Nancy Hollinrake was shocked to learn how lenders viewed manufactured-home communities.
When she and her husband wanted to buy a tidy 1,500-foot manufactured home in Lilac Drive Cooperative in Raymond 12 years ago, they couldn’t get a decent loan. Even the bank that Hollinrake’s father had founded wouldn’t write a mortgage on a manufactured home.
“They said, ‘We can’t help you. We don’t deal with places like that,’ ” she says. “I could not believe it.”
Hollinrake and her husband kept looking and eventually took a loan with a 14 percent interest rate.
“That’s the best I could do,” she said. “We either had to take that or we could not take the home.”
By 2000, the Hollinrakes’ story was a familiar one at the New Hampshire Community Loan Fund. For more than 15 years, the Community Loan Fund had helped residents of manufactured-housing parks convert to resident ownership. Making their homes more secure (because the land wouldn’t be sold out from under them) should also make them less expensive, or so they thought.
There was still one challenge. Residents like the Hollinrakes were paying double-figure interest rates on their home loans – nearly 60 percent of homeowners who responded to a 2001 survey were paying more than 11 percent. At the time, the average national mortgage interest rate was about 6.7 percent.
Those lower rates weren’t available to owners of manufactured homes. Their home loans weren’t real mortgages. They had personal property loans, like you’d use to buy a car or boat, which offer no tax advantage whatsoever.
Manufactured Home Owners and Tenants Association (MOTA) of New Hampshire leader Lois Parris kept reminding Community Loan Fund President Juliana Eades there was more work to be done.
“Every time I talked to her she said, “Finance the homes. Finance the homes,” says Eades. “Lois’s persistence and impatience kept it on our plate.”
In response, the following year, the Community Loan Fund, supported by five banks and the New Hampshire Community Development Finance Authority, created fair, fixed-rate mortgage loans for manufactured homes in cooperatively owned parks.
In the 10 years since, more than 600 homeowners have used these real mortgage loans to buy a manufactured home in a resident-owned community, refinance their high-interest loan, or install a replacement or new home on an empty lot.
The new loans also allowed people to borrow against the equity in their homes to make improvements and energy upgrades, or to pay for education or small-business needs.
The mortgage program was such a success that, in 2008, St. Mary’s Bank and Merrimack Country Savings Bank agreed to participate in a national demonstration project offering standard 30-year loans for manufactured homes in pre-approved co-ops, an important step in these mortgages becoming a regular option for borrowers here and in other states.
“I think it’s just wonderful,” said Hollinrake. “Little by little, others will come about. It’s been a long time, but it’s getting there.”
Residents had also led reform in 1984 when 57 homeowners in Town & Country MHP in Milford received frightening news in the mail. They had to move out of the park, and they had 60 days to do it.
Most Town & Country residents couldn’t afford to move their homes to another park and couldn’t afford to lose them. They were stuck. “We had nothing to protect us!” said Florence Quast, a nurse who lived in Town & Country. “We had to see if there was something or someone out there to help us.”
The secretary of the tenants association remembered reading an article about how the Community Loan Fund had helped the residents of a manufactured-housing park in Meredith keep their homes.
They called Eades at the Community Loan Fund, and she brought New Hampshire Legal Assistance attorney Elliott Berry to a meeting at the community. After that meeting, the tenants association organized and incorporated as Souhegan Valley MH Cooperative, Inc. and began working closely with Berry and another attorney, Arthur Gormley of Nashua.
“They were in the community nearly every other week for the next two years,” said Quast. Berry stalled the park’s closing by successfully challenging the legality of the park owner’s notifications while the residents, unsuccessfully, sought a site they could move their homes to.
Finally, in mid-December, 1986, the tenants offered to buy the park. The owner accepted, on the condition that they close the deal before the end of the year.
“This was a one-time offer, so we jumped on it,” said Quast. With a bridge loan from the Community Loan Fund until a New Hampshire Housing Finance (NHHF) loan came through (Quast delivered a busload of residents to central NH to persuade NHHF), Souhegan Valley became the second resident-owned community in New Hampshire.
Berry, with MOTA-NH (Manufactured Home Owners Tenants Association of New Hampshire, in which Quast had become a leader), spotlighted the Town & Country experience as they persuaded the NH legislature to require park owners to give residents more notice when their park was to be closed.
“We took their story to the State House and the idea was real easy to explain,” Berry told an audience at the Community Loan Fund’s 25th anniversary celebration. “You have a whole community that was going to be wiped out as if it were the victim of a hurricane like Katrina … the effect on the residents was exactly the same.”
Eades recalls that the most compelling testimony came from residents who hadn’t had the opportunity to buy their parks, or whose purchase attempts failed. They were able to spell out the consequences because they were living the consequences: “I own this home and I’m losing it.”
The resulting law, still in force today, extended that notice period from 60 days to 18 months. Berry then wrote and successfully advocated for the law that has become the cornerstone for park conversions in New Hampshire: RSA 205-A:21, better known as the “60-day notice” law.
That law, which took effect in 1987, says owners can’t sell a park without giving residents at least 60 days notice (including the price and other details of the signed agreement with the potential buyer) before the sale, and negotiating in good faith with the tenants.
These changes would not have been possible without co-op residents leading the charge.
This article was originally published in the summer 2012 edition of The Cooperator, ROC-NH's newsletter.
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