, professionally managed MHROCs, with or without age restrictions.
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ELIGIBLE TRANSACTION TYPES
- Acquisition/Conversion: An Acquisition Mortgage on a Manufactured Housing Community which is in the process of converting from a rental property to an MHROC. The MHROC Borrower must be formed prior to rate lock.
- Seasoned Refinance: A Refinance Mortgage on an existing MHROC with most shares already sold to resident shareholders.
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ELIGIBLE BORROWERS
Not-for-profit cooperative corporation or association (Co-op) in which shares in the Co-op are sold to shareholders and such shares entitle the shareholder to occupy a specific pad.
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REQUIREMENTS FOR RESIDENT SHAREHOLDERS
At rate-lock:
- 100% of pads must be owned by the MHROC Borrower.
- At least 90% of shares must be owned by resident-shareholders.
Seasoned Refinances offer flexibility on this point with alternate sizing.
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DEBT SERVICE RESERVE
May be required.
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TERMS
5- to 30-year terms.
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MINIMUM UPB AMOUNT
$1,000,000.
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MAXIMUM AMORTIZATION
30 years.
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INTEREST RATE
Fixed-rate only.
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INTEREST ONLY
Amortizing only, Interest only not permitted.
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RECOURSE REQUIREMENTS
Non-recourse.
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SUPPLEMENTAL FINANCING
Available, subject to the Supplemental Loan offering requirements.
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HOME RENTALS
The percentage of homes owned by the borrower, borrower-affiliate, or third-party investor cannot exceed 5%.
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TAX AND INSURANCE ESCROW
Required.
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REPLACEMENT RESERVE ESCROW
Minimum $50 per site per year and $250 for borrower-owned manufactured home per year.
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ADDITIONAL CONSIDERATIONS
- Private facilities (e.g., wells and septic systems) are allowed with considerations.
- Rental leases cannot contain options to purchase pad sites or borrower-owned manufactured homes.
- Retail sales or financing by borrowing entity of any manufactured homes or shares in the MHROC Borrower is not allowed.
- RV campgrounds and broken condominiums are excluded.
- Wrap financing, seller financing, mezzanine financing, and preferred equity are not permitted.
Fixed-Rate LTV Ratios and Amortizing DCRs1
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FIXED-RATE BASE CONVENTIONAL MAXIMUM LTV AND MINIMUM DCR (ALL AMORTIZING)
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AS MARKET RATE RENTAL2
ACQUISITIONS/CONVERSIONS: 70% / 1.40x.
SEASONED REFINANCES: 70% / 1.40x. -
AS COOPERATIVE3
ACQUISITIONS/CONVERSIONS: NA / 1.15x.
SEASONED REFINANCES: NA / 1.10x.
1Adjustments to DCRs and LTVs may be required depending on the property, product and/or market.
2‘As market rate rental’ – income and expenses underwritten as a conventional rental property operation.
3‘As cooperative’ – income and expenses underwritten as a resident-owned cooperative (as-is).
