A mobile home park bridge loan is short-term, interest-only debt that funds the acquisition and stabilization of a park before permanent financing takes over. It buys 12 to 24 months to repair infrastructure, reset below-market lot rents, and build the operating history a bank or agency lender will actually size against. Requity prices these loans between 8.5% and 12%, with 12% as a hard ceiling. This playbook covers how borrowers structure that window, and where most of them get the exit wrong.
Why bridge debt fits a value-add park
Most seller-owned parks trade on trailing income that does not reflect what the property produces after repairs and rent adjustments. Permanent lenders size on stabilized numbers and a documented operating history, neither of which exists on day one. A bridge loan is interest-only, so your monthly carry stays flat and predictable while you do the work that raises net operating income.
The pricing is standardized. Requity quotes MHP bridge debt from 8.5% to 12% depending on leverage, sponsor experience, and asset condition. That 12% ceiling is fixed, not an opening position in a negotiation. You can see how the terms are built on the lending overview or review program specifics on mobile home park loans.
What lenders actually count as income
This is the single most common misunderstanding in an MHP submission, and it is worth getting right before you write an offer.
Commercial lenders underwrite a park on lot rent, meaning the pad rent paid by residents who own their own homes, and they charge lot-based operating expenses against it. Income from park-owned homes is generally excluded or heavily discounted, because that revenue is chattel income tied to depreciating personal property, not real estate. A minority of lenders will finance park-owned homes, and separate lines of credit exist for home inventory, but neither belongs in the base underwriting.
Both agencies enforce this structurally. Freddie Mac limits homes owned by the borrower, a borrower affiliate, or a third-party investor to 25% in aggregate. Fannie Mae generally holds tenant-occupied homes to no more than 25%, with up to 35% permitted under certain conditions.
The practical consequence: a park where half the collections come from renting out park-owned homes will underwrite far smaller than the seller's revenue figure suggests. Run your own numbers on lot income only before you take the broker's pro forma seriously.
Commercial DSCR is net operating income divided by annual debt service. That is a different formula from the residential 1-4 unit convention of gross rent over PITIA, and using the residential version on a park will overstate your coverage badly.
What diligence has to clear before a bridge closes
A park bridge can fund in roughly 10 to 14 business days once diligence is complete. The calendar is set by how fast you produce information, not by the lender. Order these in parallel from the day you go under contract.
- Parcel and title structure. Confirm the park conveys as a single parcel, or a small number of contiguous parcels, with the pads included. Parks marketed as a bundle of individually deeded lots are the most common structural disqualifier we see, and no amount of good economics fixes it.
- Utility inspection. Private well and septic versus public water and sewer changes both the capital plan and your exit options. Camera the sewer lines. Do not rely on a seller disclosure.
- Lot-level rent roll. Every pad broken out: occupied or vacant, tenant-owned or park-owned, actual lot rent, and delinquency history.
- Metering configuration. Master-metered parks carry the utility expense at the park level. Identify whether submetering or ratio billing is legally permitted in that jurisdiction.
- Zoning and legal use. Many older parks are legal nonconforming. Get a zoning verification letter confirming the pad count can be rebuilt if damaged.
Where the value-add actually comes from
Infrastructure
Failing septic and undersized water lines are the most common capital items on older parks. Fund these repairs first, because they gate everything else. It is difficult to defend a lot rent increase while residents are dealing with water pressure problems.
Lot rent
Below-market lot rent is the primary lever, and it compounds. If comparable parks in the submarket charge $425 per lot and yours charges $310, a staged increase of $25 to $40 per lot per year rebuilds the income base that permanent debt will size against. Stage it. A single large increase invites turnover, and every abandoned home becomes your capital problem.
Occupancy and billing
- Convert master-metered utilities to submetered or ratio billing where local law allows, and recover the expense instead of absorbing it.
- Fill vacant pads with tenant-owned homes rather than park-owned inventory, which keeps maintenance liability off your books and improves your agency eligibility at exit.
- Document every improvement with invoices and photos. The refinance appraiser and the permanent lender's underwriter will both ask.
- Clean up delinquency early. A trailing 12-month collection history with heavy write-offs will cost you more at refinance than the rent itself is worth.
What we see on our lending desk
There is no park size we favor and no upper limit on what we will look at. We have funded communities in the single-digit pad range that no bank would open a file on, and stabilized parks well above 50 pads where the borrower needed a 24-month interest-only structure instead of a 90-day agency process. Terms have run from 12 to 24 months, averaging a little over 19. If your deal sits outside what you assume a private lender will do, ask anyway.
What surprises most borrowers is the purpose mix. Refinances outnumber acquisitions in our funded park book. A large share are borrowers taking out a maturing seller-financed note, a hard money loan that ran out of runway, or a bank line that got called. If you are buying a park with seller financing today, assume you are the one who will need a takeout in 24 months, and plan it now rather than at month 22.
Two patterns kill park deals in our pipeline more than anything else. The first is borrowers looking for 100% financing, which does not exist for this asset class from any real balance sheet lender. The second is the individually deeded lot problem described above. Both are identifiable in the first conversation, which is why we ask about parcel structure before we ask about NOI.
How do you plan the bridge exit?
Your bridge term is runway, not a finish line. The mistake we see most often is a borrower who assumes agency debt is waiting at the end without checking whether the park is eligible for it.
| Exit option | Minimum size | Park-owned home limit | Typical timeline |
|---|---|---|---|
| Fannie Mae MHC | 50 pad sites | Generally 25%, up to 35% in some cases | 60 to 90 days |
| Freddie Mac Optigo MHC | 5 pad sites | 25% in aggregate | 45 to 60 days to commitment |
| Local bank or credit union | No published minimum | Case by case, usually excluded from income | 45 to 75 days |
| CMBS | Sized to debt yield, larger balances only | Excluded from income | 60 to 120 days |
Pad count is the first gate. Fannie Mae's MHC program requires a minimum of 50 pad sites, so a 30-pad park will not qualify no matter how well it performs. Freddie Mac's Optigo MHC product goes down to five pad sites, but expects a sponsor with two or more years of MHC operating experience who already owns another community. Agency execution also carries a practical loan-size floor, because third-party reports, legal fees, and rate lock costs do not scale down to a small balance.
Layer paved road and utility standards on top of that and the two ends of the market look very different. A 20-pad park on a gravel drive with private septic is a local bank or credit union exit. A stabilized 60-pad community on public utilities is a real agency candidate. Know which one you are buying before you underwrite the takeout, because the exit assumption drives how much leverage the bridge can safely carry.
Start the exit conversation in month nine, not month twenty. Lenders price maturity pressure, and a borrower who already holds a term sheet negotiates from a materially better position. If your plan is to sell rather than refinance, the same rule applies: list before the clock forces you to.
Frequently Asked Questions
How long is a mobile home park bridge loan?
Typically 12 to 24 months, interest-only. Our funded park loans have averaged a little over 19 months. Choose a term that covers your capital plan plus a permanent financing process that can itself take 60 to 90 days.
What rate should I expect on an MHP bridge loan?
Requity prices mobile home park bridge loans between 8.5% and 12%, with 12% as a hard ceiling. Where you land depends on leverage, sponsor experience, and the condition of the park's infrastructure.
Is there a minimum or maximum park size for a bridge loan?
No fixed limit in either direction. We have financed parks in the single-digit pad range and communities well above 50 pads. Park size affects your permanent financing options at exit far more than it affects bridge eligibility, so the size question is really an exit question.
Can a bridge loan cover park-owned homes?
The collateral is the land and infrastructure, and park-owned home income is generally excluded from underwriting. Some lenders will lend against home inventory separately, and dedicated lines of credit exist for that purpose, but it should not be part of your base sizing assumption.
How fast can a mobile home park bridge loan close?
Roughly 10 to 14 business days once diligence is complete, compared with 45 to 90 days for a bank or agency execution. The variable is almost always how quickly the borrower delivers the rent roll, utility inspection, and title work.
Can I finance a park that is sold as individual lots?
Generally no. If the pads are individually deeded and conveying separately, the collateral does not function as a single commercial asset, and most balance sheet lenders including Requity will decline it. Confirm the parcel structure before you go under contract.
Get your park financed
If you have a park under contract or a maturing note and a credible value-add plan, request a bridge loan quote and we will map your capital plan to a fixed term. We underwrite parks as operators, not just as lenders, because we own and run manufactured housing communities ourselves. For adjacent asset classes, see RV park loans.