HUD 223(f) for manufactured home communities

HUD will insure a purchase or refinance loan on an existing mobile home park under Section 223(f), but only if the borrower is a state or local government, a resident-owned community or cooperative, a nonprofit, a CDFI, an Indian Tribe, or another entity HUD approves. That’s the MHC Program, created by Mortgagee Letter 2024-11 on June 4, 2024. For those buyers the terms are the most generous of any park program: up to 90% loan-to-value at 1.11x coverage, fully amortizing. A private investor can’t use it.

Why it exists

HUD’s MAP Guide treats manufactured home parks as ineligible for Section 223(f). The Mortgagee Letter makes an exception, to provide “permanent financing on transactions that might otherwise be ineligible for financing.” The borrower list points at a particular kind of buyer: a residents’ cooperative buying its own park, or a nonprofit, housing authority or Tribe buying one to keep it running as housing.

The terms

Standard 223(f) underwriting applies, with these exceptions from the letter:

• Maximum loan-to-value is 90%. Subordinate financing is evaluated case by case.
• Cash out isn’t permitted.
• Minimum debt service coverage is 1.11x.
• Cooperatives can own the park, with a General Operating Reserve funded at 3% of monthly carrying charges until it reaches 15% of the year’s charges, then 2% until it reaches 25%.
• The park must prohibit RVs and seasonal use, and can’t give residents an option to buy their pads.
• HUD’s inspection covers common areas and infrastructure, not the homes.

From the MAP Guide: the loan is fully amortizing over the lesser of 35 years or 75% of the property’s remaining economic life, and it’s non-recourse to the borrower entity with carve-outs. FHA mortgage insurance on multifamily loans is 0.25% upfront and 0.25% a year for applications from October 1, 2025.

How the process differs

The program is national, but HUD headquarters picks which regional offices process applications. Each participating region names a designated underwriter. Before the lender submits anything, it has to hold a concept meeting with that underwriter about the deal and any repairs. A MAP-compliant third-party appraisal is required, and the underwriter visits the site to judge the repairs and whether the borrower and manager can run the park.

A worked example

A residents’ cooperative is buying its 100-pad park for $5,500,000. The park nets $400,000. Assume a 7.00% rate for the arithmetic (a 5.00% 10-year Treasury plus a 2.00% example spread; HUD rates are set by the lender at rate lock, so get a real quote).

• 90% of price: $4,950,000.
• Coverage: on a 35-year fully amortizing loan at 7.00%, each dollar costs about $0.0767 a year. $400,000 ÷ (1.11 × 0.0767) = about $4,700,000.
• The loan is about $4.70 million, limited by coverage. The co-op needs about $800,000 plus closing costs.
• Mortgage insurance: about $11,750 upfront and roughly the same each year at first.

The same park on a Fannie Mae MHC loan (80% LTV, 1.25x, 30-year amortization at the same rate) sizes to about $4.0 million. HUD’s lower coverage and longer amortization add roughly $700,000 of loan.

Who to call

Only FHA-approved multifamily lenders can originate a 223(f) loan. If you represent a resident group, nonprofit or public buyer, the desk can put you in front of lenders that do. Send the park through the financing form and say who the buyer is.

Sources

• HUD, Mortgagee Letter 2024-11, Utilizing Section 223(f) for Manufactured Home Community Program, June 4, 2024.
• HUD, MAP Guide 4430.G, revision of March 19, 2021.
• Changes in Mortgage Insurance Premiums Applicable to FHA Multifamily Insurance Programs, 90 FR 45789, September 23, 2025.