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California Housing Finance Agency and Bank of America Launch Mobilehome Park Tenant Acquisition Program

Strategic Insights

— 1 min read

The California Housing Finance Agency (CHFA) and Bank of America Community Development Bank have announced a groundbreaking program to enable mobilehome park tenants to acquire the parks where they live. This innovative program is the first to use tax-exempt bond financing for tenant acquisition of mobilehome parks. The program aims to preserve affordable housing for low- and moderate-income Californians living in mobilehome parks. The partnership plans to finance one to three pilot transactions totaling approximately $10 million, targeting mobilehome parks with elderly tenants, with the potential to finance up to $100 million in transactions over the next three years.

Key Takeaways:

  • The program is a joint effort between the California Housing Finance Agency (CHFA) and Bank of America Community Development Bank to provide tax-exempt bond financing for tenant acquisition of mobilehome parks.
  • The program will initially finance one to three pilot transactions totaling approximately $10 million, targeting mobilehome parks with elderly tenants.
  • The program has the potential to finance up to $100 million in transactions over the next three years.
  • To qualify for funding in the pilot phase, mobilehome parks must have a minimum of 75 spaces and be occupied by 98 percent of the spaces and be supported by 75 percent of the tenants.
  • The proposed acquisition must meet the affordable housing objective of having a minimum of 20 percent of the park spaces occupied by very low- and low-income households, which will be in place for the life of the financing.
  • Bank of America Community Development Bank will play the lead role in packaging the loans to tenant-controlled qualified nonprofit organizations formed to purchase, own, and operate existing mobile home parks.
  • The loan funding will come from three sources: tax-exempt bonds to be issued by CHFA, loans made by Bank of America, and from the Mobile Home Park Resident Ownership Program (MPROP) funds.
  • The loan package will consist of a senior loan (CHFA), a junior loan (BofA Community Development Bank), and one or more subordinate loans (HCD/local).

Statistics:

  • Total program funding: up to $100 million
  • Number of pilot transactions: 1-3
  • Amount of initial funding: approximately $10 million
  • Target market: mobilehome parks with elderly tenants
  • Minimum park spaces: 75
  • Park occupancy rate: 98%
  • Tenant support required: 75%
  • Affordable housing percentage: 20%

Sources:

  • "California Housing Finance Agency Joins with Bank of America Community Development Bank to Provide Mobilehome Park Tenant Acquisition Program," Business Wire, Dec 21, 1994
  • "Bank of America Community Development Bank"

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