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Loan Amount: $500,000 to $6,000,000
Purpose: To fund manufactured home inventory within manufactured home communities that are owned/ managed by the borrower, or an affiliate of the borrower.
Loan Structure: The amounts advanced on the inventory line of credit (LOC) will be equal to 75% of the cost of inventory homes, including approved set-up costs. The outstanding principal balance will be subject to curtailments after 180 days of 10% of the loan balance attributable to that home, plus an additional 10% each 90 days thereafter. Upon the fifth anniversary of the loan, the bank will have the option to call all inventory loans outstanding.
Interest Rate: Floating rate of WSJ Prime plus 2.0% to 3.0% adjusted quarterly.
Collateral: Title to the home or an acceptable first lien position.
An acceptable Remarketing Agreement from the entity that owns each community.
Personal guarantees.
Fees: 2% funding fee on each draw. The Borrower will pay a monthly administrative fee of $7.50 per month per inventory home and $50 per home as homes are added to or taken out of the inventory line. Borrower to pay all legal fees and closing costs.
Submission Checklist
• Schedule of existing inventory indicating: community location, site number, make, serial number, size, invoice, and set-up costs.
• Outline of anticipated future inventory homes indicating anticipated price ranges and set-up costs, and list of communities where the inventory will be placed.
• Detailed operating statements (2 years) and balance sheet for sales entity/ borrower.
• Detailed operating statements (2 years) and current rent rolls on communities where inventory will be located. Include rent roll summary showing total sites, revenue producing sites and average rent. Include details on secured debt encumbering community.
• Financial statements and two years tax returns on guarantor(s).
• Schedule of life insurance on guarantor(s).
• Bio on sponsor detailing real estate experience, MH experience and sales experience.
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